Beckham caught playing with iphone

David Beckham is in hot water after pictures showing the former England captain tapping away on an iPhone hit the web, one month after Becks fronted a Motorola ad campaign for its £1,400 Aura handset.

The AC Milan star has been the face of Motorola since 2006, signing a multi-million pound agreement with advertising appearances rolled out across the globe.

Motorola’s newest campaign, shot by Ogilvy London, showed Beckham as a Terminator character promoting the company’s recession-snubbing Aura phone, which retails for £1,400 and is made from more than 200 Swiss-made components.

Beckham said of the campaign: “Motorola always seem to come up with something different, a concept that no one else has, and they’ve certainly done that again with Aura.

“I love classic watches, so a phone that exposes its mechanics while also being so stylish is really unique. When you hold it, it feels like you have something really special in your hand.”

Italian paparazzi caught Becks red handed while he dined alone in Milan yesterday, busying himself with an Apple iPhone, before sheepishly hiding it under the table. No doubt playing the iPhone Pro Evolution Soccer app where the version of Beckham in the game has more speed.

Banglalink hints at merger

Mobile phone operator Banglalink, owned by Egyptian Orascom Telecom Holdings, hinted yesterday in favour of a possible merger with AKTEL, saying consolidation is an option among many other strategies of the company to sustain in the competitive market.

"Except for the market leader, others are continually posting losses. In order to sustain in this fiercely competitive market, and in line with our growth ambitions, we are considering many strategies of which consolidation is an option," said Ahmed Abou Doma, chief executive officer of Banglalink, in a statement.

His statement came following media reports about the merger issue, which was disclosed by Orascom Telecom Holdings Chairman Naguib Sawiris recently.

Meanwhile, employees of both the operators are in a fear of possible job cuts amid talks for the merger.

But Doma dismissed the speculation over job losses.

He said: "On the contrary, a consolidation that results in the formation of a bigger and stronger entity is in a much better position to utilise its workforce and protect their interests. The resulting growth would require a bigger workforce and thus have a positive impact on the overall socio-economic scenario of the country.”

Now around 4,000 employees are working for the two companies.

Explaining the recent merger developments, Doma said the telecom industry in Bangladesh is already crowded with too many operators. In most developed and developing countries there are not more than 2 to 3 operators, whereas in Bangladesh there are 6, he added.

Doma also pointed out that “consolidation is beneficial if it creates better synergies -- this usually leads to more efficient sharing of resources in terms of infrastructure, procurement, and marketing. All possible options are being evaluated at this stage”.

He said it is correct to point out that at this stage all strategic options are being reviewed that are not necessarily restricted to any one operator in particular.

"It's too premature to give any indication whatsoever regarding concrete details about the potential consolidation options and timelines at this stage," he said.

"Once our negotiations on different fronts that are being explored reach a more concrete stage, we will obviously share the proposition with telecom watchdog and other government entities concerned,” he said.

Banglalink is yet to break even although it holds the market's second position with 10.90 million customers as of April 2009.

The operator's probable consolidation partner AKTEL holds the third position in the market with 8.83 million subscribers as of April.

Telekom Malaysia International has 70 percent stake and Japanese NTT DoCoMo the rest in AKTEL.

At present, the top three operators -- Grameenphone, Banglalink and AKTEL -- hold more than 90 percent market share. Norwegian Telenor's majority shareholding company Grameenphone is in the number one position with 46 percent market share and 21.02 million customers as of April 2009.

Shipbuilders may change Bangladesh economy

Industries Minister Dilip Barua said yesterday shipbuilding, which is a very labour-intensive industry, has the potential for generating a huge foreign currency and developing extraordinary skills in the field of engineering.

"The country has skilled and semi-skilled professionals as well as necessary ingredients to be a shipbuilding nation. So the industry holds the potential for transforming Bangladesh into a middle-income country in near future," Barua said.

He was speaking as chief guest at a function organised by Ananda Shipyard and Slipways Ltd, one of the leading local shipbuilders, as it formally handed over its eighth ship, Stella Moon, at $7.5 million to a Danish buyer, Stella Shipping P/S.

The function took place at the company's office at Meghnaghat in Sonargaon under Narayanganj district.

"The company has so far secured export orders for 34 ships at $373.50 million. It has received export proceeds and advance payments of $48.54 million. Denmark, Germany, Norway and Mozambique have placed the orders," said Ananda Group Chairman Dr Abdullahel Bari at the ceremony.

Earlier Ananda exported its first ship Stella Maris to another Danish company at $6 million on May 5 last year and six others to the Mozambique government at $6.2 million on November 13, said the company officials.

The officials also said they are now building 10 ships of which six have been ordered by Komorowski and four others by Wessell, two German companies.

"We hope to deliver the ships within the next three years as the construction works are going on in full swing," said a company official.

Stella Moon has 64 TEUs (twenty-foot equivalent units) container carrying capacity with 2,950 deadweight tonnages.

Deadweight tonnage, also known as deadweight (DWT), is a measure of how much mass or weight of cargo or burden a ship can carry safely.

Abdullah-al Kaiser Hasnat, a lawmaker from Narayanganj-3 constituency, Einar H Jensen, Danish ambassador, Bea M ten Tusscher, ambassador of the Kingdom of the Netherlands to Bangladesh, Hassan Farazandeh, ambassador of Iran, Afruja Bari, managing director of the company, and Abu Nasser Muhammad Abduz Zaher, chairman of Islami Bank Bangladesh Ltd, among others, were present at the function.

Islamic banking drawing attention

Hasanuzzaman

The ongoing global financial crisis is far from being over. The G20, which together accounts for almost 90 percent of the world economy, met in London in April with the primary objective of reshaping the financial architecture. The final result was an attractive commitment worth $1.1 trillion to revitalise the stagnated global demand. The lion share of this amount (nearly 70 percent) has been allocated towards strengthening the IMF's role in assisting countries that are falling prey to the silent tsunami in the global financial system.

Nevertheless, many critics have pointed out that the G20 did not do enough to streamline the global financial architecture and more critically, they failed to grasp the ongoing global financial crisis by its horns, for example re-regulating the world financial system. According to a news report, the same day that the G20 Summit was aiming to boost the IMF, the latter suspended lending to Latvia (one of the countries it has recently extended emergency crisis loans to) "until it sees more progress in cutting public spending". Such signals indicated the reluctance of developing countries to approach the IMF.

The optimists ought to be informed that that there are more dark days ahead. Freddie Mac, short for Federal Home Loan Mortgage Corporation which together with Fannie Mae own about half of the $12 trillion of the US mortgage market, once again reported a loss of nearly $10 billion in the first three months of 2009 and said it would ask for a further $6.1 billion in state aid to help compensate for the losses. This is the third request for more federal help from the respective firm since it was taken over by regulators in September last year and its latest request is likely to accumulate to a total of $51 billion.

Amid the strong turbulence being felt in the global financial system, Islamic banking system has been attracting much attention. In general, Islam forbids all forms of economic activity, which it perceives to be morally or socially degrading or harmful to others. The fundamental rule of Islamic finance is the prohibition of charging interest. According to the Sharia law, one is not allowed to make money from money, for example earnings (or payment) of interest, speculation, contractual uncertainty and transactions that prove to be advantageous to one party at the expense of another are not permitted. In accordance with Islamic principles, investments in companies, which are involved with alcohol, gambling, tobacco and pornography, are also prohibited. In short, wealth is to be generated only through legitimate trade and investment in assets.

In synchronisation with welfare economics, Sharia law can be conceptualised to possess many in-built mechanisms that aim to preserve a Pareto efficient allocation of profits in this case. In other words, its endeavour is to sustain a situation where an individual cannot be made better off without making some other party worse off. Sharia law aspires to minimise speculative types of behaviour by ensuring an equitable distribution of profits. So how does one make profit in a Sharia compliant banking system? To illustrate, in the West when an individual wants to borrow money to buy a house, he or she would go to a bank and agree a loan. Following the bank's approval of the loan, the customer would be required to make regular repayments, which include interests accrued on the loan. On the other hand, in the Sharia-compliant banking system, the bank would buy the house itself and sell it to the customer at a mark-up price. The bank and the people, who put their money in it, have a share in any profit, loss or from investments.

The one Islamic financing mechanism, which is attracting much attention in recent times, is the Sukuk, which are asset-backed, Sharia-compliant trust certificates. For the traditional banker and customer, they can conceptualise this as a bond. Then again, a bond generates interest income, which is prohibited under Sharia law. Sukuks tend to be used in parallel with an Ijara structure where the lease rental income provides a profit for the Sukuk holder. The proprietor also has the fiduciary responsibilities for the maintenance of the asset and this is the most striking difference between the conventional bond system and the Islamic one.

This is not to affirm that the Islamic banking system is not without any flaws. One of the inherent flaws is the lack of regulatory framework within the sector, implying that Sharia managers have the discretion to differ over what constitutes Sharia-compliance. Proponents of Islamic finance tend to refute this point by arguing that the built-in adherence to Islamic law makes this system fairer and hence, more morally acceptable.

To conclude, notwithstanding the fact that Islamic banks have been able to shield themselves from the spillover effects of the global economic recession, no one can predict the extent to which the Islamic finance's principles will serve to protect it from the looming financial storms. Whilst some have pointed out that it is already entwined with the mainstream finance whereby its future is as risky as any other part of the global financial industry, experts in Islamic finance believe that their way of carrying out finance-related activities has shielded them from the global credit crisis and hence, the model stands on its own merit. London, the financial heartthrob of the world, is emerging as a major financial centre for Islamic finance. Reputed banks like the UK's HSBC and Citi of the US have already set up Islamic banking subsidiaries that are flourishing.

Time and events are going to be the most crucial factors in deciding whether such a system remains a complement to the existing financial system or it evolves to such an extent that it replaces the conventional ways of doing business under a capitalist system.

Banglalink, AKTEL may merge

Mobile operators Banglalink and AKTEL are in talks for a possible merger in an aggressive bid to grab a substantial market share of Bangladesh's 46 million market, giving a hint that the number of operators will come down in the already saturated six-operator market.

The merger issue was disclosed by Orascom Telecom Holdings Chairman Naguib Sawiris recently, when he talked with journalists on the sidelines of the World Economic Forum in Jordan, according to media reports.

Sawiris said mobile operators would benefit from merger because "in long term the smaller companies won't be able to compete".

"But right now our feeling is that more consolidation has to happen in the market on the subsidiary level, like we're doing in Bangladesh. We're in discussions now with Telekom Malaysia to combine our operations," he said.

Orascom Telecom Holdings is the owning company of local Banglalink, which is yet to break even after holding the market's second largest position with 10.90 million customers as of April 2009.
Banglalink's probable consolidation partner AKTEL has the third position in the market with 8.83 million subscribers as of April.

Telekom Malaysia International has 70 percent stake and Japanese NTT DoCoMo the rest in AKTEL.

If the expected merger happens, the new operator's market share will be around 45 percent in terms of accumulated customers of 19.73 million.

At present, the top three operators -- Grameenphone, Banglalink and AKTEL -- hold more than 90 percent market share. Norwegian Telenor's majority shareholding company Grameenphone is in the number one position with 46 percent market share and 21.02 million customers as of April 2009.

Sawiris' recent disclosure about merger matches the hint he had given to the journalists during his visit to Dhaka last year.
In a press meet in Dhaka he was asked about the possibility of acquisition and merger in Bangladesh's cellphone market. He said: "Frankly speaking you have six operators, but we see only three."

He however said: "Most competitors don't want to sell unless they have built some value. And that's why we don't see someone wants to sell its stake right now. But I believe six is a crowd."
Talking to The Daily Star, a Banglalink official said it could happen as Sawiris told the press.

"There is something going on. But we are not fully aware of the development."

AKTEL officials echoed the same, saying they also heard about the issue but Telekom Malaysia International is yet to give any hint to the AKTEL office.
Talks of merger, acquisition or a new partnership in the telecom industry surfaced over the last few years, as most operators have failed to gain profitability.

Only Grameenphone now enjoys break-even. AKTEL remained profitable until the end of 2007. But then the company became a losing concern even after having a new partnership with Japanese NTT DoCoMo at the end of 2008.

Top officials of the leading mobile phone operators are already anticipating that a merger or acquisition will take place. However such talks were centring around the bottom three operators earlier.

So any merger among the leading operators will change the market's characteristics and fuel competition, experts said.

"We had mentioned earlier that for the six operators in this market it would be difficult to sustain. So it comes as no surprise that the two companies now are in discussions. Whether there will be a merger or not remains to be seen," Oddvar Hesjedal, chief executive officer of Grameenphone, told The Daily Star yesterday.

He said: "If it becomes a reality, Grameenphone will do its best to be a worthy competitor. We are confident that we will remain as the number one operator in Bangladesh in the years to come.”

Warid Telecom, the fourth largest operator, said recently it was on the lookout for a partner to raise fresh capital for investment in the next phase of its operations.

Unlocking potential

Ifty Islam

The strong rally in both developed stock markets (the S&P500 with gains of + 30 percent from the lows is the best performance over 2 months since the 1930s) and even more so for emerging markets has seen renewed optimism that the global economic recovery will be imminent.

Oil has crept above $60 a barrel again on expectations for stronger global growth. My own view is that we have likely hit the bottom in the cycle, but that any recovery, especially in the US and Europe, will be relatively weak. With trillions of asset destruction, consumption growth will remain slow for a while, as will the process of finding another engine of growth to replace finance.

However, as Harvard Prof Dani Rodrik has noted, as far as the developing nations are concerned, this need not be a tragedy. After all, “their growth depends on their ability to import and deploy the stock of knowledge that already exists in the rich world -- a stock that will not disappear or dissipate just because growth there has slowed down”.

In a previous column, I highlighted the opportunities for countries like Bangladesh and India to target growth rates of 8 percent + by a greater focus on unleashing the potential at the “bottom of the pyramid”(BOP) paraphrasing the title from the seminal book by University of Michigan Prof CK Prahalad. This was defined as people living on $2 per day and increasing the productivity and income generation opportunities could in turn see not only rapid GDP rates being maintained but also a significant reduction in poverty rates.

Moreover, while the recent announcements of support for industries most affected by the global financial crisis such as jute, leather goods and seafood/frozen food is to be welcomed, to some extent, we need to balance our targeting of traditional export industries with a focus on increasing agricultural productivity and supporting new entrepreneurial activities that can generate new market opportunities both domestically and overseas.

In contrast to Prof Prahalad, Prof Aneel Karnani, also of the University of Michigan, critiques the thinking that the BOP can make vast fortunes for multinationals (MNCs) given the limited incomes and purchasing power there.

He argues, “ Not only is there no fortune, there is not even glory at the bottom of the pyramid. It is a fallacy to claim that there is much 'untapped' purchasing power at the BOP. The poor, in fact, obviously consume most of what they earn, and as a consequence have a low savings rate. Contrary to the BOP argument, getting the poor to consume more will not solve their problem.

Their problem is that they cannot afford to consume more. The only way to help the poor and alleviate poverty is to raise the real income of the poor. There are only two ways to do this: 1) lower prices of the goods that the poor buy, which will in effect raise their income, and 2) raise the income that the poor earn.

Prof Karnani argues for the need to view the poor primarily as producers, not as consumers. By far the best way to alleviate poverty is to raise the income of the poor, and to emphasise buying from the poor rather than selling to the poor. The BOP proposition focuses on the poor primarily as consumers; it does however sometimes cite examples of organisations that treat the poor as producers.

Free market advocates argue that the best antidote to poverty is economic growth. There is much evidence linking poverty reduction to economic growth the so-called 'trickle down' effect. But, the trickle down effect may be too little and too slow. We need to target programmes specifically at poverty reduction rather than just wait for the general growth effect to kick in.

Another interesting observation from Prof Karnani is in asking why is microcredit not more effective? He argues the problem lies not with microcredit but rather with micro enterprises. The United Nations' declaration that micro entrepreneurs use loans to grow thriving businesses leading to flourishing economies is hype. A client of microcredit is an entrepreneur in the literal sense: she raises the capital, manages the business and is the residual claimant of the earnings.

But, the current usage of the word 'entrepreneur' requires more than the literal definition.
Entrepreneurship is the engine of Joseph Schumpeter's dynamism of 'creative destruction.' An entrepreneur is a person of vision and creativity who converts a new idea into a successful innovation, into a new business model. Some clients of microcredit are certainly true entrepreneurs, and have created thriving businesses these are the heart-warming anecdotes.

But the vast majority of microcredit clients are caught in subsistence activities with no prospect of competitive advantage. The self-employed poor usually have no specialised skills and often practice multiple occupations.

Creating opportunities for steady employment at reasonable wages is the best way to eradicate poverty. There is much empirical evidence showing that creating decent employment opportunities is the best way to take people out of poverty.

One suggestion that Prof Karnani has that I agree with is as follows: rather than lending $200 to 500 women so that each can buy a sewing machine and set up a micro enterprise manufacturing garments, it might be much better to lend $100,000 to an entrepreneur with managerial capabilities and business acumen and help her to set up a garment manufacturing business employing 500 people. Now the business can exploit economies of scale, deploy specialised assets, and use modern business processes to generate value for both its owners and employees.

Governments need to facilitate the creation and growth of private (small, medium and large) enterprises in labour-intensive sectors of the economy, through appropriate policies (such as de-regulation), infrastructure (such as transportation), and institutions (such as capital markets).

Small and medium sized enterprises need financing options -- both debt and equity -- in the range of $10,000 to $1 million that are almost non-existent in developing countries.
Hathay Bunano is a great example of a company that started with $5000 of capital in 2005 and has grown to create employment for 3000 rural women making hand knitted toys in the villages. Its CEO, Samantha Morshed, rightly was awarded an MBE in this year's honours list. We need to think of innovative venture capital financing to create more Hathay Bunanos and more effectively unlock the productive potential of the bottom of the pyramid in Bangladesh. This would lay the foundations for an 8 percent growth rate that would also be inclusive in sharing the rewards of growth with the poor.

Rupchanda awarded superbrand title

Superbrands, a UK-based independent authority on branding, recognises Rupchanda as a superbrand in the edible oil category in Bangladesh, according to a press release.

A committee comprising leading business entrepreneurs, corporate heads, researchers, creative experts, marketing experts and other personalities from various sectors gave the award to Rupchanda, a brand from Bangladesh Edible Oil Ltd.

Rupchanda is the first-ever brand to receive such award.
Superbrands started its journey in 1994 from London and it currently has operations in 61 countries around the world. Bangladesh is the 62nd country to be included in the Superbrands chart.

Porsche also makes great cars, remember?

by Randel Carlock

The global automobile industry is in a shambles, with a share in Ford Motor Company selling for less than a Starbucks latte, and GM and Chrysler fighting for their survival.
Somewhere in all this chaos the Porsche family has managed to create two highly-profitable automobile firms that are the world leaders in designing, manufacturing and marketing cars.

I think Jeremy Clarkson from the BBC Top Gear television show could probably explain their success, "For crying out loud! They make great cars!" Unfortunately, the recent media coverage on Porsche and VW seems to have missed this critical fact.
Porsche, which is jokingly referred to as "a hedge fund with a car showroom attached," does use hedging strategies but the reason these two companies are the targets of the financial speculators is because they have sound business models and good growth prospects.

The hedge funds do not care about Ford or GM because there is only one scenario for the future and it does not leave a lot to speculation. Unfortunately the hedge funds forgot about Porsche's secret weapon – committed family shareholders with a shared vision.
So how did Porsche, a specialty sports car manufacturer whose best-selling model is the 30-plus-year-old 911, position itself to acquire VW its much larger sister company to become the automobile industry leader?

There are never simple explanations for business success but there are critical behaviours that provide lessons for business families and perhaps all
organisations to consider about improving long-term performance. Porsche is
effective for a number of reasons including a strong alignment of their ownership
and management groups based on what we describe as the Parallel Planning
Process (PPP).

The PPP drives planning and decision-making around five critical factors: values,
vision, goals, strategy and governance. At Porsche we would describe the five
PPP factors as:

• Values: World-class management, engineering leadership, and a long-term
ownership commitment.
• Vision: Unifying Porsche and VW under family ownership.
• Goal: Global industry leadership.
• Strategy: Brand differentiation based on performance and quality.
• Governance: Decision-making influenced by family values and vision.

The family's values and vision are the foundation for a planning process where each critical factor adds synergy based on a unity of purpose between the family
and the business.
The Porsche family and specifically, Ferdinard Piech the VW Chairman, sees combining Porsche (the firm that bears his grandfather's name) with the much larger VW (founded by his grandfather) as making strategic sense and strengthening the family legacy.
This visionary family leader championed the Porsche acquisition of VW but it is the non-family Porsche CEO, Wendelin Wiedeking and his management team that delivered the successful outcome.

It also important to recognise that according to many market analysts the manufacturing synergies between the two companies would not be a strong enough reason for the merger.
There is no value in slamming hedge funds because they can play an intermediary role in the world economic system but perhaps the best way to control their actions is not more regulations but more firms like Porsche.

Short sellers are not a threat to well-run and profitable companies that create value for their stakeholders through growth and increasing their stock price. The financial crisis is a serious challenge and despite all the protests and charges that Porsche took financial advantage of the hedge funds the fact is that Porsche beat them at their own game.
Putting things in perspective, the real lesson we should consider is how more companies can become driven by a long-term visions and values that create economic and social value.
Andrew Jackson, an early US president is quoted as saying, "One person with conviction (a vision) is a majority" – perhaps we should update this idea for our purposes and recognise that a "business family with a vision is also a majority."

Sound long-term strategy is key, particularly in a crisis: Harvard’s Michael Porter

With the current global economic downturn and dire predictions of a re-run of the Great Depression of the 1930s, the forecast is all doom and gloom.
But Professor Michael Porter of Harvard University, a leading authority on competitive strategy, begs to differ. He believes this time of great economic upheaval to be the tipping point for companies – if only they know how to harness the right strategies.
“It’s times like these when tremendous competitive success can be achieved. It’s times like these where companies can shift positions in the marketplace. It’s times like these when leaders can become followers, and followers can become leaders, because we are in a period where everything is now going to open and unfreeze.”

Redefining strategy

And it is at times like these, Porter emphasises, that strategy is most important. With strategy generally being about earning a superior return over the longer run, its essence, he explains, is then about figuring out which set of needs you are going to meet in your company, which are different from the needs that you competitors are trying to meet.

“The worst mistake in strategy – and it’s a particularly bad mistake in a slowed economic downturn – is to compete with your competitors on the same thing. You want to find a different kind of value that you can deliver to a different set of customers. Strategy is fundamentally about how you’re going to deliver unique value.”
And Porter believes there’s no better time than now to heed this advice to differentiate yourself from the competition – and thrive. “In a time of economic downturn, you have to be clearer about your strategy than in normal times. When things are growing, lots of companies can be successful. In difficult times, the companies that win are the ones who are very clear about who they are and how they are trying to deliver value.
“In times of economic distress, clarity of strategy becomes even more important. In an economic downturn, figuring out what part of the industry that you want to serve becomes incredibly important.”

He cautions, however, that businesses should not overreact to the unusual conditions of a downturn, and not change their entire strategy because of the particular set of customers who are not buying today. And a sound strategy, he adds, needs a few years to incubate in order for it to really bear fruit.

Seeing the big picture

Another gaffe to avoid is what Porter calls the paradox of economic downturns. “Every bit of pressure is pulling companies to doing whatever is necessary to survive …What we’ve found over and over again is that to survive you actually have to have the capacity to integrate the short term and the long term, and think about the two together. And you can’t take actions in the short term that seem expedient, if they ultimately undermine what’s different or unique about the company. Companies that really overreact to the downturn I think get themselves into big trouble.”
To cite an example, Porter explains that if a company that is strategically focused on providing excellent products with excellent service suddenly cuts back on service and activities to cater to price-sensitive customers, they risk undermining their longer-term success and become just like their competitors who are all cutting prices as well. “When you cut and shrink, don’t do it across the board; cut to a strategy, don’t just cut. Don’t just take 10 per cent off every department – that’s a disaster.”

Making good out of the bad

But there appears to be a silver lining this cloud. As companies are normally scrutinised every quarter on their profitability, the pressure is always on to keep the numbers healthy. But at times like this, Porter says that the stock price and quarterly results actually don’t matter very much because nobody is going to look good. And trying to look a little better when everybody is bad doesn’t really get you much.
He adds that it is ironic that during such trying times that companies have the greatest flexibility to make unprecedented moves and investments that they would otherwise not have been able to do in more normal periods when they’re under more short-term scrutiny.
“At times like these, there’s a possibility to make moves that you could never dream of making before …We’ve got to see this for what it is. We’re going to have to understand that the rules of economics and competition are going to continue, and we’ve got to take advantage of this period to try to move our business forward.”

A practical guide to managing innovation

by Robert Goldsmith

What does innovation mean? It used to relate mainly to products, and that's still important. But over the last decade or so, businesses have been putting more and more emphasis on innovating new services and business models as well. In light of this, it’s time companies take another look at how they manage innovation.

“Innovation is one of the least well-managed areas in most companies,” says David Midgley, a marketing professor at INSEAD and author of The Innovation Manual. “This leads to wasted resources and costly mistakes. It’s not the effort that companies put into innovation that decides success. Instead it is how firms go about doing innovation that separates leaders from the rest.” Most of the information about managing innovation available today is siloed, addressing specific issues such as technology or finance. But as the boundaries of innovation expand, more managers will need practical knowledge and tools that transcend these functional silos.

More than good electronics

In addition to providing this practical knowledge and the toolkit to go with it, The Innovation Manual examines what is known about innovation management and asks if it still applies today when an innovation may indeed be a product, but a product with a service attached and driven by a totally different business model than a few years before. To illustrate this idea, Midgley uses the example of the Apple iPod. Apple has sold hundreds of millions of iPods since introducing them in 2001. But, he says, that success is not because the iPod is an innovative product as there are many similar devices. The real point behind the iPod is the service that allows the customer to easily download music and the business model that allows both Apple and the music industry to make money from those downloads. “Apple negotiated a business model with the music industry that allowed everybody to get what they want -- the music industry to get their royalties, Apple to sell downloads and the iPod itself, and the customer to be able to select the songs they want rather than putting up with the compilations the industry offered because of its previous business model,” Midgley says. “These are Apple’s real innovations – the rest is just good electronics.”

No longer simple

Back when innovation related only to products, it was easier for companies to manage. One group of employees designed the product and passed it on to another group who sold it. But the broader boundaries of innovation have complicated things for company managers responsible for delivering innovations to the marketplace.

Implementing an innovation today may require making major organisational changes. For example, implementing an innovative service could mean making changes to employee training programmes and company procedures. A business model innovation entails getting everyone to understand the new way of making money, or, if this is not possible, setting up a new business unit.

To understand what sort of organisational changes are required for an innovation, a manager first needs to understand what sort of challenge the innovation is going to pose. For Midgley, there are three categories of challenge – the customer, technology, and business model. Understanding which category the innovation falls into is the key to understanding what steps the company needs to take next.

“If it's a customer challenge, then you need to orient your intelligence and services one way,” Midgley explains. “If it's a challenge on the organisational side, then it's another way. If it's a breakthrough in all three then you might want to think it's a big risk.” The customer challenge addresses how far away this innovation is going to be from the way the customer usually thinks. For example, Nintendo designed the Wii video game console to appeal to an entirely new customer base, namely people who wouldn’t ordinarily think of playing electronic games. “What's interesting in the Wii is not the technology, which is fairly straightforward,” says Midgley, “and it’s not the business model, because it's actually quite a traditional business model for the gaming world. The really innovative and creative thing is making games that appeal to the grandmothers, or to families or the people who don't play ‘shoot-‘em-up games’ on PS3 (PlayStation 3).”The second type, technology, asks how much of a challenge the innovation is going to be for the organisation. The PS3 posed a typical technology challenge for Sony because the company was inventing a new superprocessor for their existing game console and customer base. The business model challenge addresses how the company can get money out of the existing value chain. This is what Apple overcame with the iPod.

The beginning is the end

The ultimate goal of any innovation is to create value in the minds of the customers.
Midgley identifies five key tasks the organisation needs to do to accomplish this and provides the tools for managers to use to accomplish the tasks. The first task is organisational and involves setting the direction and fixing the rules for implementation. The second is setting up the team. Teams are key to success, so the firm needs to select the most appropriate team for the type of innovation. Task three involves working with customers as co-creators. “You get much more mileage by working with the right customers at the right time than by suddenly popping up and saying: ‘Here's our bright and shiny new thing, how do you like it?’” Midgley says. Once the goal has been defined, the right team selected, and a solution defined that meets a strong customer need, the fourth task is to make the necessary organisational changes to deliver the solution. This is especially true for service or business model innovations.The fifth task is to build momentum in the market for the solution. Managers need to design and create markets for innovations with a thorough understanding of how customers accept or reject them, which is something companies don’t always do right. For example, the personal digital assistant (PDA) was a highly innovative product which flopped when it was first introduced by Apple, Tandy and Motorola. These companies didn’t choose the right target customer to get the market moving, nor did they understand how these customers would get best value out of the innovation. As a result, all three companies ended up emphasizing the wrong features of the product. Palm then introduced essentially the same product but, by studying how their customers would use it, the company was able to market a feature with a strong customer appeal. In the end, their highly successful version of the PDA sold in the millions.

Media, PR links hit spotlight

The media and public relations (PR) firms can work hand in hand but should maintain distance at the same time in handling news as their target audiences are not the same, said the group managing editor of an Indian newspaper yesterday.

“Often journalists complain that the public relations firms manipulate news in favour of their clients, as ad revenue matters to the media. Ideally, they both should have mutual respect for each other and not manipulate news,” said Ashok K Bhattacharya of Business Standard.

Bhattacharya was speaking at a media seminar that focused on how PR firms and media can work together. The seminar was organised as part of a daylong programme to mark the launch of Concito PR in Dhaka.
In his keynote paper, Bhattacharya said the target audiences of the media and the PR agencies differ, so do their roles.

“The number of news and TV channels has grown manifold in the last six years in India, so have PR firms. Simultaneously, the roles of journalists and PR firm staff have changed as well,” Bhattacharya said.
“The number of incidents over the role of PR firms in influencing journalists in favour of their clients has also grown,” he added.

Bhattacharya suggested professionals gain expertise in relevant fields and work with ethics.
Mahbubul Alam, editor of The Independent, who moderated the seminar, stressed ethical practices by all professionals, including journalists and PR executives.

“The truth can be suppressed for a day or two, but someday the truth would be unearthed and the question of credibility would come to the forefront,” he said.
Concito PR, an affiliated agency of Burson-Marsteller, one of the leading PR companies in the world, was launched to provide public relation services in the country.

Iqbal Sobhan Chowdhury, editor of The Bangladesh Observer, Syed Fahim Munaim, managing editor of The Daily Star, and Motiur Rahman Chowdhury, editor of Bangla-language daily Manabzamin, were also present.

Moeen Tariq, managing director of Concito PR, delivered the welcome address.

Ice-cream fest to kick off in Dhaka

A four-day ice-cream festival will kick off at Dhaka Sheraton Hotel on May 14 amid scorching summer heat.
The festival, co-organised by Dhaka Sheraton Hotel and ice-cream brand Igloo, will offer unlimited ice-cream for Tk 300 per person, said organisers at a press conference yesterday.

"The event, first organised in 2006, had pulled in huge responses and this year will be even better," said Mahfuzur Rahman, director (sales and marketing) of Sheraton.
On the prices of brand ice creams in the market, Ibrahim Khalil, group brand manager for Igloo, said the product, which is highly temperature sensitive, becomes costlier as the prices of raw materials are spiralling up by the day.
Trevor Robert MacDonald, general manager of Dhaka Sheraton Hotel, was also present.

China still has appetite for luxuries

Clutching a fistful of shopping bags from designers Vivienne Westwood, Dior and Alexander McQueen as she concluded one of her twice-monthly shopping sprees, 29-year-old Zhao Bing looked like the picture of hope for luxury retail.

"Is there a financial crisis in China? I don't think it has affected my life very much," said Zhao, who spent 7,000 yuan ($1,000) in 90 minutes at upscale Lane Crawford in Beijing's financial district last week. "I still buy those big brands, anyone you could think of."

Many well-heeled Chinese shoppers like Zhao, a film technician who gets an allowance from her parents on top of her salary, are spending freely during the global economic crisis. High-end designers and luxury retailers that thrive on such extravagance hope China's growing luxury-seeking population will cushion them against the collapse in demand in other countries.

China's 6 billion euro ($8 billion) luxury market accounts for just 3 percent of global sales, compared with 38 percent in Europe, 33 percent in South and North America and 12 percent in Japan, according to Bain & Co. But China and Brazil are projected to be the two fastest-growing luxury markets through 2012, according to consulting firm Bain & Co.

And sales of designer clothing, jewellery and other luxury goods in China will climb 7 percent this year, while worldwide luxury revenue could fall 10 percent, Bain & Co. forecast. Last year, luxury sales surged 25 percent in China while they were flat worldwide.

Just as more mainstream brands like Starbucks Corp. and Yum Brands Inc.'s KFC are expanding fast in China, higher-end brands such as Salvatore Ferragamo and Gucci are adding stores here, while many retailers have postponed or limited expansion in listless U.S., European and Japanese markets.

"The China market is growing fast. Beside the global downturn, which affects every country, China is quite stable," Michele Norsa, chief executive of Salvatore Ferragamo SpA, said in an e-mail response to questions. "Definitively, we are optimistic."

Ferragamo plans to add seven to eight China stores this year, with further expansion in 2010, according to Norsa.

Gucci Group, part of France's PPR SA, plans to open a flagship store in Shanghai in May after adding three new locations in January. It says its sales in China soared 42 percent last year compared with 2007, 10 times its global growth rate of 4.2 percent. Gucci said China currently represents one of its most dynamic areas of retail growth. Greater China including Hong Kong and Macau accounted for 14.3 percent of Gucci's sales last year.

France's Domaines Barons de Rothschild, producer of Chateau Lafite wine, is developing a vineyard in the eastern province of Shandong to serve growing local demand.

China's luxury shoppers are strikingly young, many of them self-employed or part of a growing professional class. According to consulting firm McKinsey & Co., 80 percent are under 45, compared with 30 percent of luxury shoppers in the United States and 19 percent in Japan.

Liu Hongyan, a 34-year-old marketing director for a culture magazine in the western city of Chengdu, just bought a Coach purse to replace her Chanel, two necklaces and a bracelet from Tiffany and some Estee Lauder cosmetics.

"Like many of my friends, my job is stable and not affected by the financial crisis," she said. "Now that we are finished buying apartments and cars, we are buying luxury goods."

Companies with a big presence in China, including Hermes Group and LVMH Group, declined interview requests. Spokespeople for Giorgio Armani SpA and Swatch Group said managers had no time to talk. Tiffany & Co. and Burberry Group did not respond to calls.

Growth in China may not be huge in dollar terms, but it helps counter sales declines elsewhere, says Claudia D'Arpizio, a Bain partner in Milan.

"It's not enough for offsetting completely the stronger decrease in the U.S., Japan and Europe," she said.

Fuelled by a three-decade-old economic boom that created a still-growing urban elite, China's appetite for luxury goods is surviving the sharpest global economic slump since the 1930s. And Beijing's multibillion-dollar stimulus plan appears to be reviving the economy. Recent reports show gains in factory output, retail sales and capital investment.

By 2015, China will have more than 4 million households with annual income above 250,000 yuan ($37,000), McKinsey predicted in a recent report. That will make it the world's fourth-largest country in terms of its number of households with substantial purchasing power after the United States, Japan and the United Kingdom. McKinsey said the benchmark was adjusted for purchasing power parity for each country.

And most of that money likely will be spent in China. McKinsey said its research found wealthy Chinese do 70 percent of their luxury spending at home, contrary to the industry wisdom that Chinese people make at least half their purchases abroad.

"We know Chinese consumers will continue to spend on luxury items," said Ferragamo's Norsa. "After all, it is a very big pond and in it there is space for many."

Companies are expanding inland to cities like Chengdu to reach customers "who can already afford and who will aspire to the image projected by luxury brands," said Bain's D'Arpizio.

Most Chinese, of course, still can't afford luxury brands and opt for knockoffs. From fake Gucci wallets to Chanel bags, they are widely available despite repeated government crackdowns. Some are so well made that only experts can distinguish them from genuine designer goods.

Wu Yang, a 25-year-old Beijing event planner who bought counterfeit Louis Vuitton and Gucci bags on a recent trip to Shanghai, said vendors wanted 300-500 yuan ($45-75) for a bag, compared with 5,000-10,000 ($750-$1,500) for the real thing.

"I can afford it and nobody can tell it's not real," Wu said. "This represents a girl's dream for big brands."

Beximco Pharma eyes export market expansion

Beximco Pharma, a leading medicine manufacturer, now targets expansion of its export markets to Australia and North American countries.

Gulf Cooperation Council (GCC), a forum of 10 Middle Eastern countries, and Therapeutic Goods Administration (TGA) in Australia have already accredited the company in 2008 for exports.

The combined pharmaceutical market of GCC is valued at more than $4 billion. Currently, the multinational companies in Europe and the US hold the lion's share in the GCC market.

Beximco Pharma Director Zakaria S Chowdhury told The Daily Star, “A team from Brazil has inspected our plant recently and we hope we will be certified for export of medicines there in a month.”

“We await accreditation from the UK administration also,” he added.

Presently, the company exports to 14 Asian, five African, four Pacific and two Middle Eastern countries.

Over 200 small, medium and large local and multinational companies meet around 97 percent of the Tk 5,000 crore domestic market demand.

According to industry people, some of these companies exported medicines worth nearly Tk 300 crore in 2008, which were Tk 200 crore and Tk 150 crore in 2007 and 2006 respectively.

The country now exports a wide range of pharmaceutical products covering all major therapeutic classes and dosage forms to around 60 countries, including some developed markets. High-tech specialised products like inhalers, suppositories, nasal sprays, indictable and infusions are also in the export basket.

Novartis, Beximco, Square Pharmaceuticals, Aventis, Eskayef, Popular Pharmaceuticals, ACI and Acme are some of the leading exporters.

A World Trade Organisation facility has paved the way for Bangladeshi companies to grab the global medicine markets.

Bangladesh will be able to continue with the patented products up to December 2015 as per trade related intellectual property rights. Pharmaceutical industries are now legally allowed to manufacture and sell generic versions of on-patent pharmaceutical products for domestic consumption and exports to other LDCs.

Bangladesh is a country among 50 least developed countries that is self sufficient in pharmaceuticals, the industry people claim.

But manufacturers must strictly comply with the standards for export of medicines in respective countries.

Beximco officials said the company's export figure would increase manifold in the years to come.

“We hope to take Beximco Pharma's export figure to Tk 1,000 crore by 2013 from the present national figure of Tk 300 crore,” said Chowdhury.

Beximco is diversifying to parental form of dosage of ophthalmology and nebuliser, he added.

A good number of companies, including Square Pharma, Renata and Eskayef, have won accreditation from the Medicines and Healthcare Products Regulatory Agency (MHRA) of the United Kingdom.

City Bank rolls out SME loans for women

City Bank Ltd yesterday launched “City Nokshi,” the bank's SME loan product tailor-made for women entrepreneurs.

K Mahmood Sattar, managing director and chief executive officer of the bank, launched the product at a ceremony in Dhaka, where Rehana Rahman, president of the Women Entrepreneurs Association of Bangladesh, was present as chief guest.

The bank has set a 10 percent interest rate a year on the gender-specific loan in line with the guidelines of Bangladesh Bank.

It will be available at SME outlets of the bank, where a client can apply for loans of up to Tk 25 lakh.

At the ceremony, Kabita Begum, proprietor of KB International, received the first offer letter from the CEO of the bank.

"The new loan product is aimed to promote the prospective women entrepreneurs to explore their potentials in the business industry," the bank said in the statement.

McDonald's considers offering degrees to employees

McDonald's is mooting an idea to launch its own PhD in management as it continues with attempts to shed the "McJobs" stigma associated with working for the fast food chain. Speaking to the Financial Times, McDonald's chief people officer David Fairhurst said offering a PhD was the next logical addition to the chain's other training programmes.

McDonald's has received plaudits for its investments in employee development. Last year it became one of the first companies to be approved by the Qualifications and Curriculum Authority to offer A-Level standard qualifications.

The PhD course in question is in shift management.

Fairhurst said the new A-Level standard shift management courses had made McDonald's a "university in its own right", adding that around 2,500 employees had enrolled.

However, despite the prospect of "burger flippers" becoming academically qualified, the McJobs reputation of employment in fast food restaurants as low-skilled and badly-paid will prove difficult to remove.

The term was popularised in Douglas Copeland's 1991 book 'Generation X -- Tales for an Accelerated Culture' and also appeared for the first time in the 2001 edition of the Oxford English Dictionary (OED) where it was defined as "an unstimulating low-paid job with few prospects".

Last year, McDonalds launched a petition to change the OED definition, claiming the term is out of date. It said its own surveys had shown 90% of employees thought their training was valuable and would help them throughout their working lives.

Nivea uses experiential events to promote children's sunscreen brand

Nivea Sun is mounting a nationwide 'Sunwise' roadshow to promote sun safety and the brand's Children's Sun Spray range.

The Sunwise roadshow, created by experimental agency Sledge, aims to promote sun safety to families while they are visiting family attractions during summer.
The events will take place in the Nivea Sun bus, which features areas for kids to explore.
Areas include a science lab, a weather station, an adventure corner and a games area. The brand has also created five cartoon characters, which together make up the ‘Sunwise Set'.
Samples of Nivea's Children's Sun Spray will also be provided.
The roadshow will tour locations including Chessington World of Adventures & Zoo and Legoland Windsor. It is part of a national integrated campaign featuring TV and press activity.
Nivea Sun currently works with primary schools to educate children on the power of the sun and importance of sun protection.

Marks & Spencer apologises for big-bra surcharge

Marks & Spencer (M&S) has launched an advertising campaign apologising for its decision to charge £2 more for bras sized over a DD cup.

The campaign follows Asda's move to launch a ‘one price fits all' £4 bra on Wednesday, in response to Marks & Spencer's earlier decision to keep its surcharge.
New M&S press ads carry the strapline ‘We boobed'. They go on to state that the firm was wrong for charging more for larger bras and that it will be reducing prices by £2 from Saturday.
The company also said it will be slashing 25% off the prices of all bras for two weeks.
M&S's original decision to charge more for larger bras caused campaigner Beckie Williams to start the Busts for Justice group on facebook.
The campaign has more than 8,000 members urging a change to M&S's pricing policy.
The retailer claimed it charged more for larger bras as they cost more money to make.

Hummer, Starbucks Rated Lowest for Value

Value. It’s a word you hear tossed around quite a bit in this economy, but not one that applies to every brand, according to a recent report. A survey by Brandindex, a daily measure of brand perception by the London-based firm YouGuv taken from January to April, found that some brands, like Starbucks and General Motors’ Hummer are not convincing consumers that they offer value.Hummer came in dead last in a survey which is based on about 300,000 online interviews with consumers who are 18 and older. YouGuv polls 5,000 people a day and asks them to rate about 200 brands. Hummer’s main problem is that the public’s mood has changed drastically since the brand was introduced in the 1990s, said Ted Marzilli, global managing director for Brandindex. “Hummer is one of those brands that suffers from a reverse halo effect,” he said, adding that the public’s concerns regarding gas and oil prices as well as climate change have worked against the brand. “Hummer is a brand that depicts excess rightly or wrongly, so it gets picked on.”Starbucks suffers from similar issues. “Starbucks has almost become a punchline for a joke regarding a $4 cup of coffee,” Marzilli said. “A lot of the other brands, like McDonald’s and Dunkin’ Donuts for example, have really gone hard at Starbucks. [They are] trying to make people take a step back by saying, ‘People, is $4 for a cup of coffee what you really want to be spending your money on?’”The top value brand, meanwhile, was The History Channel, which Marzilli said reflected the fact that the brand scored high in many categories. “Value” in this case may have referred to the educational component consumers felt they were getting from the channel. In comparison, MTV was penultimate for “least value” in the report.

The top nonmedia brand for value in the survey was Craftsman, which along with other brands in the top 25 like Rubbermaid, Whirlpool and Kenmore, showed consumers associate longevity with value in some cases. “They are dependable brands that have been around a long time,” Marzilli said. “They have a very long history of being good brands—not particularly flashy and not particularly expensive—and people see them as offering quite a bit of value.”

One somewhat surprising omission in the top 25 is Wal-Mart, which seems to have been bested by Target on the value front. “Target being on the list is interesting because Wal-Mart’s not on the list or not in the top 25. That’s an area where consumers are distinguishing between low price and value,” Marzilli said. “I don’t think most people would say Target has lower prices than Wal-Mart, but put in the context of ‘Do you get a lot for what you paid?’ people rated Target higher than Wal-Mart.”Among the big movers on the list, Ford’s jump can be attributed to the fact that the brand refused federal bailout funds. “They’ve kind of made a differentiator of themselves by saying, ‘We don’t need money. We’re going to manage our business better,’ and I think that’s getting a lot of positive effect among consumers.” Chevrolet, however, was also among the big improvers on the list.The brands whose image as a value leader have taken the most hits this month includes AIG, which is likely another “reverse halo effect” of an overall negative perception.The same could be said for craigslist, which got its share of negative press for the “craigslist killer” and charges of prostitution being offered over the site. Similar collateral damage was seen with the cable networks CNN, CNBC and MSNBC. Said Marzilli: “There’s been so much news related to the financial crisis and the bailouts of the automakers that maybe people are just tired of hearing the bad news.”

Chanel Celebrates No 5 Anniversary

Chanel on Tuesday, May 5, launched several initiatives to commemorate the anniversary of the debut of its legendary No 5 perfume on May 5, 1921. Along with new ads, the main item in the current effort is a short Internet film starring French actress Audrey Tautou, which is directed by Jean-Pierre Jeunet. The film, called “Train de Nuit,” depicts a brief encounter between a man and a woman traveling to Istanbul on an Orient Express train.Tautou follows in the footsteps of cinematic muses like Nicole Kidman, Ali McGraw, Carole Bouquet, Lauren Hutton and Catherine Deneuve who have served as spokeswomen for the brand. It can be viewed exclusively at www.chaneln5.com in both 60-second and 2:20 versions. There are also “making of” and “behind-the-scenes” vignettes with the actress and the director.“For me, a woman who wears perfume represents the ultimate in femininity,” Tautou said in a statement. “When a woman has a pleasant or mysterious scent, it adds a little something to her.”Clips from the film will be used in Chanel print and TV advertising, featuring Tautou. Chanel handles its ads in-house.In 1921, fashion designer Coco Chanel commissioned perfumer Ernest Beaux to create a new fragrance. Reportedly, five was Chanel’s lucky number, and after five tries, and on the fifth day of May, the fifth month of the year, she was presented with the scent. Or so Chanel’s history says.Department store Saks Fifth Avenue in New York will partner with Chanel in promoting the brand. Chanel and Saks have created a new arts program at a city school, P.S. 5 (Ellen Lurie Elementary School), which will receive special funding for after-school art classes, supplies and trips.Chanel will take over Saks’ flagship Fifth Avenue store through May 10 and a portion of Fifth Avenue will be renamed “Avenue No 5.” Seventeen window dressings inspired by the “Train de Nuit” film will feature selections from the brand’s ready-to-wear collection. Indoors, the main floor will have prominent No 5 displays, as well as other locations throughout the store.

Cans Are Hot!

Recognizing recession-weary consumers are buying more shelf stable products, Del Monte, General Mills, Kraft and others are focusing their marketing and R&D efforts on the formerly unsexy center of the supermarket.The move is notable because, for the past few years, most of Big Food’s marketing focus has been on the outer aisles while the center store—the middle aisles which hold everything from kidney beans to vanilla pudding to marshmallows—got little attention.“Center store is back,” said Tom Vierhile, a research director who tracks new products at Datamonitor in New York. “People got away from it in the first place because it lacked the pizzazz and sex appeal” that’s present in categories such as the frozen and fresh produce units, he said.That’s because retailers, for some time now, have used those outer sections as a branding tool, often investing marketing muscle behind seafood, produce and deli units to create a distinct, supermarket experience. Food makers, too, followed suit, with new products like Ore-Ida Steam ‘N Mash potatoes and ConAgra’s Healthy Choice Café Steamers winning key shelf space in frozen. But the recession and a back-to-basics focus by consumers is finally giving center store a chance to shine, industry experts say.“I think what we’re going to see now is, because more people are discovering or re-discovering the center store, these companies are now saying, ‘This is the time to advertise. We are going to innovate,’” said Phil Lempert, the self-proclaimed “Supermarket Guru.”

Among marketers shifting their focus to the center:• Del Monte. The pet and consumer foods maker recently began advertising its canned fruits and vegetables line for the first time in 10 years. Called “Stretch Your Dollar,” the $15 million campaign, via Smith Brothers Agency in Pittsburgh, aims to persuade shoppers to buy canned over fresh or frozen products. The economic downturn has caused Del Monte to up its ad spend and “develop new plans that, frankly, the company hasn’t thought about in years to drive traffic and growth into center store categories,” said CMO Bill Pearce. Del Monte, which is spending 30 percent more on marketing in its next fiscal year, said a high percentage of new products will target center store. (The company, which makes Contadina and College Inn, already is a major player in this category.)• Kraft is building distribution for its new Velveeta Shells & Cheese Cups. The new cups appeal to busy adults who crave its boxed dinners in more convenient forms, said Kraft rep Joyce Hodel. The company is running “portfolio” print ads for its dinner products for the first time this month. (One poster pairs Kraft Macaroni & Cheese with Velveeta Shells & Cheese and Deluxe Macaroni & Cheese dinners.) • General Mills, similarly, introduced Macaroni Grill, a more upscale version of Hamburger Helper that contributed to a 5 percent increase in meal sales for the latest quarter, the company said.While marketers have slowed new product pipelines, shelf stable is one area they’re still heavily invested in, data from market research firm Mintel suggests. In the second quarter of 2009 so far, 284 of 376 new product launches came from center store. By contrast, there were only 46 new chilled and frozen introductions during that same period.Said Krista Faron, a senior analyst with Mintel: “That’s just not something we saw as much of in the past.”

KFC trials Halal-only restaurants in UK

Fast-food chain KFC will operate eight Halal-only outlets in London with the aim of broadening the brand's appeal to Muslim customers.

The eateries will only sell chicken products that have been approved by the Halal Food Authority.

The trial stores are located in areas with large Muslim populations, including Forest Gate, West Ham and Tottenham.
If successful, the scheme could be extended throughout the UK.

KFC is the latest fast food chain to introduce a Halal-only menu. In February, Domino's pizza launched a Halal branch in Birmingham.

Brand Health Check: Next

The retailer helped define the 80s but is now fighting falling profits and a staid image.

Few doubt that the gloomy economic climate is resulting in a profound shake-up on the high street, but the challenges faced by Next transcend the current slowdown.

Last month, the retailer posted a slump in pre-tax profits of 14% in its year-end results, with like-for-like sales down 6.5%. More troubling, given the nation's fondness for Next's end-of-season bargains, it offered discounts on 15% fewer items in its sales, citing 'effective stock control'.

Next suffers from indistinct, middle-of-the-road positioning in a high street that is segmenting between cheaper and classier options. While Topshop is able to hire Kate Moss to design collections, Next is starting to resemble that other once-thriving clothing retailer, C&A.

Over-diversification could also be an issue. When Next first opened its doors in the early 80s it sold only clothes. Since then it has added furniture and home shopping to its offering.

Some would argue that in the process the retailer has lost some of the appeal that originally drove its growth. Is it possible now to rekindle the kind of public affection for the brand that will not only keep people queuing from 5am for the start of its sales, but also install it as a regular fixture in their retail routine?

We asked Raoul Shah, chief executive of communications agency Exposure, who has worked on the European launch of Levi's Engineered Jeans, and David Yates, senior planner at ad agency Kitcatt Nohr Alexander Shaw, who works on the John Lewis account.

Raoul Shah chief executive, Exposure

Like most fashion retailers, Next is having to fight hard for every sale.

It is caught in that difficult part of the mass market. Newer players Mango and Zara have set the pace with fresh stock delivered several times a week and an exciting environment to shop in.

The Next shopping experience lacks the wow-factor, and innovation in the area of brand experience is badly needed. It must think harder about the nature of the Next experience online, in the changing rooms, at the counter, when a mail-order package is delivered.

It also needs to use its real estate to make bold statements. The shop windows are a fantastic asset to exploit - think Ted Baker meets Selfridges.

A recent visit to Next in Westfield was like an obstacle course - narrowly packed rails of sales goods blocked attempts to reach the shoes at the back of the shop. The company needs to think harder about the impact that its sales initiatives have on the brand.

Overall, Next requires ambition and a flourish of boldness to address the mature brand and reinvigorate it for the 21st century.

Remedy

• As a mature retailer, Next has to inject some novelty. Shoppers need a reason to part with their cash.
• An overhaul of the Next brand identity and shopping experience is overdue.
• Develop a higher brand profile and image - senior people need to be more visible in the media, giving more interviews and building deeper relationships with brand influencers.
• Build on the Brand Directory as a diversification story - 'lots of great famous brands brought to you by Next'. It demonstrates innovation and stretch.

David Yates senior planner, Kitcatt Nohr Alexander Shaw

Somewhere in the past 27 years, the UK's second-biggest clothing retailer has lost its mojo.

The chain has become high-street wallpaper - outshone by the fast-fashion and low-cost players next door, and the increased accessibility of 'real' brands and high-end labels online.

The breadth of this middle market positioning is reflected in both the product and the consumer. In the attempt to cater for everyone, Next inspires almost no one. Before you even walk into the store, you know what you're going to find, and it's either beige or grey.

A recession makes this mass-premium middle ground even less appealing. But the economic environment might help drive reappraisal from consumers who wouldn't otherwise consider Next. It should also prompt a much-needed refocus of the core target audience.

The decision to stick to its guns on price, and not discount outside of main sale periods, is brave and correct. In the immediate credit-crunch future, Next needs to give people permission to trade down, and reasons for them to trade up.

Remedy

• Be famous for brilliant basics. A classic, stylish white T should pull in the cost- and fashion-conscious.
• Reclaim some fashion credibility with statement pieces. Each collection should have a key item that delights customers and surprises their friends.
• The best opportunity to bring people back into the brand may lie outside fashion. An 'improve, don't move' strategy in homewares, backed by products that embody the Next sense of style, would create a group of people ripe for introducing into other categories.

Charity launches 'age-friendly' seal for consumer products

LONDON - Merged charity Age Concern and Help the Aged has launched an accreditation scheme called Age OK.

The seal of approval will be given to products and services that experts have judged to be sufficiently ‘age-friendly'. Sky is the first winner of an Age OK accreditation for its Sky+ remote control.

In addition to the product-approval mark, Age Concern and Help the Aged also plans to launch an organisational accreditation in 2010, which will be awarded to businesses that take into account the overall customer experience for older people. This will include aspects such as shop design, customer service and marketing activity.

Research by the charity, released today, reveals that 57% of older people feel that businesses in the UK ignore them to focus on the youth market, despite the fact that the charity calculates older people's spending power to be worth an estimated £250bn a year. Furthermore, 50% of older people slammed marketers for producing patronising and stereotypical advertising targeting the over-50s.

Pizza Hut hunts college student for Summer of Twitter

Pizza Hut in the US is hunting for a college student to spend the summer months as a member of the PR team in charge of tweeting about new developments at the restaurant chain.

The company is advertising for students to apply for the 10-12 week long "twinternship", based in its headquarters in Dallas.

Duties include:

• Sharing insights and experiences via social media such as Facebook, Twitter and YouTube.
• Attending marketing meetings, ad shoots and other events; monitoring social media for happenings that may be of interest to loyal Pizza Hut fans
• Working on PR programmes.

The internship is paid, although the job ad does not reveal the salary.

Applicants are expected to prove that they have knowledge of social media and, if shortlisted, will be required to "submit a portfolio of social media know-how".

With Twitter-use growing exponentially in 2009, brands are trying to work out how to best use the service to promote themselves, and monitor what is being said about them online.

Earlier this month Amazon experienced the power of the Twittersphere when rumours spread far and wide that it had adopted an anti-gay policy by removing thousands of books from its main search and best-seller rankings.

It emerged that there was no such policy and that the problem had been caused by a classification error, but not before hundreds of thousands of mentions of the term "amazonfail" had spread across the World Wide Web.

Rachel's updates packaging but retains 'organic'

Dairy brand Rachel's is relaunching its packaging but has said that reports indicating it is dropping the word "organic" from its products are untrue.

Rachel's said that its products continued to be made from organically sourced milk and that the word "organic" would continue to appear on its packaging.

The company has certification from the Soil Association.

The new product identity simplifies the brand's logo to "Rachel's", with a design based on the signature of founder Rachel Rowlands.

It is the third product identity for the brand. It launched as 'Rachel's Dairy', which continues to be the name of the company, and then became 'Rachel's Organic' in 1997 -- until now.

The look has been created by FBA, which has worked with Rachel's for 20 years.

Reports in the media had suggested that the company was dropping "organic" because in these recession-hit times consumers perceive organic brands to be more expensive.

However, the word will continue to appear on packs and the company said that sales this year were up by 18.3%, as reported by Nielsen Data.

Steve Clarke, marketing director, said: "We have been astonished by the attention this small logo change has attracted.

"This sort of reaction is usually reserved for the likes of giants such as Cadbury's or Kellogg's, so I guess we are in good company and therefore very flattered by the attention -- but we do prefer it to be factually correct."