McDonald’s Scales Back Prices in China

By BETTINA WASSENER

Published: February 5, 2009

HONG KONG — When McDonald’s sharply lowers the price of the Filet-O-Fish sandwich and double cheeseburger in China, one thing is clear: the global slowdown has truly arrived in the once-sizzling Asian economy.

McDonald’s announced Thursday that residents of China, the world’s most populous nation, would now be able to feast on four new combo McDonald’s meals — the other two feature a chicken filet sandwich and a pork burger — for 16.50 yuan, or $2.41, a cut of up to one-third from the former price.

The promotion, McDonald’s said, is “in line with the government’s direction to stimulate domestic demand” and “help build a stronger economy.” As the economy slows, “we can do our part by helping stimulate domestic demand in the restaurant sector,” said Jeff Schwartz, chief executive of McDonald’s China.

McDonald’s is not the only food retailer to have lowered prices in China Others, like KFC, also have started promotions as consumers in China begin to fret about slowing growth and rising unemployment. But the price reduction by one of the world’s best-known companies highlights how the downturn that began in the United States has changed shopping and selling patterns as far away as China.

Just a year ago, the prices of staples like pork, rice and cooking oil were soaring, lifting inflation and threatening to overheat the Chinese economy, which had recorded double-digit growth for half a decade. Now, with growth slowing to 9 percent in 2008, and expected to be even lower this year, the pressure is on for retailers to entice shoppers with special deals.

Standard and Poor’s, the ratings agency, said on Thursday that it expected China to grow about 6.5 to 7 percent this year and to pick up steam slightly next year, with a pace of 7.8 to 8.3 percent in 2010. And S.& P.’s chief economist for the Asia Pacific region, Subir Gokarn, said he expected consumer price inflation to slow to 1.7 to 2.2 percent this year, from 5.9 percent in 2008.

Still, China remains attractive because of the size of the market and growth rates that are still ahead of those in most of the rest of the world. McDonald’s is planning to expand in China, which is now one of its fastest-growing markets.

McDonald’s opened its first restaurant in China in the southern city of Shenzhen in 1990. Since then, the number of outlets has mushroomed to 1,050, staffed by more than 60,000 employees. Another 175 restaurants are planned for this year.

McDonald’s has been a rare beneficiary of the global downturn, as shoppers around the world switch to lower-priced goods. Last week, the company reported that sales had continued to climb during the last three months of 2008, when nearly every other industry reported a sharp downturn.

http://www.nytimes.com/2009/02/06/business/worldbusiness/06mcdonalds.html

How Walmart Owns the Concept of Value Online

Its Sheer Size and 'Saves You Money' Mantra Positions Retailer to Dominate in Digital

By Jack Neff
Published: March 30, 2009

BATAVIA, Ohio (AdAge.com) -- There aren't too many places where Walmart isn't dominant. The digital realm is one of the relative few, but not for long, as it ramps up a host of programs to vault the chain -- which has already distanced itself from value retailers in the offline world -- further ahead in the online one.

What makes Walmart's efforts so interesting is its ability to "own" the concept of value online. It launched free classifieds last year, and its site, thanks to its blogger outreach and online message boards, is already crammed with content about saving money that will only grow as it builds out Save Money Live Better, a portal for penny-pinching strategies. In fact, amid all the talk of how digital has allowed marketers to be their own creators and distributors of brand content -- some people would call this a media company -- perhaps no one has the potential to be as big a juggernaut as Walmart.

Suppliers Procter & Gamble Co. and Unilever, who used to bring digital and other marketing programs to Walmart, are now vying to piggyback on programs such as its ElevenMoms network of mommy bloggers or its SoundCheck digital-music initiative. It recently launched the release of the "Twilight" DVD almost solely with digital media and public relations. It's taking free classifieds on Walmart.com. And with a network of employees closing in on 2 million globally, the world's largest retailer is creating a fairly substantial in-house social network all its own.

"Digital has such an amazing role in how to help people on an emotional, logical and rational level. We want to use it to our full potential to help our customers," said Wanda Young, senior director-digital marketing at Walmart. Nonetheless, Ms. Young, who only joined the company in October, said the chain still has a way to go. "We are really just getting started in digital in helping build up our brand."

As of mid-March, Walmart had yet to finish a review to name its first digital agency of record. And the digital manifestation of its 18-month-old ad campaign, "Save Money Live Better," remains a work in progress.

Yet with its major competitors in value retailing -- such as Costco and dollar stores -- largely absent from digital media, Walmart stands to grab a much larger share-of-mind digitally than even its dominant share of wallet in the offline world. In that, it has the support of some heavyweight marketers.

Music, moms
Soundcheck, a 3-year-old program, gained new life last year via a partnership with nine Unilever brands and substantial tie-ins to in-store displays. Unilever sponsored free downloads and streaming music videos from such artists as Beyoncé and the All-American Rejects at soundcheck.walmart.com and paired its products with new music releases in stores. The program from promo shop Lunchbox generated $26 million in sales for Unilever with a budget of between $1 million and $5 million, according to an entry in the Promotion Marketing Association's Reggie awards.

ElevenMoms, a mommy-blogger network that's already doubled to 22 bloggers and is still growing, also has become a conduit for programs from P&G's Pantene and Unilever's Suave, both handled by Rockfish Interactive, the Rogers, Ark., digital shop that created the ElevenMoms microsite.

But the highest-impact digital initiative yet for Walmart appears to be the recent launch of the "Twilight" DVD, which set a record for preorders on its website in March. Behind those sales was a social-media program that included a microsite for moms and daughters and an exclusive interview with "Twilight" cast member Taylor Lautner on Blog Talk Radio.

Among the newer initiatives is the internal social network created by Rockfish earlier this year where employees can share ideas and get answers to questions. The same service-oriented logic led it to offer free classifieds on Walmart.com -- one-upping Craigslist and Monster among others by making real-estate and job listings free. Walmart's strategy is to brand the retailer, drive traffic to the site and help customers at the same time, said Duncan Dreschel, director-customer engagement for Walmart.com. "We see part of our role as connecting customers to help each other," he said. "It also allows us to provide a more complete offering."

Already, Mr. Dreschel said, some people close deals struck on the website in the parking lot of their nearest store. How to further leverage that brick-and-click synergy has also crossed his mind. "We're looking at lots of things to make classifieds evolve," he said.

Walmart isn't entirely new to digital marketing. It's outspent most of its suppliers and rivals on online display for years, according to data from TNS. But the media buys often were made well before creative or even strategy had been discussed, said Kelly Mooney, president of Resource Interactive, Columbus, Ohio, which for several years has worked on a project based on Walmart's digital efforts. Now, however, digital is becoming more strategic for Walmart.

A Twitter search on "Walmart OR Wal-Mart" yields three or four new tweets every minute, many none too flattering. Walmart accepts this as part of the territory. "We do not see ourselves as trying to control what happens," Ms. Young said.

MOST IMPORTANT DIGITAL LESSON I'VE LEARNED

You can't control what people say about you on the web, but you can be a good listener.

"The organic nature of the web means that when you are the world's largest retailer, people will talk," said Wanda Young, senior director-digital marketing at Walmart. "And we're OK with that. We believe the hallmark of a really great brand is that you are relevant. And part of the way you do that is listening to what your customers have to say."

http://adage.com/digitalalist09/article?article_id=135579

BMW Mini Launches 'True Blood' Campaign

by Karl Greenberg, Tuesday, May 26, 2009, 7:04 PM

BMW's Mini USA division is launching a campaign aimed at vampires. Actually, the effort is from HBO -- and although it seems like a Mini campaign, it's really to promote the show "True Blood." The effort, for the second season of the show, extends last year's launch campaign that centered on faux ads for the eponymous blood substitute. In the new effort, Mini is one of several real brands being pitched to vampires. The best part for Mini is that HBO is doing all the heavy lifting, including creative, media buy, and strategy. Creative launches this week lead up to the June 14th premiere of the show.

The effort comprises national print, online and out-of-home outlets, with print running in US Weekly, AM New York, New York Observerand trade outlets. Ads, featuring blood-red versions of the Mini Cooper and Mini Clubman, have headlines like: "Feel the Wind in Your Fangs" and "Type GO."

Digital ads will run on Yahoo, CNN, AOL, the "True Blood" home page on HBO.com, and the show's microsites: bloodcopy.com, fellowshipofthesun.org, and americanvampireleague.com. Out-of-home placements will run in New York, Los Angeles, and Philadelphia. All of the ads contain URLs that lead consumers to HBO's "True Blood" page at HBO.com.

Other brands featured in the effort include Harley-Davidson, Gillette, Monster.com, and Geico. Kate Alini, Mini marketing communications manager, explains that HBO and Digital Kitchen, the network's agency, approached Mini a month ago. "After evaluating it, we thought it interesting, fun, and unique. They came up with the concept and were dead on and authentic with our brand identity. But it was their concept," she says.

Alini says the out-of-home ads run through June 21. As for Mini's own efforts, Alini says, economy notwithstanding, the Woodcliff Lake, NJ-based company is keeping its irreverent tone, but talking more about why Mini is smart buy. "Though we never lead with that, we are focused more on the retail message but in 'Mini' way."

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=106714

Nike Halts 'V is for Victory' Campaign; Resolves Pony Suit

SAN DIEGO, Aug. 4 /PRNewswire/ -- Pony, Inc., owner of the famous PONY and "Chevron trademark" brands used on footwear, sporting apparel and sporting goods, today dismissed its suit against competitorNIKE Inc. over Nike's much-hyped international "V for Victory" advertising and marketing campaign. Nike notified Pony that the campaign is no longer being used, after Pony filed its lawsuit in April of this year in Federal court in California. The complaint accused Nike of trademark infringement, trademark dilution and unfair competition based on this marketing campaign.

Nike stated, as Pony had expected, that "Nike's 'V for Victory' advertising campaign ran its course." But with a pending suit asking for treble damages for willful infringement, statutory, exemplary and punitive damages, profits and attorneys' fees, Pony was not surprised that Nike decided that the campaign had "run its course."

The suit alleged that "the key distinguishing feature of the campaign is the use of a chevron mark which is identical or virtually identical to the registered trademarks owned and used by Pony." Given that the two companies are in the same business, and Pony has owned the rights to its trademarked chevron for over 35 years, Pony felt it essential to protect its valuable trademarks in court. One blog, "Footy-Boots," described Pony as having "kicked out with their hind legs" when it filed the Nike suit.

"We achieved our goal of the lawsuit," said Kevin Wulff, CEO of Pony. "Nike is no longer engaging in the infringement and unfair competition noted in our lawsuit." As the goal of the suit had been achieved, Pony dismissed the complaint.

The "V for Victory" campaign featured rugby and soccer players and what appeared to be body paint. It was launched in or around February of 2009 and utilized online marketing and advertising, including video with a focus on a chevron mark that the lawsuit alleged was "virtually identical" to Pony's registered trademarks.

Pony will continue to proudly use its well-established Chevron mark on its extensive product lines, and will vigorously pursue any unauthorized uses of its famous trademarks.

About Pony

Pony was founded in 1972 and quickly became one the most distinctive sports brands in the world. Among the many athletes who wore PONY shoes were Pele, Muhammad Ali, George Foreman, David Thompson, Darryl Dawkins, Spud Webb, Dan Marino, Lawrence Taylor, Reggie Jackson, Tracey Austin, and most recently New York Knicks' all-star Wilson Chandler. Pony is a designer, distributor, and marketer of high performance, athletic and lifestyle footwear and apparel for men, women, and children. For more information, please visit www.pony.com.

http://investing.businessweek.com/research/markets/news/article.asp?docKey=600-200908041705PR_NEWS_USPR_____NE56829-6R4TAOFV32NSDIVP2AA823MIT6&params=timestamp%7C%7C08/04/2009%205:05%20PM%20ET%7C%7Cheadline%7C%7CNike%20Halts%20'V%20is%20for%20Victory'%20Campaign%3B%20Resolves%20Pony%20Suit%7C%7CdocSource%7C%7CPR%20Newswire%7C%7Cprovider%7C%7CACQUIREMEDIA

Verizon rejected Apple iPhone dea

By Leslie Cauley, USA TODAY NEW YORK — Verizon Wireless, the No. 2 U.S. cellphone carrier, passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple's rich financial terms and other demands.

Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, said Jim Gerace, a Verizon Wireless vice president. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial."

Verizon's decision to pull the plug on talks sent Apple into the waiting arms of Cingular, which will be the exclusive U.S. carrier for the iPhone. The multifunction device is expected to ship in June and cost about $500.

VERIZON Q4 EARNINGS: Profit falls, beats estimates

Apple and Cingular (which now is solely owned by AT&T and adopting that brand name) have declined to discuss terms of their alliance. But the Apple-Verizon talks offer a peek into the computer giant's thinking.

According to Verizon, Apple CEO Steve Jobs insisted that he have hard control over iPhone distribution.

The problem? While Apple and Verizon stores would have it, Wal-Mart, Best Buy and other Verizon distributors could have been left out. "That would have put our own distribution partners at a disadvantage" to Apple and Verizon stores, Gerace said.

Customer care was another hitch: If an iPhone went haywire, Apple wanted sole discretion over whether to replace or repair the phone. "They would have been stepping in between us and our customers to the point where we would have almost had to take a back seat … on hardware and service support," Gerace says.

Cingular won't talk about the financial terms or say how long its iPhone exclusivity lasts, but two people with direct knowledge of the deal say it's a five-year contract. The exclusive is USA-only, leaving Apple free to market its iPhone globally.

Natalie Kerris, an Apple spokeswoman, declined to comment on any aspect of this story.

Mark Siegel, a Cingular spokesman, said, "We think this is a win for Apple, and it is a win for Cingular."

Siegel declined to comment on customer care plans but said Cingular would field calls related to the wireless service. "I don't want to leave the impression that these (iPhone) customers are not ours. They are."

Siegel would not say whether Cingular distributors, which include Wal-Mart and RadioShack, would get the iPhone. The deal announcement referred only to Cingular and Apple stores and their websites.

http://www.usatoday.com/tech/news/2007-01-28-verizon-iphone_x.htm

Coca-Cola Deleting ‘Classic’ From Coke Label

By STEPHANIE CLIFFORD

Published: January 30, 2009

After 24 years, one of the most famous blunders in marketing history is quietly coming to end. The Coca-Cola Company is dropping the “Classic” from its red labels in some Southeast regions, and the word will be gone from all of its packaging by the summer, the company said Friday. The story was first reported by the trade publication Beverage Digest.

The “Classic” designation — which appears under the “Coca-Cola” script on labels — was added to the packaging in 1985, to distinguish the original formula from a sweeter, wildly unpopular new version of Coke.

New Coke has long since disappeared from shelves, making the “Classic” qualification unnecessary. The font size of the “Classic” has been shrinking in the last decade, and the company removed it from labels in Canada in 2007.

“When people think Coke, they think classic, so more than two decades after introducing the word classic, the reason for being — quote unquote — for that word as a descriptor has disappeared,” said Scott Williamson, a Coca-Cola spokesman.

With the introduction of a new global advertising campaign, called “Open Happiness,” Coca-Cola decided it was time to make its American product match what it was called elsewhere. (The language on the side of the label where it now says “Coke original formula” will change to say “Coke Classic original formula.”)

“Every place else in the world it is called Coca-Cola, except for in North America,” Mr. Williamson said.

The new-Coke introduction was one of the more noteworthy debacles in marketing history. Coca-Cola had concocted a sweeter formula for its cola soft drink, and it replaced the original formula in April 1985.

It had spent four years testing the new recipe and conducting taste tests with more than 190,000 people. Coca-Cola found people chose the new formula 55 percent of the time, and the original one 45 percent of the time.

But Coca-Cola forgot to ask how people would feel about losing the traditional soda.

“It’s been, probably, one of the most talked-about case studies ever,” said Paul Worthington, the head of strategy for the branding firm Wolff Olins. “They failed to understand the emotional significance to people that messing with Coke would have, and that’s gone down in history.”

As soon as new Coke was introduced, Coca-Cola began getting hammered. Employees had to work overtime on its complaints hotline, where it was receiving an average of 1,500 calls a day. People started hoarding containers of the classic formula, formed groups like the Old Cola Drinkers of America, and even boycotted the company in protest.

Ten weeks after introducing the new Coke, and after publicly vowing that the original formula was gone for good, company executives brought it back.

They added a “Classic” underneath the script Coca-Cola lettering to distinguish it from the new formula. Coca-Cola Classic began to outsell new Coke almost immediately, and revived the company’s sales.

It was “a humbling experiment,” Donald Keough, Coca-Cola’s president, said at the time. “Some cynics say we planned the whole thing. The truth is, we’re not that dumb, and we’re not that smart.

http://www.nytimes.com/2009/01/31/business/media/31coke.html

I.B.M. to Help Clients Fight Cost and Complexity

By STEVE LOHR

Published: June 14, 2009

In 2000, the Linux operating system was a hot technology, but it had not spread much beyond scientists, researchers and computer programmers. Then I.B.M. declared that it would back Linux with investment, research and marketing, and the technology moved swiftly into the corporate mainstream.

The same thing happened with the personal computer in the early 1980s, when I.B.M. endorsed that upstart technology and entered the market.

Starting this week, I.B.M. is returning to the same playbook, introducing some initial products and services and a roadmap for its stable of corporate and government customers to comfortably embrace cloud computing.

Cloud computing — in which vast stores of information and processing resources can be tapped from afar, over the Internet, using a personal computer, cellphone or other device — holds great promise in the corporate market. The cloud model, analysts say, has the potential to cut the costs, complexity and headaches of technology for companies and government agencies.

Already, Amazon.com, Google and Salesforce.com, among others, offer cloud-based Web services to companies, including e-mail, computer storage and customer management software. But many big companies and government agencies have been reluctant to get on board because of traditional corporate-computing concerns like the security of data, reliability of service and regulatory compliance.

“I.B.M. knows how to do all of those things,” said Frank Gens, chief analyst for IDC, a technology research firm. “Its strategy is all about making cloud computing safe for enterprise customers.”

Even if I.B.M. succeeds in its bid to make cloud computing more palatable for big corporations, there is no guarantee that it will be the main beneficiary of the trend. After I.B.M. helped create the PC industry, lower-cost competitors ended up dominating the business.

In the cloud market, I.B.M. plans to take a tailored approach. The hardware and software in its cloud offerings will be meant for specific computing chores. Just as Google runs a computing cloud optimized for Internet search, I.B.M. will make bespoke clouds for computing workloads in business.

Its early cloud entries, to be announced on Monday, follow that model. One set of offerings is focused on streamlining the technology used by corporate software developers and testers, which can consume 30 percent or more of a company’s technology resources.

The second set is virtual desktop services, in which personal computer software, either from Microsoft or open-source alternatives, is run on remote servers and piped to simple desktop machines equipped with screens and keyboards. I.B.M. found in tests with clients that such virtual PCs, with little desktop processing or storage, can use 70 percent less power than conventional PCs and reduce technical support costs by up to 40 percent,.

Both the software development and desktop services are being offered as an integrated bundle of hardware and software for a cloud running inside a corporate or government data center, or as a cloud service hosted in an I.B.M. data center.

Other offerings are planned, I.B.M. executives said, including clouds fine-tuned for data storage, and clouds for business analytics, which is software that analyzes data for patterns of customer behavior, market trends and other potentially valuable information.

I.B.M. calls its approach of fine-tuning hardware and software for specific jobs “hybrid computing.” And it will open a Hybrid Computing Research lab later this year, inviting industry and university scientists to work cooperatively on new application-specific designs intended to improve performance by 100 to 1,000 times compared with today’s systems.

The fresh look at computer design is being prompted by the surge in Internet data, from social networking to smartphone applications to sensors monitoring food shipments and electrical use. By 2011, IDC estimates, there will be one trillion Internet-connected devices, up from 500 million in 2006.

“This huge explosion of data is driving a movement to design systems around workloads because it is the only way to deliver the computation needed, and it’s far more energy-efficient,” said Kunle Olukotun, a computer scientist at Stanford.

I.B.M. had an initiative, begun in early 2008, called Blue Cloud, which mainly involved adapting its server computers for cloud technology. Most major technology suppliers have cloud-related hardware and software products, including Cisco, Hewlett-Packard, Sun Microsystems and Dell. But I.B.M., analysts say, is going further by offering simplified, integrated stacks of hardware and software, as well as cloud services.

I.B.M.’s cloud strategy, the company said, is the culmination of 100 prototype projects with companies and government agencies over the last year, and its research partnership with Google.

“The information technology infrastructure is under stress already, and the data flood is just accelerating,” said Samuel J. Palmisano, I.B.M.’s chief executive. “We’ve decided that how you solve that starts by organizing technology around the workload.”

One of I.B.M.’s test beds for cloud computing has been the Interior Department’s National Business Center, a service center that handles payroll, human relations, financial reporting, contracting services and other computing tasks for dozens of federal agencies. The center runs two large data centers, one in Northern Virginia and another outside Denver.

Douglas J. Bourgeois, the center’s director, said he is introducing several cloud-style applications over the next nine months including Web-based training, and staffing and recruitment software. And in tests with financial and procurement software, the cloud-computing environment has delivered efficiencies of 40 to 60 percent in productivity and power consumption, he said.

“For us, like other data centers, the volume of data continues to explode,” Mr. Bourgeois said. “We want to solve some of those problems with cloud computing, so we don’t have to build another $20 million data center.”

http://www.nytimes.com/2009/06/15/technology/business-computing/15blue.html