Archive for the ‘branding’ category


Selling Opel: what’s good for China is good for General Motors

15.02.2017


Above: The Opel Astra K: on the roster.

I’m not so sure that GM going into talks to sell Opel and Vauxhall to PSA (Peugeot–Citroën) is that big a surprise.
   We obviously hold a lot of nostalgia for these brands, and it’s only right that we perceive GM as selling its family jewels. Opel has made some great cars over the years, and Buick in China and the US, Vauxhall in the UK, and Holden in Australia rely on this division to provide it with product.
   But it wasn’t long ago that I said I foresaw the next Holden Commodore being a four-door booted model based on a Chinese Buick Regal that’s on the same platform. While I’ve been proved wrong with scoop photos and inside information from journalists in the immediate term, longer-term this doesn’t look so far-fetched, in a future where Peugeot owns Opel–Vauxhall and GM has no choice but to consider Chinese sourcing seriously.
   Therefore, GM isn’t thinking that it’s selling off the family jewels, at least the GM where Chinese partner SAIC is overwhelmingly calling the shots.
   What they are thinking is this: ‘We should be able to develop the whole lot in China.’ They weren’t nostalgic over Holden, and they won’t be thrilled with the losses at Opel. It’s willing to sacrifice it to make its own position stronger. We’ve already seen that SAIC has called it quits when it comes to British assembly at Longbridge—that’s now all done back in China.
   There’s been such a massive technology transfer from the US to China over the last few years that Europe is seen as surplus by the folks in Shanghai. They have all the platforms on which they can make products globally. They may even, rightly or wrongly, think that the remaining brands can get them into Europe, even if GM had pulled its Korean-made Chevrolets out of there.
   Holden can be used to westernize the product and the Australians have shown they can do it well.
   I’m not saying I agree with this, as a long-time Opel fan. I was looking forward to the new Commodores coming out of Rüsselsheim. The car looks the business, it’s roughly the size of the recently deleted Ford Falcon (therefore, I’m not sure why people are so upset about its size), and the majority of buyers don’t even know which set of wheels the power’s going to. I’ve got an Astra K coming in a few months at Lucire.
   What you’re going to see is GM basically being a Shanghai-run firm with China supplying global markets and the US operations kept going for their brand cachet.
   In the meantime, a hypothetical PSA-run Opel will continue with the existing plans till the end of these models’ life cycles, then China will become the manufacturing hub for numerous markets.
   SAIC already makes a load of Cadillacs, Buicks and Chevrolets for the domestic market, and they’ll want to pump them out more widely.
   They’ve also shown that they can take new GM platforms and turn them into Roewes—or old GM platforms and turn them into Baojuns.
   PSA, meanwhile, with 14 per cent controlled by Chinese firm Dongfeng, will pursue a strategy of streamlining platforms and be focused more on Europe. It could pay off as cross-town rival Renault has done well with Nissan, Mitsubishi, Samsung, Dacia and AvtoVAZ, but it won’t nearly be as secure. The two French groups have been obsessed with one another for as long as I can remember, for years spending more time rivalling each other than actually coming up with what customers wanted.
   Dongfeng may have to cough up more lolly and it could become a larger shareholder than the Peugeot family or the French government. But will it have the sort of geographical coverage that Renault has?
   That’ll be what PSA will be asking itself, knowing that it’s reasonably strong in China—but also realizing that it hasn’t been clever at creating models that can be sold globally (the current Citroën C6, DS 5LS and the DS 6 among them, sold exclusively in China). Nevertheless, there are savings to be had, though the most obvious fear is that Opel and Vauxhall will go the way of Panhard and Talbot, brands that fell into either Peugeot or Citroën’s hands over the years and become defunct at the expense of the parent companies’. Is there a desire to extend the group’s brand portfolio beyond Peugeot, Citroën, DS, the various Dongfeng lines, and the ex-Hindustan Ambassador?
   The official statement is non-committal enough and gives nothing away: ‘PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA.
   ‘There can be no assurance that an agreement will be reached.’
   In any case, we always said that SAIC was playing a long game. MG was a toe in the water. GM is the real deal.
   Controlling GM means they can do as they please, and what’s good for China is good for General Motors.

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Posted in branding, cars, China, culture, design, leadership, marketing, media, USA | No Comments »


Avon walling

21.01.2017

A week ago, Avon found an inventive way to get its brand noticed in peak-hour traffic.
   I could make this about how people don’t know how to drive these days, or about the media fascination with Asian drivers when the reality does not bear this out, but let’s make it all about Avon—since they are the ones who have actually inspired a full blog post today. To think, it could have just been on my Instagram and Tumblr and I would have let it go, since the following video is over a week old.

   To be fair, as well as posting on my own platforms, I thought it would only be fair to alert Avon about it on its Facebook. In this age of transparency, it’s not good to talk behind someone’s back. I would have used the website advertised on the side of this Mazda (avon.co.nz), but the below is all I get. (You can try it yourself here.) I told Avon about this, too. They need to know one of their people is a dangerous, inconsiderate, and selfish driver who is ignorant of basic New Zealand road rules, namely how a give-way sign works and how to change lanes. And if I were in their shoes, I’d want to know that the URL emblazoned in large letters on the side of my fleet of cars is wrong.

   It was ignored for a while, now my post is deleted.
   Immediately I had these five thoughts.
   1. Its brand isn’t that great. When you’re starting from a poor position, the best thing to do is try to work harder. As a network marketer, Avon can’t afford to have an office that doesn’t deal with complaints. I might even be a customer. In any case, I’m part of the audience—and these days, we can affect a brand as much as the official channels. For instance, this post.
   2. In the 2000s and 2010s, social media are seen as channels through which we can communicate with organizations. Going against this affects your brand. (There’s a great piece in the Journal of Digital and Social Media Marketing, vol. 3, no. 1 that I penned. Avon would do well to read this and integrate social media marketing into its operations.)
   3. If you’re an Avon rep and you know that the Australia–New Zealand operation ignores people, then what support do you think you can count on? My post will have been seen by many people, and a follow-up one today—informing them it’s poor form to delete comments—will be seen by more. It discourages more than customers—its distributors surely will think twice. (I’m also looking at you, Kaspersky. Another firm to avoid.)
   4. Advertising your website in large letters and have it not work is a major no-no—it contributes to the image I (and no doubt others) have on Avon as, well, a bit amateur.
   5. This is a US firm. If you’re an exporter, isn’t now a really good time to show that you care about your overseas operations? Nation brands impact on corporate ones. Now I’m beginning to wonder if Avon might not be that interested in overseas sales any more. Their new president, with his stated views on free trade, has said in his inauguration speech that they need to ‘buy American’ and ‘hire American.’ Let’s delete stuff from foreigners!
   The question I have now is: wouldn’t it have been easier to apologize for its representative’s inability to drive safely, and thank me for telling them their website is dead so they can get it fixed? The video contains the registration number, so Avon could have had a word to their rep.
   This is all Marketing 101, yet Avon seems to have failed to grasp the basics. I guess the folks who flunked marketing at university found jobs after all.

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Posted in branding, business, interests, marketing, New Zealand, USA, Wellington | No Comments »


A farewell to Tim Kitchin

19.01.2017

For the second time in two months, I found myself announcing to the members of Medinge Group another passing: that of my good friend Tim Kitchin.
   Tim passed away over the weekend, and leaves behind three kids.
   I always admired Tim’s point of view, his depth of thinking, and his generosity of spirit.
   I remember Tim taking notes at my first Medinge meeting in 2002: he drew mind maps. None of this line-by-line stuff. And they worked tremendously well for him.
   His brain had a capacity to process arguments and get to the core incredibly quickly, from where he could form a robust analysis of the issues.
   But never at any point did Tim use this massive intellect to debase or humour anyone. He used it to better any situation with a reasoned and restrained approach.
   Whenever he commented, he did so profoundly. Tim could get across in very few words some complex arguments, or at least open the door to your own thinking and analysis.
   In 2003, Tim was one of the authors of Beyond Branding, with a chapter on sustainability (‘Brand Sustainability: It’s about Life … or Death’). Note the year: he was writing about sustainability before some of today’s experts began thinking about it. Prior to that he had co-authored Managing Corporate Reputations (2001).
   He wrote a chapter summary for Beyond Branding, which began, ‘Imagine the life of the earth as a single day. In the last 400th of a second of that day we have directly altered 47% of the earth’s land area in the name of commerce and agriculture, but even so, 900 million people are still malnourished, 1.2 billion lack clean water and 2 billion have no access to sanitation.
   ‘We cannot take it for granted that governments will suddenly acquire the clarity[,] insight and commonality of belief to see a process of renovation to its end. Unless we accept our joint and several liability for this future and begin to address the sustainability of all human systems, we stand little chance of tackling the most complex system of all—our symbiosis with spaceship earth … destination unknown … arrival time yet to be announced.
   ‘Against this apocalyptic backdrop, how does a 60 year-old global CEO promise a bright future and possibly a pension to his 16 year-old apprentice, or any future at all to the ten year-old enslaved employees of his suppliers’?
   ‘How does he create a sustainable future for his organisation and those to whom it has made explicit or implicit promises? He must start by building a sustainable brand.’
   You can see the sort of thinking Tim exhibited in the above, and as I got older the more I realized how ahead of the curve he was. The problems that he writes about remain pressing, and his solutions remain relevant. Presented in language we can all understand, they introduce complex models, much like his mind maps.
   He had a real love of his work and a belief that organizations could be humanistic and help others.
   He certainly lived this belief. Tim was with us at Medinge till the end of 2014, and went on to other projects, including directing Copper, a digital fund-raising and marketing agency. He was also helpful to a Kiwi friend of mine who arrived in the UK in 2016—Tim was generous to a fault.
   With the world in such confusing turmoil, Tim still sought solutions to make sense of it all and posted to social media regularly.
   And despite whatever he was going through himself, he had a real and constant love for his children.
   Tim had an enduring spirituality and he believed in an afterlife, so if he’s right, I’ll catch up with him at some stage. By then hopefully we’ll have made a little bit more sense of this planet. As with Thomas, who passed away in December (in Tim’s words, ‘Horrid news to end a horrid year’), I’ll miss him heaps and the world will be far poorer without him.

PS.: I have the details of Tim’s service and burial from a mutual friend, Peter Massey.
   As I guessed, it will be at All Saints’ Church in Biddenden (TN27 8AJ). The date and time are Thursday, February 2 at 2 p.m.
   There will be a reception afterwards at the Bull in Benenden (TN17 4DE).
   Nearest train stations are Headcorn and Staplehurst on the line from Charing Cross, Waterloo East and London Bridge. Local taxi firm MTC is on +44 1622 890-003.
   Peter has offered help with travel and accommodation (via Facebook) so I can relay messages if need be. He has posted on Tim’s Facebook wall if any of you are connected there.—JY

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Posted in branding, marketing, publishing, social responsibility, UK | 1 Comment »


Farewell to Thomas Gad: a friend, a colleague, and a uniter

19.12.2016

Tonight, I had the sad and solemn duty to announce publicly the passing of my friend Thomas Gad.
   I’m still waiting for someone to come out and tell me that I have been severely pranked.
   Thomas was the founder of what we now call Medinge Group. After working for 17 years at Grey Advertising as an international creative director, Thomas set up Brandflight, a leading branding consultancy HQed in Stockholm. He authored 4-D Branding, Managing Brand Me (with his wife, Annette Rosencreutz), and, most recently, Customer Experience Branding.
   In 2000, Thomas seized on an idea: why not gather a bunch of leading brand practitioners at Annette’s family’s villa at Medinge, three hours west of Stockholm, for a bit of R&R, where they could all discuss ideas around the profession?
   Nicholas Ind was one of the people at that first meeting. In a statement tonight, Nick wrote, ‘I first met Thomas when I was working in Stockholm in 2000—he invited me to join him at Medinge in the Swedish countryside to talk about branding. So began a professional and personal relationship that was truly fulfilling. Thomas, and his wife Annette, hosted the annual meetings we had at his house every summer after that with unrivalled generosity. My strongest recollection of those days is not the debates we had or flying with Thomas in his sea plane (even though those are also memorable), but Thomas and Annette sitting at the dinner table in the evenings singing songs, telling jokes and bringing everyone together. Thomas was exceptional in the way he made everyone feel welcome and valued in the group—he will be deeply missed.’
   I came on the scene in 2002, invited by Chris Macrae. The event had become international the year before. Thomas and Annette made me feel incredibly at home at Medinge, and we had an incredibly productive meeting. He had taught me to sing ‘Helan går’, for no Swedish gathering is complete without a drinking song.
   At the same meeting, I met Ian Ryder, who wrote, ‘As a founding member, and now Honorary Life Member, of Medinge Group I couldn’t possibly let such a sad announcement pass without observation. Thomas was a really bright, intellectually and socially, human being who I first met at the inaugural pre-Medinge group meeting in Amsterdam sixteen years ago. Little did we know then that our band of open-minded, globally experienced brand experts would develop into a superb think-tank based out of Thomas’s home in Medinge, Sweden.
   ‘For many years he and his lovely wife, Annette, hosted with a big heart, the annual gathering at which he played fabulous host to those of us who made it there. A larger-than-life, clever and successful professional, Thomas will be sorely missed by all those lucky enough to have known him.’
   By the end of the summer 2002 meeting we had some principles around branding, the idea for a book (which became Beyond Branding), and a desire to formalize ourselves into an organization. The meeting at Medinge would soon become the Medinge Group (the definite article was part of our original name), and we had come to represent brands with a conscience: the idea that brands could do good, and that business could be humane and humanistic. This came about in an environment of real change: Enron, which had been given awards for supposedly doing good, had been exposed as fraudulent; there was a generation of media-savvy young people who could see through the BS and were voting and buying based on causes they supported; and inequality was on the rise, something that the late Economist editor, Norman Macrae (Chris’s Dad) even then called humankind’s most pressing concern. If everything is a product of its time, then that was true of us; and the issues that we care about the most are still with us, and changes to the way we do business are needed more now than ever.
   This is Thomas’s legacy: Medinge Group is an incorporated company with far more members worldwide, holding two meetings per annum: the annual summer retreat in Sweden, and a public event every spring, with the next in Sevilla. The public events, and the Brands with a Conscience awards held in the 2000s, came about during Stanley Moss’s time as CEO. Stanley wrote this morning, ‘Thomas brought his vision and resources to the foundation of Medinge, and served as a critical voice in the international movement for humanistic brands.’ We continue today to spread that vision.
   We have now been robbed far too early of two of our talents: Colin Morley, in the 7-7 bombings in London in 2005; and, now, Thomas, taken by cancer at age 65. My thoughts go to Annette and to the entire family.

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Posted in branding, business, marketing, social responsibility, Sweden | 2 Comments »


What a great opportunity for New Zealand that lies before us

09.11.2016


Above: When I refer to Hillary in the below blog post, I mean the self-professed ‘ordinary chap’ on our $5 note.

As the results of the US presidential election came in, I didn’t sense a panic. I actually sensed a great opportunity for New Zealand.
   I’ve been critical of the obsession many of our politicians have had with the US, when they were in an excellent position to carve our own, unique path as a country. Aotearoa, with its bicultural roots and multicultural awareness, has the advantage, in theory at least, of appreciating traditional notions of Māori and what had been imported via pākehā; and on an international scale, our country has sought trading partners outside the Anglosphere, having been pushed into it by factors outside our control. The loss of the UK as an export market and the damage to New Zealand–US relations in the 1980s might have seemed anathema at the time, but they pushed this country into new relationships, which now looks prudential.
   New Zealanders are welcomed wherever we go, our passports aren’t looked down upon, and we still largely enjoy a freedom of movement and safe passage without much hindrance. And it’s a reality that the centre of the global economy has been shifting eastward over the last decade.
   We don’t need something like TPPA in order to form trading relationships with China, and when I went to India on two occasions, there was a great acceptance of the potential of a trade deal with another cricketing country. In fact, my audiences, whenever I gave a speech, were rather miffed that we hadn’t gone to them first. But we only make good negotiators when we deal with our own cultural issues successfully, for how else can we claim to understand others and then do a deal? Deal-making, regardless of what certain American politicians might tell you, comes from understanding the other side, and at our best New Zealanders are good at this. It’s why we need to confront our own racism head-on and to say: this shit needs to stop. In fact, this shit needn’t even be an issue. We’re too small a country not to be working together, and we need knowledge of all the cultures that make up Aotearoa now more than ever.
   We are frequently confronted with the need to look at our national character. Perhaps an early sign of it was in the 1970s with the Commonwealth Games in 1974; certainly I’ve noticed New Zealanders begin to find our own identity as a Pacific nation, not a post-colonial Anglosphere satellite. We’re beginning to discover our national brand. And wherever you were on the flag debate, at least that, too, forced us to consider who we are. The sense I got was that we want change, but we didn’t like the design—but certainly there’s no real fondness to be tied to Empah. Anti-Americanism over the years suggests that there’s no real desire, either, to keep importing economic ideas, corrupt governmental practices, and failed health care policies, even if certain political and economic élites seem drawn to them.
   We know where they will lead: greater divisions between rich and poor, educated and uneducated, urban and rural. Those tendencies exist but here is an ideal opportunity to nip them in the bud. History has taught us sensible solutions, more humane solutions, that at least recognize human actors, social responsibility, and kaitiaki. The younger generations have accepted these as they have grown up in a globalized world, and we can see that in their own consumer choices, where they favour responsible companies, those that have a cause. They believe in a form of global citizenship, and want to be treated as such—and those ideas are present in their politics, too. It is right for people like my friend Simon Anholt to run global polls on matters that influence us all, including the US elections, and realistically it will be our technology and the free sharing of ideas that will help with our progress as a planet. If we seek our own destiny, we at least will be able to show some leadership again—and then we’ll really have something to talk about.
   When I was in Reefton last month, the first place in New Zealand to get electricity, I noted that it was up to a bunch of mavericks who brought this newfangled technology in. New Zealand suffragettes won their battle first to secure women the vote. And another person called Hillary succeeded where no other had done so before when ‘We knocked the bastard off.’ Kiwi leadership isn’t new to us, but in recent years I held a great fear that we had lost our mettle. That did indeed spur me to run for office, among other factors, to say to people: stop listening to foreign companies and foreign-owned media who don’t have New Zealand interests at heart. New Zealand has been filled with people who call themselves ordinary but it’s always been those—like Sir Ed—who have shown real leadership, not some political lobbying group in another hemisphere. But you can only be great without following, and it’s high time we stopped following divided nations and recognized that we already have the right stuff—and by that I mean our smarts, our innovation, and our independently minded way of thinking.

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Posted in branding, business, China, culture, globalization, leadership, New Zealand, politics, social responsibility, USA | No Comments »


Brexit reminds us that we need to take a lead in making globalization fairer

28.07.2016

Brexit was an interesting campaign to watch, and there’s not too much I can add that hasn’t been stated already. I saw some incredibly fake arguments from Brexit supporters, including one graphic drawing a parallel between the assassinations of Anna Lindh in 2003 and Jo Cox MP, saying how the murder of the former led Sweden to remain in the EU.

   The trouble with the graphic is that the only thing it got right was that two women were killed. Sweden wasn’t having a referendum on whether to leave the EU, it was about whether it should adopt the euro. The closest British parallel would have been when then-PM John Major negotiated the Maastricht opt-out in 1991. It also claimed that the polls were for leaving; notwithstanding that that wasn’t what the Swedes were voting for, the polls for and against adopting the euro were roughly neck in neck, though the wisdom was that the pro-euro camp would win. By the weekend, the result was that Sweden would keep the krona.
   When I argued with some pro-Brexiters about this, they, like most pecksniffians, demanded I check my facts. I didn’t have to: I have a memory that goes back further than one month, and unlike them, I know what went on in their own backyard because, in 2003, I kept my eyes open.
   I should point out that I am not summarizing all Brexiters as dimwitted Britons who wanted Johnny Foreigner to go home. I count among my closest friends someone who voted leave, and for very substantial, well thought-out reasons. He felt that the European Union had become an unwieldy bureaucracy which benefited Britain little, and while I felt the benefits outweighed the detriments, I respect his opinion and his vote. At least it was considered, and at least it wasn’t one that was based on the ramblings and rants of Farage, Johnson, Gove et al.
   Appealing to nationalism, as the likes of Farage did, is a cheap trick in politics: it stirs a wave of nostalgia, and people might love chanting at how great their nation is, but it doesn’t address the core issues that put them into the poo to begin with. Of course the UK has a great deal to be proud of; but like many countries (including ours) the globalist technocratic agenda are what have made things untenable for a growing part of the population. It’s why real wages haven’t risen yet certain corporations profit aplenty; it’s why we work more hours today than we ever did, despite futurists of a generation ago predicting all this leisure time that we would all have thanks to automation.
   But is retreat the right thing to do? The remain camp believes that it wasn’t: to influence Europe you must be in Europe. It wasn’t that long ago that not being in Europe was fatal to British exports—the failure of the British motor industry, for instance, was in part due to its late recognition that the UK needed to be part of the EEC or, at least, produce vehicles there. Globalization’s positives should be the free movement of people and of capital; and economic union to permit that greater freedom seems a sensible thing to pursue, not to run away from. The trick is how to make this work for everyday people, the growing number who are impacted by globalist forces; once there were few, now few escape them. It is, then, the role of government to either protect those who are most vulnerable, to champion (either through private enterprise or on its own accord) real innovation and industry that can create jobs, and to cut through the BS where both public and private enterprise simply reinvent the wheel from time to time, putting lipstick on the bulldog.
   I am ambivalent about it because I’ve seen our own governments, National and Labour, be particularly weak when it comes to dealing with globalization, succumbing to foreign takeovers and allowing the little guy to be run over. The deals haven’t been good for New Zealand in many respects, a small country that believes in its place in the first world but which can be deluded about this very fact. Our economy just isn’t that solid to take it on the chin. Look at our banks, mostly foreign-owned and more unreliable than ever: remember how 40 years ago cheques would take 24 hours to clear? Yet now our computerized systems take three to five working days? Insiders tell me this is the consequence of less reliable Australian systems being foisted upon us; so much so that we have a wire transfer that has been taking weeks, and no one knows where the money has gone. Just how do you misplace tens of thousands of dollars? Why do we assume Australian bankers are smart enough to answer? And those who question such agenda don’t get much truck in a media landscape also dominated by foreigners: I’m looking at one newspaper publishing group at the least. The ways of the big countries are not always the best—yet somehow the powers-that-be in this country have been hoodwinked by this consistently since 1984. I can’t understand it, and my initial reaction when there is such a lack of logic is to follow the money.
   Brexit has made me refine my thinking: I might not like a system where New Zealand’s the little player that doesn’t benefit from a level playing field, but at the same time I believe we need to find ways to influence the globalist game for the better. We love looking at Scandinavian countries because of their comparable size. They may have higher taxes but at the same time they don’t seem to balk at innovation for the greater good; they believe in the freedom of movement of capital and of people, and, despite their general humility, they actually aren’t afraid of creating global companies that take on the rest of the world. Look at Vattenfall or Statoil. We might not like Statoil for what it wants to do to our own environment, but we do have to ask what our equivalent is. We lost our lead in hybrid cars, which we held for most of the 1980s, but it’s an example of what we can do when government and private enterprise cooperate on something that is future-oriented. What’s the next big thing? Is it renewable energy tech that we can export? There are companies here already doing frictionless exports, and more need to be encouraged. Government shouldn’t try to create groups of them or force mergers upon them; that can be left to the market. But there needs to be a vision or a direction that we take to create a new brand for our country where people naturally think: innovation for the greater good = New Zealand. And, maybe, to go with that, a fairer version of globalization can emerge, certainly one that is not coloured by the next quarterly result demanded by Wall Street.
   Yes, there is some national fervour involved here, too, but applied correctly, it won’t be false flag-waving that’s dependent on the past. I’m all for being proud of your country when the victories are real and measurable—like on the sporting field. There it’s real, and it’s often about the next game or the next season: it’s future-oriented, too. With Brexit, I can’t see the vision; and the most visible foreigner among this, the Turkish-American politician, Boris Johnson, hasn’t communicated one that I can discern.
   And maybe this confusion is the opportunity we need for New Zealand.
   After the UK abandoned the Commonwealth markets in favour of one right next door, our country found new export markets, so much so that the UK accounts for 3 per cent today. Even in 1973, when it was 40 per cent, it had been falling consistently for half a decade, if I recall correctly, and the notion that Britain would reach back out toward the Empah for trade is fanciful at best.
   Being someone who has enjoyed looking at world history play out through maps, ever since I discovered a book on the subject as a third former at Rongotai College, it hasn’t escaped my thoughts that this is a further retreat for the UK in terms of its global influence.
   So who’s on the rise? It might be us. The centre of the global economy has been shifting eastward in recent times and we’re well placed to take advantage of it. We’re part of the Anglosphere so we bridge the past, where it was the dominant global culture, with those trading partners who might be on the horizon. But it has to be real. We’re nimble enough, and I can’t see why we’ve been so fascinated with apeing the US and the UK for so long. Once again we need to set our own direction: we have a culture that’s ready for it with a greater sense of identity than we’ve ever had. I just wonder if we have a government, local or national, courageous enough to embark on this.

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Posted in branding, business, China, culture, globalization, marketing, New Zealand, politics, social responsibility, Sweden, UK | No Comments »


Mitsubishi’s latest scandal: enough to shake it right out of the passenger-car market?

26.04.2016


Above: The Mitsubishi eK Wagon, one of the cars at the centre of the company’s latest scandal.

One thing about creating and running Autocade is that you gain an appreciation for corporate history. Recently, I blogged about Fiat, and the troubles the company is in; it wasn’t that long ago that Fiat was the designers’ darling, the company known for creating incredibly stylish vehicles for all its brands and showing how you could use Italian flair to generate sales.
   That was the 1990s; by the turn of the century, Fiat had lost some of its mojo, and by the time I got to Milano in the early 2000s, the taxi ranks had plenty of German and French cars. Once upon a time, they would have been nearly exclusively Italian. Today, a lot of Fiat’s range is either made by, or on platforms shared with, Ford, GM, Chrysler (which it now owns), Peugeot, Mitsubishi and Mazda. Sharing platforms isn’t a sin, but a necessity, but Fiat seems to have taken it to a new level, looking like a OEM brand whose logo is freely slapped on others’ products.
   Mitsubishi is the other car company to find itself in trouble in recent weeks. The company admitted that it had lied about the fuel economy figures for its kei cars, the micro-cars that it sells predominantly in Japan.
   It wasn’t as troublesome as Volkswagen’s defeat device which fooled the US EPA, running differently when it knew the engine was being tested. Mitsubishi kept things simple, and overinflated tyre pressures.
   It would have got away with it, too, if it weren’t for Nissan, a company to which Mitsubishi supplied, under an OEM deal, kei cars. The customer started to ask questions and tested the cars for itself.
   Mitsubishi had supplied 468,000 cars to Nissan, all of which are affected. It had only sold 157,000 under its own marque. Production of the cars, from the eK range, and the OEM equivalent for Nissan, the Dayz, is now suspended, while Mitsubishi’s shares plunged 15 per cent on the news last week.
   Sankei, the Japanese newspaper, believes that Mitsubishi used the wrong test method on the I-MIEV electric car, RVR (ASX), Outlander, and Pajero, which are exported.
   You have to wonder what the corporate culture must be like for these matters to recur so regularly. But then, collectively, people tend to forget very rapidly, and companies like Volkswagen and Mitsubishi must bank on these.
   VW isn’t the first to cheat the EPA—US car makers have attempted less sophisticated defeat devices in the latter half of the 20th century—though it has had a chequered past. Just over 10 years ago, there was a scandal involving VW colluding with a union leader to keep wage demands down, and a few low-level employees took the rap. Go back to the 1980s and the company found itself in a foreign exchange scandal. But these were known mainly among specialist circles, principally those following car industry news.
   Mitsubishi’s scandals, meanwhile, were more severe in terms of the headlines generated. Last decade, when the media called Mitsubishi Japan’s fourth-largest car maker—these days they call it the sixth—the company was implicated in a cover-up over the safety of its vehicles. Japanese authorities raided the company in 2004, and revealed that Mitsubishi Motors Corp. hid defects that affected 800,000 vehicles, and had done so since 1977. Nearly a million vehicles were recalled. Affected vehicles were sold domestically as well as in Europe and Asia. Top execs were arrested that time, including the company president, although it was hard under Japanese law to punish Mitsubishi severely. There was no disincentive to conducting business as usual. The company was ultimately bailed out by its parent, the giant Mitsubishi Group, when it found itself facing potential bankruptcy.
   People were killed as a result of Mitsubishi’s cover-ups, and at the time it was considered one of the biggest corporate scandals in Japan.
   Go back a bit further and Mitsubishi Materials Corp., a related company, had used slave labour in World War II, including US troops—something the company did not apologize for till 2015, even though the Japanese government itself had issued apologies in 2009 and 2010. While it was a first among Japanese corporations, and US POWs got what they had long awaited, descendants of Chinese slave labourers still have a lawsuit pending against a connected Mitsubishi subsidiary.
   The other major difference between Volkswagen and Mitsubishi is that the Japanese marque is relatively weak in terms of covering its market segments. It’s SUV- and truck-heavy, and its kei cars had sold well (till now), but it has little in the passenger car segments, which it had once fielded strongly. The Mirage (and the booted Attrage) and the Galant Fortis (exported as the Lancer to many markets) are what’s left: the latter is now nine years old, though still fairly competitive, and in desperate need of replacement. Its only other car is its Taiwan-only Colt Plus, still selling there as an entry-level model despite having been withdrawn from every other market. In the big-car segments, Mitsubishi is actually supplied by Nissan in Japan, but doesn’t make its own any more. ‘Sixth-largest’ is shorthand for third-smallest, at least among the big Japanese car companies.
   Mitsubishi looks set to quit the C-segment (Galant Fortis) since neither Renault nor Nissan, which it had approached, wanted a tie-up. And the company survives on tie-ups for economies of scale, and there’s now a big question mark over whether potential partners want to work with it. Automotive News’s Hans Greimel questions whether the Mitsubishi–Fiat truck deal will go ahead (though I had thought it was an inked fait accompli).
   But, most seriously, Mitsubishi hasn’t completely recovered from its earlier scandal.
   It is within living memory, and the timing and nature of the latest one, tying so closely to what rocked Volkswagen, ensured that it would get global press again, even if the bulk of the affected cars were only sold domestically. And when consumers see a pattern, they begin wondering if there’s a toxic corporate culture at play here.
   We’re too connected in 2016 not to know, and while Mitsubishi is likely to be bailed out again, it will face the prospect of shrinking car sales—and sooner or later one will have to question whether the company will stay in the passenger-car business. Isuzu exited in the 1990s, focusing on SUVs, pick-ups and heavy trucks, forced by an economic downturn. Since Mitsubishi’s own portfolio is looking similarly weighted, it wouldn’t surprise me if it chose to follow suit, its brand too tarnished, with too little brand equity, to continue.

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No surprises as Facebook slips to third in Alexa, but tech press misses it

17.04.2016


Above: Facebook’s latest move: ensuring that notifications for messages go to its own app. If you choose not to install it, tough. (Actually, you can reach your messages if you had bookmarked your old message index, and through some digging you can still get there. However, your old habit of clicking on the number won’t work any more.)

I notice that Facebook has dropped to third in Alexa this week, but none of the tech press has covered it.
   I know the usual arguments: Alexa isn’t the best way of measuring audience stats; everyone (including us) has dropped because of the way Firefox has changed its status bar, thereby omitting a lot of users from its sample; Facebook itself will have recorded no real drop in user numbers (though we also know a lot of these so-called active users are bots and spammers, as we see heaps each day); and that Alexa doesn’t capture mobile data, where people are spending far more time these days.
   It does seem rather hypocritical, however, given that the same tech press applauded and wrote heaps of articles when Facebook overtook Google in Alexa. Some hailed it as the rise and rise of Facebook. There were tones of how unassailable it had become.
   However, its number-one position was remarkably fleeting and it quickly dropped back to second, where it has been for years, apart from that one blip.
   Facebook’s position has been usurped by Google’s YouTube. I make no predictions on whether this is fleeting or not, but it doesn’t look good for Facebook. I just don’t see any YouTube hate out there. If you dislike reading the comments from the world’s keyboard warriors sitting in their underwear at home, a few cookie settings will render them invisible. YouTube becomes a remarkably tolerable site.
   Earlier this month, a report found by my friend William Shepherd showed that personal sharing on Facebook had dipped by 21 per cent.
   I have said for years that ‘Facebook is the new Digg,’ a place where news is shared, not personal updates, though it appears it has taken a while for the company to realize this. Looking at some of the bugs on the site over the years, I’m not surprised Facebook missed it: for months it acted as though its entire user base was in California, with the website stuck at the end of each month till it got to the 1st in its home state. Now it is kicking users off over fake malware accusations when it’s more likely, and this is my guess based on how the site has behaved over the years, that its databases are dying. Liking, sharing and commenting fail from time to time.
   Given this, and its many other problems—including the breach of policies outlined by some of the groups it participates in, impacting on user privacy—no wonder it’s experiencing this drop.
   I see personal updates again that I saw a day before, because relatively few of my 2,300 friends write them any more. The trend has shifted, and a lot of users must have noticed what I did many years ago.
   At Medinge Group we have long advocated transparency in brands, and Facebook’s actions run counter to a lot of what we have proposed.
   We believe that sooner or later, people wise up—something we said about Enron at one of the first meetings I attended in 2002.
   In fact, the way Facebook behaves tends to be combative, and for a 21st-century firm, its attitudes toward its user base is very 20th-century, a “them and us” model. It’s not alone in this: I’ve levelled similar accusations against Google and I stand by them. Since my own battle with them over malware, and a more recent one over intellectual property (where I was talking to a Facebook employee who eventually gave up when things got into the “too hard” basket), I’ve found dozens of other users via Twitter who have been kicked off the service, yet are running clean, malware-free machines. The blog post I wrote on the subject has been the most-read of the pieces I have authored in 2016, and certainly the most commented, as others face the same issue.
   While both giants will claim that they could not possibly have the sort of one-to-one relationship with their user bases in the same way as a small business can, it’s clear to me that big issues aren’t being flagged and dealt with at Facebook. When I read the link Bill sent me, my first reaction was, ‘Why did it take so long for someone there to realize this?’
   Let’s not even get started on the way both companies treat paying their fair share of tax.
   It’s not about the number of people experiencing any given issue, it’s about the severity of the issue that a small number of people experience. By the time a larger vocal minority experiences it, the damage has gone a lot further.
   Facebook does listen to some of these cases: I remember when it limited bot reports to 40–50 a day, at a time when it was not uncommon to find hundreds a day on the site. I complained, and after a few months, Facebook did indeed remove this limit.
   But I regard that as an exception.
   Its forced downloads of so-called malware scans that even its supplier refuses to answer for (could they have nefarious purposes?), and now the latest last week—ensuring that all message notifications in a mobile browser link to its Messenger app, resulting in a 404 for anyone who does not have it installed—are rendering the website less and less useful. In my case, I just use it less. We’re not going to download privacy-invading apps on our phone—we’re busy enough. We want to manage our time and if that means we only get to Facebook messages when we are at our desks, then so be it. Some might abandon it altogether.
   Its other move is ceasing the forwarding from www.facebook.com to m.facebook.com on mobile devices, so if you had the former bookmarked, you’re not going to see anything any more. Some browsers (like Dolphin) came with the former bookmarked. Result: a few more legit users, who might not know the difference, gone.
   If there’s no trust, then regardless of the money you have, you’re not a top brand, nor one that people really wish to associate with.
   Facebook, of course, knows some of this, which is why it has bought so many other firms where there’s still personal sharing, such as Instagram and Whatsapp.
   It knows if there’s another site that comes along that gets public support, as it did when it first started, people will abandon Facebook en masse.
   Curiously, even this past week alone, it seems intent to hurry them along. There must be some sort of corporate goal to see if it can reach fourth, just like Flight of the Conchords.

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How will things play out at Fiat?

02.04.2016


Above: The current Fiat 500. A year shy of its 10th anniversary, is it still cool in 2016?

The Detroit News reports that Fiat has been having trouble Stateside, with dealers now permitted to sell the cars alongside Chrysler, Jeep, Dodge and Ram instead of at stand-alone showrooms.
   It’s been worrying seeing Fiat’s plans unfold since it decided to take control of Chrysler, a firm that was once the darling of the US car industry, with its industry-leading R&D times, to one that was starved of investment in the 2000s.
   Those initial plans, sold as a long-term strategy, turned out to be a short-term Band-Aid. With hindsight, maybe it wasn’t too much of a surprise, since Fiat was still grappling with understanding just what it was taking on.
   Fiat needed to do something given that things at home weren’t looking too good, with a model range that wasn’t very cohesive, and with its entries into the Chinese market having faltered a few times. To the casual observer, Fiat saved Chrysler, but there’s some truth in saying that having the company that controls the Jeep brand was a lifeline to Fiat itself.
   What we’ve seen since those days was the failure of the strategy of twinning Chrysler and Lancia. While this was a marriage of convenience, I could see this having some long-term gains with Lancia focusing on smaller cars and Chrysler on larger ones, but the result in 2016 is that Lancia has been reduced to an Italy-only marque, the equivalent of what Autobianchi was a few decades ago. Once the Ypsilon is deleted, then Lancia is consigned to the history books.
   The winner has been Alfa Romeo. It has only just returned to the junior executive segment with the new Giulia, after an absence of several years, and its 4C is a cracking sports car. Things are looking up, and rumours that Alfa and Dodge would be paired up in the same way Lancia and Chrysler were mercifully haven’t come true. The Giulia platform could be used for future models. Jeep has benefited from Fiat platforms, and Ram has gained some Fiat vans.
   But the parent brand, Fiat, has looked very uncertain for a while.
   For a start, there’s little uniformity globally. Fiat has the opportunity to offer the Viaggio and Ottimo in more places than China, slotting above the Ægea, for example. While having unique models for South America makes some sense, because of Fiat’s strength there, there’s an opportunity to globalize, with the Toro pick-up truck looking very appealing.
   Without having more of its self-developed products, the Fiat range in Europe doesn’t inspire too much confidence. While most manufacturers have one or two joint-venture models, Fiat’s range is almost exclusively made up of vehicles that have shared tech. The famous 500 and Panda are on a Fiat platform which has Chrysler input (before the takeover), and is shared with Ford for its B420 Ka. The Punto, 500X and 500L are on another platform shared with GM. The Doblò is also offered to GM. The Qubo is the product of a joint venture with Peugeot. The Freemont is a rebadged Dodge Journey from México, which Fiat gained after the takeover. The 124 Spider is based on the Mazda MX-5, and built in Japan by that firm. The Fullback pick-up is a Mitsubishi Triton twin and made in Thailand by that Japanese firm.
   Fiat, in other words, is holding down more relationships than Casanova.
   As a casual observer, there’s an opportunity for a massive streamlining of platforms, and offer more in-house models. That may well be happening, and let’s hope its current strategy is more long-term than its last.
   Secondly, as mentioned earlier, Fiat hasn’t had a great reputation of being able to carry out long-term sales’ strategies in many of its markets. Take New Zealand, for example, where Fiat was offering its (Grande) Punto and Bravo models, before it decided to pull everything and offer only the 500.
   The Punto has returned after a hiatus, this time as a budget model, along with the Tipo 139 Panda, but those who bought Puntos in the 2000s might think twice about returning to a company that abandoned them and offered no direct replacement for their car when it came to trading up.
   That lack of continuity could have some buyers worried, and Fiat needs to regain their trust in a big way.
   Being the Five Hundred Car Company, which Fiat certainly was in the US, cannot help, if buyers expect Fiat to offer more. We’ve seen it fail here, and Fiat’s had to back-track. Even in Hong Kong, where Fiat had also been reduced to flogging only the 500, it has had to add the Freemont.
   Fiat will argue that as it had been absent from North America for so long, it could re-enter the market-place with a single, fashionable model: after all, Mini and Smart have done.
   The trouble is that Fiat isn’t known as a niche brand: there was enough in the US media to indicate that this was an Italian giant, and the perception of such a large company didn’t gel with it offering a niche range anywhere. It lacked the cachet of a brand that was created to be fashionable and funky from the outset. You just can’t do it when that’s the name of the owner (think: can you sell “cool” cars with GM as the brand—that had been tried in New Zealand and failed dismally; or, going back a generation, Leyland? Volkswagen surely is the sole exception with its Beetle), and FCA, which the parent company is called, isn’t a consumer-facing brand. It’s just a company name with no brand equity.
   In the same vein, average punters might not know of BMW’s connection with Mini, or Daimler AG’s connection with Smart. They stand alone with plenty of brand equity, helped by identifiable products, and, in Mini’s case, even helped by its image outside North America.
   I also question whether the 500X and 500L are cute cars in the same vein as the original 500. Getting Ben Stiller’s Derek Zoolander character to advertise the 500X seemed good in theory—till it dawned on the public that the new Zoolander film was a bit naff, cashing in on last-decade nostalgia. I’m not a fan of retro design, either, and I would have hoped that Fiat would have renewed its 500 by now, since we’re on to newer versions of the Beetle, Mini, and Smart. It’s no surprise that Fiat sales are down 14·6 per cent so far this year.
   If Toyota could not sustain Scion with all its muscle, then Fiat retail really should be integrated into dealerships selling Chrysler, Dodge, Jeep and Ram Stateside. And I’d argue that Scion couldn’t remain because the brand had lost its coolness among the college kids who bought the XB in the first place. Buyers in this consumerist game, and at the fashion end it is more a game than in any other, are notoriously fickle.
   I don’t know how it’s going to play out. Fiat’s a brand I’ve grown up with, and I’ve been visiting their dealerships since I was two years old. Back in the 1970s the showroom in Homantin, Kowloon had everything from 127s to 130s. Fiat was doing a brisk trade on 124s. I came close to buying various Fiat Group cars over the years, including a Tipo and a Lancia Delta, and more recently I had considered Alfa Romeo Mitos and Giuliettas. I briefly toyed with importing a Tipo 844 Lancia Delta from the UK badged as a Chrysler, but decided having a $75 1:43-scale one was enough.
   To see Lancia decimated and now on life support as Fiat concentrated on making Chrysler and Dodge work, to see the home brand filled with other people’s products in the interim, and to receive news that US buyers weren’t flocking to its showrooms in the same numbers any more, all make me concerned. Go to Italy and the taxi ranks no longer are dominated by Fiat Group cars: the cabbies have gone French and German. It’s all very well Maserati and Ferrari doing well but the former’s volumes won’t have a huge impact, while the latter has been separated and now has a different parent. The only continent where I think Fiat is making a decent bash of things is South America. I don’t want to paint a doom-and-gloom picture, not least because I have fondness for all the brands that now fall under the Fiat umbrella. But the weaknesses, at least to an outsider looking in, outnumber the strengths. My gut says Fiat will work through it all, but will it do it in a fast enough fashion, or is there more pain to come?

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Google and Facebook should not head “top brands” lists when consumers do not trust them

10.02.2016

I’ve always been surprised when I see Google or Facebook appear on any “top brands” lists. It’s branding 101 that a strong brand must have loyalty, awareness, positive associations, perceived quality, as well as proprietary assets, based on the model from David Aaker, and implicit in this, I always thought, was trust. You can neither be loyal to something you don’t trust, nor can you have positive brand associations toward it, nor perceive an untrustworthy thing to possess quality. According to a survey from a consultancy, Prophet, which looked at over 400 brands across 27 industries, polling nearly 10,000 customers, we don’t trust either Google or Facebook. Neither makes it into the top 50; those that make it into the top 10 are Apple, Samsung, Microsoft, Netflix, Nike, Chick-fil-A, Amazon, Spotify, Lego, and Sephora. Google slots in at 55th, and Facebook at 98th.
   To me, the Prophet approach makes far more sense, as for years—long before Edward Snowden revealed the extent of us surveillance under PRISM—I had been blogging about privacy gaffes and other serious issues behind both companies.
   People may find Google and Facebook to have utility and enjoyment, yet we willingly volunteer plenty of private information to these sites. We do not trust what they do with this information. Adweek notes that in a separate survey, Facebook was the least trusted brand when it came to personal information, making it worse than the US federal government. There have been so many occasions where users have found certain privacy settings on Facebook altered without their own intervention; and I’ve constantly maintained that, with the bots and spammers I encounter daily on the social network, its claims of user numbers are difficult to accept. In fact, if you have Facebook’s advertising preferences set to reject tracking, the site will not stop doing so, compiling a massive and sometimes inaccurate picture of who you are. What it does with that, given that you have told the site that it should not use that information, is anyone’s guess. It makes you wonder why that data collection continues. At least Google (now) stops tracking advertising pref­erences when you ask it to.
   These surveys indicate that consumers are wising up, and it opens both Google and Face­book up to challenge.
   Google dethroned the biggest website and search engine in the world when it was released, so no one’s position is guaranteed. Duck Duck Go, a search engine far better at privacy, has chipped away at Google’s share; and I find so much Facebook fatigue out there that it could follow Myspace into irrelevance. When I hear those speak of these two companies’ positions as being unassailable, I take it with a grain of salt.
   We already have seen peak Facebook (and Twitter, for that matter), for when it came to Super Bowl stats this year, there was a massive 25 per cent drop in activity. Interestingly, despite the trending #RIPTwitter hashtag last week, I don’t agree with those who think Twitter is heading into oblivion, for the simple fact that the site is less invasive and seemingly more honest than Google and Facebook. Those same experts, after all, said that Google Plus would be the Facebook-killer, while I consistently disagreed from day one.
   The Medinge Group predicted correctly in the early 2000s when it was stated that consumers would desire greater integrity and transparency from all their brands, something reflected in our book, Beyond Branding. I don’t believe that we are so different when it comes to dealing with online brands.
   This is, then, a welcome challenge for all businesses, to ensure that they demonstrate transparency to their audiences. We have remained very constant in our treatment of private information: for the most part, unless you’ve agreed to it, we don’t store it at our company. There is some information that goes to our advertising networks through cookies. We admit we could have a clearer privacy policy. But for us, we don’t want to lose your trust, because in bad times, it’s the one thing we can hang on to. It’s not something Google or Facebook seem to be aware of as they tend to ignore users’ demands and queries.
   In the last 24 hours, author Holly Jahangiri found an illustration depicting child pornography on Facebook that had been reported by many of her friends—only for Facebook to deem it constantly acceptable, despite what it states in its own terms and conditions. It was only when she Tweeted about it that Facebook finally responded publicly; and only when she involved a US government agency did the page disappear. The pressure of accountability like that against dishonest companies tells me Twitter will be around for a while yet.

   The trend this year, I believe, is the ongoing rise of challengers to these two brands. When the tipping-point against them occurs, I do not yet know. But now, I sense that it’s closer than ever.

This blog post is an adaptation of the editorial in issue 35 of Lucire.

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