Thursday, October 30, 2008

How China Could Resolve Its Growing Consumer Crisis


Empty milk shelves in China (Courtesy of Wikimedia Commons)
One after another bad news came thick and fast for the middle kingdom. And then some more.

First up were the contaminated pet food which caused the deaths of many precious pooches and kitties in the West. Next were the dangerous levels of lead found in the paint of toys manufactured in China. Major toy makers like Mattel were literally caught with their pants down and they had to take quick action.

Of course, everybody's imagination was caught when cute as a button Lin Miaoke sang like an angel during the recent Beijing Olympics Games in August. Unfortunately, that turned into a nightmare when it was discovered that another cute but perhaps less beauteous child Yang Peiyi was the voice behind the singing.

The icing which took the cake is literally in the icing - or rather the melamine tainted milk in the icing. This was probably the biggest blow to China's reputation as the world's manufacturing hub. More than 54,000 babies and toddlers were sickened, with four deaths, by the dastardly deed by a major Chinese milk factory. As if that's not bad enough, the very same melamine is now found in eggs! What's especially bad in both instances is that the disclosure only came after somebody else detected it.

Could the Chinese authorities have done more to prevent this snowballing crisis of confidence? Yes, I believe so. Here are my thoughts

First, they could have been faster with the truth and to reveal it themselves rather than wait for somebody else to burst the bubble. With hundreds of millions of Chinese online, you cannot expect people to just shut up and endure what has been burning in their hearts and minds. It is better to be early with the bad news and get over and done with it, rather than wait until it festers.

Next, they should have been more open with the extent of the problems. Transparency and honesty works in a crisis situation. Trying to fudge it or hide it just doesn't cut it in the age of online-enabled openness.

One also needs to also put one's actions where one's mouth is. It is heartening to hear the Chinese leadership proclaiming that they will take firm action against the perpetuators. However, it isn't enough. What China needs to do now is to do a massive clean up exercise and embark on its own investigations of the entire food supply chain. And to do it quickly. Johnson & Johnson did it with Tylenol and it has paid off in the end.

It is also important to pay attention to the groundswell of public opinion. With the prevalence of social media platforms like blogs, forums, bulletin boards and internet messaging, the millions of ordinary Chinese citizens are now the media. They are empowered as citizen journalists, each with their own independent (and often strong) views, opinions and thoughts. Ignore the blogosphere at your own peril!

Finally, China needs to think less of saving face and more of saving lives (and its reputation). It is better to eat humble pie now, cry a little and be truly remorseful early rather than late. Say you are sorry from the onset, and perform an extraordinary feat of public good and win back that lost confidence. It was a real pity that they didn't include Yang Peiyi in the closing ceremony of the Olympic games because that would have been a major coup.

What do you think about China's efforts to curb its consumer crisis?

Wednesday, October 22, 2008

Social Media Strategy in 6 Cs



As the chief perpetuator of Yesterday.sg - Singapore's first heritage and museum blog - I have been invited numerous times to share what we did. How do we keep going at it despite the odds? After all, history and new media isn't exactly easy bedfellows.

Well, here are some of the lessons which we have learnt about running an interest-based blog, which you can consider when starting your own corporate blog. In the spirit of marketers worldwide, I have distilled them into 5 Cs.

Content

As the saying goes, content is king. If you don't have a compelling story to tell, don't even consider embracing social media platforms. What's important though is that the tales that you tell must resonate with your audiences - and not just your CEO. Make the experience as rich as possible with videos, podcasts, photos and all, but don't neglect quality over quantity.

Community

Blogs, Facebook, Forums, Flickr, Twitter, Plurk, and blog aggregators like Ping.sg all do one thing well. And that is in connecting people. Having a fascinating yarn isn't good enough if you don't a group of believers or advocates for your cause. Invest in time and effort to make it happen. Better yet, work with existing social media communities and see how you can play a part.

Consistency

Starting a blog is more akin to a marathon rather than a 100 metre sprint. Pace yourself in terms of the frequency of posts such that you can keep going in good times and bad. Unlike personal blogs, corporate blogs are official platforms for your organisation. You can't blog according to moodswings if you are doing so in your official capacity (although being cheery certainly helps).

Candor

This is probably the hardest "virtue" to emulate but it may be the one that makes the most difference. Some degree of openness and transparency helps you to endear your organisation in the online space to the digital denizens. If you screwed up, do say so and be sincere about wanting to change for the better.

Connect

Be a part of the action and see how you can be a part of existing networks. Join their activities and be an active contributor (subject to time and energy) in discussions, projects and other social media initiatives. Socialise and learn the principle of reciprocity (or I scratch your back and you scratch mine) in blogging.

Credibility

This is what I call the authority index. In other words, how appropriate your organisation is to start a blog or social media channel in a specific subject matter. Where possible, find the right niches to fill and focus on them. Don't try to fit a round peg into a square hole unless you can find a bridge to connect them to each other.

Friday, October 17, 2008

Can You Make Money from Online Content?

Would you pay for a half hour comedy on Youtube? Or a nice fancy photograph gleaned from Flickr? How about donating perhaps a couple of bucks to Wikipedia for using information there?

If you are like most people, the answer would be "no".

In fact, I just heard that Google is still trying to profit from its multi-billion dollar acquisition of Youtube, which is bleeding precious cash flow at the rate of about a million a month.

So how does one monetize content creation online? Advertising and sponsored content? Perhaps if you are like mrbrown who has a huge number of hits. Pay per view, listen or download? Maybe (if iTunes would want to take your creation in the first place).

Maybe you can use it as a pre-publicity channel for a real life, face-to-face concert or live performance that you are doing. In fact, quite a few bands have been doing it, offering music for free on the Net, and creaming it off later through concerts that sell tickets. However, you better be good or else...

These were some of the interesting discussion topics which we spoke about last night at the prelude hosted by Text 100 to the upcoming Singapore Digital Media Festival (or DMFest), organised by the Singapore Infocomm Technology Federation (SITF) from 30th to 31st October 2008. Boasting some of the upcoming and leading names in the digital content creation scene, it focuses on the theme Television 2.0: Internet Services and New Media Mashup.

It was quite an eye-opener for me to view the preview videos, some of which were beautifully rendered using machinima techniques (a production method using computer generated imagery using real-time interactive 3-D engines). I also discovered how Twitter has a video counterpart called Seesmic (started by famous French social media guy Loic Le Meur).

The crunch for me though was this. Should Singapore try to create yet another Search Engine, photo hosting service, online community website, or microblogging platform? Or should we instead invest in improving the quality of our created content?

I believe that the answer is in the latter. Sure we can create yet another application to connect, compile, consolidate or confuse (haha). However, without that flash of inspiration blended with the fine art of storytelling, our media businesses are going to find it difficult to pit themselves against players in the global stage.

We need to teach our guys how to shoot beautiful photographs, pen poetic prose that persuades and moves, and produce movies that can win hearts. We need to also go beyond our fetish for hardware (the latest, greatest, most featured-packed gadget) to understand the fundamentals of what makes a great script, how camera angles can make all the difference, and the difference between good and abysmal acting.

Sure, there are amateurish flashes of brilliance in Youtube. However, they are few and far between. In fact, there is such a thing called the professionally amateurish video (eg Lonely Girl 15) which purports to be done at home, but actually have a complete crew behind it.

What's your take on this? Can we create an internet sensation without yet another Tammy NYP effect?

Friday, October 10, 2008

Marketing Strategies in a Downturn

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What should companies do in a recession? Should they cut back on their advertising expenses or use the opportunity to build their brands like what P&G would do?

I found out the answers to the above and more at the recent CEO Power Breakfast hosted by the Institute of Advertising Singapore and Moove Media. Held at the pristine Shangri-La Hotel, the panel discussion featured three top marketers in Singapore: Mr Terry O'Connor, CEO of Courts Singapore, Mr Quek Peck Leng, CEO of Singtel Mobile and Exec Vice President (Consumer) of Singtel, and Ms Isabelle Svartstein-Bourjade, General Manager of L'Oreal. The moderator was Ms Goh Shu Fen, Principal of R3 Asia Pacific.

Some of the trends cited were pretty sobering in these times:

75% if CEOs in the US thought they provided good customer service. However,
59% of customers were dissatisfied with customer service there.

A year ago, the ST Index (Singapore's main stock index) was at 3,900. Back then we were cited as a "Developed country growing at a developing pace". Today, STI is close to 2,000.

Being a highly attentive student (I was furiously scribbling notes), I managed to pick up 11 useful tips from the talk:

1) Focus on the core value and business proposition of your brand. In uncertain times, consumers will want to stick to something which they are familiar with. For retailers like Courts, more emphasis will be placed on price as opposed to service.

2) Consider the other consumer concerns. For L'Oreal, growing environmental consciousness and worry about side effects (triggered by the China milk scandals) have given rise to more minimal packaging and emphasis on consumer health and safety. The top 3 drivers for them would be value, safety and the environment.

3) For the case of Singtel, it will involve moving from big bold ideas to smaller and more granular ones. In a downturn, consumers will be tighter in the mind and the wallet. As such, FMCGs (or in Singtel's case, FMTG with T meaning Technology) need embrace a street view rather than a world view.

4) Companies must also look for new markets of growth and capitalise on them. An example cited was the beauty market for men, something which L'Oreal is pursuing aggressively, small though that market may be.

5) Product portfolios would also need to be changed, and this would include the corresponding advertising and branding investment. The cash cows and stars may need to be realigned as consumer's cut their expenses.

6) For retailers, tighter category management is key. This means that one needs to dissect further what one's customers want in times like this rather than rely on historical information. In fact, getting a snapshot of the future - what's going ahead for the next 3 to 9 months - becomes more crucial than what took place in the past.

7) An excellent idea mooted by Shu Fen was to expand your brand's intended use. For example, A1 Steak Sauce moved into offering itself as a condiment for hamburgers instead of pricey steaks during the last crisis.

8) Work on bundling with complementary products and services. For example, laptops, handphones and telcos could work together on an integrated campaign.

9) Agencies must also get into the act together with their clients. In fact, they should try to work together like supply chain partners rather than a vendor-vendee relationship. I like the analogy used, where clients are currently like the pig offering bacon, while agencies are like chickens offering eggs. Both parties should work in lockstep, possibly on a week by week or month by month basis. To make this succeed, information should be freely shared both ways.

10) Customer analytics gains primary importance. This means that you need to know what your customers are telling you on a regular basis - their purchase patterns, attitudes towards service, and so on. Companies should spend more on consumer research because a recession isn't the time for reckless risk taking.

11) Finally, make sure you have the right folks for the job. As much as possible, get everybody in the team to think lean. Extravagance becomes a luxury, and one can't simply splash advertisements ad infinitum like there is no tomorrow.

While the above tips were useful for seasoned marketers like myself, they seem to emphasise a more back to basics approach in marketing and advertising. The topic of experimenting with new media did arise during the talk, and the general consensus seems to be that it isn't quite worth the Return On Investment (ROI) compared to other traditional means. However, L'Oreal did share that they were going to try a product launch entirely online during the coming slow period to test its effectiveness. I think the results of that would be interesting and most telling.

Thursday, October 02, 2008

From Excess to Austerity - a Self Help Guide


Courtesy of Notagainfarm

By now, almost everybody would have thought about the impact of the collapse in financial systems and how it would affect their lives. The wiping out of US$1 trillion in liquidity from American stock markets in one day - after the failure of the Bush's Administrations proposed US$700 billion bailout package in clearing Congress - was especially sobering. Apparently, this could just be the tip of the iceberg as the financial saga sparked off by loans made in bad faith unravels itself.

What could one do in a situation like this? Does it mean that one should immediately cut all expenses and live like a Spartan?

Well, here are some tips that could help ease the transition.

1) Eat less. Yes, you heard me. In fact, if you eat up to 70% or 80% of your usual bursting at the seams fullness, you could not only save money but live longer too. This is apparently the secret to Minister Mentor Lee Kuan Yew's long and productive life.

2) Drive less. As a regular commuter on board SBS buses, I will tell you that it isn't too bad to leave your car at home once in a while. You not only get to see life from a different perspective, you also save tremendously on parking, ERP charges and fuel. Even better if you don't own a car.

3) Watch less television (perhaps except for the news). I have lived without a television for six years in my home, and am loving the extra amount of free time that it has given me. This also puts you at less risk of falling prey to commercials touting an extravagant yuppified lifestyle.

4) Reduce, reuse and recycle. You will be amazed at how long fabrics can last. Some of my comfy T-shirts at home have been around since my junior college days and are still holding out well (sans a few threads here and there). Where possible, try to keep that old shoe serviceable and always have a set of clothes specially for grand occasions.

5) Embrace cheaper hobbies. I know that golf is a great place to discuss business and all, but it does also cost quite a bit to get the full set of gear plus membership at those posh clubs. If the wallet looks miserably empty, do what Forrest Gump - and I - enjoy best. Just put on those running shoes and hit the asphalt.

6) Spend more time outdoors. The less time you spend surrounded by material temptations in an artificial air-conditioned environment, the less likely you are to reach inside your purse. Plus some fresh air and exercise is good for you.

7) Visit museums and heritage sites. Many of them cost less than a cinema ticket (alot are free!) and they often provide much food for the soul and inspiration for the mind. By absorbing different cultures, artistic forms, and stories from the past, you are less likely to be troubled by the present.

8) Devote more time to your significant others. Dining at a hawker centre with your family and loved ones, or just spending an evening at home playing with the kids can be just as pleasurable. Be delighted with the simple things in life and put more emphasis on relationships.

9) Holiday in Uniquely Singapore. I am not kidding. Really. There is so much to do and see here in our tropical island nation. Go explore one of the fascinating lanes in Little India, embark on a nature trek from Macritchie Reservoir to Bukit Timah Hill, or indulge in colourful cuisine at Geylang.

10) Finally and most importantly, simplify your life. This is probably the most important message that I have. Do not get trapped by the temptations of hedonistic pleasures. Doing nothing can sometimes be more therapeutic than stressing oneself up just to keep up with the Joneses, Tans, Muthusamys, or Muhammads.