Business reading report

by - A2 Knowledge searchers 

Tenure: 3-Dec-2012 to 19-Dec-2012

Samsung drops attempt to ban Apple sales in Europe

Korea's Samsung Electronics on Tuesday said it was dropping an attempt to stop the sale of some Apple products in Germany, Britain, France, Italy and the Netherlands, though it did not say it would halt its court battle for compensation.

"Samsung remains committed to licensing our technologies on fair, reasonable and non-discriminatory terms, and we strongly believe it is better when companies compete fairly in the marketplace, rather than in court," the company said in a statement.

The decision comes a day after a judge rejected Apple Inc's request for a ban on the sale of Samsung Electronics' smartphones in the United States. In August, Apple was awarded $1.05 billion in damages after a U.S. jury found Samsung had copied critical features of the iPhone and iPad.

Delhi's Chandni Chowk market goes online

Over 2,500 businesses in the capital's iconic Chandni Chowk market are now online with their own websites as part of an initiative by Google, owner of the world's most popular search engine.

Google, as part of its 'India Get Your Business Online' initiative launched in November 2011, offers free websites and domains to small and medium businesses (SMBs) in the country.

"There are 47 million SMBs in the country, but only 400,000 have a web presence. Of this, only 100,000 have a decent quality web presence," Anandan said.

As part of the project, Google India and HostGator went to each shop in Chandni Chowk and built over 2,500 free websites for businesses operating from the market.

In addition to creating these websites, Google India has also launched a common website 'www.chandnichowknowonline.in' to provide a directory of businesses from Chandni Chowk.  The move will help these shop owners increase their business as information about them would be more widely available.

Tata Motors global sales at 102,337 vehicles

India's Tata Motors Ltd, part of the salt-to-steel Tata Group conglomerate, reported global wholesale sales of 102,337 vehicles in November. Sales at its key Jaguar Land Rover subsidiary stood at 34,649 vehicles during the month.

Overall passenger car sales stood at 53,089 vehicles, the company said in a statement. It sold 49,248 commercial vehicles during November.

Retailers bet on festival season to revive sales

Top retailers, who have been struggling with sluggish demand and high inventory, are expecting stronger same-store sales growth in the third and fourth quarters of this fiscal on the back of the festive and wedding seasons.

For example, two years ago, for the quarter ended December 2010, Pantaloon and Shoppers Stop’s sales grew 20.9% and 22%, respectively. However, for the quarter ended September 2012, their sales languished at 10.8% and 5% each. But this could change.

Kishore Biyani’s Pantaloon Retail India is seeing some revival in demand in its high-margin fashion business, as opposed to its foods and home retail business that saw some weakness. “Second, we will have free cash flows and third, our Ebitda-to-debt ratio should not be more than three times.” The lifestyle business has a potential of delivering an ebitda margin of 12-13% going ahead, as the fashion business in India is at “its tipping point”, he said.

“The sector has bottomed out,” said analyst Abneesh Roy of Edelweiss Securities

Volkswagen says Jan-Sept China auto sales up 18.3 pct on year

Volkswagen AG and its China joint ventures sold 18.3 per cent more vehicles in mainland China and Hong Kong in the first three quarters, the German automaker said on Friday.

Sales came to nearly 2 million vehicles during the nine-month period, compared with 1.69 million a year earlier, it said in a statement.

Volkswagen makes vehicles in China in partnership with FAW Group and SAIC Motor Corp.

Wrangler jeans gear up for motorcycle riders in India

Wrangler jeans are getting a makeover in India and going up-market in the process as parent VF Corp customizes the all-American denims for the country's motorcycle-riding population and adds features to suit local needs.

VF Corp hopes the strategy will add $1.1 billion in revenue to its Asia-Pacific business over the next five years.

India, with its burgeoning middle class, is a fast-growing market for international brands that want to capitalize on opportunities in Asia's third largest economy.

"In India, they understand the western heritage that is appropriate for the brand because the Indian consumer is open to the film industry," VF Corp Chief Executive Eric Wiseman said in an interview, adding that many Indians are familiar with Westerns, unlike consumers in China.

China and India are the two hot destinations for American retailers, with the Chinese market much bigger. But many note that a large English-speaking population exposed to Hollywood and American pop culture makes the Indian shopper easier to target.

"The Wrangler position in India ... is targeted at the premium customer. The brand is aiming to tap into the potentially large segment of young consumers there whose lifestyles relate to jeans and motorcycles," Wiseman said.

Mobile marketing: a moving target and a higher bar

Tectonic shifts continue to take place in the world of media. Online is now challenging TV for the top media slot in the USA. In 2012 to date, Google alone generated more ad revenue than all newspapers combined and nearly as much as magazines. But yet another change is taking place. In a few years, Smartphone’s will be the dominant means by which people consume digital content and interact with apps and ads.

Mobile is the do-it-all, emerging giant of the digital domain. The growth figures are staggering and as penetration of Smartphone’s permeates beyond the richest in each country, we can expect the vast majority of people to access the web and apps via their phones. In the G20 countries, by 2015 Smartphone’s are expected to make four times as many connections to the web as PCs.

Pepsi's Beyonce Promotion Is The Choice Of An Old Generation

Pepsi has agreed to spend an estimated $50 million on ads, a Super Bowl halftime show, and unnamed “collaborative projects” with pop star Beyonce because, as one of its execs put it, “Consumers are seeking a much greater authenticity in marketing from the brands they love.”

Here are the reasons why it makes no sense…and will make no cents:

It’s an old idea. Pepsi first hired Beyonce in 2002 after Britney Spears fell out of favor (it had spent $8 million just to run Britney’s spots on the Super Bowl). Coke similarly wasted many millions sponsoring Christina Aguilera (whose mug appeared on cans just like Beyonce’s will next year). 

Sponsorship isn’t authentic. Beyonce isn’t working for Pepsi because she loves the product; she’s said as much, reassuring her fans in a statement that the deal lets her take Pepsi’s money “…with no compromise and without sacrificing my creativity.” 

Brand Pricing Strategy: The Early Apple Way

Pricing strategy is one of the most important marketing decisions.

The early Mac had higher COGS (cost-of-goods-sold) than the MS.DOS PC. This is because we had to amortize all of our system software development and leading edge proprietary graphics hardware technology across a much smaller number of physical units than PCs. Bill Gates purposefully priced his operating system at a very low price to OEMs (original equipment manufacturers) in order to hold off competitors. Bill’s strategy was to charge a high price for application software and in fact Microsoft’s profit on each Mac was about the same as Apple’s because Microsoft’s MacOffice was premium priced. The reality was that breakthrough high tech products have always been expensive in their early days. For example, the first dye sublimation color printer in 1988 was priced at $29,000 ( e.g. ink jet printers today cost about $79). Or a Sharp 70” HDTV 4 years ago was introduced at CES at a price point of over $50,000.

Steve Jobs first principles never changed:

The product experience must be elegant; no compromises.

Apple creates complete end-to-end systems, not just hardware products.

27 years after the first Macintosh was introduced, Apple is still employing a premium price strategy. 

No plans for Starbucks' killer pricing

Undeterred by the entry of iconic US-based coffee chain Starbucks at competitive prices, entrenched players such as CCD, Barista and Costa Coffee are unlikely to go in for price war, and plan to continue with differentiated pricing strategy.

Starbucks, which debuted here over the weekend, said it will follow low pricing strategy across all its forthcoming outlets, including the next one at the premium Taj Hotel.

Starbucks, with Tatas as partner, has opted for competitive pricing that is nearly half the coffee chain's charges elsewhere in the world -- with a cup of coffee costing about Rs 80 for a small offering and Rs 165 for a large one.

Asked if the company will have same prices at its all stores, including the one to be launched at the Taj this week, Starbucks Coffee Company Chairman, President and Chief Executive Howard Schultz replied in the affirmative.

"The pricing will be same across all outlets despite Starbucks having the reputation of being a high-end premium brand. We try to have value proposition of all kinds equal to society, especially, when we open in mid-market," Schultz said after the launch of flagship store here on Friday.

When contacted, Cafe Coffee Day (CCD), which runs 1,350 stores, said it will continue to follow a different pricing strategy which includes the rental.