Brand Editors?

David Kiley in his businessweek blog post quoted Larry Light, former CMO if McDonald's, who said that he was actually the 'Brand Editor' of McDonald's. He remarked that consumers and media had a lot more control on McDonald's brand perception than him. I completely agree with his sentiment. A CMO of a large multinational is likely to be a Brand editor given the nature of their job description. He is the guy who says yes or no to an ad agency's concept, clears a media campaign, signs a press release or gives a go ahead to someone's product promotion plan. He is highly unlikely to do much more without antagonizing the people in operations or quality or human resource department. That makes it a lot harder job and all are comfortable in their silos trying to improve one metric or the other by a few decimals without recognizing that they are not going anywhere. The CEO must take lead in busting these silos every so often and get everyone to take up a new challenge contributing to a common goal.

Buyer Power

FT reports that China has refused to accept iron ore prices set in other importing countries like Japan and South Korea. This by no means is the first occasion when China has clashed with the the key iron ore producers like Australian BHP Billiton & Rio Tinto and Brazil's Vale. In 2005, BHP blinked first and gave in to China's demand for a lower purchase price than what was agreed between Japan's Nippon Steel and Vale. However, this year in June talks broke down between the miners and China as the miners refused to offer a higher discount than what was being offered to Japan and South Korea. Since then, the big mills in China have been buying at the same prices as Japanese and Korean mills while smaller mills are buying higher prices from the spot market.

This is more complex than one side wringing the hand of the other. China Iron and Steel Association (CISA) leads the negotiations from the China side. Representing enormous buyer power, they hope to extract higher discounts from the miners than other smaller buyers in Asia. This may seem to be a legitimate argument and by no means rare in business negotiations. But iron ore is a key ingredint of steel that is so essential to our consumption - going into everything from cars to utensils to furniture. A differential pricing will be a blow to competitiveness of Japanese and South Korean companies whose products often compete in international markets with made in china ones. No doubt they will ask the miners to treat them at par with anyone else out there. More importantly though, the question is how do you price a commodity that is not traded on any exchange and yet essential to our existence? There has not been any transparency or information on price setting procedure on such products so far. This was so because the ore miners were in too strong a position for any single buyer to play hardball with them - until CISA came into being. It will be interesting to see what happens next. Whatever happens will be of extreme geopolitical significance and will be a lesson in international trade negotiations that none can afford to ignore.

Truth, Lies and Statistics ...

Steve Yastrow blogged on marketing measurements on Tom Peters blog a few days ago. His post has touched a cord with many and has attracted several wonderful and smart comments that I would highly recommend reading. I am reproducing two highly relevant quotes his smart blog followers have contributed there in comments section:

“Statistics are used by managers like a drunk uses a lamp post – more for support than illumination.”

And every reader's favorite there (that includes me as well)-

"Not everything that counts can be counted, and not everything that can be counted counts."

Truly a classic, by Einstein as per the post.

I believe the quotes tell it succintly. In most organizations, managers look at data and somehow try to dress it up so that it supports their story, howsoever irrelevant and far from truth it may be. Simple actions or behaviors of employees are given far less credit than is due. And how HR practices or incentive structures drive those actions or behaviors is completey overlooked and forgotten most of the time.

Saving Africa

Courtesy William Easterly, Can the west save Africa?


Thanks to Alex Tabarrok on Marginal Revolution for this excellent find.

You can go to market for free but...

Seth Godin once again guided me to an insightful report in the New York Times that reveals some startling facts regarding the global music industry. Charles Blow reports:

"A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs."

Seth points out that the internet has brought down the cost of market entry to almost zero enabling a large number of people to compete for buyer's attention.

However, if the market gets this crowded the job of marketers becomes so much more difficult. How do you differentiate your product, target the right market, take the right channel strategy and invest the right amount of money? I would argue that the listening posts need to be close to the customer in order to get answers to these questions right.

Jon Stewart vs. Financial News Networks

I am a big fan of Jon but I was late to catch this. But when I did, it did inspire me to post on this blog. Jon blasted Jim Cramer, the host of a popular CNBC show 'Mad Money' for not standing up to protect public interest and cheerleading the mad market even though he (and others at CNBC) knew what was going on. His criticism was not about Cramer but the whole financial journalism in general for losing its way. This point was lost on some though if you follow various columns and blogs on internet on this. However, what I want to congratulate Jon for is calling out his own industry colleagues for not doing their job properly. It takes a lot of guts to do this and that is why we never have enough people doing it. Thank you Jon. Here's the link to Jon's The Daily Show.

Happy 2009

So, it's new year time. Time for resolutions and predictions. My new year resolution is to keep this blog going. I predict that 2009 would be the year when basics would be back in fashion, whether in personal or corporate life. Keep your head firmly on your shoulders. Avoid doing stupid things. Love your customers.