Thursday, December 31, 2009

Alcatel-Lucent Seeks Wireless Innovation

Sarfraz Haroon passes along Alcatel-Lucent's foray into the global invention network - "As part of a program called TechQuest, Alcatel-Lucent is seeking applications from wireless / mobile technology experts for applications in the areas of public safety, entertainment, eHealthcare and eLearning".  See details here.  Just don't call it Open Innovation!

The "New" Old Market - Muslim Consumer

Having developed the focus on the Muslim Consumer at P&G at the highest level, it is interesting to see mainstream marketing and communication companies exploring new revenue streams in this consumer sector.  Astute P&G colleague Amer Almomen passes along WPP's thinking around the 1.6 billion consumer awaiting marketing messages, see article here.

Overall, the article shows the early approach to be exploratory while unburdened from cliches about Islam.  Yet, categorization (essential for agencies to develop processes) is nascent - to "touch" the "life" of the "boss" through messaging in the Islamic environment requires minds that have grown up in the environment, or development of large knowledge bases on behaviors created through engagement and intelligence extracted from them.  One such organization is Maktoob Research, recently acquired by Yahoo, see details here.

The Muslim Consumer's diversity from ethnic to economic to geographic is an exciting realm to delve into!  Good luck to all entrants!

Thursday, December 17, 2009

American Express - Consumer Analytics and Insights

A little bit old news, yet for consumer research and even quants in the the consumer research and insights field, this is exceptional news:

"American Express is unleashing a powerful weapon: a new unit that will harness transaction data for its 90 million cardholders to inform both marketing decisions and larger strategic issues."

This is transactional data on committed to using their credit card consumers and American Express has always been brilliant at understanding their consumer.  I believe the value here will be exceptional.

See the cached article off Google cache here or search for it on AdAge here.

Tuesday, December 15, 2009

New Currency on the Horizon for the Gulf

The Dubai concerns and continued global economic fluctuations are resulting in pushing forward the single Gulf Cooperative Council's (GCC) plans for a single currency among the 6 Gulf nations of Saudi Arabia, UAE, Qatar, Kuwait, Bahrain and Oman.  Read details here.

Interesting to note from the manufacturer and buyers of consumer goods perspective is the fact that the single currency has not been pegged yet.  Dollar? Euro? Gold? Basket?

Will Design Thinking Deliver to the Consumer?

A new mantra among the corporations of the world is emerging for the teen years of the 21st century - Design Thinking.  Just like the concept of Innovation rose in the early 2000s, Design Thinking as an idea is finally on the rise.

The leaders in this space have existed for a while, couple of examples being IDEO and Procter & Gamble (with its Innovation Centers).  The level of understanding, misunderstanding or not understanding this space are clear from the Business Week article "Inside the Design Thinking Process", here.  The author, Helen Walters, discusses the Aspen Design Summit where multiple design driven sessions were conducted to solve hard problems.

I give credit to Ms. Walters on stating about the Design Thinking process as implemented at the Aspen Design Summit, "... the strongest takeaway was that those looking for a prescribed way to implement design thinking are destined to be disappointed. It's a messy, opaque process that depends as much on group dynamics as intellect or insight."

Preparation of such sessions requires experience and insights into human behavior.  Someone I personally know to be exceptionally talented at this is the Marketing Consulting Services of Copenhagen, see information here.

Yet, the one reason I suggest giving this article serious consideration is because the author highlights the key to the success of all Design Thinking processes, having the end user or consumer of the product or service engaged, which apparently was missing from all the sessions conducted at the Aspen Design Summit.  The author termed the results being developed out of the sessions to "seem like entirely inappropriate bunk" for the end user or consumer.

Perhaps all this is becoming news due to Roger Martin causing an uproar with his open challenge to the research driven, heavily analytical product and service development organizations and management consultancies, see my blog "Roger Martin - On Designing the Future", here.

I believe that exciting times are ahead as the left and right brained individuals realize that to truly deliver a breakthrough to their consumer, they must work collaboratively, break down the silo and unburden themselves from the past to really "create".

China Update

Good friend Mr. Tony Tsai, CEO – BHG Retail Innovation Institute and EVP Operations – The BJ Hualian Hypermarket Co. forwards valuable insights on China's approach and management of its ownership of USA debt and foreign exchange reserves, and how it is perceived globally.

Do we have a new leader that now begins to manage the economics of the globe?  Perhaps China has been one for a long while!

A horse may look like it is pulling the cart... but the one who holds the reins, reigns.

"How does China deal with the risk of holding US Treasury bonds?
"Convertible bonds" are not a solution for China in hedging the risk of holding US Treasury bonds. This could make things worse for China. Given the huge amount of foreign exchange reserves, what China should do is commit to adjusting its structure for economic growth, purchase strategic materials at the right time and persist in renminbi internationalization so as to ensure the security of China's investment in US Treasury bonds.

"World Bank believes China understands the risks of an asset-price bubble
Juan Jose Daboub, managing director of the World Bank, points out on Dec. 14 that the World Bank believes that Chinese authorities understand the risks of an asset-price bubble and will take the measures that they believe are more appropriate. They have done so in the past.

Growing Entrepreneurism - "Start-up Visa" to Dubai?

Interesting piece on offering visas to individuals who plan to start new businesses in a location that is not their native country.  The concept is discussed in the Abu Dhabi newspaper, The National, in an article "Making Dubai the global hub of start-up success", here.

The article provides comparisons to major start-up centers of the world such as San Francisco with an evaluation of infrastructure, tax consideration, etc.

Monday, December 14, 2009

The State of Business Process Management (BPM)

Good friend Rashid Khan, the inventor of the term BPM (Business Process Management) continues his educational blog on the industry, see here.  From one of his entries I found valuable:

"So what is the state of the BPM industry today? Here are some revealing facts:

  • No pure-play BPM vendor is big enough or strong enough financially to go public, though several continue to threaten for several years now that they will soon. It does not happen, even while every year the analysts continue to forecast rapid growth in the industry and among the leaders.
  • We keep hearing every other year that the big players such Oracle, Microsoft and SAP will make major inroads in to the BPM market, but that also has not happened.
  • Gartner, after having pushed BPM, simulations, “round-tripping”, and SOA, is now on to a new gig called “Pattern Based Strategies” to further confuse their already confused customers, which is always good for their business. (see )
  • All this while Gartner admits that the most important “hot questions” their clients ask are basic BPM 101 questions such as “1. What are the benefits of BPM?” and “2. How should I get started?” (see ) Makes one wonder why companies are paying Gartner money for answering such basic questions, unless they are totally confused!
  • There is no slowdown in the number of new entrants to the BPM market, which indicates that the market is still largely open with no strong leaders, and no sign of consolidation, contrary to all predictions. "

Friday, December 11, 2009

Breakthrough Innovation in 30 Hours?

Mr. Aaron Turcott, one of the top graduate students at Georgia Institute of Technology I had the opportunity to instruct sends a link to CapGemini's Accelerated Solutions Environment, here.  Interesting... 

I would direct anyone interested in the above to give serious consideration to my previous business partner Ms. Frederikke Kroon's breakthrough method of innovation conducted in 30 hours or less, see details and media on Frederikke's work and company Marketing Consulting Services in Copenhagen here.  Though the method requires intense preparation ranging anywhere from four to ten weeks, yet the execution occurs in 30 hours, creating tangible value that engages the client, carefully mixes in adjacencies, from anthropology to theology, scientists to artists, etc.  The results Frederikke's organization produced for multinational clients such as Arla, Vovlo and Carlsberg speak for themselves!

Roger Martin - On Designing the Future

My astute friend from McKinsey, Samvit Kanoria forwards "What's Thwarting American Innovation? Too Much Science, Says Roger Martin", in Fast Company, see here.  The article highlights Mr. Martin's focus on creativity in innovation being a combination of science and design aspects of product or service development working together.

For the scientist, he states - "The future has no legitimacy for analytical thinkers."

Mr. Martin thrashes the large management consulting companies and lays the blame of innovation bottle neck on a corporate structure mired in research and analysis of the past - "But what they analyze is the past.  And if the future is not exactly like the past, or there are things happening that are hard to measure scientifically, they get ignored."

Mr. Martin is asked - "Are you saying that the regression analysis jockeys and Six Sigma black belts have got it all wrong?" and he states - "Well, yes."

Interestingly, my tenure at P&G was during the time Roger Martin was advising A.G. Lafley and I was a part of the substantial changes brought within P&G's approach to business.  See information on some my work related to Virtual Shopper here on my friend Franz Dill's blog, who also was one of the founders of the P&G Innovation Centers.

Though Mr. Martin speaks candidly, yet the change he suggests carries pain to the corporate as a whole and the machinery of suppliers supporting it.  Corporate innovation remains more perception than reality, with incremental results seen in their markets from licensing, buyouts, etc.  Breakthrough innovation remains the domain of the entrepreneur, one who can imagine a future unburdened by the past!

Monday, November 30, 2009

Service Innovation in Airlines - AirAsia

Tony Fernandes believes that the key to his Air Asia airlines breakthrough success is people (committed to the customer), leadership and ability to brand and market - perhaps the pillars of service innovation.  See interview below.

Wednesday, November 18, 2009

Google's Holiday Gift to the US Air Travelers

Airline consumer will be heads down on their smartphones and laptops at airports this holiday season, thanks to Google, which is offering free WiFi at 47 participating airports around the USA, details here.  Though you will not find Atlanta, New York or Chicago on the list!

America's consumer goes from "Be Like" to "I Am"

"There is no such thing as "the American consumer"".

States an article in AdAge - "No more Joe consumer in America", here.  One key to this shift has been the American consumer's ability to voice a choice, ability to create and join communities of choice, and the choice being the brand that fulfills a need.  Did the Internet help enable this?

This democratization of the American demographic is discussed in a white paper (for you to purchase) here by Mr. Francese, demographic trends analyst at WPP's Ogilvy & Mather and founder of American Demographic magazine.  He states that:

"The iconic American family - married couple with children - will account for a mere 22% of households."

The changes represent the continued growth of digital communication mediums, while emphasizing the need to engage directly and pervasively with the consumer.

Tuesday, November 17, 2009

Brand Manager vs. Brand Advocate?

Forrester has finally caught up with the leading marketing companies of today!  Forrester published a report recommending the shift from the designation "Brand Manager" to "Brand Advocate" in their report - "Adaptive Brand Marketing: Rethinking Your Approach To Brands In The Digital Age", here.

I was activitly engaged in creating this new pathway seven years ago at PG-Tremor, details here.  The Advertising Age magazine states as much in their article, "Why its time to do away with the brand manager", here:

"Executives of big marketers Procter & Gamble and Unilever note that they're already doing much of what Forrester recommends.  The global brand strategist/local brand advocate breakdown, for instance, resembles how they and other big household and personal-care marketers already organize."

I remember one of the big moments was when the brand managers discovered they had minimal to no insights on the digital social networks driven communities of choice forming around the "choice" i.e. the brand that fulfilled a need.  The AdAge articles states this to be a necessity today:

"[Rex Briggs] believes marketers in the digital age need to be more "numerate", with more training in research and analytics..."

Interestingly, I remember listening to Paul Poleman current CEO of Unilever when he was at P&G about the importance of information technology in reaching the consumer.  He is quoted in the article stating:

"Web-enabled consumer intelligence may be one of the biggest benefits of social media for marketers."

The astute will note that Mr. Poleman used the words "intelligence" not analytics!

Thursday, November 5, 2009

The Economist For Subscribers Now

Recently, the Economist has begun restricting content on their site.  Some of the great information freely available to the Internet user is now for the paid subscribers only.

The magazine recently wrote an article on America's ailing newspapers "Big is Best", read here.  It will be interesting to see how the Internet news and information market place shapes up.

Wednesday, November 4, 2009

Old and Famous Chinese Brands

Via Tony Tsai:

"China forbids foreign investment in "old and famous Chinese brands"
Vice Minister of Commerce Jiang Zengwei says that old and famous Chinese brands are not allowed to introduce foreign investment. If they do so, they will be deprived of the fame of being an "old and famous Chinese brand". He says there are only about 1,000 old and famous Chinese brands in China compared with more than 10,000 in 1949. He says the China should protect those old and famous brands. He points out it is an important duty of the government to protect China's national brands. According to the current regulations, an old and famous brand must have been established before 1956."

Friday, October 30, 2009

1984: PC vs. Apple? PC - 2009: Android (based) vs. iPhone? Who?

In the 1980s IBM diluted Apple to single digit share of the personal computer market place.  I believe if Apple continues in the same vein, the Android powered smart-phones will do the same to it now.

Can Apple change? Will it?

Read more at Wired here.

Friday, October 16, 2009

The Economist Looks at Business Through Schumpeter's Eyes

This is probably the best article I have read to date that puts the past, the present and what may be the future of business and management into perspective. The Economist's "Schumpeter, Taking Flight" is a new column launched on September 19th, 2009, read here, says of Schumpeter - "Joseph Schumpeter was one of the few intellectuals who saw business straight." I agree.

As an entrepreneur and a global businessman, Schumpeter's concepts on economics have made the most sense to me. Especially, the concept of "Creative Destruction" (see a primer here) has been a key to my thought process in the past twenty years as I conduct and build businesses around the world. The Economist states:

"[Schumpeter] regarded business people as unsung heroes: men and women who create new enterprises through the sheer force of their wills and imaginations, and, in so doing, are responsible for the most benign development in human history, the spread of mass affluence."

I look forward to the Economist's perspectives as it perceives business today through Schumpeter's eyes.

Ease of Doing Business and GDP growth

I previously wrote about the World Bank's "Doing Business" here. Their new report is out, the overview can be downloaded directly here. The Economist sites a study that is important to note:

"... in poor countries, a ten-day reduction in the time it takes to start a business can lead to an increase of 0.4 percentage points in GDP growth. Another shows that people who have a formal title to their property invest as much as 47% more in their businesses."

World Perspective 6 [Water]

Sunday, October 11, 2009

Hummer Story Continues...

Via Tony Tsai -

"GM decides to sell Hummer to Tengzhong; government approval is key to deal
Oct. 8, GM CEO Fritz Henderson says that GM has decided to sell Hummer to Sichuan Tenzhong Heavy Industrial Machinery. Earlier, China's Ministry of Commerce said that it had not yet received any application for the deal. Government approval has become the biggest variable in the deal. Apart from Hummer, GM has successfully sold Saab and Opel."

Tuesday, October 6, 2009

Predicted (Perceived) vs. Actual Social Behavior

A grand social policy shift was made in Portugal in 2001 - The decriminalization of drug use and possession. The Economist writes:

"The place was dubbed Europe's "most shameful neighbourhood" and its "worst drugs ghetto". The Times helpfully managed to find a young British backpacker sprawled comatose on a corner. This lurid coverage was prompted by a government decision to decriminalise the personal use and possession of all drugs, including heroin and cocaine. The police were told not to arrest anyone found taking any kind of drug."

Fast forward to 2009, the Economist quotes from a report on Portugal's decision and its outcomes:

"The number of addicts registered in drug-substitution programmes has risen from 6,000 in 1999 to over 24,000 in 2008, reflecting a big rise in treatment (but not in drug use). Between 2001 and 2007 the number of Portuguese who say they have taken heroin at least once in their lives increased from just 1% to 1.1%. For most other drugs, the figures have fallen: Portugal has one of Europe’s lowest lifetime usage rates for cannabis. And most notably, heroin and other drug abuse has decreased among vulnerable younger age-groups..."

"The share of heroin users who inject the drug has also fallen, from 45% before decriminalisation to 17% now, he says, because the new law has facilitated treatment and harm-reduction programmes. Drug addicts now account for only 20% of Portugal’s HIV cases, down from 56% before. “We no longer have to work under the paradox that exists in many countries of providing support and medical care to people the law considers criminals.”"

Hats off to Portugal for bringing innovation in social policy. See more data and read the complete article here at the Economist.

Democratization of Mobile? (called openness)

"Google and Verizon announced a “groundbreaking” partnership Tuesday that will bring Google-powered smartphones to the nation’s largest wireless carrier, finally bringing innovative devices to the country’s biggest and best wireless network.

Call the announcement a major victory for Google and perhaps even for openness."

Read details here on Wired. And not to be outdone:

"Bowing to openness pressure from the FCC, AT&T renounced on Tuesday its opposition to internet telephone calls that use the iPhone’s 3G data connection.

In short, Skype on the iPhone is now OK by AT&T, the company said in letters to Apple and the FCC."

Read details here on Wired.

Thursday, September 17, 2009

China Update

Good friend Mr. Tony Tsai passes along great updates from China:  

Consumer Focus

McKinseys & Co.: China will become world's third largest consumer
According to a research report released by McKinseys & Co. on Aug. 21, China will become the world's third largest consumer by 2020, with over $2.5tr in personal consumer spending, just behind the US and Japan. The report pointed out that the Chinese government is adopting a series of policies to stimulate consumption and transfer the economic development focus from heavy industry and export to service and consumption.

Ministry of Commerce advises to cut import duties to boost high-end spending
Aug. 6, Vice Minister of Commerce Jiang Zengwei says that China should cut import duties on luxury goods, such as cosmetics and watches to encourage wealthy consumers in mainland China to buy such products at home rather than abroad. Lowering the duties will boost the imports of luxury goods and that will spur domestic retail sales. He adds that China should promote sales on credit to bolster domestic demand.

Ministry of Health publishes four new regulations to solicit public opinion
The Ministry of Health recently issued four new regulations, including health archives management, booking register in hospitals, complaints from patients and an electronic case history, to solicit public opinions within three days. It indicates that the Ministry of Health is pushing forward medical reform steadily, which will bring great benefits to ordinary people.

Global Business & Transparency

Wen Jiabao: China's economic development still lacks inner vitalityDuring an inspection tour in Jiangsu province, Chinese Premier Wen Jiabao said, "There are still a lot of unstable and uncertain factors ahead and the economic situation is still very grave, although both the world economy and the national economy are making positive changes." He said the country's economic performance showed increasingly positive signs, but stressed recovery was still "unstable", not consolidated and "unbalanced". He warned against blind optimism. He said, "The country's economic development still lacks inner vitality to counter the crisis, as policy support remains an important propellant of economic growth." Weakening external demand was also creating overcapacity in some sectors, which would be a big obstacle to a rebound in industrial and economic growth. He reiterated that the country should stick to its proactive fiscal policy and moderately easy monetary policy for a sustained growth.

Wen Jiabao: China's economy is at crucial juncture in recovery and government will not change policy direction
Sept. 1, Chinese Premier Wen Jiabao meets with visiting World Bank President Robert Zoellick. He says that China's economy is at a crucial juncture in its recovery and the government will not change its policy direction.

China's accounting standards will meet international standards within two years
Sept. 10, the Ministry of Finance issues the roadmap for the substantial convergence between China's Accounting Standards for Business Enterprises and International Financial Reporting Standards. The roadmap has set a deadline of 2011. Starting from 2012, all of China's large and medium-sized enterprises will adopt the revised accounting standards system for Chinese business enterprises which is equivalent to the International Financial Reporting Standards. It has been reported that the European Committee decided that during the transitional period from 2009 to 2010, the EU will allow Chinese enterprises to adopt Chinese accounting standards when entering the European market, so they do not have to adjust their financial statements in accordance with International Financial Reporting Standards used in the EU.

Reorganization and restructuring of enterprises can not neglect democratic decision-making
The All China Federation of Trade Unions recently issued a circular about further strengthening democratic management during the reorganization, restructuring, closure and bankruptcy of state-owned enterprises, in order to protect the legitimate rights and interests of employees.

Four hundred and eighty-six of the world's top 500 companies have set up presence in Beijing
According to statistics, foreign direct investment (FDI) in Beijing in the first half of this year rose 5% year-on-year. Yu Xiaofeng, vice director of the Department of Foreign Trade under the Ministry of Commerce, attends an investment forum in Beijing and lists the reasons why Beijing has become the first choice for investment by multinationals and well-known foreign companies.The reasons include preferential investment policies, a good investment environment, high-tech human resources, low labor costs and simplified procedures for examination and approval of investment projects. By the end of the first half of 2009, 486 of the world's top 500 companies had a presence in Beijing. Beijing's actual use of FDI totalled $3.5b. Most of the companies are from Hong Kong, the British Virgin lslands, Germany, the US and Singapore.

China's FDI rose 7% in Aug., first growth in 11 months
Sept. 15, Yao Jian, spokesman for the Ministry of Commerce, says that China received nearly $7.5b in foreign direct investment (FDI) in Aug., up 7% from a year earlier, the first growth in 11 months, since last Oct. He says that currently, China's FDI policies have already formed a complete framework, and are fair and impartial. However, they need adjustments and optimization to better support the country's economic restructuring and to create a resource-saving and environment-friendly society. He notes that the adjustment and optimization will focus on investment procedures. Foreign investment filing systems will replace the current examination and approval system.

Tuesday, August 25, 2009

Yahoo and Maktoob - Social Web Growing Up in the Gulf

Yahoo will be acquiring  Click here for details.

About four years back, while working with Mr. Khurram Hamid who was leading digital mobile marketing for P&G out of Dubai, I met with Mr. Ahmed Nassef, GM of Maktoob (website here) to review their web and social network analytics capabilities.  Ahmed stated his goal of becoming the Yahoo of the MENA region.

Maktoob impressed me with what they were trying to build.  More importantly Maktoob Research (website here) was starting to develop deeper understanding and garner insights on the Arab consumer.  I had worked on the definition and concpet of the Muslim consumer for P&G and felt that Maktoob was leading the way in social networks and social media for the Arab populace of MENA.

Congratulations to Ahmed and Maktoob employees!

Thursday, August 13, 2009

Governments and Innovation

I heard Jim Greenwood (bio here), President & CEO, Biotechnology Industry Organization state on CNBC:

"Government can spur innovation, it can incentivize innovation... but the government cannot innovate."

Thursday, August 6, 2009

Asia Poised for Innovation

A chat with friend and advisor Mr. Martin Ertl, CIO Bombardier Transportation highlighted that the most recent patent applications for alternate energy and/or clean energy have been coming out of China and at a steady pace and massive rate.

The following article from the McKinsey Quarterly, "Asia and the elements of innovation" by Eric Drexler could not have been more apropos to my conversation with Mr. Ertl.  The article discusses some of the key differentiators of Weatern and Asian cultures and why Asia looks to take exponential lead in innovation.  The article states:

"To become a world-class center of technological innovation, a society must have three basic elements:
• drive—a culture that supports change and hungers for it
• human capital—the personal abilities that make world-class technology possible
• a capacity for mobilization—a society’s ability to pursue ambitious new goals

Having personally experienced education in South Asia, I can attest to the following, though it is changing:

"Cultures differ radically in their attitudes toward education. In the rising societies of Asia, education is a top priority, far above, for example, sports. During national exam season, when students study for the test that will determine their future in higher education, I found that Indian newspapers carry science and mathematics quizzes that would stump most US college graduates. Recent physics tests given to US and Chinese students entering comparable technically oriented universities produced distributions of scores that had little overlap. In Chinese societies, scholarly students have a status among their peers like that of athletes in the United States and run little risk of being marginalized, ridiculed, or beaten. In India, I found that students chase after the autographs, not of entertainers, but of scientists."

Read the complete article here.

Stephen Roach: I'm starting to worry about China's economy

Via Mr. Tony Tsai, CEO – BHG Retail Innovation Institute and EVP Operations – The BJ Hualian Hypermarket Co.:

"This is an article written by Stephen Roach, chairman of Morgan Stanley Asia, which is posted on the website of the Financial Times. Its original title is "I've been an optimist on China. But I‘m starting to worry". On the surface, China appears to be leading the world from recession to recovery. After coming to a virtual standstill in late 2008, at least as measured quarter-to-quarter, economic growth accelerated sharply in spring 2009. A back-of-the envelope calculation suggests China may have accounted for as much as 2% of annualized growth in inflation-adjusted world output in the second quarter of 2009. With contractions moderating elsewhere, China's rebound may have been enough in and of itself to allow the global gross domestic product to eke out a small positive gain for the first time since last summer.That's the good news. The bad news is that China's recent growth spurt comes at a steep price. Fearful that its recent economic short- fall would deepen, Chinese policymakers have opted for quantity over quality in setting the macro-strategy, the centrepiece of which is an enormous surge in infrastructure spending funded by a burst of bank lending. A macro strategy that exacerbates troubling imbalances is ultimately a recipe for failure. In many respects, that's what the global crisis and the recession of 2008-09 are all about. China will not get special dispensation from the most critical lesson of this post-crisis era."

See the complete article here.

Sunday, July 19, 2009

Consumer Value Shopping Driven Innovation in Retail

Andy Bond, CEO of ASDA talks with the Economist about the changes in consumer behavior and how ASDA continues to innovate and grow its revenue.

Tuesday, June 30, 2009

Consumer Insight - Alcohol Consumption and its Future Regulation

Dr. Ayesha Haroon sends along an article "Alcohol link to one in 25 deaths" here, discussing a study conducted at the University of Toronto.  Dr. Haroon highlighted that with the release of further details, the surgeon generals of the developed countries will have to reconsider their alcohol regulations while their governments will have to review policy towards alcohol sales and consumption.  Interesting fact about Europe in the article:

"Worldwide, average alcohol consumption is around 12 units a week - but in Europe that soars to 21.5. "

Alcohol in the form of consumer products have provided capitalism with exceptional wealth creation.  Perhaps too much of anything is bound to raise an eyebrow or two!

Thursday, June 25, 2009

Food and Farms

""According to our laws and our policy, foreigners or foreign companies are not allowed to rent or buy land to grow rice or any kind of food, including raising any livestock in Thailand," Deputy Commerce Minister Alonkorn Pollabutr told reporters."

Reports Maktoob Business here.  I have written previously about the consumer choices for farm commodities and products in regions where the ability to produce either is minimal or difficult, and the results of it.  Collectively, the GCC states currently lead the world in land acquisition and/or leasing of farms.  Yet the above may be a small set back for now.

The Economist writes an excellent article on the subject here.  The article states:

"It is not just Gulf states that are buying up farms. China secured the right to grow palm oil for biofuel on 2.8m hectares of Congo, which would be the world’s largest palm-oil plantation. It is negotiating to grow biofuels on 2m hectares in Zambia, a country where Chinese farms are said to produce a quarter of the eggs sold in the capital, Lusaka. According to one estimate, 1m Chinese farm labourers will be working in Africa this year, a number one African leader called “catastrophic”."

Below is a revealing data diagram highlighting investment and deal structure from the Economist.

(Click to enlarge)

A bit of hype and herd (crowd) mentality is shown in the following statistics followed by of course pullback - "Between the start of 2007 and the middle of 2008, The Economist index of food prices rose 78%; soyabeans and rice both soared more than 130%. Meanwhile, food stocks slumped. In the five largest grain exporters, the ratio of stocks to consumption-plus-exports fell to 11% in 2009, below its ten-year average of over 15%."

Yet, all this activity is termed as "neocolonialist" as the article states - "The head of the UN’s Food and Agriculture Organisation, Jacques Diouf, dubs some projects “neocolonialist”."

As the need continues to grow for food, the agri-focused economics will gain from it.  Will the results be similar to oil economics?

US Gov.'s Consumer - The Citizen - Insight

The Economist discusses "Americans have grown slightly more receptive to the idea of an activist government."  Read complete article here.

The US citizen is the consumer of the US government.  From the consumer insight perspective, I found this graph of value.

Changes in Consumer Decision Making

The McKinsey Quarterly publishes a thought provoking look at the "consumer decision journey" here.  The article developed the new approach to the decision journey:

"... by examining the purchase decisions of almost 20,000 consumers across five industries and three continents. Our research showed that the proliferation of media and products requires marketers to find new ways to get their brands included in the initial-consideration set that consumers develop as they begin their decision journey. We also found that because of the shift away from one-way communication—from marketers to consumers—toward a two-way conversation, marketers need a more systematic way to satisfy customer demands and manage word-of-mouth. In addition, the research identified two different types of customer loyalty, challenging companies to reinvigorate their loyalty programs and the way they manage the customer experience."

There is a link to a good interactive animation titled "The consumer decision journey" with audio that discusses the changes today's consumer has incorporated vs. the traditional funnel used by marketers to define touch points for their messaging.

Tuesday, June 16, 2009

Asian Airports Delight Their Customers

Six of the top 10 airports in the world are Asian - according to Skytrax's study using 8.6m passengers reviewing 196 airports worldwide. These are 1. Incheon (Seoul) 2. Hong Kong 3. Singapore Changi 4. Zurich 5. Munich 6. Kansai 7. Kuala Lumpur 8. Amsterdam 9. Centrair Nagoya 10. Auckland.

Incheon International Airport, Seoul, South Korea

Comments from a user on the Economist's website discussing the top 10 airports here is particularly good:

"If you look at the airports listed in the top ten and analyze their success, you will find that in most cases they are planned to provide convenience for the travelling public and that making a buck is not their raison d'etre."

See details on here.

See my post on the world's best airlines here.

Monday, June 15, 2009

Power of Communities of Choice

I continue here with sharing examples of what communities of choice are capable of versus the mystifying term called - wisdom of the crowds.  Please see various examples in my blog on this subject.

The Wired just published an article in their Danger Room that shares methods for internet users who are interested in speaking and acting against the current Iranian regime.  The user can employ simple methods to attack the Iranian governments websites.  See details here.

I find this fascinating - at the same time I see the self organization of such communities of choice to be driving us towards new paradigms of "choice", refining the perception versus reality debate of marketing.  In a perfect world... one would not have to choose!

Wednesday, June 10, 2009

Punctuated Equilibrium and Economic Disasters?

During a long and lengthy conversation a few years back with brilliant colleague Mr. Franz Dill, we delved into examples of the replication of the theory of Punctuated Equilibrium in commerce and trade, see details on the theory here. For example, why does a soap suddenly stop selling completely in a certain region while two double in volume?

The McKinsey Quarterly just published an article - "‘Power curves’: What natural and economic disasters have in common - Parallels between the failures of man-made systems, such as the economy, and of similarly complex natural ones offer fascinating food for thought" documenting the pattern discovering aptitude of humans to map the above through statistical analysis. See complete article here.

Chinese Smart Phone Consumer's Options

"China Unicom, while negotiating with Apple for the distribution of iPhone 3G in China, is expected to launch an Android-powered smartphone, the Uphone, which is built using its in-house developed UniPlus platform"

It will be interesting to watch the pricing and Chinese smart phone user's choice from the above two options.

Innovation in Manufacturing

Good friend Mr. Tony Tsai passes along "The Manufacturing Institute – Accenture: Innovation Roundtable Report" here. Practices called out as common among the participants of the roundtable for the report:
  • Focus on more structure, less serendipity
  • Evaluate multiple innovation dimensions
  • Bring greater discipline to managing innovation portfolios
  • Cultivate innovation in people
It is a good report for tenured and seasoned corporate managers now assigned the task of running innovation organizations. Lots of good material in the survey conducted for direct application to their strategies.

I have stated before that - "Satiated people do not innovate". For me, the report seems to have focused more on corporate innovation organizations and associated portfolios. Breakthrough innovation remains the domain of the entrepreneur while incremental innovation is the approach of the corporate, something that has to be converted to a process for measurement. Both have to exist, neither should try to act as the other!

Breakthrough Health Care Consumer Innovation in India

I am excited to showcase India Institute of Technology at Kharagpur, India here on my blog yet again (see previous entry here). The Economist has published an article "On the pulse" here regarding development of an artificial heart at IIT-KGP that will be going into human trials in a matter of a year or so. The cost will be 1/30th of the average cost of one developed in the USA with much less failure rates. Please click through to the article for detials.

I like to share the trend I have been observing - South Asian educated mind's movement from memorization of best practices and replication to challenging the learned behaviors and "creating" the next breakthrough.

"A new, low-cost design for an artificial heart takes its inspiration from an unusual source—the cockroach."

My congratulations to IIT-KGP! Brilliant.

Tuesday, June 9, 2009

US Utility Consumer Managing Their Electricity

The utility companies run one of the oldest infrastructures in the USA. A friend working in mesh networks for Smart Grids highlighted the fact that an industry where change may occur once in 20 years is being driven to incorporate and integrate technology whose pace of change is substantially faster. Challenges abound!

The Economist in their recent Technology Quarterly have an excellent article on the subject, "Building the smart grid" here. The article highlights my point above further:

"Even though the demands being placed on national electricity grids are changing rapidly, the grids themselves have changed very little since they were first developed more than a century ago. The first grids were built as one-way streets, consisting of power stations at one end supplying power when needed to customers at the other end. That approach worked well for many years, and helped drive the growth of industrial nations by making electricity ubiquitous, but it is now showing its age."

From speed of growth, lack of transparency on the transmission and distribution side of the grid to the consumer's habits of obliquity to their electricity usage, the opportunities abound. Having lived and traveled overseas extensively, the USA lags in one key aspect that the article touches on some what - the US consumer has never been given an incentive to save electricity. The utility companies must grow their revenue and bringing smartness to the electric grid will cut into their top-lines. The article discusses this aspect:

"One problem is that power companies are understandably reluctant to invest in technologies that will reduce consumption of the product they sell, even if there are other benefits. One way to realign the public interest with that of the utilities is through a process called “decoupling” which breaks the direct relationship between electricity sales and profits, a measure that has been successfully employed in California. Energy use per person has remained largely flat over the past 30 years in California, but it has increased by roughly 50% for the rest of America. But in some instances the business case is straightforward. Enel (utility in Italy)spent around €2.1 billion ($3 billion) installing its 30m smart meters in Italy, but now saves around €500m a year as a result, so its investment paid for itself within five years."

I am reminded of Bill Bryson's article "The Waste Generation" on the US consumers' habits in his book "I am a stranger here myself". The author writes that when he used to live in England, the utility offered an off-peak energy plan resulting in value back to the customers. He used to run his washing machine on a timers at night to receive the benefits using timers.

Is the pain or perhaps the desire to manage utilities strong enough for the consumer to adopt the new changes or are the stimulus funds would be used enforce a new regime for the unwilling customer?

"The American government is spending some $4 billion from its economic-stimulus package on smart-grid initiatives, but providing a smart meter for every American home would cost far more: California’s investor-owned utilities alone are spending about $4.5 billion on deploying smart meters over the next few years. That implies that a nationwide implementation could cost around $50 billion. But PNNL estimates that $450 billion would have to be poured into conventional grid infrastructure to meet America’s expected growth over the next decade anyway. Mr Carlson, who now works for GridPoint, argues that a bit of thought is called for if the aim is to move to a new energy-management model, “as opposed to building more of what we’ve already got.”"

One thing is for certain, once the grid gets tapped, the invention driven entrepreneurial opportunities for revenue generation through fulfillment of user needs will be endless!

Monday, June 8, 2009

Consumer Focus: Social Media Organizations

"Social media isn't a box to be ticked or a department to be manned or even a campaign to be launched. It's about thinking differently about marketing, customer service, the entire company. It's about realizing that consumers are running the biggest recommendation service in the world and that, as has been tiresomely often repeated, they define the brand (no, this is not new; yes, this is becoming more obvious and important by the day). All thinking about product, customers and communications, needs to take this into account -- it cannot sit in a silo."

Above is an excerpt from AdvertisingAge - "Dedicated Social Media Silos? That's the Last Thing We Need" here by Jonah Bloom.

I enjoyed the article.  The tone was perhaps a bit professorial, yet, I have to agree with the statement above.  Unfortunately, silos will develop, organizations have to develop silos, Clayton Christensen's "The Innovator's Dilemma" documents the reasons in detail.

Good article overall about what is happening in the social media creation, management and monetization market place.

Monday, June 1, 2009

Health Care Consumers Winning in India

"America's spending on health care is soaring, yet its medical outcomes remain mediocre."

So states "Lessons from a frugal innovator" in the Economist here. The article begins with the description of a complex heart bypass surgery, while the patient is having a chat. This approach has been pioneered by Dr. Vivek Jawali at Wockhardt, an Indian hospital chain. According to the article this is just one of the many innovation in health care in India. The article goes on to share other innovation-in-practice examples like the one above.

The article highlights how the Western prowess in the medicine perhaps may be detrimental to itself:

"Dr. Jawali is feted today as a pioneer, but he remembers how Western colleagues ridiculed him for years for advocating his inventive “awake surgery”. He thinks that snub reflects an innate cultural advantage enjoyed by India.

Unlike the hidebound health systems of the rich world, he says, “in our country’s patient-centric health system you must innovate.” This does not mean adopting every fancy new piece of equipment. Over the years he has rejected surgical robots and “keyhole surgery” kit because the costs did not justify the benefits. Instead, he has looked for tools and techniques that spare resources and improve outcomes."

Interestingly, I experienced this first hand at a seminar discussing changes in health care in the USA. An Indian student tried to highlight some of the advantages stated in the article and the presenter proceeded to slight him that this may not be the case on this particular planet.

Yet, as the article shows, the Western organizations themselves are tired of their own system.

"Columbia Asia, a privately held American firm with over a dozen hospitals across Asia, is also making a big push into India. Rick Evans, its boss, says his investors left America to escape over-regulation and the political power of the medical lobby."

India is offering another advantage to the breakthrough innovators, faster improvements at speeds unparalleled in any other part of the world.

"[Aravind, the world’s biggest eye-hospital chain] staff screen over 2.7m patients a year via clinics in remote areas, referring 285,000 of them for surgery at its hospitals. International experts vouch that the care is good, not least because Aravind’s doctors perform so many more operations than they would in the West that they become expert."

Perhaps, this is an approach to perfection through practice, as the old adage goes! The article closes with:

"[Tim Brown, head of Ideo] says, "In health care, as in life, there is need for both Ferraris and Tata Nanos."

Sunday, May 31, 2009

China And Electric Cars

"China is set to become the world's largest producer of environment-friendly cars within 10 years, largely due to the central government's backing and the domestic car makers' ambitions to push electric vehicles, according to business consulting firm Bain & Company."

See the complete article at the China Daily here. The Cherry S18 electric car is pictured on the right.

This level of Chinese government push this early in the country's automotive industry's growth bodes well for the future of the Chinese consumers and their environmental aspirations.

Saturday, May 30, 2009

Communities Of Choice - The Avenue For 21st Century Breakthroughs

I have written consistently and proven the point that there is a myth called wisdom of the crowds. Perhaps it is a marketing term now engulfing the tera-intellect.

An excellent example in the Wired magazine article "There's Power In The Puzzle" here, highlights yet again how the power of communities formed by choice can drive breakthroughs past the imagination of the initiators of the idea for the community. The article discusses a SETI@home like program yet driven from a gamer's perspective, i.e. putting the people in the center of the process. The result is a game called Foldit -

"It simply serves up a multicolored knot of spirals and clumps—a 3-D render of a protein. Players use the cursor to grab, bend, pull, and wiggle the chain of amino acids anywhere along its length, folding the protein into its optimum shape. The only rules are based on physics—opposite charges attract, atomic bonds have limited angles of rotation, and the parts of the molecule that stick to water tend to point outward. The closer your model's properties adhere to those rules, the more points you get."

Yet, the important part of this activity was:

"Working on test proteins for which Baker already knew the structures, folders quickly started to make friends via the in-game chat channel. They shared insights and half-finished puzzles; teams emerged, and collective efforts proved far more successful than any solo folder. A member of the leading team named Jason Kuznicki ... set up a wiki that Popović adopted as Foldit's official manual. "We even built a mini-Facebook for them," he says."

I believe the 21st century is going to be about "communities of choice" driving breakthrough innovation. The internet will continue to flatten the intellectual landscape and making collaboration ubiquitous, where a student who has completed the MIT computer science course work through MIT's open-courseware in Vietnam's low socio-economic class (see excellent article here) can engage in direct scientific analysis with individuals independent of geography.

Note that the winner of the game of Foldit who developed a complex protein is a 13 year old.

Friday, May 29, 2009

Product Innovation from India

While at P&G, I developed a R&D center outside of the USA. It is exciting to read this article "Outsourcing: Product Innovation from India" here, highlighting how India has slowly but steadily moved up the product innovation value chain at Even though the article is based on a white paper originally published by Zinnov in 2005, it is insightful. The article states:

"As of 2005, more than 150 international companies, large and small, were doing R&D in India. Multinational companies started hiring strong leaders to run their development centers in India. Some of these companies imported expats (professionals returning from the United States, the United Kingdom and other Western countries) to run their operations in India. The leadership teams of these companies understood that they could do a lot more from India than simply being a back office to the product teams in their home countries. Thus began a quiet revolution. The India-based leadership teams of these companies convinced their executive management to allow them to take ownership of certain products whereby the Indian teams could conceptualize and build new features and modules."

Here an excellent diagram from the article showing the product companies operating in India as of 2005.

Update: A macro-economic number showing India had 5.4% growth in Q1 2009 vs. projected growth of 5.2%.

Thursday, May 28, 2009

Smart Mobs!

Interesting article on communities of choice (not wisdom of crowds) leading the way to collaboratively support each other towards a goal in the article "Smart Mobs, Smarter Puzzles", here authored by Clive Thompson. The article states:

"It's in becoming a neuron in a much bigger intelligence: Finding a piece of evidence, contributing it to the wiki that players inevitably create, and brainstorming with others to figure out what everything means. ARGs could not have existed before the Internet."

One of the best examples of this phenomena is the coupons and discount codes space on the internet that is not corporation or for profit organization driven.

Wednesday, May 27, 2009

China - Recession Proof?

Very good video and transcript at The McKinsey Quarterly, "Is China Recession Proof?" here.

Tuesday, May 12, 2009

China - Consumer Sector Updates

Through my good friend Mr. Tony Tsai:

Ministry of Health to launch two-year crackdown on illegal food additives
May 11, Su Zhi, deputy director of the Food Safety and Sanitation Surveillance Bureau under the Ministry of Health, says the ministry will launch a two-year crackdown on illegal food additives. He puts forward a five-point proposal on the crackdown of illegal additives, such as improving related standards on food additives and further strengthening the government's measures for food safety supervision and crackdown.

It is hard to keep China's fuel prices in line with international crude oil prices
The National Development and Reform Commission (NDRC) has published the administrative measures for crude oil prices, taking effect May 8 on a trial basis. According to the measures, China will adjust domestic fuel prices when global crude oil prices report a daily fluctuation band of more than 4% for 22 working days in a row. The launch of the measures is aimed at keeping China's fuel prices in line with international crude oil prices, in order to ensure Chinese fuel prices do not drop lower than international crude oil prices. If that happens, the Chinese government will have to increase fiscal subsidies to oil companies and the domestic oil industry and market will become disorderly. Zhou Xiaogang, an energy expert, thinks it is hard to keep China's fuel prices in line with international crude oil prices. China's oil market is not competitive. Private oil firms are still weak, and unable to compete with domestic state-owned oil giants.

PWC: there is a great deal of room to increase human capital effectiveness in China
PricewaterhouseCoopers (PWC) recently published the research report about human capital influence among China's listed enterprises for 2008. The report pointed out it is a good idea for Chinese enterprises to increase core competitiveness of human capital which can help them tackle economic crisis and realize long-term sustainable development. Compared with enterprises in the US and Europe, there is a great deal of room for China-listed enterprises to increase human capital effectiveness.

Expert: consumer prices expected to show rise in second half of year
May 11, the National Bureau of Statistics says that China's Consumer Price Index (CPI) fell 1.5% in April from a year earlier, marking the third straight decline. China's Producer Price Index (PPI) fell 6.6% in April year-on-year, marking the fifth straight decline. But some experts believe that consumer prices should show an upward trend in the second half of the year. The government stimulus package and explosive loan growth will drive industrial product prices and consumer prices up.

Beijing to reduce 300 hectares of land supply for commercial buildings and to loosen control on foreign investment in local real estate market
May 11, the Beijing Municipal Bureau of Land and Resources publishes the 2009 annual land supply plan. By the end of last year, approximately 40m sq m of commercial buildings had not been sold, which is expected to meet market demand for two to three years. Compared with last year, land supplied for the construction of commercial buildings in Beijing this year will be down by 300 hectares. The Beijing Land Reserve Center will loosen control on foreign investment in Beijing's real estate market.

Coca-Cola claims it will focus on existing brands and give up take over of Huiyuan Juice. According to media reports, Coca-Cola is set to abandon any attempt to take over the Huiyuan Juice Group. Buying a small stake with no decision power is not what Coca-Cola wants at all. May 12, Coca-Cola says in a statement, "We were disappointed, but we also respect the Ministry of Commerce's decision not to approve our proposed purchase of the Huiyuan Juice business. We are now focusing all of our energies and expertise on growing our existing brands and continuing to innovate with new brands, including in the juice segment. Beyond that, it is our policy not to comment on speculation."

Monday, May 11, 2009

Thoughts on Consumer Insights

Below is a quick and nice look at what consumer insights mean from a presentation on SlideShare. What provided me value from it? The author, Giulio Bonini, states that there are four properties of a consumer insights: (1) Deep, (2) Original, (3) Base of your communication, and (4) Specific for your target. Enjoy!

Sunday, May 10, 2009

World's Most Innovative?

Here is an article from BusinessWeek on "The 50 Most Innovative Companies". Fascinating!

More enjoyable is the article "The World's 25 Unsung Innovative Companies" here.

Monday, April 27, 2009

Chinese Consumer - Market Dynamics in Retail

Good friend and colleague who is a global leader in retail innovation, Mr. Tony Tsai, Chief Executive Officer – BHG Retail Innovation Institute & Executive VP Operations – The BJ Hualian Hypermarket Co. forwards an excellent article from Nielsen called "Changing Market Dynamics in China's Retail Industry".

The article states of the consumer product goods while touching on the fast moving consumer goods:

"The government’s retail statistics show a slowdown in retail sales over the last six months from 22 percent growth year on year in Quarter 3 to 19 percent in December and 15 percent in February. This slowdown is certainly reflected in FMCG as well. When looking through Nielsen data, specifically in the Modern Trade channel, there is a significant slowing from a 13 percent growth in Q4 2008 to two percent in Jan/Feb 09."

Mr. Tsai and I had discussed, interestingly sitting in Dubai a few years back while we were conducting an analysis of Gulf retail markets, how retail growth in emerging regions like Gulf begins with super market arena in tier 1 cities is followed by hyper and mini growth. What I was curious about was what happens with tier 2 and then tier 3, where the consumer desires for the experience of the tier 1 cities and the super markets? Inevitably it is consumer economics driven. As tier 1 cities grow larger and harder to navigate, hyper and mini marts start to provide the essentials of daily consumption while the weekend trips are reserved to the super "stores".

In case of China, Mr. Tsai had shared about 6 months ago that the workers who do not have work in the cities are returning to the tier 2 and tier 3 cities and towns. The Nielsen reports the results of this:

"Lower tier cities, where the spend on food and beverages represent roughly 40 percent of household expenditure, are achieving double digit growth, however the growth is potentially being fueled by the fact that more workers are staying in their hometowns as less job opportunities exist due to factory closures in South China. Another factor could also be that consumers are moving from villages to the towns to do their shopping as well as downgrading to lower priced products."

Also, Mr. Tsai back then highlighted that fluctuations in economics of a rapidly growing region like Gulf will impact consumer behavior, such as brand switching. I felt that bargain hunting may start to play a role in the consumers decisions

The nielsen report validates these predictions for the rapidly growing region like China impacted with economic woes:

"Consumers are changing their purchasing behavior ... with the significant increase in promotional activity, are being ‘trained’ to buy more on promotion. This highlights the importance of price right now with 85 percent of Modern Trade shoppers paying more attention to price promotions."

China Update

Few selected reports from China:

"China's shopping team to sign over 30 deals in the US - a delegation sent by the Ministry of Commerce arrives in the US to explore trade and investment opportunities. The delegation will visit Washington, Chicago and San Francisco on a 10-day trip. The delegation is expected to sign more than 30 deals with American companies."

"China still struggling with over-capacity in some regions - the Ministry of Industry and Information Technology holds a press conference. According to the press conference, China's industrial output grew 5.1% year-on-year in the first quarter of the year. March alone saw a rise of 8.3%. Zhu Hongren, director of the Performance Inspection and Coordination Bureau under the Ministry of Industry and Information Technology (MIIT), says China is still struggling with over-capacity in some regions. In the first quarter, 15 provinces and municipalities posted industrial growth of over 10%. Industrial growth in Central and West China is faster than in East China."

"China bans import of poultry from Kentucky, US - the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) says on its official website that China has suspended all imports of poultry and poultry products from Kentucky, the US after an outbreak of the bird flu was reported at a chicken farm in Kentucky. "

Computer Vision in Consumer Space Grows

The thrust in the computer vision sector has grown to the point that the Association of Computing Machinery (ACM) has launched a new conference Interactive Multimedia for Consumer Electronics, to take place on October 19th, 2009 in Beijing (details here).  Of interest will be papers and workshops on presence and environment sensing, face and hand detection, recognition and tracking, facial expression and emotion / mood recognition, and gesture and activity recognition.

Machines Providing Real-Time Consumer Insights

"...Unilever, an Anglo-Dutch consumer-goods giant, is using expression-analysis software to pinpoint how testers react to foods. Procter & Gamble, an American competitor, is using similar technology to decipher the expressions of focus groups viewing its advertisements."

States the article "Machines that can see" here in The Economist.  Similarly, the ability of sensors driven understanding of environments can enable in-context communication with a perspective consumer.  Further, remembering the consumer and the context allows for touching them in a non-disruptive fashion where the flow of information or marketing is "continued".  For example, as the article states:

"Digital billboards—the large TV screens that display advertisements in public places—already take into account the weather (touting cold drinks when it is hot) and the time of day (promoting wine in the evening). NICTA, a media laboratory funded by the Australian government, has gone a stage further. It has developed a digital sign called TABANAR, which sports an integrated camera. When a passer-by approaches, software determines his sex, approximate age and hair growth. Shoppers can then be enticed with highly targeted advertisements: action figures for little boys, for example, or razors for beardless men. If the person begins to turn away, TABANAR launches a different ad, perhaps with dramatic music. If he comes back later, TABANAR can show yet another advertisement. “You tend to go: ‘Wow, thanks, how did you know I needed that?’,” says Rob Fitzpatrick of NICTA."

At P&G, I led an effort in kiosks that enabled a perspective consumer to conduct virtual beauty care at the shelf for beauty care products.  Such services have existed in South Korea in specific but they may be going main stream across the world in other CPG categories:

"Computer vision has even advanced to the point that it can perform internet searches with an image, rather than key words, as a search term. Later this year Accenture, a consulting firm, will launch a free service, called Accenture Mobile Object-Recognition Platform (AMORP), that will enable people to use images sent from mobile phones to look things up on the web. After sending an image of, say, a Chinese delicacy, a curious foodie might receive information gleaned from, for example. Fredrik Linaker, head of the AMORP project at Accenture’s research centre in Sofia Antipolis, France, likens the project to “physical-world hyperlinking”."

The use of computer vision based applications beyond consumer centric opportunities are tremendous as well.  The article discusses the applicability and examples of use in intelligence and safety sector also.

Crowds - Wise?

A good article on The Economist looks at simulating crowds here. It discusses how computational models of crowds is starting to enable more realistic behavior of humans. As an example, the article discusses the behavior of people during a fire blaze.

"The trouble is that the software that is used to do this generally treats people like particles in a fluid, says Mr Wittasek. “It assumes people behave like water flowing through a pipe,” he says. “They move at constant flow rates, heading for the nearest exits. But that’s not realistic.” Human behaviour is in fact far more complex and often quite irrational. When fleeing a fire people will often try to retrace their steps and leave the building by the way they came in, rather than heading for the nearest exit—even if it is much closer."

The article discusses the learning from the film "The Lord of the Rings" - where massive crowds of waring orcs were simulated with each individual orc having an independent brain to make decisions from a predefined set.

Of course, the article has a section labeled "The wisdom of the crowds"! Interestingly the article talks about crowds of humans and animals with examples.

Consumer Insight: Middle East - Beauty and Health

New technological entrees into emerging markets always provide an insight into what the consumer is asking or aspiring for.  Beauty (health, skin, etc.) is a consumer product goods category that grows as the consumers become more affluent in a region.

A related example here "Middle East Launch of Revolutionary Cold Laser Technique For Body Shaping" is a solution that was either very exclusive in the region or one had to travel to receive.  The article states:

"Dr. Douglas Dedo of the Palm Beach Institute of Cosmetic Surgery and past President of the American Academy of Cosmetic Surgery added: “This revolutionary treatment can work without any kind of surgery or the need for excessive dieting or exercise; though as a doctor I always recommend a healthy lifestyle for my patients. What is also exciting is that clinical studies have revealed that ZERONA™ can help in the treatment of acute and chronic pain relief as well as in controlling cholesterol and triglycerides.” "

Friday, April 24, 2009

Robotics in Commercial and Consumer Space

Friend Ms. Jessica Banks passes along a video on Festo's latest robotic technologies showing how they may connect into the commercial and consumer markets. See details on the company Festo here.

Wednesday, April 22, 2009

TiE - The Indus Entrepreneurs and TiECON 2009

The Economist recently cited in the article "Global Heroes" here, The Indus Entrepreneurs (TiE) as one of the premier entrepreneurial organizations in the world.

I am proud to say that I am a charter member of the organization. TiE (see global website here) is a non-profit organization with the mission to - "... to foster Conscious Entrepreneurship Globally by Educating, Mentoring and Networking."

The above article states:

"TiE was founded in Silicon Valley in 1992 by a group of Indian transplants who wanted to promote entrepreneurship through mentoring, networking and education. Today the network has 12,000 members and operates in 53 cities in 12 countries, but it continues to be anchored in the Valley."

TiE is hosting the world's leading entrepreneurial conference in Silicon Valley on May 15th and 16th, 2009. See details here.

I recommend the TiECON 2009 conference and the TiE organization to all entrepreneurs, successful and budding alike.

Tuesday, April 21, 2009

Monday, April 20, 2009

Biofuels - Did the Consumer Know or Ask?

One of marketing's various roles is to enable the target consumer to be educated about what the product or service provides and why it will help alleviate their pain. Similarly, marketing is a tool to create perceptions that at times are contentious. Biofuels is an interesting sector where new data and numbers will require either consumer education or perception building on the part of manufacturers and retailers to clarify information that is "contentious". This is going to be an interesting sector to watch that has delivered consumer innovation to alleviate the pain, or has it? You be the judge.

"[International Council for Science] ... supports some controversial findings published in 2007 by Paul Crutzen of the Max Planck Institute for Chemistry in Mainz, Germany. Dr Crutzen concluded that most analyses had underestimated the importance to global warming of a gas called nitrous oxide (N2O) by a factor of between three and five. The amount of this gas released by farming biofuel crops such as maize and rape probably negates by itself any advantage offered by reduced emissions of CO2."

States the article in the Economist article "Biofools" here. Currently, on average up to 10% Ethanol produced from corn is included in petrol sold in the USA. A few statistics on Ethanol that are helpful in alleviating misconceptions in an article at the CATO Institute "Ethanol Makes Gasoline, Costlier, Dirtier" here.

Yet, as published on the Wall Street Journal Blogs "E-corn-omics: Ethanol vs. Gasoline vs. Food" here:

"... for now the CBO (Congressional Budget Office) is leaning toward ethanol’s corner. Based on research from the Argonne National Laboratory, the CBO says U.S. corn ethanol, as currently produced, amounts to a 20% reduction in lifecycle greenhouse-gas emissions compared with gasoline."

The above data and political decisions may be in contention but the true impact of producing biofuels brings the issue closer to home when one considers its water consumption, see an excellent article in the Economist "Sin Aqua Non" here. It states:

"... climate change has persuaded western governments to subsidise biofuels, which could prove as big a disaster for water as they already have been for food. At the moment, about 2% of irrigated water is used to grow crops for energy, or 44km3. But if all the national plans and policies to increase biofuels were to be implemented, reckons the UN, they would require an extra 180km3 of water."

Does the intelligent "community" of consumers of energy know the depth of impact caused by biofuels? Or do the "crowds" of consumers hurl and herd themselves at what some said should be done? See my discussions on debunking the myth of wisdom of the crowds among these blogs.

China and Singapore Plan "Knowledge City"

Following the "Suzhou Industrial Park", "Tianjin Eco-City", the third large-scale cooperation project between China and Singapore - "Knowledge City" has been settled in the north district of Science Town in the Guangzhou Development Zone. Both sides have reached an agreement on the location of the project and will jointly carry out the project's feasibility study from April to Aug. The construction of the project is expected to begin in early 2010.

China: Tax Management

From my friend and colleague Mr. Tony Tsai, Chief Executive Officer – BHG Retail Innovation Institute & Executive VP Operations – The BJ Hualian Hypermarket Co.:

On reduction of taxes to stimulate various sectors:

"An official at the State Administration of Taxation says that the State Administration of Taxation will issue a new tax policy to promote development of venture capital enterprises. The Chinese government will offer preferential tax treatment to venture capital enterprises in corporate income tax."

"The National Development and Reform Commission (NDRC) holds a symposium for the development situation of China's IT industry in Hefei, the capital of Anhui province. Representatives from the Shanghai Municipal Development and Reform Commission suggest that the central government reduce value-added tax and business tax for the IT industry. Representatives from the Jiangsu Provincial Development and Reform Commission suggest the central government issue detailed rules on the implementation of a stimulus plan for the IT industry as quickly as possible."

"Coface, the leading international credit insurance and credit management services group, recently published the results of the survey of corporate credit risk management among Chinese enterprises for 2008. The survey shows that the financial crisis has led to a marked deterioration in payment behavior by buyers interested in China. More than 90% of respondents have revealed problems with overdue payments. In 2008, there was a trend towards longer payment delays. The survey shows that more than half of the respondents regard financial difficulties as the main reason for nonpayment, while poor or inexperienced management is the second contributing factor for 25% of them."

"According to yesterday's media reports, the National Copyright Administration will collect a music copyright fee of RMB2.5 per minute from TV stations, and RMB0.3 per minute from radio stations. An official from the National Copyright Administration says today (April 15) that the music copyright fees for TV or radio stations have not yet been set."

Tuesday, April 14, 2009

Rebranding Zhongnanhai

By way of Mr. Tony Tsai, Chief Executive Officer – BHG Retail Innovation Institute & Executive VP Operations – The BJ Hualian Hypermarket Co. from China:

"Experts ask to discontinue use of Zhongnanhai as a cigarette brand; it may mislead consumers ThinkTank Research Center for Health Development will submit a petition to the Trademark Appraisal Committee under the State Administration of Industry and Commerce asking it to discontinue the use of "Zhongnanhai [pinyin]" - the name of the central leadership compound - as a cigarette brand. Using the sacred place's name as that of a cigarette brand is misleading to consumers. Buyers feel the cigarette brand is acknowledged by the central government and see it as a symbol of high quality and authority. Some legal experts believe using Zhongnanhai as a brand violates the Trademark Law. According to Article 10 of the Trademark Law, names of a central government office location cannot be used as brands."

What Are People Looking For?

Via Mr. Martin Ertl, CIO - Bombardier Transportation, from Digg Labs, the Swarm on Digg here.

Monday, April 13, 2009

Consumer Spending Vs. Savings in the USA

In The McKinsey Quarterly, "The economic impact of increased US savings" here. Here are a few quantitative insights based on the fact that household incomes have not been growing and in some cased globally have been decreased, a recent example being renegotiation of contracts at automakers in Germany.

"...holding incomes constant, each percentage point increase in the savings rate translates into roughly $100 billion less in consumer spending¬. A 5 percent savings rate would mean $530 billion less in spending each year if US incomes fail to rise; if they rose by 2 percent a year, a 2.3 percent savings rate would mean $250 billion less spending, all else being equal."

The conclusion:

"But without significant income gains, deleveraging could undermine consumption and the global economy for years to come."

Robert Shiller on the Current Economics

Excellent conversation with Robert Shiller at The McKinsey Quarterly "Surveying the economic horizon: A conversation with Robert Shiller" here. The quarterly's email states, "Robert Shiller, a professor at Yale University and cocreator of the Case–Shiller Home Price Index, discusses four aspects of the current crisis: regulating for financial innovation, reducing trust in models, redesigning institutions, and the time line for turnaround. His perspectives are informed in part through his research that psychology—particularly an understanding of human irrationality—can play a key role in explaining economic breakdowns and exploring effective solutions."

On innovation, Robert Schiller states:

"I don’t want to see us killing off innovation, and this is what may get lost—and I hope it doesn’t get lost—in the current crisis. Ultimately, let’s not forget that we’ve learned lessons that a capitalist economy is an economy that promotes entrepreneurship, and entrepreneurship is not the province for government bureaucrats."

On the possibility of an economic turn around:

"I don’t want to say that I don’t think there will be a turnaround soon, but I think that many of us are too much expecting that it might come tomorrow or the day after. And this volatility is evidence of that. So I think it is quite possible that the stock market and the housing market, five years from now, will be close to where they are now."

Asian Airlines Delight Thier Customers

16.2 million travellers from about 100 countries took part in Skytrax's annual survey - Skytrax specializes in airline and airport research. The top 10 airlines are all Asian airlines, see details here.

The Economist writes in an article "Asian Tigers" here:

"Lining up behind the Hong Kong carrier were, in order, Singapore Airlines, Asiana Airlines, Qatar Airways, Emirates, Qantas, Etihad Airways, Air New Zealand, Malaysia Airlines and Thai Airways. Interestingly/strangely enough, the exact same airlines made up last year's top ten, albeit in a slightly different order."

I am an international traveler, yet I will reserve my comments regarding my personal experiences and share the comments of a customer of the airline industry:

"Yesterday at the airport in Hong Kong, I was waiting to get on an AA/Cathay flight back to the USA, and my heart sank when I realized it was an American 777 as opposed to the Cathay plane."