News As We Read- 21st June'13

Thought of the Day:

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Following made the Headlines:

India:

• Pepsi Drops an Atom Bomb on Manu Anand: In a sudden development, Manu Anand, region president for India and South Asia at beverage and snacks company PepsiCo, has quit, in circumstances described by company insiders as less than amicable. Two company officials, who spoke on the condition of anonymity because of the sensitivity of the matter, say concern at Pepsi’s Asia-Pacific headquarters over loss of market share to rival Coca-Cola as well as less-than-expected returns from 160 crore spent on the sixth edition of Indian Premier League contributed to Anand’s abrupt departure. This is the first time in the history of PepsiCo India that the head of the company has quit at such short notice, without a succession plan in place. Anand’s exit was announced internally on Thursday evening. Anand said he had decided to seek early retirement. “I have decided to seek early retirement from PepsiCo. Though it’s been two-and-ahalf years at PepsiCo India as president, I have spent 19 years with the company. I just want some time out.” The sudden exit had nothing to do with performance, Anand claimed. “My decision to move out is personal…I am evaluating options,” he said. A PepsiCo India statement attributed Anand’s exit to him ‘deciding to join another company’.

• ‘Only Vimal’ Tailoring a Grand Comeback: Reliance group’s suiting, shirting & ready- to-wear brand ‘Only Vimal’ is all set to make a grand comeback and has appointed Scarecrow as its creative agency. The appointment was the culmination of a multi-agency pitch: the incumbent Grey, Saints & Warriors and Bang in the Middle were a part of the pitch amongst others. The account is being pegged at close to 30 crore. As per the sources, plans are afoot to revamp the brand through a slew of activities, including both ATL and BTL spends.

• A ‘Fair’ Ad War Boomerangs on HUL: The move was fair, but the response is lovely. Hindustan Unilever had thrown down the gauntlet. “Fair & Lovely hai unbeatable. Lagi 5 crore ki shart?” (Fair & Lovely is unbeatable. Game for 5 crore bet?), it proclaimed in a TV commercial. French cosmetic giant L’Oreal picked up the challenge. “Sirf hum dete hai complete fairness. Toh 5 crore kab milenge?” (Only we give complete fairness. So when do we get 5 crore?) responded L’Oreal in a print advertisement for its brand Garnier. While the jury may still be out over which brand can give you best fairness, for the time being, it seems HUL has been ambushed in its own game. While L'Oreal declined to comment, HUL’s spokesperson said that the challenge methodology has been validated by Ernst & Young and it is available for all consumers to participate in. However, Advertising Standard Council of India (ASCI), has received complaints against the challenge. Alan Colaco, secretary general of ASCI, refused to share details, explaining, “We have a gestation period of a month. So, we can’t talk about the nature of complaints.” He said they have been getting a steady stream of complaints against all fairness cream brands for misleading claims in the past few months. HUL’s loose ball has been hit for a six by Garnier, say experts. “Garnier’s ambushing response to this campaign is a master stroke of what is ‘let me cut you to size’ strategy in a turf that never belonged to Fair & Lovely in the first place,” says Smitha Sarma Ranganathan, a brand communication specialist who teaches marketing management at IBS Bangalore. Jagdeep Kapoor, MD, Samsika Marketing, says, “It has lost 5 crore challenge that it had in its hand.” No one challenged the leader; so there was no trigger, he adds. “Unnecessary attack led to a stronger counter-attack, which could prove to be counterproductive for the leader.”

• P&G Invests 235 cr in Home Products Unit: Procter & Gamble, the world’s largest consumer products company, has pumped 235 crore into its unlisted Indian unit, perhaps one of the first investments by chairman and CEO AG Lafley, who was called out of retirement last month. In a board meet held last week, P&G Home Products, which sells Tide, Ariel and Pantene, passed a resolution to raise 235 crore by issuing 34.6 lakh shares of 10 each at a premium of 760 to its parent company. Since October last, the Cincinnati-based parent company has invested 998 crore in its Indian arm, including last week’s fund infusion, as it tries to scale up its production and match rival Unilever’s reach, especially in the hinterland. ET had reported in October 2012 that Procter & Gamble planned to invest 1,540 crore in its unlisted arm. Confirming the investment, P&G spokesperson said the move is in line with the company’s long-term sustainable growth plan for the Indian market. “It is also evident in our investments in expanding existing manufacturing facilities, like our plants at Mandideep and Baddi, and in setting up new manufacturing facilities like the upcoming Hyderabad site -- and all this, despite the external macroeconomic factors,” the spokesperson added. The move is in line with the Cincinnati-based firm's global mandate to set up over 20 production centres and acquire one billion new consumers in emerging markets by 2015. In the past few years, P&G has been trying to push its existing brands into adjacent categories as well — into higher and lower value tiers as part of earlier CEO Bob McDonald’s strategy.

• 60 Million Women in India Online: Google Study: About 40% of the 150 million Internet users in the country are women and close to 24 million of them log in everyday to check emails, interact on social networking sites and shop online, according to a study conducted by search giant Google. “Around 60 million women in India are now online and use the Internet to manage their day-to-day life. With easy access to Internet at homes, cyber cafes, offices and growing adoption of smart phones, Internet is being used by women for a variety of things,” Google India VP and managing director Rajan Anandan told reporters here. The study also found that women who are online are relatively more affluent and younger, he added. The study found that three out of four women in SEC AB are now online.

• Global beer brands steal the fizz from local peers: Danish beer maker Carlsberg, which entered India six years ago, has steadily consolidated its position in the domestic market, pegged at 275 million cases, with its most popular brand Tuborg now standing fourth in the pecking order, after UB’s Kingfisher and SABMiller’s Haywards and Knockout. In terms of share, Tuborg is now at 4.5 per cent, from 3 per cent earlier. Kingfisher, meanwhile, leads by a huge margin, standing at 40 per cent in terms of market share. Haywards and Knockout, in the interim, have shares of 14 per cent and 8.5 per cent, according to data sourced from the industry. The old warhorse Thunderbolt, from Mount Shivalik, which ranked amongst the top four beer brands in the country, now stands at number five with a share of about 2.5 per cent. Two years ago, Thunderbolt had a share of about 5 per cent and was a dominant player in the north. Tuborgs success, say persons in the know, is partly linked to its ability to grab share from players such as Thunderbolt, which has been struggling in recent years to keep pace with competition. Subodh Marwah, director, marketing, Carlsberg India, says the company has innovated to keep the excitement going, from switching to green bottles from the standard amber ones for Tuborg, to launching products that can be flipped opened easily with a finger and not need openers used in uncorking bottles. In terms of pricing, Marwah says, Tuborg is in the mid- market segment, competing with Kingfisher and Haywards at ₹ 110 for a 650ml- bottle (called a quart in industry parlance). At the lower end of the market, Carlsberg has Palone 8 in the ₹ 95- 100 price- point, competing with UB’s London Pilsner. At the upper end, there is Carlsberg Elephant Strong, retailing at ₹ 165- 167 for a quart. Even more premium is the Budweiser Magnum, which retails at ₹ 175 for a quart. Carlsberg does not have a product in this price segment. The Danish beer maker, however, is now rolling out a new variant of Tuborg, priced between the ₹ 110- 167 pricepoints, available for ₹ 135 for a quart. Marwah says that the new variant is a fruit- flavoured beer with a profile that is sweet compared to the bitter taste that characterises regular beer. “We have rolled out the new product called Tuborg Booster Strong in West Bengal and Maharashtra, and will take it to other cities in the next threesix months.” The company is also in the process of setting up a new plant in Bihar to be able to cater to markets in the central and eastern parts of the country. Since inception, Carlsberg has opted to have a hub and spoke model, setting up plants near its consumption markets. The company has a total of six plants: Three acquired in Himachal Pradesh, West Bengal and Haryana and three greenfield plants, set up in Rajasthan, Maharashtra and Andhra Pradesh.

International:

• Saab-owner plans to see GM back in court over $3bn claim: The owner of Saab, Dutch firm Spyker, plans new court action against General Motors which it claims lost it $3bn (£1.95bn) by blocking the sale of the Swedish carmaker. Spyker bought Saab from GM in 2010 and kept the right to use the US carmaker's technology to build vehicles. It wanted to sell Saab to a Chinese firm in 2011, but GM blocked it, saying the sale would forfeit that right. A judge threw out Spyker's previous case last year against the US giant. Spyker's claim has been that the deal was blocked by GM because it did not want competition in China, and that GM's blocking tactics caused Saab to collapse. GM said at the time of the previous court case that Spyker bought Saab knowing its financial history, pointing out that Saab had granted it a contractual right to agree, or not, to the transaction and that those terms had been spelled out. At the time GM called the allegations "baseless".

• Instagram launches 15-second video feature: Look out Vine: Instagram isn't just about sharing arty photos anymore. On Thursday, the company announced its 130 million monthly users will now be able to shoot and share 15-second videos, dressed up with one of 13 special filters. The new video feature was made available to all iOS and Android Instagram users around the world Thursday as a free update to the existing Instagram app. The basic look of the app is the same, but a small movie icon has been added that takes you into video mode. The changes were announced by Instagram co-founder and CEO Kevin Systrom during a press event at the headquarters of Facebook, which bought Instagram last year. "It's everything we know and love about Instagram, but it moves," Systrom said. The video-sharing feature was widely expected and puts Instagram in direct competition with Vine, the popular Twitter-owned app that lets users share looping six-second video clips. Vine has skyrocketed in popularity in the six months since it launched, attracting more than 13 million users. Many of the six-second videos have a unique look and feel, employing fast cuts and stop-motion animations to tell quirky little stories.

• Colin Henry Named CEO of Jaeger: Colin Henry has been named chief executive officer of Jaeger, which was acquired by the private equity firm Better Capital in April, 2012. Henry, who will take up his new post on July 15, was formerly chief product officer at Esprit, and has held senior management roles at Umbro, Ralph Lauren, and Marks & Spencer. He is Jaeger's first chief executive since the acquisition. “I am delighted that Colin is joining as ceoof Jaeger,” said Nick Sanders of Better Capital. “Over the last year, we have placed Jaeger on a positive trajectory, and the business is now looking in good shape; I look forward to Colin building on this momentum in the coming months.” Henry said: “I am enthused about getting involved with the business next month as I strongly believe it has a lot of potential, both in the U.K. and internationally. I look forward to working closely with Better Capital and helping to continue the good progress made since it acquired the business over a year ago.” As reported, Better Capital paid 19.5 million pounds, or $30.9 million at the time, for a large majority stake in the struggling company formerly owned by Harold Tillman. Belinda Earl served as ceo of the company when it was owned by Tillman, who is the former chairman of the British Fashion Council.

• Smog Bites Into Singapore Retail: Smog blown in from forest fires in neighboring Indonesia is keeping shoppers at home in this city-state and retailers are taking a hit during a key sales period. Lau Chuen Wei, an executive director at the Singapore Retailers Association, said that an informal poll of her organization's members indicated that foot traffic was significantly down and that sales had declined by between 8 to 12 percent year-on-year over the last seven days as Singaporeans sought refuge in air-conditioned homes and offices as air pollution levels reached record hazardous levels early Thursday afternoon. The financial district, located in southern Singapore, was especially badly hit. Television footage showed the boardwalk leading to Louis Vuitton’s island maison, built on reclaimed land just off the Marina Bay Sands resort, unusually empty. “Suburban stores are not as badly affected as city stores, as most people are staying closer to home, avoiding venturing too far out,” Ms. Lau said. Vivian Balakrishnan, Singapore’s minister for Environment and Water Resources, said late Wednesday night that the haze was likely to persist for the next few days and that a stop work order might be issued depending on conditions. Dozens of companies began allowing employees to work from home Thursday, including Nike Inc, according to a list that was widely circulated on local websites. The information couldn’t immediately be verified and Nike Singapore didn’t immediately respond to a request for comment. The haze comes in the middle of the annual June school vacation, a popular shopping period, and the eight-week long Great Singapore Sale, which often draws in visiting shoppers from Southeast Asia.

• Jennifer Aniston Tapped for Saks' Key to the Cure: Jennifer Aniston is headlining Saks Fifth Avenue’s 2013 Key to the Cure campaign. As the Entertainment Industry Foundation ambassador for the initiative, the actress will appear in ads wearing this year’s limited-edition T-shirt designed by Emilio Pucci’s Peter Dundas. As of Oct. 1, shoppers will find the $35 item at Saks and Saks Off 5th stores, as well as saks.com. All proceeds will be donated to the EIF’s Women’s Cancer Research Fund, which benefits charitable programs seeking new detection methods, better treatments and potential cures for cancers that affect women. Aniston follows in the ranks of former EIF ambassadors such as Penélope Cruz, Jennifer Hudson and Uma Thurman. For the national public service announcement, Aniston paired Dundas’ white shirt with a gray heart-shaped design with slim jeans and an oversize brown leather belt. The image will run in September and October issues of major fashion and lifestyle magazines. While tabloids continue to debate the status of her wedding plans with Justin Theroux, who has just signed up for HBO’s “The Leftovers,” Aniston made her 8-carat engagement ring easy to spot by posing with her left hand on her left shoulder. Next month she starts filming “Squirrel to the Nuts,” directed by Peter Bogdanovich. She said, “My hope is that everyone will contribute to this worthy cause by purchasing a Key to the Cure T-shirt designed by Emilio Pucci.” Saks will stage this year’s charity shopping weekend Oct. 17 to 20 at all Saks and Off 5th stores, and via saks.com. In the 14 years since Saks launched its first charitable shopping weekend, the retailer has raised more than $33 million for cancer research with the help of its vendors and partners. The Breast Cancer Research Foundation, EIF’s Women’s Cancer Research Fund, the Cleveland Clinic, Boston’s Dana-Farber Cancer Institute and the Nevada Cancer Institute are among the organizations that have benefited from KTTC.