Posts tagged ‘consumer behaviour’


The EU lands Google with another fine—but will Google change?

19.07.2018


Zain Ali

The EU gets it when it comes to fines. Rather than the paltry US$17 million certain US states’ attorneys-general stung Google with some years ago for hacking Iphones, they’ve now fined the search engine giant €4,340 million, on top of its earlier fine of €2,420 million over anticompetitive behaviour.
   That US$17 million, I mentioned at the time, amounted to a few hours’ income at Google.
   As the EU’s competition commissioner Margrethe Vestager noted on Twitter, ‘Fine of €4,34 bn to @Google for 3 types of illegal restrictions on the use of Android. In this way it has cemented the dominance of its search engine. Denying rivals a chance to innovate and compete on the merits. It’s illegal under EU antitrust rules. @Google now has to stop it’.
   Google forces manufacturers to preinstall Chrome if they want to install Google Play. The EU also notes that virtually all Android devices have Google Search preinstalled, and most users never download competing apps, furthering Google’s dominance of search. Google pays manufacturers and cellphone networks to preinstall the Google search app on their phones, and prevented manufacturers from installing Google apps if their versions of Android were not approved by Google.
   DuckDuckGo, my search engine of choice, welcomed the decision. It noted:

   This last Tweet is particularly damning about Google’s deceptive practices (or, as I call them, ‘business as usual’ for Google):

   That’s consumer confusion on top of restrictive contracts that promote market dominance and anti-competitive behaviour.
   This is a very petty company, one that shut down Vivaldi’s Adwords account after its CEO gave some interviews about privacy.
   Of course I’m biased, and I make no apology for it—and anyone who has followed my journey on this blog from being a Google fan to a Google-sceptic over the last decade and a half will know just how Google’s own misleading and deceptive conduct helped changed my mind.
   Google’s argument, that many Android manufacturers installed rival apps, clearly fell on deaf ears, and understandably so. While I’m sure Android experts can think up examples, as a regular person who occasionally looks at phones, even those ones with rival apps still ship with the Google ones. In other words, there’s simply more bloat. I’ve yet to see one in this country ship without a Chrome default and Google Play installed, often in such a way that you can’t delete it, and Google Services, without getting your phone rooted.
   I did read this in the Murdoch Press and thought it was a bit of a laugh, but then maybe my own experience isn’t typical:

The impact of any changes mandated by the EU decision on Google’s ability to target ads to users—and to its profitability—is an open question. The two apps targeted in the EU decision, Google’s search and its Chrome browser, are extremely popular in their own right. Consumers are likely to seek them out from an app store even if they weren’t preinstalled on the phone, said Tarun Pathak, an analyst at research firm Counterpoint.

   I just don’t believe they would, and I made it a point to get a phone that would, happily, have neither. By buying a Chinese Android phone, I escape Google’s tracking; by seeking out the Firefox browser, I get to surf the way I want. That choice is going to create competition, something that Google is worried about.
   The Wall Street Journal also states that despite the earlier fine, Google’s shopping rivals said little or nothing has actually happened.
   With all of Google’s misdeeds uncovered on this blog over the years, I’m really not surprised.
   The EU is, at the very least, forcing some to examine just how intrusive Google is. It might soon discover how uncooperative Google can be.

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Cambridge Analytica is merely Facebook’s ‘smaller, less ambitious sibling’

14.04.2018

Beyond all that had gone on with AIQ and Cambridge Analytica, a lot more has come out about Facebook’s practices, things that I always suspected they do, for why else would they collect data on you even after you opted out?
   Now, Sam Biddle at The Intercept has written a piece that demonstrates that whatever Cambridge Analytica did, Facebook itself does far, far more, and not just to 87 million people, but all of its users (that’s either 2,000 million if you believe Facebook’s figures, or around half that if you believe my theories), using its FBLearner Flow program.
   Biddle writes (link in original):

This isn’t Facebook showing you Chevy ads because you’ve been reading about Ford all week — old hat in the online marketing world — rather Facebook using facts of your life to predict that in the near future, you’re going to get sick of your car. Facebook’s name for this service: “loyalty prediction.”
   Spiritually, Facebook’s artificial intelligence advertising has a lot in common with political consultancy Cambridge Analytica’s controversial “psychographic” profiling of voters, which uses mundane consumer demographics (what you’re interested in, where you live) to predict political action. But unlike Cambridge Analytica and its peers, who must content themselves with whatever data they can extract from Facebook’s public interfaces, Facebook is sitting on the motherlode, with unfettered access to staggering databases of behavior and preferences. A 2016 ProPublica report found some 29,000 different criteria for each individual Facebook user …
   … Cambridge Analytica begins to resemble Facebook’s smaller, less ambitious sibling.

   As I’ve said many times, I’ve no problem with Facebook making money, or even using AI for that matter, as long as it does so honestly, and I would hope that people would take as a given that we expect that it does so ethically. If a user (like me) has opted out of ad preferences because I took the time many years ago to check my settings, and return to the page regularly to make sure Facebook hasn’t altered them (as it often does), then I expect them to be respected (my investigations show that they aren’t). Sure, show me ads to pay the bills, but not ones that are tied to preferences that you collect that I gave you no permission to collect. As far as I know, the ad networks we work with respect these rules if readers had opted out at aboutads.info and the EU equivalent.
   Regulating Facebook mightn’t be that bad an idea if there’s no punishment to these guys essentially breaking basic consumer laws (as I know them to be here) as well as the codes of conduct they sign up to with industry bodies in their country. As I said of Google in 2011: if the other 60-plus members of the Network Advertising Initiative can create cookies that respect the rules, why can’t Google? Here we are again, except the main player breaking the rules is Facebook, and the data they have on us is far more precise than some Google cookies.
   Coming back to Biddle’s story, he sums up the company as a ‘data wholesaler, period.’ The 29,000 criteria per user claim is very easy to believe for those of us who have popped into Facebook ad preferences and found thousands of items collected about us, even after opting out. We also know that the Facebook data download shows an entirely different set of preferences, which means either the ad preference page is lying or the download is lying. In either case, those preferences are being used, manipulated and sold.
   Transparency can help Facebook through this crisis, yet all we saw from CEO Mark Zuckerberg was more obfuscation and feigned ignorance at the Senate and Congress. This exchange last week between Rep. Anna Eshoo of Palo Alto and Zuckerberg was a good example:

   Eshoo: It was. Are you willing to change your business model in the interest of protecting individual privacy?
   Zuckerberg: Congresswoman, we have made and are continuing to make changes to reduce the amount of data …
   Eshoo: No, are you willing to change your business model in the interest of protecting individual privacy?
   Zuckerberg: Congresswoman, I’m not sure what that means.

   In other words, they want to preserve their business model and keep things exactly as they are, even if they are probably in violation of a 2011 US FTC decree.
   The BBC World Service News had carried the hearings but, as far as I know, little made it on to the nightly TV here.
   This is either down to the natural news cycle: when Christopher Wylie blew the whistle on Cambridge Analytica in The Observer, it was major news, and subsequent follow-ups haven’t piqued the news editors’ interest in the same way. Or, the media were only outraged as it connected to Trump and Brexit, and now that we know it’s exponentially more widespread, it doesn’t matter as much.
   There’s still hope that the social network can be a force for good, if Zuckerberg and co. are actually sincere about it. If Facebook has this technology, why employ it for evil? That may sound a naïve question, but if you genuinely were there to better humankind (and not rate your female Harvard classmates on their looks) and you were sitting on a motherlode of user data, wouldn’t you ensure that the platform were used to create greater harmony between people rather than sow discord and spur murder? Wouldn’t you refrain from bragging that you have the ability to influence elections? The fact that Facebook doesn’t, and continues to see us as units to be milked in the matrix, should worry us a great deal more than an 87 million-user data breach.

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Posted in business, internet, marketing, media, politics, technology, UK, USA | No Comments »


How my Dad called the primary and the election for Donald Trump ages ago

11.11.2016


FJM88NL, licensed under Creative Commons

I’ve had a phone call and a lot of comments on this in the last couple of days: my Dad, who is 81 with early-stage Alzheimer’s, called the US presidential election for Donald Trump months ago. I posted it on my social networks the day he made his definitive call, and friends remembered it. Thank you for all your compliments.
   Go back to 2015, he had called the Republican primary for Trump.
   I wasn’t as confident but I had Tweeted the week before the election that polls were understating Trump’s actual support by at least 6 per cent.
   In 2008, when everyone had dismissed Gov. Sarah Palin, he said that she wasn’t going to go away, and that she’d command an even greater influence in the first Obama term. While he predicted an Obama win, again quite early on, he wasn’t optimistic and didn’t think there would be great change in the US. You may or may not agree with that.
   Going right back to the 1980s, when I was at college, and before China showed any signs of opening up, he made the call about its economic rise, and that I would be assured, by the time I was in my 30s and 40s, that many would want to deal with the country. It would be, I remember him telling me, a career advantage to being Chinese—in contrast to the racism we encountered far more frequently back then.
   During the height of the Muldoon era, Dad, who counted himself as part of Rob’s Mob, made the call that Sir Robert Muldoon would not be able to hold on to his power or reputation in his old age. When a documentary aired condemning Sir Robert after his death, so that he wouldn’t be around to file a defamation suit, he said, ‘I told you so.’
   Even in the elections I contested (and he encouraged me to run), while he refused to be drawn on what he thought my chances were, he was unequivocally clear that my rival, John Morrison, wouldn’t win, in 2013. Dad certainly did better than some so-called political experts I can name.
   And if you want to get really spooky, during the Martin Bashir interview of Princess Diana, he said that by the time she was 37, she’d have a ‘really bad year’. He didn’t say she’d die.
   No, he’s not a Mystic Meg of any sort. He’s a guy who’s been around for a while and kept his eyes open.
   If you want to know his secret, I can tell you that his political projections are based in part around reading. Not mainstream media, but websites that he’s discovered over the years himself. He’s a keen web surfer and loves his news. He doesn’t put that much stock in political “experts”, and after having run myself, I can fully understand why.
   He’d even take in the viewpoints on Russia Today, which gives you an idea of how varied his reading was. Just today I caught him watching an address from Edward Snowden.
   With Palin, it was probably the sudden rise of her fan sites set up by US conservatives. He hadn’t seen such a rapid rise of sites that soon galvanized their support around the former Alaskan governor before. While mainstream media dismissed her and gave the impression that post-2008, she wouldn’t matter, Dad had entirely the opposite reading. Politically centrist, and, like me, a swing voter, he kept following the sites out of interest, and saw how they morphed into the Tea Party movement. He also knew they wouldn’t go away any time soon, and observed that there was a Palin effect, as the likes of Ted Cruz soon found out when contesting their Senate seats.
   And, despite my own criticisms of this practice, Dad would read the comments. Sometimes he would wade through hundreds of them, to get a sense of what people were thinking.
   It was his reading of media from left and right during the latest US presidential election that saw him made his calls very assertively.
   Rather than dismiss certain conservatives as ill-educated, as some media might, Dad treated them as human beings. He knew they would galvanize and get behind Trump.
   When you’ve lived through a world war (including an occupation) and then a civil war, and saw your family start from the bottom again after 1949, you get to be good at knowing what people go through.
   He’s always been politically switched on, and had a keen interest in history and economics, the latter of which he studied at a tertiary level. But he’d always explain to me that it came down to people and their behaviour, and never rational decision-making. I might have only lived just over half his lifetime so far, but I find little fault in that statement. All new movements have plenty of power, till they become the establishment.
   His thoughts on China in the 1980s could well have stemmed from that: I never asked him, and aphasia means he’d now find difficulty telling me anyway.
   Sadly for the US, he finds appeal in the theory that the nation will break up, though he hasn’t quite yet made the call in the same way he made the one for the Trump presidency. But as with his Trump prediction, I’m publishing this one online.
   He’s never stated it as succinctly but he has, in passing in the 1980s and 1990s, said that the British Empire wouldn’t last much longer beyond our current monarch’s reign.
   You never know, we might be coming back to this post in a few years’ time. These are gloomy scenarios but I’d rather put Dad’s ideas out there now, as I did with the Trump presidency, rather than tell you ex post facto how clever he was. The lesson: treat people as people, and it’s amazing how much that will reveal.

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Posted in China, culture, media, New Zealand, politics, UK, USA | No Comments »


There can be only one, unless you forget to register your design: the Range Rover Evoque and the copycat Landwind X7

21.04.2015


The stunning original: the Range Rover Evoque.

There has been a lot of ongoing press about Landwind’s copy of the Range Rover Evoque (a road test of the Evoque comes next week in Lucire, incidentally), one of my favourite Sloane Ranger SUVs. There’s no way Landwind would have come up with the design independently, and, if put before most occidental courts, there would be a finding in favour of the Indian firm.
   People are right to be upset, even in China, which has plenty of firms these days that spend millions on developing a new car and hiring the right talent. The days of SEAT Ibiza and Daihatsu Charade rip-offs are not completely gone, but if you read the Chinese motoring press, the journalists there are as condemning of copies as their colleagues everywhere else.
   The impression one gets in the west is that this is par for the course in China in 2015, even though it isn’t. While there have been firms that have gone from legitimate licensing to copying (I’m looking at you, Zotye and Yema), the reverse has tended to be the case in the Middle Kingdom.
   The latest article on the Landwind X7 appears in Haymarket’s Autocar, a magazine I’ve taken since 1980. I even think Autocar is being overly cautious by putting copy in quotation marks in its headline. It’s a copy, and that’s that.
   Landwind has maintained that it’s had no complaints from Jaguar Land Rover, while JLR CEO Ralf Speth says he will complain. Considering it’s been five years since the Evoque was launched, and news of the copy, and Landwind’s patent grant from 2014, has been around for a while, then saying you will complain in 2015 seems a little late.
   In fact, it’s very late. What surprises me is that this is something already known in China. I’m not the most literate when it comes to reading my first language, but as I understand it, a firm that shows a product in China at a government-sponsored show, if it wishes to maintain its “novelty” and prevent this sort of piracy from taking place, must register it within six months, under article 24 of China’s patent law:

Within six months before the date of application, an invention for which an application is filed for a patent does not lose its novelty under any of the following circumstances:
(1) It is exhibited for the first time at an international exhibition sponsored or recognized by the Chinese Government;
(2) It is published for the first time at a specified academic or technological conference; and
(3) Its contents are divulged by others without the consent of the applicant.

   The Evoque was shown at Guangzhou at a state-sanctioned motor show in December 2010, which meant that Jaguar Land Rover had until June 2011, at the outside, to file this registration. JLR reportedly missed the deadline [edit: with the patent office receiving the application on November 24, 2011].
   The consequence of missing the period is that an original design becomes an “existing design”. While it’s not entirely the end of the road for Jaguar Land Rover in terms of legal remedies, it is one of the quirks of Chinese intellectual property law, which, sadly, is not as geared to protecting authors as it is in the west.
   The approach one would have in, say, a common law jurisdiction, to prove objective similarity in the cases of copyright (and, as I understand it, a similar approach under patent), does not apply there. (Incidentally, this approach is one reason BMW could not have won against Shuanghuan for its CEO, which is usually mentioned by Top Gear watchers as an X5 copy. Look more closely and the front is far closer to a Toyota Land Cruiser Prado’s, and there’s neither a kidney grille nor a Hofmeister-Knick. It’s a mess, but Shuanghuan could easily argue that it picks up on period SUV trends, like the triangular sixth light found on an Opel Astra is part of a 2000s æsthetic for hatchbacks.)
   If you go back to November 2014, the South China Morning Post reported on this matter, again quoting Dr Speth in Autocar.
   He’s found it ‘disappointing’ for a while, it seems, but back in 2014 there was no mention of going after Landwind. An A. T. Kearney expert backs him up, saying, ‘… copying by Chinese original equipment manufacturers is still possible and accepted in China.’ It’s increasingly unacceptable, but, there are loopholes.
   I’m not arguing that this is right, nor do I condone the X7, but you do wonder why JLR hasn’t taken action. The above may be why JLR has stayed silent on the whole affair.
   This is why I read nothing on any action being taken by JLR when the Landwind was first shown, when a patent was granted (a year ago this month), or when the X7 was last displayed at a Chinese motor show.
   The SCMP piece is a much fairer article, noting that Chinese car makers have become more sophisticated and invested in original designs. It also notes that consumers are divided: while some would love to have the copy, another felt ‘ashamed about Landwind,’ points usually ignored in the occidental media.
   Land Rover has traditionally been swift in taking on copycats, and it had fought Landwind’s EU trade mark registration in 2006. This firm is known to them.
   Landwind, meanwhile, has a connection to previous Land Rover owner Ford, through Jiangling, which has a substantial Ford shareholding. Could some pressure be brought through Ford?
   For now, Jaguar Land Rover’s trouble with its patent registration has yet to make it into the western media. It’s doubtful that state media have ganged up on Jaguar Land Rover, considering it has a partnership with Chery, and invested in a new plant in Changshu. It really needs to be asking its lawyers some serious questions.

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Posted in business, cars, China, design, general, India, media, UK | 2 Comments »


The fall of Facebook advertising and the rise of something else

14.07.2012

I remember when Michael Wolff was very bullish about the internet in the 1990s, so when he starts sounding warning bells, we had better take heed.
   The way Michael paints Facebook—and a belief that its advertising model will eventually collapse for being so limited—is not unfamiliar to anyone who ever wondered, during the dot-com boom, just why those companies were worth that much.
   If AltaVista, the world’s biggest website, could fall once someone (Google) figured out a better search model, then Facebook, with what Michael thinks is an ill-defined purpose, could suffer a similar fate.
   Doc Searls picked out this bit from Michael’s article:

At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media. Facebook, with its 900 million users, valuation of around $100 billion, and the bulk of its business in traditional display advertising, is now at the heart of the heart of the fallacy.
   The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people’s behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising’s impact.

Consequently, Facebook will face ever-decreasing advertising prices as it plateaus, and it will need to either reinvent itself or define itself more properly; or, possibly, even define itself more narrowly.
   Doc makes some further points in his piece, saying that advertising that is so personal might actually be unwanted. And he’s right.
   It all points to how brands need to engage, and that the shape of advertising, just as with branding, has changed markedly in the last 30 years. Whereas brands were top–down, they are now informed more by audiences, and strategies adjusted to match. Advertising is the same: personalization can’t work because it’s still a top–down process that disengages audiences. Facebookers have already taken exception to their own faces being used on advertisements within the social network, so personalization based on friends’ uptakes of a brand isn’t welcome by all, either, for the same reason: there was no engagement. An inhuman algorithm drove that, and one that didn’t necessarily have the consent of the parties involved. And even if advertising were still top–down, for people who advertise using the service, how many truly know what their target audiences are, to that professional degree?
   Based on this, Facebook’s contribution to advertising is providing the platform for engagement, and letting advertisers discover who their target audiences are, to set the stage for greater understanding. It’s letting go of the idea of the hard sell, one that doesn’t really build brand equity anyway. Fan pages have been helpful, based on the ones I have run, but Facebook erred earlier this year by putting member comments into a box, whereas they should have equal prominence with official company updates. Minimizing the audience’s importance in favour of top–down pronouncements goes against the way branding and marketing have developed, and the way advertising is evolving.
   If Facebook sees itself as a means of creating top–down marketing because of its sheer scale, then it is a step behind the game—and it’s a means to nowhere.

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Posted in branding, business, internet, marketing, technology, USA | 2 Comments »


Cringely gives Facebook till 2014 to peak—and he may be right

22.07.2011

Bob Cringely wrote (found via Stowe Boyd):

Facebook is a huge success. You can’t argue with 750 million users and growing. And I don’t see Google+ making a big dent in that. What I see instead is more properly the fading of the entire social media category, the victim of an ever-shortening event horizon.
   Each era of computing seems to run for about a decade of total dominance by a given platform. Mainframes (1960–1970), minicomputers (1970–1980), character-based PCs (1980–1990), graphical PCs (1990–2000), notebooks (2000–2010), smart phones and tablets (2010–2020?). We could look at this in different ways like how these devices are connected but I don’t think it would make a huge difference.
   Now look at the dominant players in each succession—IBM (1960–1985), DEC (1965–1980), Microsoft (1987–2003), Google (2000–2010), Facebook (2007–?). That’s 25 years, 15 years, 15 years, 10 years, and how long will Facebook reign supreme? Not 15 years and I don’t think even 10. I give Facebook seven years or until 2014 to peak.

   I’ve said it for a while based on the opaque corporate culture at the company and its apparent disregard for privacy (the opposite to what it was like in 2006). Arrogant cultures like that don’t last long. I’ve similarly said nothing is forever, with Altavista as my example.
   It’s likely that the social phenomenon passes, not because it is invalid, but because most occidentals will have found their tribe of 150 and interact with it. Or, an economic change or a collaboration tool brings people into connection with others that sees their daily routines change.
   Facebook is a social tool, one which surfaced as a recession loomed, and grew as people desperately tried to define their networks or retreated from hardships. Once either task is done, then it loses its appeal. It loses further appeal—hence the embrace of Google Plus by the Google Kool-Aid drinkers—when networks get to a certain size and undesirable elements kick in, either people you don’t like (or have come to dislike through contact) or the need for too much maintenance. (See email’s loss of utility through spam, Wikipedia’s loss of accuracy through power-hungry editors and incompetent additions, or Google Blog Search’s loss of decent results through splogs and its own Adsense programme.)
   Facebook’s culture will likely give it seven years as it will deem itself invincible and fail to adopt to shifting consumer needs.

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Posted in business, culture, internet, leadership, technology, USA | 2 Comments »


Saab to get €245 million if Pang Da and Youngman deal approved

04.07.2011

Today, from Saab:

Swedish Automobile N.V. (SWAN) and Saab Automobile AB (Saab Automobile) today announced the signing of final agreements with Pang Da Automobile Trade Co., Ltd. (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman), thereby converting the non-binding memorandum of understanding relating to the equity investment of Pang Da and Youngman …

The amount of the investment is €245 million, which amounts to this, according to Saab (some proofreading changes by me):

The agreements allow for the return of Mr Vladimir Antonov as a shareholder–financier of SWAN and Saab Automobile which the parties expect as soon as the parties at interest have cleared him. The NPJV will be 50 per cent owned by Saab Automobile and 50 per cent by Youngman Passenger Car, and forms the foundation for an expansion of the Saab product portfolio with three models which, until now, did not form part of Saab Automobile’s current and future product portfolio. As such the NPJV will focus on developing three completely new Saab vehicles: the Saab 9-1, Saab 9-6X and Saab 9-7.

   No doubt there will be existing technology in the three cars, and they should go down terrifically in China. And if it all goes well, this means that Saab won’t follow MG Rover down the gurgler, despite having been unable to pay wages a few weeks ago.
   But €245 million isn’t that much in today’s world, especially since Saab can’t be breaking even at its present capacity.
   I don’t want to see Saab disappear. It may have been the choice of TV villains (Leslie Grantham in both The Paradise Club and 99–1 comes to mind) as well as one or two real-life ones I can think of, but it’s a storied brand and it’s made good cars over the years. And a mate of mine has a 900, too.
   Sweden hasn’t spent all these years bagging the brand, either—it was effectively stripped of its Saab-ness while under General Motors.
   Let’s hope the company can get things right with the Chinese equity stake, which hopefully will provide more confidence. It’ll open up distribution in China, providing the government agencies agree, where a foreign brand like Saab would go down immensely well, and just at the right time. Good timing was not something that MG Rover was blessed with, regardless of the actions of the Phoenix Four.
   The discerning Chinese buyer is emerging on the mainland, and they don’t necessarily want the flash of the Mercedes-Benz. A more subtle brand might work there, and Saab actually fits the bill.
   The 9-7, I assume, is a large car, and Youngman’s Pang Qingnian hints that not only will China get this model, but the US as well.
   Good luck to the parties on this one—here’s hoping the worst is over.

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Posted in branding, business, cars, China, culture, design, marketing, Sweden | No Comments »


Chloé chief sees China moving to more understated luxury—or is it?

28.02.2011

Geoffroy de la Bourdonnaye of Chloé believes the mainland Chinese market is moving toward more understated luxury.
   I believe there’ll always be a mixture. The understated buyer is emerging probably because of saturation by more extrovert brands—and often, buyers want to get something different, rather than conform.
   And the top-end luxury brands have probably been devalued in any case.
   With the affluent Chinese already buying, say, cars with a grille, it wasn’t a surprise to find some brands ape that æsthetic. Who hasn’t been copied? There are downmarket cars from Chinese manufacturers with Mercedes-style grilles from a variety of manufacturers, for example.
   Don’t laugh too loudly in the west: it wasn’t that long ago that the 1975 US-market Ford Granada looked like a Mercedes pastiche. Even Ford’s own advertising sold it as a Mercedes rival. Hindsight tells us it was not.
   I say it’s sometimes differentiation, or the consumer desire for it, that drives trends—so what de la Bourdonnaye observes is one such trend in motion in China.
   The consumer knows that just because something has a luxury æsthetic doesn’t make it well built—which is why we’re seeing improvements in quality in Chinese products. It also explains the relatively restrained looks of Chery’s Riich car range: it’s meant to be premium, but it hasn’t gone too far overboard. (The G5 may be derivative, but it’s also not outlandish.)
   While the theory of market homogeneity has had plenty of critiques over the years, there is some truth in saying that the Chinese market is reflecting others as the practice of branding matures. It’s not as though the Chinese consumer is behind—even while the Bamboo Curtain was a few layers thicker, people within the mainland’s borders were able to discern one brand from another—but the world market is globalizing even further with China’s input.
   Chinese tastes will drive more of the global consumer market. We’re already seeing it with the US—the Buick LaCrosse is a joint US–Chinese design–and it’s bound to influence other sectors.
   A number of forces are at work, and Chloé seems to be a beneficiary. But it needs to be aware that it’s not just this shift to understatement—and, like all brands, it will have to continue moving with the times.

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Posted in branding, business, cars, China, design, France, marketing, USA | No Comments »


How will Chevrolet go down in Korea?

25.01.2011

Last week, GM announced it would drop the Daewoo marque, as it has done through Europe, in its native Korea, in favour of Chevrolet.
   The company will also be renamed GM Korea, a name it once had nearly four decades ago.
   While most will think this makes sense, so GM can concentrate on unifying its Chevrolet brand globally, I have to play devil’s advocate.
   We know that GM opted to use Buick as its first brand in China in the Communist era because it had generated a lot of goodwill prewar. And it worked: Chinese people, somehow, knew that Buick was a quality brand, even though there were very few cars in China in the 1930s. In the 1990s, 60 years on, Buick sold pretty much everything it made through its joint ventures in China.
   This might be due to Chinese people valuing history and a sense of brand loyalty in an era where foreign brands were still fairly new in the People’s Republic.
   What about Korea? Of course, South Korea is no stranger to brands and consumerism, but where does Chevrolet fit? Is it as well placed as Daewoo, which has seen years of financial disgrace as a car company?
   If we took the Chinese experience, then we might look at the last car GM sold as a Chevy in the Korean market:

Image:Chevrolet_1700_Wagon.jpgChevrolet 1700. 1972–8 (prod. 8,105). 4-door sedan, 5-door wagon. F/R, 1698 cm³ (4 cyl. CIH). Holden Torana (LJ), made by Saehan of Korea. Essentially a facsimile of the Australian original, but for an unusual station wagon model that looked more like an Opel at the back. Robust, but a failure on the Korean market, thanks to a perception that it was thirsty (the oil crisis did not help; Korean engines were generally smaller at this point). In theory replaced by facelifted Camina in 1976, though it ran alongside it.

   Not exactly a success. The supposed successor, the Camina, sold even fewer, despite having a smaller engine.
   If Koreans had the same conditions as the Chinese, then this one model sold as a Chevrolet in Korea will instil negative brand associations in the Korean market.
   Daewoo hasn’t exactly had the history of Buick. It emerged as a car marque only in the 1980s, taking over from Saehan, so it may well be disposable. It’s also not like Datsun of Japan, which had plenty of years established worldwide. Nor is it like other storied GM brands such as Vauxhall and Holden, which are restricted to one country or one region.
   Koreans have also seen major brands such as Goldstar, or Lucky–Goldstar, become the much simpler LG. Walk around Seoul and you see plenty of KFCs and Pizza Huts.
   But there’s still a part of me that says a nation that has very few expatriates might just prefer their locally made cars to have local brands.
   Koreans have a perception that foreign brands invite the tax authorities to investigate you, which is why so few people buy non-Korean cars there. So how will Korean-made and Korean-developed, but foreign-badged, cars go down there?
   It hasn’t been done with rival brands Hyundai, Kia, Ssangyong or Samsung, the latter two having foreign owners.
   GM will have to be careful how Chevrolet is marketed, to ensure that it’s perceived, at least in Korea, as a Korean brand that just happens to have an American home and a French pronunciation. Because if there’s one thing branding can do, it’s to make people overlook the actual country of origin in favour of the perceived one. This is why Japanese giants such as Suntory sell fruit juices in New Zealand as Just Juice, Fresh-Up or Bay Harvest—brands with histories in New Zealand—and we do not see Bill Murray on our airwaves getting lost in translation in a commercial.
   Sure, Daewoo has been owned by GM for years, so every car buff in Korea knows that the name change means nothing. Some of the range—the Alpheon and the Veritas, for instance—hail from China and Australia. But the everyday person in the street might be a bit more comfortable buying a Daewoo Alpheon than a Chevrolet Alpheon—because no one really wants the revenuers sending a letter saying they’re going to be audited.

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Opel is not a snob brand

19.01.2011
George Cole as Arthur Daley
Arthur Daley, Opel’s last New Zealand spokesman: ‘Never mind the Capri, Tel: I sell Opels now.’

In the Fairfax Press, General Motors has apparently confirmed it will bring in Opel-branded cars to sell alongside Holden-branded ones.
   It’s an obvious move. For years, a good part of Holden’s range was Opel-designed. Like Vauxhall, the model name was the same as the Opels on the Continent, but with Holden in front, with the exception of the Opel Corsa (called Holden Barina).
   In fact, New Zealand fielded the Holden Vectra before Australia introduced this model with the B series. The two markets have often differed—those old enough might remember the Holden-badged version of the Isuzu Aska, assembled locally as the Camira in favour of the Australian model.
   Australia, which I believe still has tariffs on motor cars, found the Opel-made product increasingly expensive, especially against Hyundai, which has carved huge inroads into the market.
   In the mid-2000s, the Opels began disappearing in favour of Daewoos. The Opel Corsa C gave way to the inferior Daewoo Kalos. The Opel Vectra C, never facelifted, gave way to the Daewoo Tosca. The Daewoo Lacetti was inserted below the Opel Astra G and H, though the latest Lacetti Première, badged Holden Cruze, has supplanted both the former Lacetti and the Astra.
   In other words, Holden’s product was outclassed at every level by its principal rival Ford—certainly on this side of the Tasman, where CD-segment vehicles sell particularly well. Maybe Holden had Ford licked on price, but in terms of brand equity, it was falling fast. Perceived quality? Forget it. Brand loyalty? Don’t think it’s going to happen. There is very little that’s desirable about a Daewoo, though I admit to appreciating the Winstorm SUV’s styling. The car as a commodity? That’ll be the Daewoo.
   The Astra still has a lot of fans in Australia, so the plan is to bring in that model at least—and as affordable, European cars, positioning roughly where Volkswagen is. Corsa, Insignia and others will come in as well, with both a new dealer network and some Holden dealers.
   The analysts have found that in Europe, Chevrolet (Eurospeak for Daewoo) has not cannibalized Opel sales. No surprises there. Take me: an Opel customer. I wrote to Holden some years ago, when they threatened to bring in the Daewoo Tosca, that there was no way in heck I would get one of their cars. I’m willing to bet that I wasn’t alone in feeling that way, and the fact the Tosca looks like a Seoul taxicab helps my argument.
   Why not, I said, bring in Opels and pursue a unique model strategy, as GMNZ did in the 1980s and 1990s?
   The question now is price. Opels were sold here in the 1980s at a premium and found few customers. It was only with the 1989 introduction of the Vectra A, at a reasonable price, that GM began clawing back market share in that segment. New Zealanders didn’t seem to mind whether the car was branded Opel or Holden, but when it did become a Holden in 1994, it made marketing a great deal easier.
   Fairfax hints that Opels will carry a premium in Australia. But it rightly points out that Ford has European-sourced models that are competitive. However, I can make one thing very clear for New Zealand: if GM decides to reintroduce Opel into this market, where there are no tariffs on cars, it’ll have to be positioned against a lot of the competition from Ford. I have a feeling most Kiwis know they are buying German engineering when they head to the blue oval, with the exception of the Falcon, and Ford’s marketing has said as much.
   We’ve had a different history from the Australians, and the brand has different connotations. It’s certainly not premium, and there’s very little reason for it to be. Ford might have had Dennis Waterman as Terry McCann singing the Minder “feem toon” do a dealer ad here in New Zealand, but, remember, GM had George Cole, as Arthur Daley, sell the Opel.
   George Cole is not premium.
   Mainstream European brands have failed time and again with premium pricing here. Peugeot lost sales when it began having ideas above its station. Renault has consistently got its pricing wrong and missed plenty of opportunities.
   I have a feeling some of this is due to New Zealanders being world travellers. In a small country, we have to look outward. And that brings us exposure to international brands very readily.
   We’ve also had plenty of used Japanese imports—including ex-Japan Opel Astra Gs.
   It may account for why we don’t fall for the fake snobbery that automakers have tried to slap us with for many years. We seem to adopt best practice on so many things because I believe we’re an accepting people.
   Transparency will be the order of the day. GM can’t afford to have Kiwis reject a brand for having ideas above its station should it go ahead with a similar effort over here. It has to balance (our relatively small) volume carefully with cannibalization. It has to consider whether it would like to have Holden’s brand equity continue to dip.
   Mind you, we could have avoided all this if in 1992 GM did what I suggested then: badge the whole lot as Opel.* It would have ruined the blokeyness of the Holden brand, but it would have had products that appealed to buyers of B-, C- and CD-segment cars. In 1992, a big Opel Commodore, VP series, wouldn’t have been too bad, would it? And we’d have hopefully avoided this Daewoo experiment that has made ‘Australia’s own’ synonymous with ‘Made in Korea’.

* I know, with hindsight, this would have been a rotten idea, especially with New Zealanders embracing the VT Commodore in 1997. It’s hard to imagine that model having greater success here with a non-Holden badge.—JY

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