Wal-Mart was forced to close some of its stores in China when they were accused of selling mislabeled pork. Wal-Mart started labeling their pork products as ‘Organic’ in a quest to increase profit. As studies reveal the side-effects of unhealthy modified foods, companies take desperate measures to promote sales, as seen in this case.

The pork which they were selling contained an addictive called ‘Clenbuterol’ which was the cause of sickness of many people in China. This drug helps produce leaner meat but is dangerous for people with heart problems. Official reports reveal that a total of 63,547 kilograms of pork was involved over a span of two years. This led to a closure of 13 Wal-Mart stores in China.

This case highlights the importance of following ethical methods of production. False advertising may lead to profits in the short run but in the long run, it damages the image of the company. A brand must therefore be careful while indulging in any such activities. A company, in order to survive in the competitive market, must adapt themselves to the environment of the country they are operating in. Respecting sentiments of the public and laws of the government are pre-requisites for survival for even the most reputed companies; Wal-Mart in this case.

Source : BBC NEWS

Coca-Cola Canada is going white this November, changing its can’s color from red to white to draw attention to the plight of polar bears. Coca-Cola Ltd has joined hands with World Wildlife Federation (WWF) to promote the Artic Home campaign. Coca-Cola is committed to providing $2 million to the WWF in the next 5 years and has also assured to match the donations made by the consumers.‘We first used polar bears in their print advertisement in France back in 1922 and hence, they are an integral part’ said Nicola Kettlitz, president of Coca-Cola Ltd.

Is it just the dedication of the company to the environment or a marketing move? Well, it’s a mix of both. As correctly pointed out by Katrina Ma, companies that wish to maintain a competitive edge often use cleverly designed environmental strategies to innovate and promote the product. This strategy creates a sense of psychological benefit among the people as they feel happy keeping the limited edition white cans and at the same time, they believe they are contributing to the cause as a percentage of the money they pay is donated. This enables Coca-Cola to have a competitive advantage as people will prefer their product over their competitor’s.

Source : FINANCIAL POST

On July 28, 2009, after an eight year long struggle, Wal-Mart announced it would sell its stores to a local German retailer, finally abandoning their hopes to win over the German customers. Two months after selling stores in South Korea, Wal-Mart ended up selling 85 stores to the Metro Group and incurred a loss of $1 billion.

‘They entered Germany when the whole market was deviating from its existing model’ said James Bacos, the director of consumer goods practice at Mercer Management Consulting. Analysts estimate that Wal-Mart continuously lost money for most of the eight years it operated. However, despite these impediments, Wal-Mart had a 29 per cent increase in international net sales over June 2005.

The German market is driven by persistent price competition, cultural resistance of German shoppers to supermarkets and discount stores that have established a name for themselves in the market. As correctly pointed out by Aanshu Kapoor, Wal-Mart could not compete with the prices of local retails that offered good quality goods at below-average prices. In order to be successful, a business organization must keep a close check on its business environment, which is always changing. Ignoring the trend in the market or failing to adapt to them will create difficulties and often leads to a forced closure of the firm (as we saw in this case).

Source : NY TIMES

A consumer is said to be the ‘king’ of free market. The earlier principle of CAVEAT EMPTOR, which meant ‘let the buyer beware’ has now changed to CAVEAT VENDITOR, which means ‘let the seller beware’. This transformation was made possible due to initiatives taken by many business firms who realized the importance of consumer protection.

The need for consumer protection arises due to the following reasons:-

• Ignorance on part of the costumers, and
• Exploitation and unfair practices on part of the sellers.

The business must protect the interests and satisfy the need of their customers. Many enterprises have now realized that it is in their long term interest to satisfy their customers as satisfied customers not only help in repeat sales, but also provide good feedback to other potential customers. Businesses also have a social obligation towards various ethnic groups as they use resources which belong to the society.

Thus, it is the moral duty of every enterprise to protect the interests of their customers. They must stop unfair trade practices such as under-weighing and under-measurement. They must discontinue the sale of unsafe and hazardous goods that can cause damage to health and property of a person. Hence, a business must avoid unscrupulous and exploitative trade practices and protects consumers from any sort of exploitation.

Google Inc., the world’s largest Internet search company, purchased Motorola Mobility Holdings Inc. for a whopping $12.5 billion earlier this year. Experts say as the search giant enters the handset business by acquiring Motorola, Microsoft will have a lot to gain from it.

Google and Apple have taken over majority of the smart phone market. Google acted as a catalyst to boost Android’s rise by providing the software free to almost 40 hardware makers. However, the strategy to expand business could have negative effects on Google’s business relations with its Android using partners.  Many handset makers are insecure about Google’s future plans. “Google is no longer just a partner; they’re also a competitor because they’ve entered the smart-phone handset business,” says Neil Mawston, the director of London-based Strategy Analytics’ global wireless practice. They fear that Google might be biased towards Motorola and could abandon them in the future.

This has also raised speculations about other potential take overs. Since RIM is busy dealing with its own internal issues, analysts see Microsoft as a potential buyer. Since the deal was finalized, Google has gone down almost 2 per cent. The deal makes Windows phones an attractive platform, and hence, Google would have to face many challenges to remain competitive.

Source : SEARCH PROQUEST

One of the most important decisions that a marketer has to take in area of ‘Product’ is in respect of branding. Branding refers to the act of assigning a name, term, sign, symbol to the product.  Branding is creating a corporate brand entity for consumers and making sure it gets imprinted in the minds of the consumers.

The importance of branding cannot be underestimated. Branding helps in differentiating the company’s product from that of their competitor’s. Branding helps facilitates advertising. Without branding, the company would only be spreading awareness about the generic name. It also helps in easy introduction of a new product that the company wished to add to its product line. This is the reason why many companies with strong brand names decide to launch a new product under the same brand name. From the consumer’s point of view, branding helps them to identify the product. It ensures a particular level of quality, builds up confidence among customers and increases level of customer satisfaction.

It is important to realize branding can either prove to be advantageous or have a negative impact. A negative impact can distort consumer’s confidence and hence decisions related to branding must be taken with utmost care, keeping your company’s image in mind.

As noted by Katrina Ma, the new iPhone may have disappointed a few, if not many, of its prospect buyers. While fans were expecting iPhone 5, a redesigned version of the phone- faster and slimmer- they only got iPhone 4S, very similar to the old model with a few extra features. Although iPhone is still the most popular and innovative product, and Apple also has the market leadership in tablets (almost 70%), this gadget is viewed by many as the worst product manufactured since the launch of the company.

Following the death of Mr. Steve Jobs, former C.E.O of Apple, the market price of share has also gone down. What went wrong? You often see a company’s new product enjoying the goodwill of the old product. This, however, is not true in all cases. Despite the fact that Apple is placed fairly well in the minds of most people, CONSUMER REPORTS still won’t recommend iPhone 4S to customers. Any company must add to the value of the product, so that the customers prefer it in comparison to that of their competitors. The consumers make purchasing decisions based on features, price, etc. of the product and it is the job of the marketer to provide them with the same.

Source : The Global Mail

Mark Foote, the CEO of Canada’s second largest mass merchandise discount stores, ZELLERS, announced the introduction of food items to its existing product line. This move was initiated to compete with Wal-Mart Canada Corporation and Lablow Cos. Ltd. who have bulked up upon groceries to attract customers.

Mr Foote, former executive at Loblaw, began his venture by highlighting the household needs of the people and cheap-chic fashion for money-conscious consumers and has now chosen a field he expertizes in. “Due to the increasingly crowded grocery market that Zellers faces, the beginning results have been encouraging and the customer traffic has been stronger than expected”, said Mr. Foote.

Although food is a retail magnet, it still involves high investment and considerable amount of risk. Due to its perishable nature, an efficient network of transportation and warehousing is required to ship food. Adding to that, it faces competition from retail giant Wal-Mart who already have a well-established image for good quality food. In order to remain competitive, Zellers must match the prices of their rivals and at the same time ensure that the benefits justify the costs. Apart from the cost of establishment, expenses are incurred on hiring technical and support staff to manage the business, which must also be taken into consideration.

Source : THE GLOBAL MAIL

Have a job in marketing that makes you travel a lot? Well, be prepared to pay extra for each piece of checked baggage. Air Canada has introduced a new first-bag fee of $25 making it a displeasing affliction for people traveling to USA. Bruce Cran, President of the Consumer’s Association of Canada labeled this move as a ‘money grabbing’ strategy and believes that all major airlines should work in favor of the people instead of coming up with schemes to latch onto the last penny left in their pockets. The $25 fee for people traveling to the US comes in addition to the $35 dollar second bag levy the company has been charging since 2008.

In defense, Air Canada spokesperson Peter Fitzpatrick said “this new policy of adjusting fares will help us remain competitive in terms of revenue in the market”. Fitz also stated that the industry is facing enormous cost pressures and this scheme will help the company to attain financial sustainability.

Other major air carriers in Canada are currently charging $20 for checking-in a second bag but have no intentions of introducing a first-bag fee for the fear of losing their share in the market.

Source : OTTAWA CITIZEN

The Satyam Computer Services scandal was publicly announced on 7 January, 2009. The chairman of the leading Indian outsourcing company SCS, Mr. Ramalinga Raju confessed that he systematically falsified company’s financial accounts. The company served some of the largest banks and media companies including Nestle, General Motors, General Electric, etc.

Mr. Raju was compelled to resign after he admitted the allegations as the company grew from an insignificant number of employees to a back office giant with over 55,000 workers with operations in around 60 countries. According to the allegations, $1.04 billion out of the total fraud money (1.40 billion) in cash and bank loans listed as assets, turned out to be non-existent.

In his LETTER to the board, Raju described a small discrepancy that grew out of his control. He claimed ‘What started as a marginal gap between the actual profit and the one in the books, continues to grow over the years’

The Satyam Scam has been an eye opener for most people. As correctly pointed out by McLeod, ethics form an integral part of how an firm works. One can hit a jackpot by following unethical ways to earn money in a short period or go with the ethical way of earning money, as well as, goodwill and respect in the market.

SOURCE : NY TIMES