17 April, 2015

Help me, I'm stuffocating!

Melbourne Herald Sun, Thursday April 15, 2015

James Wallman is travelling the world promoting his stirring new book, Stuffocation. Wherever he goes - New York, London - people ask him what the title means. He looks at them, "What do you think it is?"

"That we're suffocating with too much stuff?" "You've got it."

We've all been there: the wardrobe that's stuffed with clothes but nothing to wear. When you dig through stuff that's "too valuable" to throw away.

It reminded me of one period when I rented a self storage locker for five years, then decided to take out what was valuable and throw the rest away. I got one office chair and a filing cabinet, the rest I dumped - it had cost me $6,000 in storage. I'd been stuffocated.

In his book Wallman points out that "more" was not the norm in the past. Up until the end of WWII, we had, hopefully, sufficient - if the depression hadn't wiped out the family's meagre possessions. Things were so much dearer too. If you calculated labour and material costs by today's standards, in the early 1700s a shirt would have cost $3,500.

Now we can all afford a new shirt - $10 at the market if necessary. Or we can flaunt our wealth and spend a thousand dollars at a prestige name boutique at Crown.

Furniture was handed down through generations. Now a few flat packs from IKEA and your new home is furnished.

So are people becoming more mindful about their purchasing habits? Yes, says Wallman. "I think people will buy less, buy fewer but better. This is not the end of consumerism. This is not the end of spending money. We're humans and we all still want to buy shoes and cars and clothes and cellphones; it's not the end of stuff at all."

Speaking to Jessica Vaughn at JWT, he spelled out his vision of the clash between materialism and stuffocation: "This is going to be the defining problem of the 21st century."

Throughout our economies we see retreat from more. You don't need an encyclopaedia, Google's at your fingertips. A car? Call Uber. Need a girlfriend? Call eHarmony or a dozen other sites. You don't have to reject possessions - just be more thoughtful in choosing them.

James' preference he calls "experientialism". Getting the enjoyment and fun out of the experience rather than another car you can't find space to park.

The upcoming Generation Y is inclined that way. They aren't scared of a great depression or a world war. They are angry that their parents swept up most of the finance and houses. But they make up for that by staying home, living free and having fun. The experiential life style.

University of California Los Angeles carried out an anthropological survey - of 32 middle-class LA families with children. They photographed every space in the houses, catalogued every item, and were staggered. They took 20,000 photographs, every one packed from floor to ceiling with stuff.

Hey and these were people like you and me: teachers, firefighters, nurses, small-business owners, lawyers, tradesmen and contractors, among others.

The research found that we live in the most materially rich society in global history. That we have “light-years more possessions” than any preceding society. We’re coping with extraordinary clutter, we’re in a clutter crisis.

"My manifesto," says Wallman, " is that if you care about happiness, status, identity and meaning for yourself, you should be experiential, not materialistic. It will make you happier."

10 April, 2015

If it's not on TV can it be real?

Melbourne Herald Sun, Thursday April 9, 2015

Remember that wonderful Leunig cartoon where a family sits riveted before a TV set watching a spectacular sunset, even as the real sun is setting outside their window?

A lot of sports fans are like this too. They travel and queue to get inside the stadium, then keep a radio plugged into their ear to listen to a commentator's description of what is going on before their eyes. In recent years small portable TVs have replaced the trannies, so if today's game is being televised you can watch it in life and then get the replay on TV. Perhaps we don't trust our own senses, or certainly we don't want to miss anything, and maybe we don't believe it if it's not on the telly.

The smart sports promoters are well aware of this and want to keep their fans happy. This human need has now been fully catered for at Etihad Stadium. A new $10 million upgrade has created an 'embracing experience' for the spectators wherever they sit.

Seven hundred wifi hotspots will make sure no Facebook or tweet will be left unnoticed; 1500 digital TVs will ensure that not one kick or fowl will not be replayed again and again. Embracing experience? Or suffocating? But that's how the fans want it, snapping up the AFL Live Official App for their smart phones so not a precious minute or fact of the sport need be missed.

I remember the first Aussie Rules game I saw. In Darwin, played by a mixed team - some of the boys preferred to play barefoot. I found the fast, high-scoring game thrilling after a youth spent with the somewhat quieter games of soccer and cricket. To me, Footy summarised Australia - quick, loud, daring and determined on success.

So maybe, like our once knock-about suburbs Carlton or Port Melbourne, sport has become expensive and gentrified. It's all a bit too proper because there's so much money riding on it.

The AFL has declared this to be "The Year of the Fans" and has loudly promoted its attention to its fan base after a year consumed by doping cases and rows over ticket pricing and costs. In response, they have given fans back the $3 pie.

The trouble is that there are matters so important that they take away attention from the fans. Like the broadcasting deal that promises to exceed last year's $1.258 billion. A lot of distraction - but you can understand why the broadcasters expect the clubs to dance to their tune.

So a test of "Year of the Fan" is whether matches will be timed to suit footy-loving families, or prime time television.

Of course, despite the grumbles, the Etihad stadium is doing the right thing. The AFL's general manager of media, Peter Campbell, calls it "data-tainment". Fans want more than fit young men running up and down a field. "Gone are the days when putting on a scarf and beanie was enough".

"It's not just what's going on on the ground anymore," said Campbell, reinforcing the stadium's thoughts.

"It's what's on the big screens, the perimeter hoardings; the music over the PA, a fan's engagement with their friends and other supporters on social. There's just as much uploading at games these days as there is downloading."

So now it's an immersive, emotional, communal, multi-media, socially communicative experience. And you thought it was just a day at the footy.

ray@ebeatty.com

03 April, 2015

We've lost Paris but let's keep Palace

Melbourne Herald Sun, Thursday April 2, 2015

Back in the early 70s I worked in "the Paris end of Collins Street", and it really did have the feel of the great European city. Out of my office window - next door to the Melbourne Club - I watched elegantly dressed ladies take coffee at pavement tables, and men in office suits slipping into the Ross Hotel for "a quick one".

But it seemed no sooner was I there than the excavator of progress moved in and I watched them dig the deepest hole you've ever seen. It seemed to take for ever, the beautiful 19th century buildings - housing the elite of Melbourne's medical consultants, it seemed - were gone.

Eventually the twin towers of the ANZ building took over much of the block down to Exhibition Street and I have never forgiven IM Pei, the great architect, for turning my patch into the Chicago end of Collins Street.

So much of Melbourne's character was wrecked by the indiscriminate constructions of the 60s and 70s. The brake was thrown when the public rose up to defend the Regent Theatre which, along with the Plaza Ballroom underneath, was threatened with the wrecking ball. Ironically the ones we have to thank for stopping the madness are the Builders' Labourers Federation. Inspired by Jack Mundey in Sydney and his "green bans", the Victorian branch responded to the Save the Regent Committee, and stopped all demolition.

The resolution of these stand-offs took years but we can be thankful to have a city with some superb theatres. Except that they are always under threat.

That energetic conductor-come-entrepreneur Greg Hocking pointed me to what was happening to the Palace Theatre in Bourke Street. The case is being fought in VCAT right now, with Melbourne City Council and crowds of supporters once again fighting to save a theatre from developers.

"Melbourne doesn't have many venues with that 1000 to 1500 capacity," he explained. "Nobody would pay the money needed to build theatres of that quality and size these days." So if they go, they are gone. He pointed to St Kilda's Palais, Flinders Street's Forum - all periodically under threat. We have to stay vigilant.

When I visit Paris or Rome it isn't swish new office blocks I want to see. Fortunately, through good management or the inability to ever agree, those cities retain much of their hearts intact. You can walk, after midnight up the Champs Elysees and feel the city as it had been more than a century ago.

Rome by night is a parade of delights. Every street is crowded with art and statues; circle around the Colosseum and you feel yourself transported back a millennium or two.

Melbourne of course does not have anything like this history. Which to my mind is a good reason for retaining what little we do have. This city does retain its old charms, in its lanes and cobbled alleys, its packed shops and varied buskers (last night I passed a concert pianist busking in Swanston Street. Wow.)

But the grand streets and boulevards that are the signature of this town have succumbed too much to glass and steel for my liking. My office is in Collins Street, in the building where General Douglas MacArthur ran the Pacific War. It's a beautiful sturdy place filled with brown wood furniture and the well-worn comfort of a century's habitation.

A few metres up the street, however, there's a building that's falling apart and in the process of demotion. The old National Mutual House, built in 1965.

ray@ebeatty.com

26 March, 2015

What to do when the smoothie hits the fan

Melbourne Herald Sun, Thursday March 26, 2015

Just a few weeks ago I wrote about how to handle the PR when some disaster hits your company.

Well it seemed no time after the ink dried (which on a computer is a very short time), your morning berry smoothie turned very sour. Four cases of Hepatitis A were traced, ostensibly, to packets of Nana's Frozen Mixed Berries. They were imports from China and somehow had been infected.

For parent company Patties Foods it was a grenade tossed into a smoothly growing year. Suddenly they were under orders to recall the berries, and to their credit they also pulled out any of their similar products, like frozen raspberries.

But they had to act swiftly and decisively - at stake was their other range of more important products like Four 'n' Twenty pies and Herbert Adams pastries - pillars of the supermarket food aisles.

Remember my advice previously, about speaking quietly and honestly to explain what is happening? Because usually the truth is not as catastrophic as the media make out. But it is also difficult to admit there is a problem when already, behind you, is the sound of lawyers' knives sharpening. A lawyer's advice is always, as we know from the TV crime shows, to "say nothing". Because there's always another lawyer waiting to pounce on the words as a confession of guilt.

So we see these chief executives putting out a tortured, non-admitting statement that sounds like an apology, and then standing mute before customers or relatives. Like we've seen in the two recent Malaysian Airline crashes. You can't help feeling sorry for managers blamed for disasters they did not cause - and forced to wear the abuse.

Product recalls are easier to handle. If you look at the ACCC Product Safety Recalls site you'll be amazed at how many car recalls there are. Every make you can think of from Mercedes to Ford to Nissan has recalls - and that's only this year.

At least car dealers have records of their customers, tightly controlled so recall is swift and clean. Nevertheless it can be an expensive exercise. Five year ago Toyota's sticky accelerator pedals hit a whole range of cars in the US - including Corolla, Prius, RAV4 and various Lexus models. The eventual cost (it hasn't ended yet) is expected to hit $6 billion. What would that do to your bottom line?

Because of their vast variety of products, stores and supermarkets are regularly in the recall news and mostly they have developed effective procedures they call "crisis management". A lot of the money they pay PR firms is to have experts on hand whenever a boiler bursts.

They develop "crisis and issues manuals" for the client - lengthy wordy documents which in brief repeat what I told you the other week. Don't be sneaky, don't think you can hide anything, be frank and friendly but try not to admit blame. Not in a legal sense anyway.
Make your top executive readily available to the media.

In the case of Patties, they have not been as open as they might - their web site is perhaps too defensive and sounds more concerned with the well-being of Patties rather than the customer. But on the whole they have been open-faced so I'd give them eight out of ten. Fortunately the outbreak has been quickly stopped and nobody died. So there is not too much the lawyers can sink their teeth into.

ray@ebeatty.com

19 March, 2015

When only the best is a girl called Nicole

Melbourne Herald Sun, Thursday March 19, 2015

When the world's richest people needed a spokesperson for their re-positioned airline, someone smart, elegant, sincere - they picked an Australian, Nicole Kidman. And all this week you will have seen her praising the magnificent new Airbus A380 fleet of Abu Dhabi's Etihad Airways.

Richest, you ask? Well try this rough calculation: native population one million. Sovereign wealth fund - the piggy bank under the bed - one trillion dollars. So on that basis alone every native Emariti is worth one million dollars.

Etihad is described as the world's fastest-growing airline, being only 12 years old but currently in the process of increasing its fleet from 100 to 200 brand new aircraft. It has chosen the high road of marketing, featuring the quality and style of its operations.

At its helm is CEO James Hogan, a boy from Coburg and Ivanhoe Grammar. It also holds 24 per cent of Virgin Australia so you could say the bonds with Australia are pretty strong.

Hogan started his career on the ground floor at Ansett forty years ago, so he's your typical Aussie self-made man. Nicole, as we all know, was a Sydney schoolgirl when she first ventured onto the screen in Bush Christmas. So she's the self-made girl, though I have no idea if anybody thought of it when they were casting the commercial.

What I do know is how fiercely competitive the world aviation market is, and how important to carve a solid position for your brand.

The major brands are clearly stamped with their identity - Qantas, British Airways, Singapore (girl), American, Air France, Lufthansa - you know exactly what you are buying, have known them all your life.

Then there are the bargain carriers, Jetstar, Air Asia, Air China, Garuda, Brunei, Cathay - dozens of them. How can you make your new airline stand out?

Hogan has used the opportunity of his new fleet of planes to create an upper level of luxury. So the new planes have a seat called The Apartment - a room which contains a full-length bed and immaculate service; or The Residence, a three-room private apartment on your plane.

Aren't they expensive? Of course! The Residence from Abu Dhabi to London is $24,000. But then, this isn't made for us hoi polloi, this is for the flyer making a choice between the suite and his private jet. With its own butler and chefs, you're probably more comfortable on the big plane.


But by promoting itself as the classy airline Etihad will attract the business travellers, who don't pay their own fares anyway, and who are much more profitable than the penny-pinching rabble in economy. In fact I wouldn't mind betting they get a better class of economy passenger anyway, willing to pay a little extra for the perceived luxury of the new fleet.

Just last week we lost Stuart Wagstaff, who epitomised the line, "when only the best will do". All right, he was talking about fags, but the words ring true in marketing.

This is the strategy that Etihad are running. So they have put their name on our Docklands stadium, Twickenham rugby, and Manchester City's soccer ground. They put their name on the best to create an identity up against established airlines like Qantas and BA. They should be on a safe bet with Nicole, too.

ray@ebeatty.com

12 March, 2015

Crowdfunding has become the mighty beanstalk

Melbourne Herald Sun, Thursday March 12, 2015

Three years ago I introduced my readers to the new concept called "crowdfunding". This was a novel way to raise funds for small projects and products. Well, what a surprise - this little idea is growing like Jack's beanstalk and is now looking at some very serious money indeed as it knocks on the giant's window.

One of the most popular funders is Kickstarter, which originally helped designer Scott Wilson market the idea of a wrist strap which would turn an Apple Nano iPod into a trendy watch. He put his designs on the web and in a day had raised $1 million.

Seeing a few more examples like this, thousands who had a good idea but would be ignored by the banks, followed this method.

The early enthusiasts had small investments for projects like music albums, painting exhibitions, independent movies and concerts. But it quickly grew beyond this to become a source of small-scale financing. There are now several hundred crowdfunder sites on the internet, which all need to be studied with care: Gofundme, Indiegogo, Teespring, YouCaring; Crowdrise and more, all slightly different.

At the start there is always an idea. The originator persuades his immediate circle about its merits and persuades them to invest a little of their savings in it. He or she then builds a prototype and promotes it on the web. They nominate a base amount of money needed to make it work. Hopefully others like the idea and invest a little of their cash in it.

If the donations hit the target, the project is launched. If not, the funds are usually returned (every source has different rules. It's important to read them first.)

The donors are paid in different ways. Sometimes they receive a copy of the product when it is finally made; other times they share the profits of a successful venture. Sellaband raises fans' money to pay for professional recording or manufacture or marketing of their adored artist. With the decline of music labels and their rivers of vinyl gold, bands have had to fend for themselves - not their strong point. But the enthusiasm and investment of their fans make possible that new album or big-city tour.

All the little contributions mount up. In 2013 the crowdfunding economy exceeded $5 billion and is rapidly growing. Just last week smart-watch maker Pebble launched its Time model on Kickstarter and raised $1 million in 30 minutes, $8 million in 12 hours.

In the UK, The Crowdfunding Centre promotes a diverse range of projects and targets like $140,000 to create a hand-held Geiger counter, to $2,000 to support a Green MP for Bristol.

Computer games are also favourite clients. An online game Star Citizen claimed to have raised $90,000,000, a world record so far.

But you ain't seen nothin' yet. The Chinese have discovered it. With 1.4 billion in their middle class - as canny a bunch of money managers as you'll ever find - they are taking to it like ducks to water. So much so that their government is already worrying.

So is the government of Brazil, where the crowdfunding ecosystem has planted roots. Both for the same reason - it is drawing people and money away from the carefully managed bureaucratic paths and setting them free in cyberspace.

Banks, governments, institutions, hierarchies - so much freedom threatens them all. Which is a good reason to applaud it.

06 March, 2015

The end of Australian cars

Melbourne Herald Sun, Friday March 6, 2015

We have two years till the end of car manufacturing in Australia, completing a hundred-year history that is part of our national identity.

It is a painful, drawn-out loss as first Ford, then Holden, finally Toyota lock their gates. Countless schemes have attempted to save the industry but the end was, in hindsight, inevitable. Just in the past seven years some $10 billion in subsidies from state and federal governments failed to revitalise the industry. How much was it costing each of us tax payers so that a dwindling number of enthusiasts could drive their favourite Holden or Ford?

In fact we have always paid high taxes to support the industry. For much of the last century it was in the form of tariffs, reaching nearly 60 per cent. As we are reminded regularly, call it what you like but in the end it is a tax.

But let's remember: even if we don't weld our cars any more, all the other functions are performed locally. They are imported, marketed, sold, fuelled and serviced as much as ever, so don't take off your marketing jacket.

In fact, if you are involved in selling cars, you'll be busier than ever. Australia offers 64 brands, more new cars than anywhere else in the world. Even the US only has about 50. They will be coming from Europe, America, China, Korea, Japan, Thailand - as they have been for years.

Such a crowded choice makes marketing a nightmare. How do you differentiate your model from all the rest? They all look so shiny, fast, desirable, driven by sexy girls and hunky men.

The iconic labels will remain; Holden is planning to bring in Germany's Opel Insignia and there is much debate about whether to badge it "Commodore". You can be sure similar arguments can be heard in the Ford and Toyota offices.

From the customer point of view, the next few years will be a good time to buy a car, with the many manufacturers juggling for market share, putting downward pressure on price and sugaring the benefits.

Car companies will need to pay much more attention to each brand's positioning and message. There will no longer be the "buy local" urge among drivers or fleets. Pricing and status will be focal points.

As brands are forced to develop personalities, let's hope we see a resurgence in creative advertising - the clever, witty ads of the Bernbach and Ogilvy era, to make the ads stand up and be noticed.

They will need it - a whole new market will explode on top of this. The electric cars are queuing up to enter.

Ford will have its Focus at $43,000 with 122 kms range; the BMW i3 at $75,000 with 190 kms in its batteries. But crowning them all, Tesla claims a range of up to 500 kms, though its car costs over $100,000.

At the moment electric car sales are hampered by availability and price, but these are being resolved. New technology for batteries is also emerging from the university labs, which will transform the major drag on EV sales: the fear of running out of juice.

In a year or two we'll see a competitive petrol versus electric car market so let me reassure you, though the mammoth factories may be no more, you have not see the last of shiny-suited car salesmen spruiking on your telly.


Blog: themarketeer-raybeatty.blogspot.com

26 February, 2015

Whatever you say, they'll call you a liar

Melbourne Herald Sun, Thursday 26, 2015

If you tell your audience that you are not what they think you are, they will continue to believe what they think - but now know you to be a liar, too. This is a public relations lesson many politicians have had to learn. The more you deny, the more they think you are lying. In the end, like the Cultural Revolution show trials, the only way out is mea culpa. "Yes I did it and I'm sorry."
Not just politicians, companies have had to learn this too. For 40 years Nestle has fought constant battles of accusation and denial over the marketing of its formula in the third world. The whole infant milk business has been hit by protests, boycotts, letters to the editor, parliamentary votes. It still hasn't ended. You wonder how this could be - now if you visit the Nestle mothers' web page you are greeted by the headline: "Breastfeeding is best". They promote breastfeeding for the first six months, with gradual introduction of "complementary" food.

This multinational must have spent millions over the past 40 years fighting protests and defamation cases. In fact they won a case fought internationally for over two years - their opponents were fined $400.

But a group called IBFAN UK continues to fight from a tiny office in Cambridge. Hundreds of volunteer groups around the world ban Nestle products from chocolate bars to Perrier mineral water. Nestle claims it complies with every WHO provision. But the more they plead innocence, the more they're called guilty.

So you think oil companies don't believe in climate change? Not so. See what ExxonMobil has to say: "A variety of policy strategies can contribute to greenhouse gas emissions reductions, such as cap-and-trade rules...and carbon taxes. ExxonMobil participates in greenhouse gas emissions trading when cost-effective, in areas of our operations where regulated trading schemes exist."

In fact they boast at length about the many measures they take to reduce carbon emissions and their research into clean energy. So where are these climate deniers? A few provincial politicians and Republicans. All the rest of the world is cleaning up its act - including the oil majors.

The same goes with tightening the belt. McDonalds gave up denying its responsibility for Australia's expanding girth. Now you will find it offering "healthier" foods through its McCafe. It has a Nutrition section to its web site and even offers a 14 page pdf book of information on nutrition, ingredients, and allergens. It will even help you find Halal restaurants.

Willie Wonka is in retreat. Cadbury will no longer make big rich chocolate bars. It has taken the pledge in the British government's anti-obesity drive and put a cap of 250 calories on all its single chocolate bars. In Australia, however, they blame the shrinkage on cocoa costs. The price, of course, remains the same.
Its new owners, Mondelez International of Chicago, is the latest food giant, having swallowed Kraft, Cadbury, Oreos, Nabisco, Toblerone, even Vegemite. The last thing they can afford is a Nestle-style boycott on their $46 billion world cash-flow. Especially when so much of it is centred on those little shelves around the cash registers.

So if you are faced with a PR disaster about your product, don't instinctively deny it. Find out the truth. Tell it, fix it, and face the world with a clean pair of hands. And hope that the truth will speak up for itself.

20 February, 2015

There's gold in them silver locks

Melbourne Herald Sun, Thursday February 19, 2015

There's a new chap at the video library. He looks at my DVD and my silver hair and slowly points out: "You realise this is Blue-Ray 3D, so you need special equipment to see it?" I give him a stern look and describe my 3D Sony 5.1 theatre system and say I know perfectly well what it will play.
Here's another marketer who does not realise what he sees in an over-50 customer. He's looking at someone who is probably still working, has no kids to feed and clothe, no school fees, no mortgage to pay, no lavish lifestyle to show off, who has hopefully grown out of his expensive habits. In other words, a big disposable income.

But he's not alone in this error. In Britain they estimate that only five percent of advertising money is targeted at the over 50s. No doubt if you took out the funeral plans and aged care homes there would be even less. Yet in this survey the 50-69s were 29 per cent of the population and accounted for 80 per cent of the wealth.

Marie Stafford is Research Director at the J Walter Thompson agency in London. She saw the problem up close last year, doing research on baby boomers. So many brands got it wrong. "They have no empathy with the generation," she observed. They did not distinguish between a 50 or 60 year old, fit, working and engaged with the world - and someone who's 80 or 90.

The problem is, nobody is willing to be old any more. Marie saw this. "They are of the baby boomer generation, which has been used to being very vocal, setting the pace and making change."

"It's almost like, now they've gotten to this age and they're changing the status quo yet again. They're not going to do it how their parents did it, and they're not going to do it how we expect them to do it either. It feels completely new, a new generation we haven't seen before."

Well this is a generation where the Rolling Stones are still demanding Satisfaction, and this year we have concerts by septuagenarians Neil Diamond and Paul Simon in town. They're a far cry from the white haired couples shuffling along the foreshore, in the superannuation commercials.

Of course for many of the over 50s, super is a sore point. The GFC of 2007-8 smashed their nest eggs and left behind a rotten smell. Now there is no longer the trust in banks and institutions to look after one's old age. So they pick up their shovels and go back to the mine. But they are not going to play the "old" game any more.

Marie ran focus groups. She found people of that age exhilarating. "Half of them, I thought were in the wrong room," she said. "They were very youthful in terms of what they were doing with their time and how active they were—so not like the generation we’re presented with culturally in advertising and the media."

Is it that agencies are full of young people? "It shouldn’t be the problem—it’s our job to put ourselves in other people’s shoes regardless of age differences - but I think it is. If there’s no one internally who understands what it’s like to be 50 or 60, then it is an issue."

So when that still-active rocker Paul McCartney asks "Will you still need me, will you still feed me?" You'd better answer "Yes".

12 February, 2015

Women at the top

Melbourne Herald Sun, Thursday February 12, 2015

Sheryl Sandberg is beautiful, brilliant, a billionaire, and chief operating officer of Facebook. Last year her book Lean In: Women, Work, and the Will to Lead was a best-seller for months and she is popular for her TED talks and speeches to women's groups. She's also happily married with three small children.
So she believes a woman can have it all? Not really. She can point to the Fortune 500, the list of America's top CEOs, and 24 of them are women. Barely 5 per cent. When we look at Australia's Top 100 we find four women - close enough in percentage terms, except that with this month's departure of Gail Kelly from Westpac, that number will dwindle to three.

What is controversial about Sandberg's talks is - sure there are elements of sexism and testosterone involved, but more of the questions need to be sheeted to women themselves.

"We women don’t take enough risk in our careers," she has stated. In her articles and books she writes about warning her female staff: “Don’t Leave Before You Leave.”

She sees this at Facebook, and in her previous job, that made her reputation, with Google. “I offer promotions and opportunities to these young women, and they tell me, ‘I want to get pregnant in three years, so I can’t do that.'" And then they mark time, at a stage when the most ambitious job advancement should be made.

Pattie Sellers compiles Fortune's Most Powerful Women in Business list. She has seen a change in the types of companies or industries that have adopted female leaders. She reports in wonder: "Who would have imagined that two of the biggest defence contractors would have female leaders? And IBM and HP? It’s kind of amazing—America’s two biggest tech companies."

She would have responded equally to Australia's situation - that dominion of male engineers, Telstra, with a female chairman Catherine Livingstone; or our most masculine reserve, the mining industry, dominated by Gina Rinehart.

There is a lot of talk about opportunities and quotas, and women don't have the same roadblocks in their path that they had half a century ago. It's not so long ago that a woman was sacked when she married, or if they were both teachers, the woman would automatically lose her job. Now, at least, they are free to continue their career path.

Women are more collaborative than men, so in a world where teams and work groups are all-important, their contributions shine. "But women think about power differently than men do," says Sellers. "Women think about power much more horizontally. Men think about power vertically."

She asked hundreds of women and men why they started their company. "Men tend to say to make a lot of money. Women want to create the company they would like to work for." Often, they have come from a big company and they don’t want to work that way any more.
Our universities turn out increasing numbers of highly qualified women. Will they forever fill the ranks of middle management without breasting the top? Sellers sees little chance of parity. "We might get 100 CEOs; eventually 150. But we're never going to get 250 Fortune 500s."

It comes down to the girls. Can they change the nature of business - or the nature of themselves?

05 February, 2015

We all suffer from collective memory loss.

Melbourne Herald Sun, Thursday February 5, 2015

It's almost pathological, what short-term collective memories we have. Look at the stock market. One day a share is a dollar, the next day $1.10, then it drops to 90c. The stocks rise and fall like bouncy balls but when you look closer, you find the listed companies are trading the way they were the week before, business much the same, profits much the same, so what is it that makes the stock so agitated?

To the outsider it seems like we can't remember how things were a week ago and certainly have little foresight on how they will be a week from now.

It's like rain. At the moment in Melbourne it has been raining. No matter that the west of this state is in the grip of drought. Down here we're ok and the grass is green, therefore our water is going to last forever, our dams will never empty.

Now wait a minute, if we stop and think we know that there is a major drought on its way. If not this year or the next, maybe the year after. 15 of the past 18 years have been drier than the Victorian average.

We know that once again we will be checking the levels of our dams in every morning's paper. Last drought everybody got so worried that we spent a fortune on a desalination plant that has never been used. After all, now it's raining. Does that mean that the plant will never be used? No, we know that it's only a matter of time, maybe in the future people will be saying what great foresight this had shown.

Until now Victoria has been Australia's greatest gas consumer. But new Queensland export contracts will triple gas demand, and push prices up to overseas levels. Our off-shore gas wells will find their contents sucked up - and their lives much reduced from the current 30 years.

In the United States they beat the shortage by opening up huge shale gas and oil deposits. Suddenly they are trumpeting about having fuel sufficiency for 100 years.

It turns out that Victoria also has huge shale beds capable of producing gas and oil, and enormous coal reserves for coal seam gas. These two areas obviously need urgent attention. But what happens? The last state government banned coal seam gas because of complaints from farmers and then, because they did not know the difference, they banned shale and even oil exploration.

The new government has come in and at the moment seem too scared by this dilemma to do anything about it. So they have allowed the prohibition to continue with no good scientific justification.

In fact, we are quite capable of extracting fuel in an environmentally careful way. We know how to drill oil without spillage, protect water tables from gas leaks. Gas can be released from shale like riffling a pack of cards.


Meanwhile, Australia imports 91 per cent of its fuel, and by 2030 we will be completely dependent on overseas fuel. The trouble is, what if some conflict closed off our sea access - as the Japanese did in WWII. We're an island, what do we do next?

In his NRMA report, Air Vice-Marshal John Blackburn insisted: "This is a national security, a national survival issue in the longer term."

Tighten the regulations, build in safeguards - and for once, show a little foresight.

29 January, 2015

The gadgets of the future are here and now

Melbourne Herald Sun, Thursday January 29, 2015

More than a decade ago I visited what is now called the Consumer Electronics Show, in Las Vegas, and at the time I thought it was the biggest trade exhibition I'd ever seen in my life. Well this month the 2015 show was far bigger than before.

At 200,000 square metres with 3600 exhibitors you could never see it all. And as always, within it are the pointers to what our future world will look like.

Some are predictable: TVs are getting bigger, brighter, more intensely coloured, glasses-free 3D; 4K Blu-ray is coming as is sensational virtual reality.

There are little innovations like ear buds that measure your biometric and fitness information even as they play the music you're jogging to.

Nanotechnology is moving towards centre stage, making possible inventions of once-impossible tinyness with greater power and wide applications.

The heroes of the show were in fact the cars. Some technologies are already here, or will be in very short order. Self-parking cars. Continuous connection to the web. Noise cancellation speaker systems that allow four passengers to each hear their preferred music at the same time, without disturbing other passengers.
Mercedes-Benz wowed them all with its concept car. Dr. Dieter Zetsche, head of Mercedes-Benz Cars, was there in person to introduce the "F015 Luxury in Motion". This beautiful machine looks sculpted and inside it has four comfortable swivel armchairs that can be turned to face each other. "The car is growing beyond its role as a mere means of transport and will ultimately become a mobile living space," said Dr Zetsche. In other words it's another room for your house or another office for your business.

Don't worry about the driver - the car will do that. Or, using a floating control console, any of the passengers can take over the driving duties. You a back-seat driver? Here's the steering wheel. Fortunately the car has its own anti-accident technology.

The endless display halls were also filled with robots. Some giving directions. Some serving on the stands. Others demonstrating how they can pick products in a warehouse or clean the floor of your house. There were pet dinosaur robots that loved being stroked or tickled, and another bot that will rock your baby to sleep. No doubt you have already noticed the appearance of numerous vacuum cleaner robots in Harvey Norman or Myer. Well brace yourself, there are many more robots on the immediate horizon.

Smart homes are well and truly on their way. Many new devices are built for remote control from your iPhone or Android phone. Cookers, washing machines, house lighting, music systems, security - all controllable from far away when you need it.
The Cicret bracelet looks purely decorative - till you turn it on. It then projects a smartphone screen onto your wrist which you can touch, drag, pinch, select in the same way you control your phone. I wouldn't recommend it if you have hairy arms, though.

The much-discussed Apple Watch is expected to arrive this autumn, meanwhile Google's Android Wear software keeps launching new apps, powering smartwatches from Samsung, LG and Motorola. Like the Moto 360 which can play games, run note-taking app Evernote, and take voice commands.

So thousands of inventions and gadgets are primed to come your way. At least you'll have no shortage of choice by Christmas time.

22 January, 2015

Some of the best ads are phoney

Melbourne Herald Sun, Thursday January 22, 2015

For nine years the makers of Doritos corn chips, Frito-Lay, have invited members of the public to create their own Doritos commercial. This year the winner will see their ad played in Super Bowl time (the most expensive advertising time in America, on February 1st) and receive a million dollars prize. Already there is an Australian finalist, Armand De Saint-Salvy from Sydney.
But there is another Doritos commercial doing the rounds, also from Australia. It's the jolly, musical story of an attractive couple who meet, court and marry through their mutual passion for Doritos. They decide to honeymoon "at the beginning" - back in the tropics where the oil comes from. Only to find the rainforest has been devastated to allow the planting of huge palm oil plantations.

The ad, it turns out, comes from an environmental group Sum Of Us, connected with the Rainforest Action Network, Greenpeace, and Union of Concerned Scientists. The objective is to pressure the parent, PepsiCo, to be more insistent in its policing of the habitat management practised by its third-world suppliers.

There are a lot of these spoof ads around if you search. They make popular subjects for final-year photography, art or cinema students, so they can be very polished and professional.

I particularly like the Yves Saint Laurant perfume ad with a beautifully shot bottle proudly named "Cocaine". Much like Dior's product "Opium". What betrays this as a spoof are the two neat lines of white powder in the photo foreground.
As you'll recall, I keep complaining about the lack of creativity in much of today's advertising. In fact some of the best ads are either spoofs, or very close to being send-ups.

One current ad is called a "content video" - think of it as a long tv commercial on YouTube. It features that dreaded figure - the fitness bore. Working his abs and pecs around a gym he talks lengthily about "the palaeo diet" (don't eat anything a caveman couldn't get); "the space diet" which you eat hanging upside down breathing from an oxygen tank; the hachuchu berry that turns fat into muscle overnight. You've met the type. The payoff though is right at the end when you see the sponsor. Grill'd Hamburgers with their low carb super bun. It sure doesn't look like a Hungry Jack's commercial.

But because it's so unexpected, you'll laugh and remember it longer.

YouTube is currently creating a raft of ads which spoof the extravagant Super Bowl ads coming up. American advertisers spend millions on commercials to launch between the game's first and second half. YouTube (i.e. parent Google) want to see whether their ads can pull viewers away from the network. When they are paying $5 million for a 30-second spot, the advertisers will not be pleased if too many viewers are lured away by the fake commercials.

For the social media, though, it is an audacious act, pitting themselves against the might of the networks on the biggest TV event of the year. If they do make a dent on the program's viewing numbers, they can then turn to the advertisers and show they have the same pulling power as the expensive stations.

The digitals - YouTube, Facebook, Twitter, Netflix and the rest - are now looking to build themselves broadcast empires too. And fuelled by their enormous income streams, there's no doubt that there is nothing phoney in that ambition.

15 January, 2015

On movies and TV, we face long-distance censorship

Melbourne Herald Sun, Thursday January 15, 2015

In the old days of the Hays Office, Hollywood movies were tightly restricted on what sex could be shown. Remember the old I Love Lucy and Bewitched sitcoms? Ever noticed that the parents always had twin beds in their rooms? I wondered about my parents sharing a double bed when no-one on TV or in the movies seemed to do so. But that was censorship maintaining rigid boundaries between couples and coupling.

Sex on screen has come a long way in our liberated age. But the Hays Office may be raising its head again - this time through economic muscle. 2013 saw the film business turn over $44 billion world-wide. And a substantial percentage of these receipts were from China, with an industry now bigger than America's.

Add the movie-devouring of India and the Middle East, and you are talking very big bikkies. Enough to make a blockbuster movie financially feasible or dead in the pending tray.

So if the Chinese censors demand less cleavage; or the Indian distributors are unhappy with the blatant sex...well it can be solved with a simple cut-away shot.

Currently in China the hot topic on social media is a very lush and expensive serial drama The Empress of China, about history's only female Chinese ruler. After the first episode played - to a record audience - the series mysteriously went off-air. Four weeks later it returned. All the decolletage shots (the fashion was popular at the time) had been re-edited to head-only framing. The court ladies lost their boobs.

Late last year the board that administers censorship issued a string of prohibitions. And funny enough they are very like the list issued by Will H. Hays in 1930 - you know, the usual: nudity, partner-swapping, rape, incest, prostitution - even flirtation. So now everybody is wondering how a show like Game of Thrones, which features all of the above, is going to fare. The pilot having just been shown on CCTV, an experienced fan reported: "I guess it's okay if all you want to watch is a medieval European castle documentary.” The Chinese version has lost 11 minutes.
But of actually greater importance in China is the political message. In 1984 a movie called Red Dawn was released to poor reviews and moderate multiplex success. It featured Russians and Cubans invading the US. Then in 2009 it was remade with invading Chinese. But wait a minute... it was not released till four years later, and the Chinese had changed to North Koreans. All done through editing and computer graphics in post-production. I mean, the Chinese audience would not want to see themselves as the villains, would they?

The Chinese giggle, online, at an obvious piece of product placement in the new Transformers:
The Age of Extinction movie. As a robot tears its way through Hong Kong there is an unexplained cut to a Communist official who sternly declares: "The central government will protect Hong Kong at all costs!" That's called "And now a word from our sponsor..."

Even the North Koreans have clout, as when they hacked Sony's computers last year and forced the re-scheduling of The Interview, the comedy about an assassination attempt on Kim Jong-un.

Perhaps we'll end up making two versions of every film. As it is, they shoot several endings, don't they? And then choose the one that most appeals to the test market audience. Well here that test market is a small committee in far away Beijing.

08 January, 2015

It's a new year in cargo cult land

Melbourne Herald Sun, January 8, 2015

Every new year, for eight years, I have visited the primitive society where our happy nation of simple folk live, enjoying the gifts of their our magical cargo cult.

Just like the natives of New Guinea who believed their wartime prosperity with plane loads of food, machines, trinkets and clothes arriving from across the sea, would continue for ever, we believe the same story.

It's our cargo cult economy. The world gives us more and more - cars, stores full of beautiful clothes; stoves, pots and pans and fancy goods; container loads of food, phones, TVs, trinkets and mirrors. We just sit back and receive, signing the chits. We don't have to do anything for these gifts, just let the donors take whatever they want.

Last year, though, the tribe became dissatisfied with the gifts. There was too much fighting within the old chief's family. So as always, we executed the old chief, and responded to the new chief's aggressive prayers.

He told us gifts of cargo were being wasted on medicine men, the unproductive young, and in feeding the old. They were pushed to the edges of the tribe to beg for scraps.

Now the cargo would be just for the deserving. But what's this - the gods don't want so much of our rocks and dirt any more. They're digging up less and in turn they have reduced the amount of cargo they'll send us. Calamity!

The mood of the tribe is turning angry. Where are all the plane loads of booty our new leader promised us? He hastily consulted the gods on his coconut shell telephone and responded: To appease the gods they demand we make them more infrastructure. They want to see our sincerity by how much we can build.

So teams of tribesmen will carve new tracks through the forest. A banana plantation will be chopped down to create a new landing strip. Hundreds of grass huts will be built.

Groups of manmeri (men and women) had been making stone axes and ceremonial clothes for the tribe, for generations, but they were pushed away to make room for the new giant straw and bamboo towers that will soon dominate the skyline. Any clothes or implements we need will arrive amongst the abundance of booty that the cargo will bring.

The Tribal Drumbeating Corporation is also being cut back, it makes the natives too restless and asks silly questions like "is there really a Cargo God?". So the tribe had a great feast on a few hundred of their drummers, leaving yet more booty for the rest of us.
In any case, the containers have thousands of discs to view and the plastic masks from Disney are much lighter than the old ones of wood and cowrie shells.

Of course there are always grumblers in the tribe. Complaining that we are cutting back too much of the jungle, digging the wrong holes or making too much smoke with the burning-off.

They even say, one day the gifts will end. But we know that the gods will always bring new cargo to our island. We'll just make sure that no canoes from the other islands ever make it onto our beaches. Turn back or be barbecued, this is Cargo Cult Land. Here's wishing a Happy New Cult to you all.

18 December, 2014

Opera makes the most memorable TV commercials

Melbourne Herald Sun, Thursday December 18, 2014

Mazda likes to portray itself as a good corporate citizen, and thanks its many customers by sponsoring the annual Opera in the Bowl concert, as it did last weekend.

Of course in such a popular event the opera needs to be light, short and digestible, with lots of songs that everyone knows - even if they believe they know nothing about opera. So it was that the warm summer night was filled with Opera Australia's orchestra and finest young singers entertaining the crowd with two hours of delightful, er, TV commercials.

I don't think it was deliberate, but more than two-thirds I could remember back to a TV soundtrack. It's just that a great operatic tune is so memorable, and so made for words, that advertisers have always found them irresistible.
So when the orchestra opened with Bizet's Carmen, B&D's Roll-a-Door opened in my mind. Then Carmina Burana by Carl Orff conjured hundreds of men racing across a field chasing a beer.

The great Verdi of course was there with the Anvil Chorus (Yellow Pages), and Nabucco's Chorus of the Hebrew Slaves which caused a row in Italy when a bank used it for a TV commercial.

There is a financial reason for this resurgence of opera, far more mundane than its great beauty. Most of our favourite operas were written more than a century ago and so are out of copyright. So although you have to pay the record company or singers - you don't pay hefty original music costs or residuals. So when you can get the world's greatest music for nothing - why not?

And marketers have been filching opera tracks since before the Marx Brothers. They're all snapped up and replayed, fortunately only 30 seconds at a time. So La Donna E Mobile becomes "pasta from Leggo's". Rossini's Figaro becomes Vittoria Coffee and in an earlier commercial Doritos Chips. Pachelbel's Canon takes you to Tasmania, and Wagner's Valkyries fetch the Reflex copy paper.

Cars love the smooth ride of classical music: Debussy's Clair de Lune for Honda Accord, Rachmaninoff's Pictures at an Exhibition is Mitsubishi's Magna. Honda Legend uses the dreamlike atmosphere of Cantaloube's Songs of the Auvergne; Holden Statesman used Mozart's Piano Concerto 21; and for their Calibre, Holst's The Planets. Of course the grouind-shaker of them all was when the Army Reserve blew its trainees through the smoke bombs with Tchaikovsky's 1812 Overture.
There is actually give and take in this process - Stanley Kubrick turned Richard Strauss into a hit composer when he ran Also Sprach Zarathustra as the soundtrack for his 2001. It was scarcely known then. And Delibes was yet another obscure, little known 19th century opera composer - there are thousands of them - until his Flower Duet was played through the cabin of a British Airways commercial. It was then that the dust was blown off the volumes of Lakme and it is now in the world's frequent opera repertoire.

I'll bet that a lot of my readers are now surprised to discover they are so familiar with the works of opera and classical symphonies. You may not know the names but the music is right inside you. Maybe you might use this holiday break to explore the world of classics, if you haven't been into it before. You'll be amazed at what you find, and you don't have to buy any products.

Have a very merry Christmas!

11 December, 2014

All the world's top chefs have planned your Christmas dinner

Melbourne Herald Sun, Thursday December 11, 2014

It has pride of place on the bench of so many a young family's kitchen. The cook book rack where the Margaret Fulton tome would sit open at that day's planned recipe. Only now it's not a book in its place but an iPad, or its clone. The recipe would be displayed as before, with bright coloured photo of what (hopefully) it will eventually look like.

It may be an actual Margaret Fulton recipe, or Jamie Oliver, or Nigella Lawson - or any of your favourite TV chefs, they all seem to have their own sites including the various Master Chef winners and their judges.

World wide there are hundreds of recipe sites, somewhere there's one for every taste and every nationality from gnocchi to spare ribs to Peking duck.

To this you can add the thousands of enthusiastic bloggers. Some have as much skill and character as the professionals; large numbers of them leave much to be desired and a queasy feeling in the tum.

But Australians appreciate their home cooking and are doing a lot of it, even if they also consume large quantities of take-away. But we are fortunate in having very affordable food. Our incomes have risen faster than prices. So the Department of Agriculture was able to report in 2012 that over the previous 20 years, while our incomes rose by 36 per cent, the spending on food only went up 13 per cent.

This is corroborated by the Australian Bureau of Statistics which reported that households spent 20 per cent of their cash on food and drink in 1984, yet 25 years later it was only 16.5 per cent. The popularity of eating certainly hasn't declined so it must be price. And that's even excluding alcohol.

Of course clever marketing joins the dots and you'll find a helluva lot of doodling in the recipe pages. I've talked before about the work Coles and Woolworths have done to develop their home delivery services.

Now Coles have taken it a step further, with the announcement of a new Recipe to Cart service. It's a marriage made in supermarket heaven: the blushing bride is Taste.com.au, the country's biggest recipe deliverer, claiming a reach of 6,277,000 readers and clickers per month between its website, magazine and newspaper lift-outs.

You choose your recipes, click the ingredients, they pass into the digital shopping basket and the next day they get delivered to your door. I wonder if there's another button you can click to deliver Curtis Stone or Heston Blumenthal to cook it up for you.

Christmas of course is a time when the nation goes extravagantly mad in its food buying. So it's an ideal time for Taste and Coles to launch this service. They have constructed a Christmas Menu Planner with lots of seasonal dishes based around products on Coles shelves.

Woolworths are fighting back with Jamie Oliver Christmas recipes, while Aldi and IGA have had their home economists toiling for months to deliver acres of appetising meals on their web sites.

So if you are one of our millions of keen on-line recipe hunters, rest assured that a very well catered Christmas has been laid out for you.

04 December, 2014

To police the TPP we need WikiLeaks

Melbourne Herald Sun, Thursday December 4, 2014

Australia's future as a trading nation is the subject of intense discussion. The Trans Pacific Partnership (TPP) is an agreement being hammered out between Australia and our 11 trading neighbours including America, Canada, Japan, Chile, Mexico, Malaysia and Vietnam. But not including China or India.

How do we know about it? Certainly not through the trust of our government, which keeps the details under heavy security - as did the previous Labor government - so any information we have is thanks to WikiLeaks.
Consequently we are working on a jigsaw puzzle with 80 per cent of the pieces missing. But we do get to understand the picture.

Detractors have stormed over one of the chapters that we have seen, on intellectual property. Howls of protest have been heard from music and movie lovers at the planned tightening of copyright laws and the cutting of online piracy.

I would regard separating freedom from theft as a primary task.

Of more concern are the moves which could see Australia paying more for drugs, medicine, and health care. We are used to our PBS and generic drugs, they have made our good health affordable.

We can also expect to see Australia's already-low tariff walls descend even further on items like machines, cars and technology.

But the question will inevitable arise: will Americans free up their agriculture markets, or the Japanese permit Australian rice?

Even behind curtains, our negotiators are being scrutinised very closely and will have to justify any concessions they make to a suspicious public.

If there is anyone with a broad-ranging view of this country's economic future, it's Phil Ruthven, the chairman of Ibisworld market researchers. How did he view the TPP?

To my surprise, he was not very concerned about it. "Any treaty is always healthy," he said, "But our trade and tourism relationships are in the Asian region, not the Pacific. 80 per cent of our trade is now focussed on Asia. Two thirds of our tourists are coming from Asia.

"We're one of the fastest growing countries, mainly from immigrants, and two-thirds of those are from Asia. Any treaty with Asia is probably more valuable to us than America. In reality our future is Asian rather than Pacific orientated."

All of which makes you wonder at the treaty being so drawn-out. Are we sure we are sitting on the right side of the fence? China already has its treaty, signed last month, and India is not too far away, we are told.

Once he warmed to his theme, Phil of course was a trove of information and statistics.

"By 2016 China will be bigger than America, economically. But they won't become a power so quickly." Which leave us in between two giants.
"We are pretty tiny," muses Phil, "and we need friends everywhere."

So he advises that while we make our new accommodation with China and India, we must never neglect to stay close friends with America.

Does that mean paying more for software? "I think you'll find IP is one of the most valuable assets they have got. Look at the expense of developing drugs. I would have some sympathy for them wanting to be paid for that."

However, we still expect our negotiators to be tough nuts - and we have WikiLeaks to spy on them for us.

28 November, 2014

Bespoke and mass production will no longer be contradictions.

Melbourne Herald Sun, Thursday November 27, 2014

Once upon a time a son of gentry would visit the family shoemaker in Jermyn Street, London, to have his feet lasted. Perfect models would be made of his feet, carved out of hard wood, which from then on would be used to make his shoes.

Then later, while serving in India's North-West Frontier, he may decide it was time for a few new pairs. A letter to Jermyn Street would see the beautiful new, perfectly fitting shoes delivered by the next tea clipper.

This bespoke shoe making is still available in a few stores around the world, if you have about $5000 for a pair of shoes. But rapid innovations may make it available for us non-gentry, and not a very long time away.

Already there is technology that can scan your foot, digitise it, and rebuild a perfect model - the last - with a 3D printer. There are a number of companies around the world working to create just such a system. Some of the sports shoe companies already have "design your own style".

Management consultants McKinsey & Co point to a huge new marketing wave coming at us in the shape of custom choice and fitting. A lot of the software has already been written, many of the machines have already been built.

Ford and General Motors have invested heavily on interchangeable robotics - so when you order your car, details, specifications, features and colours can all be programmed into your order on-line.

We're already used to our computers being customised to the smallest details of memory, screen definition, networking capacity, inbuilt radio and TV - there seems to be no function that can't be specified when we make the purchase.

Clothing is another area where the computer comes into its own. Like the shoemaker's last, your whole body could be recorded and filed. So long as you were managing your weight, you could order your perfectly-fitting outfits from wherever you were in the world. The computer image would even show you how you will look with that particular blouse and skirt or trousers and jacket.

Of course this sounds like magical marketing but it will all depend on the ability to supply and respond. By all accounts it took our supermarkets over two years to develop a system reliable enough that now they can advertise computer shopping with home delivery.

McKinsey instruct that the first step is to identify opportunities that create value for the consumer and are supported by smooth, swift, and inexpensive transactions for both customer and producer.

The second is the tricky part - keeping costs controlled even when numbers and manufacturing complexity increase. This is why the customising of goods is still in the hands of small start-ups or separate divisions of large companies.
But now, they say, "We believe the time for widespread, profitable mass customisation may finally have come, the result of emerging or improved technologies."

They foretell it has the potential to increase a company's revenue and beat competitors, improve cash flow and reduce waste. You only make what has been ordered - and usually paid for. The customer's loyalty is guaranteed - they know you will always supply the perfect fit. You'll also gather data that can help you develop the range of standard products for the off-the-peg customers.

Customising is mass production - but one at a time. It creates a radical new marketplace.

20 November, 2014

The European grocer that invaded Australia

Melbourne Herald Sun, Thursday November 20, 2014

For a company that didn't believe in advertising for much of its history, the current commercial is pretty lavish. Set in a primitive, frozen, Grimm-like alpine village and inhabited by inbred coarse natives, we see them react when Johann returns from a visit to far-away Australia.

He tells them of hopping animals, cricket bats, even gets them to surf on the lake - which, being perfectly flat, just sees them sink below the ice.

Finally the villagers of Julbacken pick up burning torches and revolt. But at Johann's house they find a barbecue and table piled with Christmas fare. One prawn and they're converted to the Aussie Christmas.
The advertiser is a surprise: Aldi Supermarkets. For a price-driven, warehouse-shelved operation that doesn't even give you carry bags, they have spent big on some classy advertising for their Christmas drive.

But then you look closer and my, how they have grown without being noticed. It seems such a little time back that they were a curious German food store selling phoney Corn Flakes. You'd go there when it was close by - not very often because there weren't many - or the days before payday when you'd feel the need to be penny-pinching.

Now however there are 340 Aldi stores in Queensland, NSW, ACT and Victoria. They turn over $5 billion a year and have overtaken IGA to become number three in supermarkets with 10.3 per cent market share. All done since 2001.

Much of this was achieved with very little media advertising, compared to Coles and Woolworths. They persistently letterbox their neighbourhoods so I'll have to give that credit. But of course their main draw is their ability to dramatically prune the price of most products.

While I cuttingly describe them as "phoney" products, I do have to admit that they are quality made and packaged. I've also noticed that a lot more recognised brands are starting to penetrate their shelves. They claim that a hundred per cent of their fresh meat, eggs and bread is sourced locally.

The stores themselves are a third the size of a conventional supermarket. This means a concentration of products, so there is less range to choose from. But it also reduces the cost. In fact Choice consumer magazine had regularly done basket comparisons that show Aldi as much as 25 per cent cheaper than the big boys. They wrote in a report, "Even if a customer does not shop at ALDI, they obtain significant benefits from having an ALDI in their local area, as the Coles or Woolworths store prices more keenly".

With 9000 stores in 18 countries, the group's main gripe about Australia is that they can't grow fast enough. They like to build and own their stores but claim that this country is the most restrictive one they operate in. Such a big wide country, but they can't find the suitably sited, correctly zoned blocks.

Even the ACCC sympathised, stating in 2009: "The barriers to entry created by planning laws are particularly pronounced for independent supermarkets".

Just this June Aldi submitted to the Competition Policy Review that this lack of real estate was reducing the opportunity for Australians to enjoy the lower prices brought about by competition. Their rivals, on the other hand, already have networks of old inner-city stores that can be upgraded - as you'll no doubt have seen in some of your local supermarkets.
So don't be surprised if any large empty shops near you suddenly sprout blue and orange logos.

16 November, 2014

The Great Golden Shield of China

Melbourne Herald Sun, Thursday November 13, 2014
They say that you can see the Great Wall of China from the moon. Well from there you could certainly experience another wonder: the Great Firewall of China.

This is the huge barrier the Chinese government has built to protect itself not from the hoards of Mongolian marauders, but from the hoards of western democracy campaigners. All internet and email has to filter through this mighty dam to ensure that it is pure of thought and ideology.

Of course every government longs for this controlling power - just look at the measures frequently proposed in our own Parliament. However it is unbelievably expensive - and cumbersome. The Chinese call it The Golden Shield and it's estimated that as many as two million police are involved in the project. What that would do to the budget blow-out.

Naturally, Chinese computer enthusiasts devote enormous time and energy to finding ways around this colossus. They have a constant cat and mouse game with the authorities, making a hole and getting full use of it before it is found and blocked up.

However, all this censorship has not impeded the paths of profit. The world's greatest data companies see billions of dollars in trade, and huge Chinese companies have a world market to serve.

So, early next year Twitter is opening its Hong Kong office, devoted to China business even though it is banished from the land. Google already has a sales office, in a ten-storey headquarters in Beijing. Facebook has just rented its own offices in Beijing, with views of the Forbidden City.

Which is quite appropriate, because the social activities of these world giants are mired in the quagmire of Chinese censorship.

That Golden Shield has seen some mighty stoushes. Google especially has spent ten years in a market where they once had 36 per cent - that has dropped to 1.7 per cent. The government has repeatedly blocked the search engine, both in English and Chinese. You'll get no sensible response to "tank man" or "Tibetan protest" or "Hong Kong democracy demonstrations".
Facebook was blocked in 2009 - so why are they about to move into a huge new office? Well, China is where the business is. Huge clients like Alibaba, Lenovo, Xiaomi - the names may not be familiar, but their products are in your house or office: from toys to computers to clothes and shoes and phones. Probably they have someone else's brand stuck on the face - but the companies that make them are vast and they depend on exports.

At the same time our social media giants have found that there is a big hungry world out there. Twitter has 284 million users, 78 per cent of them outside the US, even without a presence in China. In the last reported quarter its revenue was US$242million - not bad for a recently launched company. Facebook made $800 million, Google $13.2 billion. And they are all complaining that business is slow.

These companies see the Asia-Pacific region as the future, with offices strategically spread from Seoul to Beijing or Hong Kong, to Singapore and Sydney. And even the world's biggest Golden Shield won't keep out these treasure hunters for long.

06 November, 2014

How Carman won over the majors

Melbourne Herald Sun, Thursday November 6, 2014

As marketers, our job is to produce and sell products, for the public to choose and buy. But in order to do this we need a marketplace, shelves, distributors. This is why, if you've followed this column over the years, you'll have seen me frequently complain about the shrinking space allowed to us out in that market.

The policies of the major grocery chains are working to kill off the smaller manufacturers. Need proof? Visit any Coles, Woolworths or IDG and you'll see how the supermarkets' own generic products have pushed the great brands off the shelves.
Nowadays you're lucky to find two brands competing against any home product. Even big names like Kelloggs or Kraft or Nestle are feeling the squeeze. The small local brands barely stand a chance and seem to be fading away.

Everywhere you look you'll see home brand cereals, dairy, meat, vegetables, cleaning products, frozen foods - in fact it's hard to think of a category where the competition has not been reduced to two or three brands against shelves of discounted home products. Whenever I raise this topic I receive emails of agreement from manufacturers and marketers - some well known names, though I have to keep them private because they fear the power of the retail majors.

So I am always delighted at the tales of the small manufacturer who has overcome the obstacles and made their products so uniquely desirable that they crash through onto the shelf.

This week you may have seen a TV commercial for Carman's Muesli range. It features the company's founder and CEO, Carolyn Creswell, at a very continental-looking garden breakfast setting surrounded by family and friends. Perhaps they are celebrating the success of Carmen's range of products and its ability to achieve distribution as wide-spread as the big multi-national brands.

As an 18 year old, Carolyn had a part-time job bagging muesli mix. When the company decided to close this business she bought it off them for $1000, and ran it from her kitchen in Melbourne.

So what is the most important attribute for business success? Look at the stories in any business biographies and it shines through: perseverance. Not giving in.

Carolyn hung in there for over 20 years, refining the product, building the distribution, forging the supply links. She is quick to make changes when they are needed - range extensions, listening to feedback from consumers. Which is totally different from conventional cereal companies, many of whose products were formulated a century ago and rarely adjusted since.
As she recently explained: "We introduced Blueberry Seed Nut Bars this year and they weren't performing. We replaced 'Seed' with 'Superfood' and doubled the sales. That's something you can do very quickly when you own 100 per cent of the company."

Recently Carolyn reviewed and reformulated her entire muesli range. They were hearing from customers that the muesli took too long to chew. "So we reduced the thickness of the oats to make it lighter and easier to eat," she says. "You've got to stay focused on that last 20 metres: the things a shopper will consider before they decide to buy. It's worth investing in."

The philosophy has been successful for her. She is now Australia's richest woman under 40, worth $83 million. She has export deals with the UK, South-East Asia and China. As she shows on Channel 10's Recipe to Riches, she is a marketer who knows her oats.

30 October, 2014

What can the Elves tell you about aeroplane safety?

Melbourne Herald Sun, Thursday October 30, 2014

At the start of every international airline flight you are greeted by the safety instructions. Once they were performed as a little mime act by the cabin crew but nowadays they have been replaced by a video of smartly-pressed hostesses going through a routine you have heard so many times you just don't bother to watch.

But this time the arriving passengers, in the video, are in for a surprise - is that Elijah Wood across the aisle? On screen, is that an Elf princess giving seat belt fitting instructions from the glades of Rivendell? Or Gandalf demonstrating the safety crouch? You must be flying Air New Zealand on your way to Middle-Earth. Sure enough a lot of the broadcast comes from Hobbiton in The Shire.

The princess shows you the seat belt sign, and how to store your sacks of gold under your seat. A falling oxygen mask is fitted over the snout of a bulky Orc. Our tourist finds a gold ring but drops it off the Kawarau Bridge in Queenstown - and of course bungy jumps into the river after it.

The "passengers" demonstrate the emergency exits by fleeing from a charging army of Orcs. And finally Sir Peter Jackson makes a personal appearance in a recliner seat, to warn you about stowing your electronic devices at take-off.

So not only have you paid attention to the safety instructions, you have also been highly amused, had your appetite whetted to catch up with the film - and watched an enticing tourist ad for the beauty of New Zealand. Pretty clever for a boring grudge task.

This latest video flew into the air last week, but Air New Zealand have a history of creative safety films. Over past years they have featured All Blacks, Richard Simmons exercises, Sports Illustrated swimsuit models in the South Pacific, and previous Lord of the Rings-based promotions.

But is it frivolous, is it undignified to make fun of such a serious topic as air safety? Well if it makes passengers take notice of something that has become invisible to them, go for it.

Does it harm the bottom line? Take a look at Air NZ versus their closest neighbour Qantas, who take their air safety very seriously indeed. This 2013-14 financial year Air NZ chalked up a current profit of $300 million. Big brother Qantas has rung up a $646 million loss. Eh?

Well you can't pin that on in-transit videos, but perhaps it gives an indication of attitudes. For a start Qantas are flying a fleet with aging planes like the four-engine, thirsty Boeing 747s. Air NZ has been first to jump for the two-engined, more efficient 787-9s. Qantas had ordered those too, but has pushed the order to 2017.

As in any business game, chance comes into it too. Qantas has fierce rivals like Virgin at home and a host of Asian airlines slashing prices on the flight paths to Europe. Whereas Air NZ has much of its home turf to itself, with lots of highly profitable flights to towns like Hokitika and Paraparaumu. We can't even say them, let alone fly there.

It's only a one-stop hop to Hollywood. A long one admittedly. So no wonder their movie industry is also flourishing, carrying lots of wealthy film moguls. When they see what creative folk fly their planes, it will assure them they have come to the right place to make movies.

23 October, 2014

Halloween's coming - have you got your costume ready yet?

Melbourne Herald Sun, Thursday October 23, 2014

It was a four-year-old's birthday party and I saw half a dozen of them, including the birthday girl, dressed in flowing blue gowns. It was a Frozen theme - based on the blockbusting Disney cartoon - and they all chose to dress as Elsa. She's the powerful, magic one you see, while the heroine Anna was a bit too nice and wimpy for these girls.
After that, everywhere I went, I couldn't seem to cross a street without seeing some Elsa or Prince Charming being ushered in and out of their parents' cars. "Tell you what," I thought, "someone must be making a mint out of all these costumes."

When I checked, I wasn't far wrong. "Halloween's been going gangbusters this year," said Dale Pruser of Creative Costumes in Prahran. "I'm so busy - especially those of us with kids. It's like everybody is going to a party, and trick-or-treating is organised for whole streets"

Dale has been in the business 20 years "but now it's huge. We'll do even more business than Christmas."

It seems that the American passion for Halloween has joined with the riotous local custom of Muck-Up Week to fill the streets with masked revellers. With mini ice-queens weaving in and out between their feet. Oh and don't forget last weekend's Zombie Shuffle over Princes Bridge. The costume people do well out of making our fresh-faced youngsters look like rotting flesh.

So what is this passion with dressing up? After thirty years of plain dressing, jeans and jumpers, are our youth angling back towards the flashy dressing of the seventies and eighties? Is Sergeant Pepper coming back?

Costumes are definitely a necessity if you're going to a party over the coming days - Dale Pruser recalled the frequency of week-before and week-after parties to celebrate Halloween.

Research in the US has indicated that this little splurge will run to $8 billion over there, and as usual we are following at a fast trot. That's a lot of pumpkin heads. In fact the average person has budgeted around $80 a head. They are looking for better costumes and more variety.

Matthew Shay is president and CEO at America's National Retail Federation, who have conducted the research for 11 years now and found rapid and consistent growth. "There's no question that the variety of adult, child and even pet costumes now available has driven the demand and popularity of Halloween among consumers of all ages," he said. Even pets?

Yes - pets are the fastest-growing category in the dress-up market and if you look around your favourite shopping centre you will discover a whole variety of doggy outfits, from $2-shop cheapies to some surprisingly expensive quality merchandise.

But then as you and your children haunt the suburban streets on Friday week, you don't want the family werewolf to let you down.

Even the Australian Retailers Association has been surprised. "I noticed yesterday four customers at Bunnings buying boxes of skull fairy lights," said Executive Director Russell Zimmerman. "I'm quite staggered by the popularity of it - it's becoming a part of the market, like Mother's Day. We'll start to look closer at it."

Perhaps this is what to do if you're too young or too poor to get invited to the Spring Racing Carnival. Because after all that's a dress-up event too.