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.

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!

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.

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."

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.

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]

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."

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.

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.