Is Rupert really interested in Yahoo?
Friday, February 15, 2008
When a kill is done/cornered by lion, its the hyenas who start crowding for a feast. With Yahoo under hostile bid, one can see lot many hyenas lining up to cater to their self interests. Word leaked out yesterday (Wednesday) that Rupert Murdoch’s News Corp. is looking at taking a stake of 20 percent or more in Yahoo in exchange for MySpace, some cash and other online properties. An infusion from News Corp., the reasoning goes, could boost Yahoo’s stock price high enough to outstrip Microsoft. But as pointed out by BigTech , Fortune Blog, there’s a good chance that News Corp. is more interested in peeking at Yahoo’s secrets at the bargaining table than in actually stealing Microsoft’s prize.
The author has questioned the potential News Corp and Yahoo deal on three points. First, he says, because Yahoo and News Corp. would have to convince Yahoo shareholders that the abstract deal is worth more than the cold hard cash Microsoft is offering. Convincing Yahoo shareholders to embrace a MySpace deal would be difficult enough, because it would assume that MySpace is worth billions of dollars. According to The Wall Street Journal, News Corp. would likely push for a valuation between $6 billion and $10 billion. But then for a harsh fact that much of MySpace’s revenue comes from its $900 million advertising deal with Google , in which the online giant has agreed to pay about $20 million per month until mid-2010. So far, that deal doesn’t seem to be working out so well for Google. In its most recent conference call with analysts, Google blamed its disappointing performance in part on its inability to make the MySpace deal pay off as quickly as it would like. That makes it doubtful that MySpace is really worth billions today. And if investors don’t believe in the value of MySpace, they won’t believe that this deal makes Yahoo more valuable than the more than $40 billion in cash and stock Microsoft is offering.
Second he points out, its’s not clear who would run the MyHoo combination. Third, because there’s a good chance that News Corp. is more interested in peeking at Yahoo’s secrets at the bargaining table than in actually stealing Microsoft’s prize. In business, everybody knows about Rupert's shrewdness.
The author has questioned the potential News Corp and Yahoo deal on three points. First, he says, because Yahoo and News Corp. would have to convince Yahoo shareholders that the abstract deal is worth more than the cold hard cash Microsoft is offering. Convincing Yahoo shareholders to embrace a MySpace deal would be difficult enough, because it would assume that MySpace is worth billions of dollars. According to The Wall Street Journal, News Corp. would likely push for a valuation between $6 billion and $10 billion. But then for a harsh fact that much of MySpace’s revenue comes from its $900 million advertising deal with Google , in which the online giant has agreed to pay about $20 million per month until mid-2010. So far, that deal doesn’t seem to be working out so well for Google. In its most recent conference call with analysts, Google blamed its disappointing performance in part on its inability to make the MySpace deal pay off as quickly as it would like. That makes it doubtful that MySpace is really worth billions today. And if investors don’t believe in the value of MySpace, they won’t believe that this deal makes Yahoo more valuable than the more than $40 billion in cash and stock Microsoft is offering.Second he points out, its’s not clear who would run the MyHoo combination. Third, because there’s a good chance that News Corp. is more interested in peeking at Yahoo’s secrets at the bargaining table than in actually stealing Microsoft’s prize. In business, everybody knows about Rupert's shrewdness.
Finally there’s the strong possibility that News Corp. doesn’t really want to do a Yahoo deal at all, and is only dangling the MySpace idea as a way to gain information.After all, as a media baron who has struck big deals with both Google and Microsoft, Rupert Murdoch stands to be affected quite a bit if there’s a power shift in online advertising. There’s arguably no better way to prepare for the changes than to get an up-close look at what Microsoft would get by purchasing Yahoo — and that’s perspective Murdoch would be likely to get if he at least pretends to be interested in taking a stake in Yahoo.
But then, its business after all; and all is fair in love and war!
posted by Jas @ 1:32 PM,
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Motorola - is climax coming?
Sunday, February 03, 2008
When a company announces that it is going to do away with one of its key business units it is definite to impact the stock price in exchange. And if the stock rises by something like over 10% then it surely rings a bell (and in case you haven't noticed, even the trade volume is high). It doesn’t take much of analysis to understand that Motorola had been doing badly in handset business. Its only ticket to cash registers was Razr, except for that one model, rest all just came and were lost in clutter. After grabbing world market share of 23% in 2006 on momentum led by its Razr phone, the company has lost nearly half that as rivals outpaced it with successful new products. So it was not surprising to see Motorola slip to number three spot behind market leader Nokia and now runner up Samsung.
I personally feel that Motorola has been too laidback, they are trying to catch the market based on some engineering innovations and aren’t really able to connect to the normal consumer who can give them volumes. Nokia relies on design innovations rather than engineering innovations in the electronic part. The ease of operation and sturdiness has been two main selling points of Nokia. If you have used Nokia once, you can use almost all Nokia phones as they are similar on usage, unlike other phones which are difficult to learn and the interface change with the handset.
Motorola has come up with another model W230. Looks like the handset was launched after a careful gap analysis of features and market need. With features like expandable memory upto 2GB,MP3 player,FM with recording, large phonebook memory and USB1.1 data connectivity, its loaded with features; I felt the handset was priced quite aggressively at Rs.3,400. The ad for the set is again a very typical of Moto phones with TG of middle class. It’s targeted at youth and boils down to the same word - Attitude. But it is actually a nice ad than the earlier one where father loses his head!
Labels: Brands, Business, Launch, TVC
posted by Jas @ 2:21 PM,
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Whopper Freak Out
Saturday, January 12, 2008
In the time when virals have just become a norm, stings are outdated and launching a new website just for a viral campaign is anything but hot; there is a fresh air of innovation to all this with the Burger King's latest campaign - Whopper Freak Out.
In this hidden camera style video, we get to see how people react when they are told the Whopper (the most popular burger from Burger King) has been permanently discontinued, as well as how customers react when the bags they are given contain not Whoppers, but Big Mac���s or Wendy���s burgers. A dirty game maybe, but surely works for their customers.
I was wondering how ling would they go, and even if you end it all up saying it was all a small joke ; I bet you will lose some loyalty. But thats where the campaign scores, it ends in a wonderful way which you have to see the campaign to appreciate.
Click the snapshot below to see the campaign live.
In this hidden camera style video, we get to see how people react when they are told the Whopper (the most popular burger from Burger King) has been permanently discontinued, as well as how customers react when the bags they are given contain not Whoppers, but Big Mac���s or Wendy���s burgers. A dirty game maybe, but surely works for their customers.
I was wondering how ling would they go, and even if you end it all up saying it was all a small joke ; I bet you will lose some loyalty. But thats where the campaign scores, it ends in a wonderful way which you have to see the campaign to appreciate.
Click the snapshot below to see the campaign live.
Website: http://www.whopperfreakout.com/
Labels: BTL, Business, Funny, New Trends, Viral
posted by Jas @ 7:25 PM,
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Customizing credit cards to individuals
Wednesday, January 02, 2008
Capital One has launched America's first - "Do-it-yourself" credit card. It has come up with a Web site called Card Lab that gives consumers the opportunity to “build their own” credit card. The customer can choose among various options for introductory and ongoing interest rates, rewards, annual fee (or none), and card design.
The process is essentially comprised of following steps:
The process is essentially comprised of following steps:
- Indicate Credit Level based on past history
- Select Features and Rewards - like if one wants rewards in form of miles/points or cash back; the introductory APR, annual fee etc
- Pick a Design - one can choose from a given set of 9 designs or one can add own image to the card (now thats customization!)
- Review and Apply
The choices are then packaged together to create a card customized to each cardholders' personal preferences. This concept is being used in the USA for the first time whereas this has been tested before in UK and Turkey.
However, there are some trade offs in this venture. Once the applicant makes a choice, a certain number of other choices are closed for him. So, if you want no-frills, no rewards, you can get a lower interest rate. Want points or air miles? The interest rate goes up. Want a 0% interest rate for a year? Expect a higher ongoing rate. Want two points per dollar charged instead of one? Prepare to pay an annual fee.
From a marketing point of view, it does make an impact on consumers for following main reasons:
1. Empowerment
This concept gives the power in the hand of consumer to design what ever they feel like. This brings in more brand loyalty as consumer identifies more with the product.
2. Transparency
The selection process allows consumer to see the trade offs with every selection, hence consumer can know how the APR or annual fee change on selecting the desired cash back for example. The generic way of personalization was to have an online interview approach and make a product recommendation at the end of the process. This is an abstract way as consumer doesn't know what is full platter looking like.
3. Personalization
The site not only allows user to choose the features but also the card image, which can be of a memorable sunny day you enjoyed at Las Vegas. This creates an emotional connect with the consumer, an important building block in marketing.
4. Behavioral data
The data so accumulated from online behavior of consumers will go a long way in helping Capital One to understand consumer and help them design things better to command more loyalty and consumer base.
All said and done, this is one initiative a lot of marketers in cards domain will be watching out for.
Labels: Business, Marketing Practices, New Trends
posted by Jas @ 5:23 PM,
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Cadbury India repeats innovation success
Thursday, October 18, 2007
Agency: Ogilvy & Mather, Mumbai, India
Creative Directors: Anup Chitnis, Rensil D'silva, Piyush Pandey
They did it with Perk about a decade back and they have done it again with 'Ulta Perk' now. Cadbury brought the chocolate coated wafer category to the Indian cocoa confectionary market with launch of its highly successful brand - Perk, then popularized by brand ambassador Priety Zinta.
Perk was launched in the market in 1995 and has seen consistent growth through the years. The cocoa confectionary wafer market is around 35 % of the total chocolate market and has been growing at around 13% annually. Perk has been one of the best sellers in impulse buy market. Priced at Rs5 these days for regular size and at Rs10 for 'Bada Perk' (Bigger Perk), the Perk set the trend for Nestle's Kit Kat and Munch to be followed.Cadbury has come up with a new innovative product line extension now, by having wafer on outside and chocolate inside. Lucratively priced at Rs.5; the new concept is surely going to pull many consumers. According to Cadbury, extensive consumer research and testing has been undertaken to determine the product taste, format and the communication campaign. ‘Ulta Perk’ has been test marketed in the South Markets – Tamil Nadu & Karnataka (South of India) for over 6 months and has received excellent response from the consumers.
Even the advertisements are really interesting ones. The problem with these impulse buys is that in starting, a good amount of money needs to be pumped in marketing activities before a significant return can be achieved. And Even after you have done, you still need to keep pumping a decent money to make it rememberable on impulse. The TVC is featured below while the print adverts take on the mantra of situations in a totally opposite context than it would be normally. Like man chasing a dog up a tree, a fly complaining about a man in its food, a balloon playing with a child floating in air etc; all going with the tagline -"Cadbury's reverse bar. Wafer outside, chocolate inside."
What is best part for Cadbury is that its a festive time in India and according to the recent urban practices, people have started giving dry fruits and confectionery items instead of traditional sweets / mithai. So in assortment packages, which by the way are quite popular from Cadbury, may be having few Ulta Perks embedded adding to sampling opportunity. This may soon give it desirable sales, provided the taste and texture is nice.
Sources: Cadbury India website, Ads of the World
Labels: Brands, Business, Launch, TVC
posted by Jas @ 3:35 PM,
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Stress on corporate images
Monday, September 17, 2007
Few years back I read a report detailing how HLL was considering to change its then green colored leaves logo to something that was closer to its mother brand Unilever, which itself was undergoing a plastic surgery for fresh image in consumer mind. Now HLL has changed to HUL, company board deciding to use the word Hindustan (with reports that its probably only occurrence in world that Unilever has allowed a local name). After each advertisement of a Lever's product you can see the new 'vitality' filled sign of Unilever with Hindustan Unilever written below it. This branding fo corporate identity along with the brand makes sense for the obvious. But is it just because of changing corporate image or is due to higher competition in market? Is it that HUL now wants to leverage its larger than life corporate image and add the benefit to its brands?
In case you are ready to negate the argument then have a look at other happenings. Check the FMCG battlefield where the goriest of battles have been fought - soft drink industry. After the Pepsi ads you would now see the branding of PepsiCo. Post liberalization PepsiCo was allowed to use its international brand name in India (earlier it had to use 'Lehar' alongside), but since then it hasnt done any branding. Infact I was surprised to see the name PepsiCo used in US instead of Pepsi as the corporate name 3 years back, and here in India nobody had heard about PepsiCo! PepsiCo India even has its own website now, which I once tried to find helplessly 2 yrs back (for assignment purpose). The impact may have been because of pesticide issue.
Coke too has worked a lot for its corporate image with McCann Erickson, with Prasoon Joshi coming up with new ad line "Boond boond khushi khushi" or "Little drops of joy". He was the one who changed Coca Cola's fortune with hugely popular "Thanda matlab Coca Cola". According to Joshi,
The entire campaign, “Little Drops of Joy”, is based on moments of joy in the daily lives of consumers. The TVC portrays how little drops of Coca-Cola transform drab moments of life to a more cheerful one. One of these commercial opens with the shot of a couple, walking on the road and fighting over daily chores. Suddenly, drops of Coca-Cola engulf them and the boy spots a beautiful dress on a mannequin and decides to buy it for the girl in order to pacify her. The second section of the commercial shows an old Parsi lady in a pensive mood. Again, the bubbles appear and immediately the old lady spots her friend in a car and they go out. In the end the message appears: “Coca Cola India — Boond Boond Khushi Khushi.” If you ask me, my point will be that big things give you excitement but its the small things that make you feel happy and contended, hence crucial for branding.
Also, as part of its re-positioning strategy, Coca-Cola has revealed its five-pillar growth strategy, that of 5 Ps -
In case you are ready to negate the argument then have a look at other happenings. Check the FMCG battlefield where the goriest of battles have been fought - soft drink industry. After the Pepsi ads you would now see the branding of PepsiCo. Post liberalization PepsiCo was allowed to use its international brand name in India (earlier it had to use 'Lehar' alongside), but since then it hasnt done any branding. Infact I was surprised to see the name PepsiCo used in US instead of Pepsi as the corporate name 3 years back, and here in India nobody had heard about PepsiCo! PepsiCo India even has its own website now, which I once tried to find helplessly 2 yrs back (for assignment purpose). The impact may have been because of pesticide issue.
Coke too has worked a lot for its corporate image with McCann Erickson, with Prasoon Joshi coming up with new ad line "Boond boond khushi khushi" or "Little drops of joy". He was the one who changed Coca Cola's fortune with hugely popular "Thanda matlab Coca Cola". According to Joshi,In a growing, constantly changing market like India, a brand needs to have an emotional connect. In small-town India, which is the next big market, marketers are constantly trying to find the right lingo that will guarantee the right connection. Boond Boond Khushi Khushi is their connect with the brand. One isn’t supposed to look at the drops in isolation, but see them as drops of a larger vision, aimed at mutual growth and development. Boond Boond Khushi Khushi will refresh the consumer on an everyday basis. We are not saying that Coca-Cola cause miracles. What is very real about it is that we don’t claim to transform lives but simply envelop a moment with joy.
The entire campaign, “Little Drops of Joy”, is based on moments of joy in the daily lives of consumers. The TVC portrays how little drops of Coca-Cola transform drab moments of life to a more cheerful one. One of these commercial opens with the shot of a couple, walking on the road and fighting over daily chores. Suddenly, drops of Coca-Cola engulf them and the boy spots a beautiful dress on a mannequin and decides to buy it for the girl in order to pacify her. The second section of the commercial shows an old Parsi lady in a pensive mood. Again, the bubbles appear and immediately the old lady spots her friend in a car and they go out. In the end the message appears: “Coca Cola India — Boond Boond Khushi Khushi.” If you ask me, my point will be that big things give you excitement but its the small things that make you feel happy and contended, hence crucial for branding.Also, as part of its re-positioning strategy, Coca-Cola has revealed its five-pillar growth strategy, that of 5 Ps -
- People
- Planet
- Portfolio
- Partners and
- Performance.
The company is testing a foray into dairy-based products as well as introducing in India energy drink major Glaceau’s brands that it recently acquired for $ 4.1 billion. This is in response to shift of Indian consumer towards healthy drinking habits. Pepsi had beaten Coke on this with its Tropicana range of juices. and with report of Pepsico India Holdings Pvt. Ltd., being close to purchasing a juice brand in India, the battle is surely gonna hot up
Labels: Business, Marketing Practices, New Trends
posted by Jas @ 2:37 AM,
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Carrefour vs WalMart, the Indian perspective
Wednesday, August 22, 2007
The GDP growth is more than heartening, money has effectively been trickling down in most part of the country, local retailers are investing in hypermarts and mall outlets, people have opened up to the spending lifestyle, disposable income has risen nicely and living on credit has been gaining acceptability. All these things make India not just a favorable but a hot market for these retail majors. Europe and American land has already been saturated, to survive in international arena, the retail majors will have to beat each other to gain the promising fresh ground across the world.
On the other half of the story, one thing that many in India would be waiting would be the war of Carrefour and Walmart. With government delaying the direct investment by any foreign retail chains and these players evaluating the local players (WalMart with Bharti and Carrefour with Wadia Brothers) the time has surely become the critical hinge to hang on for a while.
The plans of slow and steady growth of Carrefour has long been eroded by Walmart, since it began its european rampage, and announced its arrival with thud by acquiring Asda (WalMart doubled its international sales to more that US$25 billion at that time with the acquisition). Carrefour had replied by having a friendly bid rival Promodes at Euro 15.9b, thereby potentially creating Europe’s largest retailer with a market value of US $48 billion. Though the sentiments could have been affected by the failed attempt of Carrefour to enter American market in 1980s, still what mattered was the global pie; and it was too large to be fought by gimmicks.
Here is where Asian countries come into picture. The land has yet been riding on its own unorganized distribution network, making road tougher for these retail chains. But the largest investment - land and labor has been cheap, making it lucrative. These retail chains thrive on local sourcing, private brands and strong distribution network. The last option is yet to be seen that how these majors can exploit. Because the evading market for these majors - South East Asia, is driven by trust, mutual understanding and credit. It’s very normal for a person to tell the retailer while walking on the road to send purified water container, x kg aata and y kg sugar to his home. The price may be paid at the end of the month when he is given a list of purchases in previous month. You can’t expect that in Europe or America. Europe especially, being low on labor, is mostly a self serving model based. All this leads to development of organized format.
So when the fight is on between the two for markets they also understand how tough the path further would be. The market is held by the unorganized wholesale setups who have been effectively been driving the sales since more than century. All the major cities have a wholesale market from where the sales of area of anything between 60 to 200kms radius are operated. And mind it; it’s the wholesale and not operator, so retailers have to come by themselves over here.
This setup may be rendered low on effectiveness by these giants and that will be a trouble for a government of a democratic country. So it is yet to be seen how and when their entry is allowed. The markets across world today can be classified under five formats:
· Hypermarts
· Discount Department Stores
· Hard Discounts
· Category Killers
· Warehouse Clubs and Cash and carry
For now, the cash and carry seems to be a nice backdoor available and last week Walmart braced it in full publicity. The cash-and-carry model is being followed by the German retailer Metro AG in India which has set up two distribution centers in Bangalore and is in the process of setting up more in Hyderabad and Kolkata.Whatsoever, the time will make the fight only grimmer. Will the culture also make a difference in this acceptance is also a yet another point!
Labels: Business
posted by Jas @ 11:23 PM,
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Google strengthens its internet lordship!!
Wednesday, October 18, 2006
Post placements am having a browse to check what all have I missed out on in that 1.5 week; and this one was just awesome- Google buying out YouTube and finalising a search partnership with MySpace. The computer market is poised for a mega war sometime in future. A computer is majorly used with internet interaction these days, so where Microsoft is making sure that it captures the desktop market and strengthens its hold on internet market too, Google is doing just the opposite, capture the internet market and seep into desktop too to complete a backend for its powerful tools. And mind it, Google has beaten Yahoo to get this buyout, while Yahoo is just wondering where its kingdom suddenly vanished !!
The still-unprofitable YouTube is the most expensive acquisition by Google yet. Google had flirted YouTube with an offer of $1.6 billion which finally came to $1.65 billion, and with beating out Yahoo, Google will gain access to the nearly 100 million users of MySpace too, providing web search and sponsored search links for the social networking site. MySpace's 115 million plus registered users are a vital source of traffic to YouTube, the internet's largest video-sharing site.
With this Google surely has gone a lot ahead in field of Online Marketing. According to MarketingVox, the deal with MySpacem will begin in the fourth quarter, with Google guaranteeing at least $900 million to FIM over three years, so long as the latter meets traffic and other commitments.
After Orkut, AdSense and Blogger (beta), lets see if Google also comes out with YouTube beta wherein one has to log on using the google account and password. Finally one fine day I see myself working out my way with technology with just ONE Google account :)
Sources: MarketingVox
Labels: Business
posted by Jas @ 12:29 PM,
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