Hele Down wrote an excellent blog on businessblogshub.com explaining how business can help promote a positive image of themselves and how it may not necessarily incur high costs.

She implores small businesses to consider using the media to promote themselves and talks about how you should not think that only the big companies use these channels. According to her, other than the time you spend arranging it-the rest of the promotion is virtually free.

I found this extremely interesting because small business do indeed rule out the possibility of promotion using the media (Newspapers, TV or Radio) because more often than not, it is considered extremely expensive. She says ‘Being published in the press or featuring in an industry magazine can add weight to all your other marketing and shouldn’t be seen as something only the big companies go after’. This always made perfect sense to me growing up. If a small business could merely do something newsworthy such as an inauguration event, special discount or special feature, it was guaranteed promotion in the  media without it paying a dime.

Hele also says ‘The thing to remember is that good press is more about what your business does than what it says’. This is key, as business should deliver on what they promise and as they say, actions speak louder than words! A business’ actions leave a much more lasting impact than what it may say in its press release.

She also cites examples using which you can generate publicity for your business and not expect heavy costs in return. Her ideas are extremely appealing though one may criticize her on being far too simplistic as quite often, the media requires an ‘extra’ incentive to provide any form of coverage.

As they say, the world is a selfish place.

One aspect which Comm101 didn’t really explore was the effects or mergers or takeovers. I wanted to give an example of two giant companies. I’m going to talk about P&G buying Gillette.

P&G paid a huge amount of money to buy Gillette. 54 billion dollars to be precise. The reasons for Gillette could be many but the most evident ones, keeping in mind that this was a friendly transition, will be discussed here.

The acquisition of Gillette by P&G may be due to reasons such as ‘shelf space’. As Susan Egan, Managing Director of Egan-Jones Rating Co., said at the time of the acquisition, ‘The fight for shelf space is ongoing, it’s one of the main things that a large consumer product company like Gillette is looking at, and a combination with Procter & Gamble makes a lot of sense,” Egan said. “It’ll enable both Gillette and Procter & Gamble to get better shelf space and to distribute their products more cheaply.”

Due to the friendly nature of this great acquisition, Gillette’s former CEO became chairman of Cincinnati-based P&G, joining its board. Warren Buffet, owned the largest number of shares in Gillette and was extremely happy about the deal and dubbed it a ‘dream deal’.

Statistics said, that this acquisition would catapult P&G’s annual sales to more than 60 Billion dollars. Such acquisitions, mergers and takeovers may help to reduce fierceness of  competition, get rid of the price and shelf wars and accumulate resources to become a consolidated better firm and may even help to expand. However, when mergers and takeovers fail, the results are colossal. The Damien-Chrysler failure is a reminder. Therefore, such steps should be taken with much caution and research.

This is in response to Winsum Tam’s blog post where she wrote an excellent post explaining the recent mishap in calculation resulting from the alleged usage of a non-factual source for information (Wikipedia) by a senior executive of BP.

They say that ‘knowledge is power’. That may be true but a few amendments to that saying might be in order keeping in sight the post by Winsum. Knowledge from a factual source IS power, without a doubt. But knowledge or information from a source which is not reliable can often create more problems than it solves. Mr. Rainey will agree with me as he’s currently looking at 5 years of posible jail time due to his miscalculations. According to his sources of information, a deepwater rig leaked 5000 barrels of oil per day; whereas, engineers believed it could possibly be up to 100,000 BOPD.

This made me appreciate the need for citations in all my work in university. Information is only as resourceful as its source and if that information is used to make decisions which will effect others too, then accountability also comes into question. This incident will serve as a reminder to all those in positions of power and responsibility because they have a greater responsibility on their shoulders as opposed to someone using information solely for himself.

Therefore, it is fair to say, your source is equally, if not more important, as important as your information.

Mina Coyne wrote an interesting blog post about a very famous bank,  Merrill Lynch, settling litigation for a huge some of money. She talked about ‘Should people with power in firms be able to take advantage of their power by lying or cheating to improve their company?’

That debate she sparked is too simplistic. The instinctive answer is ‘of course no!’ but it happens everywhere around the world and Merril Lynch is not the sole abuser of power. Recently, ‘JPMorgan Chase and Credit Suisse agreed to settlements with the Securities and Exchange Commission totaling $417‘. Apparently, they misled investors regarding  securities ‘while some of the underlying loans were already showing signs of delinquency’.

What’s interesting to note however, is that out of these 2 banks, none admitted or denied guilt and simply agreed to settle. This gives rise to the notion that ‘Money is power’. JP Morgan and Credit Suisse were able to wriggle their way out of further legal proceedings simply by agreeing to settle and compensating financially for the ‘misinformation’.

Although, being unbiased is what I usually aim for in my blogposts, I can not help but think about the many families who were destroyed due to the consciously depicted inaccuracies of such banks and I can not help but lash out at them. These banks still have the audacity to not accept their guilt, their crimes, their doings and their actions. This is injustice to the maximum and accountability should be extended to all the perpetrators. In addition, the sphere of accountability should be widened and should not be merely restricted to financial or monetary compensation by the perpetrators.

Ikea, the giant international home products company, recently found itself in a very awkward situation. It appears that the company’s suppliers used political and criminal prisoners. This directly contradicts Jeanette Skjelmose statement, Ikea’s sustainability manager, who said: “We deeply regret that this could happen. Using political prisoners in production has never been accepted within the Ikea Group.”

Ikea acquired the services of Ernst & Young, an accounting firm, to look into the matter, dating back 25-30 years. This digging into the past may prove more irksome and defaming  than Ikea may anticipate considering how, ‘The group is campaigning for compensation for many former prisoners, whom they say carry psychological and physical scars from the labour they were forced to do.’ Such unveilings of the past can destroy a company’s reputation singlehandedly but it seems Ikea is determined to rise above this as it has asked Ernst and Young to look deeply into this matter and come up with a report.

Ms Skjelmose went on to say that Ikea follows a strict procedure and codes of conduct for its suppliers now but also accepted that the measures used earlier were not effective enough.

This coming out clean by Ikea is a component of Corporate Social Responsibility which they aim to enforce through their image as socially responsible company. ‘Ernst & Young looked at 20,000 pages of documents from Ikea’s internal records and 80,000 archived items from German federal and state archives and interview more than 90 people.’ The level of extensive research and probing depicted above proves that Ikea wants a clean and fair representation of the past and  a ‘clean’ image, accepting of its own mistakes and rectifying them.

Ikea is not alone in this in today’s day and age where reputation of companies is vitally important and they strive to maintain those images to be seen as a socially responsible company. In one of my previous posts, I wrote about Olympus digging up records of the past few decades to rectify some grave mistakes.

Therefore, it is evident that being a ‘clean’, ‘uncorrupted and ‘honest’ company is what everyone is aspiring to be these days. The question however is, is all this part of a marketing strategy to attract more customers or a genuine effort to uphold standards of social responsibility?

You decide!

Think you can spot the difference?

For many years, China has been under immense global pressure to take a stronger stance against the counterfeit mafia that has flourished in the domestic Chinese market. These groups produce copies of high end products and sell them at the same price as the originals in markets both outside and inside China.

Recently, 73 people were caught and arrested by the joint efforts of the Chinese police and US authorities manufacturing and exporting fake international brands.  These  brands are usually extremely high end products and cater to quite a niche market.  One would think that such an industry would not amount to much but estimates and statistics say otherwise. ‘The Organization for Economic Cooperation and Development estimates the amount of counterfeit goods and pirated copyrights in world trade grew from about $100 billion in 2001 to about $250 billion in 2007…’   

The potential to make money in this industry is huge but questions of legality, ethics and morals come into question. It’s strictly illegal to produce all of the counterfeits that we see circling around in such markets. Issues such as intellectual ownership rights, copyrights, patents and all sorts of other legal formalities come into play combined with the possibility of these items actually causing harm.

A health care worker was selling counterfeit poisonous cosmetics to unsuspecting customers through eBay. The ramifications of which could be huge considering her products were extremely toxic, poisonous and could even lead to brain cancer.

In conclusion, think twice before buying something which seems to good to be true.

For years people have raised concerns regarding the fast food industry and how unhealthy  and possibly dangerous it is for its consumers. No matter how swiftly these fast food chains try to dodge the onslaught brought upon them, they never succeed in satisfying anyone’s questions regarding how healthy or unhealthy their food is.

McDonald’s Canada has recently tried to clear the air and answer direct questions from its consumers by launching yourquestions.mcdonalds.ca where anyone can ask a direct question to McDonald’s. McDonald’s replies in turn and aims to fully satisfy the consumer by answering to the best of their abilities.

This campaign is designed to market McDonald’s more transparently and at using social media efficiently-people who got answers to their questions can share it with their friends through facebook or Twitter. One huge ‘confession’ to a frequently question was in the form of a video which can be seen here: https://www.youtube.com/watch?v=oSd0keSj2W8&feature=plcp. The question was, ‘Why the burgers photographed in McDonald’s ads look so much more appetizing than they do in real life’.

This platform which McDonald’s is using is laudable and an effective way to deal with actual problems AND ‘myths’ which arise when any brand gets recognition or is frequently used by consumers. The food industry is particularly sensitive and so this may be a good move on McDonald’s part to clarify and debunk the myths surrounding it’s products.

However, there isn’t absolute certainty that this will work and so there’s an element of risk involved. McDonald’s tried something similar in the US but it backfired, much to the dismay of McDonald’s so it’s not a fail-proof marketing plan but it’s a good effort nonetheless.

References: 

1. http://www.dailymail.co.uk/news/article-2090862/McDstories-McDonalds-Twitter-promotion-backfires-users-share-fast-food-horror-stories.html

2. http://yourquestions.mcdonalds.ca/questions/218

3.http://m.theglobeandmail.com/report-on-business/industry-news/marketing/mcdonalds-marketing-tries-a-transparent-approach/article4357943/?service=mobile

Muhammad Yunus – Founder of Grameen Bank and Nobel Peace Prize winner

The Nobel Peace Prize 2006 was awarded jointly to Muhammad Yunus and Grameen Bank “for their efforts to create economic and social development from below”. Grameen Bank is a micro-finance organization which allows small loans to be made available without any collateral to set up small businesses. The bank’s main focus was to allow women to start up small businesses to eradicate poverty and it has been a huge success. The unusual bit about Grameen is that some of the women who are borrowers of the bank are also on the Board of Directors of the bank and in effect, part owners.

Recently, there has been a huge struggle between the Bank and the Government. Last year, the government removed Grameen’s founder Muhammad Yunus from the Managing Director’s position claiming he was too old at 70 years of age and that the official age of retirement was 60 years.

Recently, the cabinet of the PM Sheikh Hasina amended a 29 year old rule which would effectively give the government authority to bypass Grameen’s board of directors and handpick Yunus’ successor. This brazen step not only threaten’s Grameen’s independence but also the ownership rights of millions of poor women who control 97% shares of Grameen.

Many believe that Hasina, whose government is considered immensely corrupt, is on a personal vendetta against Yunus who forayed into politics for a brief period, criticizing Hasina’s government, and now Hasina is attempting to humiliate him.

Whatever the case, it is important to note that in today’s day and age, businesses are hugely impacted by the political scenario in the country or market they operate in and only a fool would not take into account the political side of any market or country.

References:

1. http://opinionator.blogs.nytimes.com/2012/08/22/an-attack-on-grameen-bank-and-the-cause-of-women/

2. http://www.nobelprize.org/nobel_prizes/peace/laureates/2006/

3. http://www.avaaz.org/en/save_the_world_best_bank/?bEDcmdb&v=18483

The five existing providers in Pakistan.

A decade ago, cellular service in Pakistan was provided by a couple of companies which operated as Oligopolies and catered only to the elite. However, in recent years, the telecom market has exploded with tremendous growth and has surpassed everyone’s expectations. More than 131 million people use cell phone services in Pakistan which has led Pakistan to rank at number 5 in Asia in terms of mobile phone users.

At one point (2011) , there were 6 providers in the telecom market in Pakistan. What’s important to understand regarding the level of competition is that consumers in Pakistan are not bound by long term contracts to cellular phone companies. All they require is a copy of the national ID card to set up a connection, or switch to another provider. There’s little or no brand loyalty when you as a consumer have so little restrictions and your decisions are more or less based on price. Therefore, there’s cutthroat competition and little room to relax.

The emergence of new players in the market after a horrifying earthquake in 2005 led to a flurry of intense aggressive marketing against each other, price wars which made 2 cents per minute calls to any network possible without subscribing to any special package or deal and an overload of information which has led to a clutter of noise in the media.

The price wars continued for quite a while until they could not lower them anymore and then began the endless charade of unethical marketing campaigns ridiculing each other. As of this moment, consumers can barely distinguish one provider from the other due to the overload of information and no clear PoD between any of the providers.

References:

1. http://www.brandchannel.com/features_effect.asp?pf_id=426

2.http://tribune.com.pk/story/218713/pakistan-5th-in-asian-mobile-phone-users/

3.http://www.pta.gov.pk/index.php?option=com_content&view=article&id=265&Itemid=135

4.http://www.indexmundi.com/pakistan/cell-phone-companies-in-pakistan.html

Picture perfect?

Olympus corporation has been in business for almost a century. They’ve made countless products which range from cameras to medical devices.

This giant of a company recently came into the open with a confession which shocked the business community and it’s shareholders at large. On 8 November 2011, the company admitted that they had committed serious money laundering and tax evasion to cover losses on investments dating to the 1990s. This was termed as the “biggest and the longest running loss hiding arrangements in japanese history” according to the Wall Street Journal. The company laid the blame of the unethical and inappropriate accounting on ex-president Tsuyoshi Kikukawa, auditor Hideo Yamada and executive VP Hisashi Mori. This unethical accounting malpractice only came into light when the new foreign President Michael Woodford started digging into old acquisitions made by Olympus from 2006-2009. All of them involved the Cayman Islands, tax evasion, dissolving accounts shortly after the transactions were made and in the final case, huge amounts of ‘transaction fee’ to two middle men was also uncovered.

Woodford’s revelations made Olympus’ stocks plummet by 50% and shareholders weren’t too happy with the cover-up of secret losses which lasted for about a decade.

Picture perfect for Olympus? I think not.

References: – http://www.time.com/time/world/article/0,8599,2098115,00.html

–http://www.nytimes.com/2011/11/08/business/olympus-hid-investing-losses-in-big-merger-payouts.html

–http://en.wikipedia.org/wiki/Olympus_Cameras