Posts Tagged 2012
Each one of us can probably recollect our earliest memories of mascots that we would chase after. Poor sods. Always got a beating from the kids. My personal favourite was Tony the tiger who appeared on the Kellogg’s Frosties pack.
But mascots just like a logo play an integral part in building a brand. Today morning I caught the daily morning talk show round-ups and one guest was from the 2012 Olympics and he was talking about their mascots. Odd looking creatures but none-the-less their objective is similar to everyone elses. Improve recall, spread the the message of the brand and build a stronger relationship with people.
Now I’m sure most of you know the following mascots:
- Ronald McDonald
- Joe Camel
- The Marlbourough Man
- Mickey Mouse
- Energizer Bunny
- Kool Aid man
- Colonel Sanders
- Quicky the bunny
- Michelin Man
But do you know the 2012 Olympic mascots? Cue Wenlock & Mandeville.
Odd looking creatures. While public sentiment on the creatures are at an all time low, when we break them apart we actually see that there is more to Wenlock & Mandeville.
First, the names, which might ring a few geographical bells: Wenlock is named after the Shropshire town of Much Wenlock where, in the mid-19th century, the Wenlock Games became the inspiration for the modern Olympic movement.
Mandeville’s name is derived from Stoke Mandeville, in Buckinghamshire, home to Stoke Mandeville Hospital. In the 1940s, Dr Ludwig Guttmann came to the hospital to set up a spinal unit. Looking for ways to inspire the soldiers in his care he established the Stoke Mandeville Games, widely recognised as a forerunner to the modern Paralympics.
The characters are said to have been fashioned from the last drops of steel left over from the final support girder of the Olympic stadium in Stratford, East London.The one-eyed figures were created by London-based creative agency Iris, whose clients include Wonderbra and Argos.
The duo have been given their own story, written by author Michael Morpurgo which has been turned into an animated film.
They also get their own website, and even individual Twitter and Facebook pages.
But while all of this has been done to create a mascot, one might feel that they overcomplicated it. It’s a mascot that people will find difficult to resonate with due to the abnormalities in its creation.
But while it won’t be an instant hit, it will garner rememberence as it is definitely unique. But whether or not it garners good will shall be interesting to watch.
Brands come and brands go. Some of them evolve, get iconic and celebrate anniversaries of successful business like Coca-Cola and Mercedes-Benz, and some have to move out of the market, giving space to more innovative and ambitious competitors. In this review we at Popsop will try to figure out if the 10 troubled brands, which according to 24/7 Wall St., “will disappear in 2012,” are really doomed. What they say really makes sense and should be taken seriously: for instance, last year, they predicted that T-Mobile won’t do on its own the following year, and in early March, “AT&T Inc. rose after agreeing to buy T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock to create America’s largest mobile-phone company,” as Bloomberg reports. Still, they did wrong predictions for other companies including Kia and BP, which managed to do much better than it was expected (maybe, the predictions will turn to be correct, but over a longer period of time than stated).Of course, there might have been much more brands mentioned on the list, but the reviewers chose only ten, some of which are purely U.S. ones, and the rest have already become global. 24/7 Wall St. says that the following brands will bit the dust within 18 months, and the forecast is based on a range of ‘signs’ which may indicate the upcoming oblivion of a firm: the range of these include a downfall in sales, soon bankruptcy or selling-out, loss of consumers to name but a few. According to the online journal, in the coming year and a half, the following brands will be driven into oblivion: Sony Pictures, A&W, Saab, American Apparel, Sears, Sony Ericsson, Kellogg’s Corn Pops, MySpace, Soap Opera Digest, and Nokia. What have brought them to the edge? Keep on reading to find it out (the order is the same as in the original list).
1. Sony Pictures
Sony’s biopic is coming to its end. In 1989, Sony purchased Columbia Tri-Star Picture for $3.4 billion, but now, 22 years after this deal, the things are not as in the beginning—according to the piece, it “lost $3.1 billion in its latest fiscal on revenue of $86.5 billion,” more than in previous years, and it means that the company is about to be sold to another cinema giant. The company has now some of nice releases in stock—the upcoming ‘Friends with Benefits’ starring Justin Timberlake and Mila Kunis—but these are not the friends which can save the company. “The only valuable asset with which he can easily part is Columbia which would attract interest from a number of large media operations. Sony Entertainment will disappear with the sale of its assets,” says the piece.
2. A&W Restaurants
People like to eat, and in this era they want to eat fast and have tasty things on their plate. America has got numerous fast-food chains, some of which are dominating and eating up smaller ones. A&W Restaurants, owned by fast food holding company giant Yum! Brands, was on the foreground of the fast-food revolution in the states and pioneered the ‘drive-in’ fast food format, now is in the end of the line—in the end of 2010, it has 322 outlets in the U.S. and 317 outside the U.S., while McDonald’s has 32,000 restaurants in the USA only and Yum! flagship KFC had 5,055 stores in the U.S. and 11,798 overseas. The brand, which has been operating for about 100 years (since 1919), is ‘fading away.’ Obviously, it’s time for bigger players.
The car market is quite as saturated as the food one. There are all kinds of models which suit any tastes—sports cars, family autos, luxury vehicles, minis, everything you might want. Saab with its quite moderate models doesn’t seem to fit into this picture. Last year, the brand sold under 32,000 cars, and the situation is not improving. In 1989, GM bought 50% stake and management control of Saab, but in 2010 the car brand was purchased by Spyker, yet it didn’t save the brand as the sales were still going down. The help came from the east. In June, 2011, according to BBC, Saab owner Spyker reached “agreement with two Chinese firms to invest a total of 245m euros (£214m, $350m) in the firm” to reinvigorate the brand.
4. American Apparel
This apparel retailer is obviously moving towards bankruptcy—being founded in 1998, it had a bright (primarily thanks to its brave advertising), but a short life—of course, the manufacturer and retailer is still alive, it will soon be closed unless it improves the situation. “Further, if we were unable to implement a plan of reorganization or if sufficient debtor-in-possession financing were not available, we could be forced to liquidate under Chapter 7 of the U.S. Bankruptcy Code,” said the company’s annual report this year, according to Reuters. American Apparel closed 15 stores to end the previous quarter with 258 stores, the press release states, and according to the piece, “for the first quarter of this year, the retailer had net sales of $116.1 million, a 4.7% decline over sales of $121.8 million in the same period a year ago.” That doesn’t sound very optimistic.
Here, Sears Holdings, American chain of department stores, needs to take a decision and choose between Sears and Kmart—one to stay and one to be removed for ever. It just can’t run two of them on the same market where Target and Walmart are operating. Sears, which used to be a competitor to Kmart, merged with it in 2005, but has been doing worse than it new ‘frenemy.’ In the piece, it’s stated that “neither Sears nor Kmart have done well recently, but Sears’ domestic locations same store numbers were off 5.2% in the first quarter and Kmart’s were down 1.6%,” so it’s obvious that Sears should leave the scene to give the chance to another wing of the company.
6. Sony Ericsson
This venture was started by Sony and Ericsson to produce handset offerings for the global market. In the yearly years, it indeed managed to become a powerful competitor to Nokia(which is also featured on this list below), LG and Samsung, but it wasn’t innovative enough to go further like Apple and other companies. “In a period when smartphone sales worldwide are rising in the double digits and sales of the iPhone double year over year, Sony Ericsson’s unit sales dropped from 97 million in 2008 to 43 million last year,” says the overview. With such numbers, we might soon have to say goodbye to the mobile phones with the green spot. But not only lack of groundbreaking innovation is the reason. Nature has contributed to it as well. “Sony Ericsson sold 7.6 million phones in the second quarter, compared with forecasts for 8-11 million, as earthquake-related supply chain constraints cut sales of mostly expensive models by 1.5 million phones, or some 400 million euros,” states Reuters in an article dated July 15, 2011. Still, the company’s chief executive Bert Nordberg is optimistic about the company’s future saying that “second-half operating profit would have to grow 73% to 176 million euros.”
7. Kellogg’s Corn Pops
This is the only food brand which is predicted to retire according to the 24/7 Wall St. review. And it doesn’t seem to upset anybody if a brand like Kellogg’s Corn Pops leaves the market.“Sales of the brand dropped 18% over the year that ended in April, down to $74 million,” and it gives the territory for more successful brands like Cheerios or Quaker. Actually, there is not a big difference between them.
8. Soap Opera Digest
This magazine is based on the trend, which is dying out. Soap operas are no longer as popular as they used to be, so the press and digital recaps revolving around this theme are also losing their popularity. In the first year the magazine was published, 1988, it was read by 1.1 million people, and in 2010 only 490 thousand soap opera fans buy it (according to Wikipedia), so it’s high time to sell it or just close it.
Facebook, Twitter, Google+… is there any room left for MySpace? Probably, not. It used to be the largest social network, but not it’s a good example of what happens with online destinations like that on arrival of better, smarter, fast-growing, etc. rivals. In 2005, MySpace, which was founded in 1999, was bought by News Corp for $580 million (quite a big sum for that time, but the service’s status was worth it), but after the popularity of the website reduced, the owner made its mind to sell the network. MySpace was purchased by Specific Media, a digital media company, on June 29, 2011, for only $35 million. “MySpace is a recognized leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online,” said Tim Vanderhook, Specific Media CEO. “There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest. We look forward to combining our platforms to drive the next generation of digital innovation.”
Sony Ericsson is not the only one mobile phone maker on the edge of extinction this year. It’s also predicted that Nokia is going to leave us soon as well. According to press release as of February 11, 2011, “Nokia and Microsoft announced plans to form a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem,” and as part of this partnership, the mobile maker “would adopt Windows Phone as its principal smartphone strategy.” The conditions are not that perfect for Nokia, but in general, it’s not the end of the Finland-based company. Still, as the piece on 247wallst.com informs, “Nokia sold 25% of the global total of 428 million units sold in the first quarter.” Probably, soon we’ll read that Nokia becomes part of some other corporation—let’s say, HTC, Samsung, LG or Microsoft.
Now that the predictions are made, we’ll just have to wait one year to see which of them come true. No regret about 9 of them, but Nokia should really stay. We hope it will.
24/7 Wall St. has created a new list of brands that will disappear, which includes Sears (NASDAQ:SHLD), Sony Pictures (NYSE:SNE), American Apparel (NYSE:APP), Nokia (NYSE:NOK), Saab, A&W All-American Foods Restaurants, Soap Opera Digest, Sony Ericsson, MySpace (NYSE:NWS.A), and Kellogg’s Corn Pops. (NYSE:K).
Each year, 24/7 Wall St. regularly compiles a list of brands that are going to disappear in the near-term. Last year’s list proved to be prescient in many instances, predicting the demise of T-Mobile among others. In late May, AT&T (NYSE:T) and Deutsch Telekom announced that AT&T would buy T-Mobile USA for $39 billion. The deal would add 34 million customers to the company and create the country’s largest wireless operator.
Other 201o nominees – including Blockbuster – bit the dust, while companies, such as Dollar Thrifty are on the road to oblivion. Last September, after finally giving in to competition from Netflix and buckling under nearly $1 billion in debt, Blockbuster filed for Chapter 11 bankruptcy protection. In April of this year, Dish Network acquired the company for $320 million. Car rental chain Dollar Thrifty is still entertaining buyout offers from Avis and Hertz. On June 6, the embattled company recommended that its shareholders not accept Hertz’s recent offer, valued at $2.24 billion, or $72 a share. Meanwhile, on June 13th, Avis Budget announced that “it had made progress in its discussion with the Federal Trade Commission regarding its potential acquisition” of the company. Although Dollar Thrifty can remain choosy, a sale is a matter of when, not if.
We also missed the mark on a few companies. Notably, Kia, Moody’s, BP, and Zales appear to be doing better than we expected.
Brands that have stood the test of time for decades are falling by the wayside at an alarming rate. For instance, Pontiac – a major car brand since 1926 – is gone, shut down by a struggling GM. Blockbuster is in the process of dismantling, after it once controlled the VHS and DVD markets. House & Garden folded after 106 years. It succumbed to the advertising downturn, a lot of competition, and the cost of paper and postage. Its demise echoed the 1972 shutdown of what is probably the most famous magazine in history–Life. That was a long time ago, but it serves to demonstrate that no brand is too big to fail if it is overwhelmed by competition, new inventions, costs, or poor management.
This year’s list of The Ten Brands That Will Disappear takes a methodical approach in deciding which brands will walk the plank. The major criteria were as follows: (1) a rapid fall-off in sales and steep losses; (2) disclosures by the parent of the brand that it might go out of business; (3) rapidly rising costs that are extremely unlikely to be recouped through higher prices; (4) companies which are sold; (5) companies that go into bankruptcy; (6) firms that have lost the great majority of their customers; or (7) operations with rapidly withering market share. Each of the ten brands on the list suffer from one or more of these problems. Each of the ten will be gone, based on our definitions, within 18 months.
Sony has a studio production arm which has nothing to do with its core businesses of consumer electronics and gaming. Sony bought what was Columbia Tri-Star Picture in 1989 for $3.4 billion. This entertainment operation has done poorly recently. Sony’s fiscal year ends in March, and for the period revenue for the group dropped 15% to $7.2 billion and operating income fell by 10% to $466 million. Sony is in trouble. It lost $3.1 billion in its latest fiscal on revenue of $86.5 billion. Sony’s gaming system group is under siege by Microsoft (NASDAQ: MSFT) and Nintendo. Its consumer electronics group faces an overwhelming challenge from Apple. The company’s future prospects have been further damaged by the Japan earthquake and the hack of its large PlayStation Network. CEO Howard Stringer is under pressure to do something to increase the value of Sony’s shares. The only valuable asset with which he can easily part is Columbia which would attract interest from a number of large media operations. Sony Entertainment will disappear with the sale of its assets.
A&W All–American Food Restaurants. A&W Restaurants is owned by fast food holding company giant Yum! Brands (NYSE: YUM) which has had the firm for sale since January. There have been no buyers. The chain was founded in 1919. The size of company grew rapidly, and immediately after WWII 450 franchises were opened. The firm pioneered the “drive in” fast food format. A&W began to sell canned versions of its sodas in 1971 – the part of the business that will survive as a container beverage business which is now owned by Dr. Pepper/Snapple. The A&W Restaurant business is too small to be viable now. It had 322 outlets in the U.S and 317 outside the U.S at the end of last year. All were operated by franchisees. By contrast, Yum!’s flagship KFC had 5,055 stories in the U.S. and 11,798 overseas. Two massive global fast food chains are even larger. Subway has 35,000 locations worldwide, and McDonald’s has nearly as many. A&W does not have the ability to market itself against these chains and at least a dozen other fast food operators like Burger King. And, A&W does not have the size to efficiently handle food purchase, logistics, and transportation cost compared to competitors many times as large.
The first Saab car was launched in 1949 by Swedish industrial firm Svenska Aeroplan. The firm produced a series of sedans and coupes, the flagship of which was the 900 series, released in 1978. About one million of these would eventually be sold. Saab’s engineering reputation and the rise in its international sales attracted GM to buy half the company in 1989 and the balance in 2000. Saab’s problem, which grew under the management of the world’s No.1 automobile manufacturer, was that it was never more than a niche brand in an industry dominated by very large players such as Ford and Chevrolet. It did not build very inexpensive cars like VW did, or expensive sports cars as Porsche did. Saab’s models were, in price and features, up against models from the world’s largest car companies that sold hundreds of thousands of units each year. Saab also did not have a wide number of models to suit different budgets and driver tastes. GM decided to jettison the brand in late 2008, and the small company quickly became insolvent. Saab finally found a buyer in high-end car maker Spyker which took control of the company last year. Spyker quickly ran low on money because only 32,000 Saabs were sold in 2010. Spyker turned to Chinese industrial investors for money. Pang Da Automobile agreed to take an equity stake in the company. But, the agreement is not binding, and with a potential of global sales which are still below 50,000 a year based on manufacturing and marketing operations and demand, Saab is no longer a financially viable brand.
The once-hip retailer reached the brink of bankruptcy earlier this year, and there is no indication that it has gained anything more than a little time with its latest financing. It currently trades as a penny stock. The company had three stores and $82 million in revenue in 2003. Those numbers reached 260 stores and $545 million in 2008. For the first quarter of this year, the retailer had net sales for the quarter of $116.1 million, a 4.7% decline over sales of $121.8 million in the same period a year ago. Comparable store sales declined 8% on a constant currency basis. American Apparel posted a net loss for the period of $21 million. Comparable store sales have flattened, which means the firm likely will continue to post losses. American Apparel is also almost certainly under gross margin pressure because of the rise in cotton prices. The retailer raised $14.9 million in April by selling shares at a discount of 43% to a group of private investors led by Canadian financier Michael Serruya and Delavaco Capital. According to Reuters, the 15.8 million shares sold represented 20.3 percent of the company’s outstanding stock on March 31. That sum is not nearly enough to keep American Apparel from going the way of Borders. It is a small, under-funded player in a market with very large competitors with healthy balance sheets. It does not help matters that the company’s founder and CEO, Dov Charney, has been a defendant in several lawsuits filed by former employees alleging sexual harassment.
The parent of Sears and Kmart–Sears Holdings-is in a lot of trouble. Total revenue dropped $341 million to $9.7 billion for the quarter which closed April 30, 2011. The company had a net loss of $170 million. Sears Holdings was created by a merger of the parents of the two chains on March 24, 2005. The operation has been a disaster ever since. The company has tried to run 4,000 stores which operate across the US and Canada. Neither Sears nor Kmart have done well recently, but Sears’ domestic locations same store numbers were off 5.2% in the first quarter and Kmart’s were down 1.6%. Last year domestic comparable store sales declined 1.6% in the total, with an increase at Kmart of .7% and a decline at Sears Domestic of 3.6%. New CEO Lou D’Ambrosio recently said of the last quarter that, “we also fell short on executing with excellence. We cannot control the weather or economy or government spending. But we can control how we execute and leverage the potent set of assets we have.” D’Ambrosio needs to pull a rabbit out of his hat soon. Shares are down 55% during the last five years. D’Ambrosio only reasonable solution to the firm’s financial problems is to stop supporting two brands which compete with one another and larger rivals such as Walmart (NYSE: WMT) and Target (NYSE: TGT). The cost to market two brands and maintain stores which overlap one another geographically must be in the hundreds of millions of dollars each year. Employee and supply chain costs are also gigantic. The path D’Ambrosio is likely to take is to consolidate two brand into one–keeping the better performing Kmart and shuttering Sears.
Sony Ericsson was formed by the two large consumer electronics companies to market the handset offerings each had handled separately. The venture started in 2001, before the rise of the smartphone. Early in its history, it was one of the biggest handset manufacturers along with Nokia (NYSE: NOK), Samsung, LG, and Motorola. Sales of Sony Ericsson phones were originally helped by the popularity of other Sony portable devices like the Walkman. Sony Ericsson’s product development lagged behind those of companies like Apple (NASDAQ: AAPL) and Research In Motion (NASDAQ: RIMM) which dominated the high end smartphone industry early. Sony Ericsson also relied on the Symbian operating system which was championed by market leader Nokia, but which it has abandoned in favor of Microsoft’s (NASDAQ: MSFT) Windows mobile operating because of licence costs and difficulty with programmers. In a period when smartphone sales worldwide are rising in the double digits and sales of the iPhone double year over year, Sony Ericsson’s unit sales dropped from 97 million in 2008 to 43 million last year. New competitors like HTC now outsell Sony Ericsson by widening numbers. Sony Ericsson management expects several more quarters of falling sales and the company has laid off thousands of people. There have been rumors, backed by logic, that Sony will take over the operation, rebrand the handsets with its name, and market them in tandem with its PS3 consoles and VAIO PCs.
The cereal business is not what is used to be, at least for products that are not considered “healthy.” Among those is Kellogg’s Corn Pops ready-to-eat cereal. Sales of the brand dropped 18% over the year that ended in April, down to $74 million. That puts it well behind brands like Cheerios and Frosted Flakes each which have sales of over $200 million a year. Private label sales have also hurt sales of branded cereals. Revenues in this category were $637 million over the same April-end period. There is also profit margin pressure on Corn Pops because of the sharp increase in corn prices. Kellogg’s describes the product as being “Crispy, glazed, crunchy, sweet.” Corn Pops also contain mono- and diglycerides, used to bind saturated fat, and BHT for freshness, which is also used in embalming fluid. None of these are likely to be what mothers want to serve their children in an age in which a healthy breakfast is more likely to be egg whites and a bowl of fresh fruit.
MySpace, once the world’s largest social network, died a long time ago. It will be buried soon. News Corp (NYSE: NWS) bought MySpace and its parent in 2005 for $580 million which was considered inexpensive at the time based on the web property’s size. MySpace held the top spot among social networks based on visitors from mid-2006 until mid-2008 according to several online research services. It was overtaken by Facebook at that point. Facebook has 700 million members worldwide now and recently passed Yahoo! (NASDAQ: YHOO) as the largest website for display advertising based on revenue. News Corp was able to get an exclusive advertising deal worth $900 million shortly after it bought the property, but that was its sales high-water mark. Its audience is currently estimated to be less that 20 million visitors in the US. Why did MySpace fall so far behind Facebook? No one knows for certain. It may be that Facebook had more attractive features for people who wanted to share their identities online. It may have been that it appealed to a younger audience which tends to spend more time online. News Corp announced in February that it would sell MySpace. There were no serious bids. Rumors surfaced recently that a buyer may take the website for $100 million. The brand is worth little if anything. A buyer is likely to kill the name and fold the subscriber base into another brand. News Corp has hinted it will close MySpace if it does not find a buyer.
The magazine’s future has been ruined by two trends. The first is the number of cancellations of soap operas. Long-lived shows which include “All My Children” and “One Life to Live” have been canceled and replaced by talk show, which are less expensive to air. The other insurmountable challenge is the wide availability of details on soap operas online. Some of the shows even have their own fan sites. News about the industry, in other words, is now distributed and not longer in one place. Soap Opera Digest’s first quarter advertising pages fell 21% in the first quarter and revenue was down 18% to $4 million. In 2000, the magazine’s circulation was in excess of 1.1 million readers. By 2005 it fell below 500,000 where it has remained for the last 5 years. Source Interlink Media, the magazine’s parent, which also owns automotive, truck, and motorcycle publications, has little reason to support a product based on a dying industry.
Nokia is dead. Shareholders are just waiting for an undertaker. The world’s largest handset company has one asset: Nokia sold 25% of the global total of 428 million units sold in the first quarter. Its problem is that in the industry, the company is viewed as a falling knife. Its market share in the same quarter of 2010 was nearly 31%. The arguments that Nokia will not stay independent are numerous. It has a very modest presence in the rapidly-growing smartphone industry which is dominated by Apple, Research In Motion’s Blackberry, HTC, and Samsung. Nokia runs the outdated Symbian operating system and is in the process of changing to Microsoft Window mobile OS which has a tiny share of the market. Nokia would be an attractive takeover target to a large extent because the cost to “buy” 25% of the global handset market would only be $22 billion based on Nokia’s current market cap. Obviously, a buyer would need to pay a premium, but even $30 billion is within reach of several companies. Potential buyers would start with HTC, the fourth largest smartphone maker in the world. Its sales have doubled in both the last quarter and the last year. HTC will sell as many as 80 million handsets in 2011. The Taiwan-based company’s challenge would be whether it could finance such a large deal. The other three likely bidders do not have that problem. Microsoft, which is Nokia’s primary software partner, could easily buy the company and is often mentioned as a suitor. The world’s largest software company recently moved further into the telecom industry though its purchase of VoIP giant Skype which has 170 million active customers. Two other large firms have many reasons to buy Nokia. Samsung, part of one of the largest conglomerates in Korea, has publicly set a goal to be the No.1 handset company in the world by 2014. The parent company is the largest in South Korea with revenue in 2010 of $134 billion. A buyout of Nokia would launch Samsung into the position as the world’s handset leader. LG Electronics, the 7th largest company in South Korea, with sales of $48 billion, is by most measures the third largest smartphone company. It has the scale and balance sheet to takeover Nokia. The only question about the Finland-based company is whether a buyer would maintain the Microsoft relationship or change to the popular Android OS to power Nokia phones.
Douglas A. McIntyre