MarketLine Blog

Posts written in May 2013

Inditex’s expansion in emerging markets

MarketLine

Industria de Diseno Textil SA (Inditex), founded in 1963 by Amancio Ortega Gaona, opened its first Zara shop in 1975 in A Coruna, Spain. The company is continuing to grow and has now become a leading player in international/ emerging markets. In 2012 new stores were opened in 64 markets, including the initial launches in five countries: Armenia, Bosnia-Herzegovina, Ecuador, Georgia and the Former Yugoslav Republic of Macedonia. Sales rose 16%, with Asia’s share of Inditex’s total revenues growing to 20% from 18%. Inditex’s international success has been driven by… Read more

How much are Superman’s glasses?

MarketLine

If bought online, they can come as cheap as $95 with a portion of the proceeds going to charity. Warby Parker, the eyewear company that sells prescription glasses and sunglasses almost exclusively online and at a relatively low cost, has created a new collection of plastic frames inspired by the upcoming superhero movie – Superman Man of Steel. The company, founded in 2010, has seen some impressive growth in the last couple of years. It has increased its headcount from four to 113 employees, beat its own yearly sales projections… Read more

Automotive Manufacturing: All eyes on Brazil

MarketLine

According to data published by the OICA, 2,623,704 cars rolled off Brazilian production lines in 2012 making the country the seventh largest producer of cars worldwide. This represented year-on-year volume growth of 4.1%, continuing a trend that has seen production almost double since the year 2000. Brazil is now home to some of the world’s largest automakers and Fiat, Ford, GM, Honda, Hyundai, Nissan, Peugeot, Renault, Toyota, and Volkswagen are all opening new factories or expanding existing ones. Such investment is expected to increase Brazil’s annual production capacity by 1.5… Read more

Greek government privatizing infrastructure and energy

MarketLine

Following a contraction in Greek domestic product worth at least 15%, the country has, since 2009, been hobbled by market reaction to negotiations with creditors culminating in an (overall) bailout worth $310bn. Greek debt now stands at 171% of GDP.  In part a reaction to this, the Greek government, led by prime minister Atonis Samaras, has put up domestic industry for tender or sale to the private sector. Depa, Greece’s natural gas corporation, is the subject of a bid by Gazprom: the Russian company, which already supplies 90% of Greek… Read more

Rustlers Hot Subs: The Successful Transfer of a Foodservice Concept to Retail

MarketLine

In September 2009, UK-based company Kepak Convenience Foods extended its Rustlers line of hot snacks to include a range of Rustlers Hot Subs microwaveable sandwiches. Sales over the first 12 months of the line’s launch exceeded £10m, accounting for around 10% of the UK’s retail hot snacks market. Thanks in no small part to the expansion of the Subway chain from 300 outlets in 2005 to 1,400 outlets by 2011, the UK fast food market has been reshaped: sandwiches are no longer seen solely as a lunchtime item for office… Read more

Fairy Liquid Using Evocative Marketing Techniques to Boost Product Sales

MarketLine

In 2010, Procter & Gamble’s (P&G’s) Fairy Liquid brand recorded particularly impressive growth rates in both the auto and hand dishwash product categories in the UK. The growth in sales has been attributed to a heritage marketing campaign designed to celebrate the 50th anniversary of the brand. This article analyzes how Fairy Liquid has successfully managed to introduce a nostalgia-based marketing campaign while also leveraging superior efficacy benefits compared to competitors to enhance value perceptions of the brand. The article also looks at how P&G plans to launch another evocative… Read more

US Laundry Care Market: How Leading Manufacturers Can Enhance Perceptions of Value

MarketLine

Even though the US laundry care market is commonly characterized by consumer inertia, the recession did bring about changes in buying behavior as shoppers looked to obtain maximum value for money, and this change is continuing in the post-recessionary market. This article examines that how Procter & Gamble (P&G) and the Dial Corporation have looked to reposition their brands in order to capitalize on these changing buying patterns. Reduced levels of financial wellbeing brought about changes in buying behavior as consumers looked to obtain greater value for money from the… Read more

Robinsons Retails Group prepares for IPO

MarketLine

Robinsons Retail Group, the Philippine retailer and operator of stores including Toys “R” Us, Topshop, and Ben Sherman (in the Philippines), has appointed Deutsche Bank, JP Morgan Chase, and UBS to manage a seeming $800m initial public offering scheduled for the third quarter of this year. The billionaire owner, John Gokongwei, is selling during a bullish time for the Southeast Asian economy as investors, mostly foreign, are flooding into the country on the back of simultaneous positive indicators for domestic markets: Philippine equities are up 26.3% year to date making… Read more

Mentos -Turning Unexpected Online Attention to Your Advantage

MarketLine

In 2006, an online filmmaking duo called EepyBird posted a video featuring an explosive mixture of Diet Coke and Mentos candy. The video rapidly became immensely popular. Mentos’ manufacturer, Perfetti Van Melle, rapidly capitalized on this sudden fame to promote the candy brand, while Coca-Cola lagged behind in its online marketing efforts. Even at the time of the initial Mentos and Diet Coke video in 2006, it was clear that online viral marketing was a vital part of the marketer’s toolbox, and the basic rules have not changed since. If… Read more

Was Tumblr worth $1.1bn for Yahoo!?

MarketLine

Yahoo!’s acquisition of blogging service Tumblr has been all over the news in the past few days, as the company looks to make its first big-ticket acquisition of 2013. Remarkably, the agreed price of the acquisition stands at $1.1bn, a substantial amount considering that Tumblr accrued just $13m in revenues last year. So, the question begs to be asked, why has Yahoo! paid such a premium in order to seize control of the fiver-year-old company? The answer lies with its online presence, specifically within the social media space. According to… Read more

Cadbury Maintaining Sustainability and Traditions in UK Chocolate Market

MarketLine

In 2009 Cadbury trialed a new packaging format for its Roses chocolates brand, replacing the standard 975g metal tin with a carton box pack. However, a poor sales performance resulted in the company reverting to the tin format for the 2010 Christmas season. This article analyzes the reasons behind Cadbury’s decision, and explores the hypothesis that consumers’ actions relating to sustainability may be at odds with their intentions when brands evoke strong emotions of tradition and nostalgia. This article examines the reasons behind Cadbury’s original packaging switch and subsequent reversal,… Read more

Crest 3D White Using Consumer-Focused Innovation to Form a Point of Differentiation in a Saturated Teeth Whitening Market

MarketLine

An attractive smile – in particular white teeth – has become a sought-after physical attribute among today’s self-expressive and appearance-conscious US consumers. However, with today’s teeth whitening market nearing saturation in Western regions, it has become hard for industry players to achieve standout appeal. This blog entry examines how the Crest and Oral-B brands, which are both owned by Procter & Gamble, have used consumer-focused innovation to form a point of differentiation within the US teeth whitening market. The Crest and Oral-B 3D White Collection achieved $151.1m in first-year sales,… Read more

Fiber Cereal – How One Ingredient Can Make or Break an Entire Category?

MarketLine

Cereal manufacturers in Australia and New Zealand have struggled to gain traction in the fiber cereal category. Not only do they have to contend with Kellogg’s dominance of the category, but they also face competition from non-cereal products touting the same benefits. This article investigates the appeal of fiber cereal, and how industry players can withstand competition from both within and outside of their category. The fiber cereal markets in Australia and New Zealand are characterized by numerous players, both new and established. Despite the number of products on offer… Read more

Cherrygood Using Product Differentiation to Achieve Success within the Dwindling UK Juice and Smoothie Market

MarketLine

Amid a dwindling UK juice and smoothie category, Cherrygood, the UK’s first ready-to-drink cherry juice, has achieved notable market success following its launch in 2009. In its first year of operation the brand reported a turnover of £1.2m. This article will examine how Cherrygood’s unique product attributes and brand marketing have enabled it to form a point of differentiation within the UK juice and smoothie category and in so doing buck the category’s declining trend. The UK juice and smoothie category has fallen foul of cost-conscious consumers following the recession… Read more

Preservative Free Packaging helping Beauty Products to tap Consumers

MarketLine

As the attention consumers pay towards natural beauty and cosmetics that are “free-from” ingredients perceived as harmful continues to grow, packaging suppliers including Promens and Aptar have launched sterile packaging solutions that allow cosmetics manufacturers to sell preservative-free products. Although there is no scientific evidence that preservatives such as parabens are actually harmful at the levels at which they are used in personal care products, the combination of media misinformation, lobbying by non-governmental organizations (NGOs), and marketing claims made by the producers of natural products have tainted such chemicals in… Read more

Sony Profitable Again after Five Years

MarketLine

Following a weaker yen (the dollar and euro have both appreciated almost 20% against the yen in recent months), the giant electronics, entertainment, and technology exporter has recorded a net profit of Y43bn ($435m), a remarkable turnaround from the Japanese firm’s Y475bn loss a year earlier. Indeed, currency market trends, largely brought about by the consequences or perceived future consequences of the Bank of Japan’s monetary, fiscal, and regulatory easing (what has been deemed Abenomics, after the incumbent Premier’s pushing for the changes), have been necessary for the turnaround, the… Read more

Premium Spirits Harnessing Greater Consumer Spending Power in the Chinese Market

MarketLine

Rising wealth among Chinese consumers has driven the market for luxury goods. While premium imported spirits have status-symbol appeal, they are also faced with strong competition from both within and outside the category. This article looks at opportunities for international spirits manufacturers in China, and the issues that need to be addressed when strategizing market entry and/or expansion. China is a key growth market for virtually all consumer packaged goods (CPG) categories, as the sheer size and spending power of the market is difficult to ignore. For premium spirits, the… Read more

Dettol Targeting the Personal Care Market in the Far East

MarketLine

Reckitt Benckiser reported impressive year-on-year pre-tax profits for 2010, stating that its performance in developing markets had helped offset sluggish activity in its Western markets. As part of this impressive performance, the company said its Dettol brand continued to deliver excellent growth in developing markets. This article examines how the Dettol brand has been well placed to extend its product portfolio into the personal care market in the Far East (particularly China, India, Japan, and South Korea) region of Reckitt Benckiser’s developing market axis, and how competitors can compete with… Read more

Regional Food Theme, Creating Distinction Through Leveraging Regional Differences

MarketLine

In recent times there has been a greater emphasis placed on location when it comes to product. Consumers want to know where a product was produced, and often desire ingredients that are sourced locally. While this is important to consumers for environmental reasons (“food miles” is becoming an increasingly prominent issue), there is also a feeling that local produce is fresher, and that heritage and supporting local businesses is important. Furthermore, regions thrive on their own individuality, with manufacturers and food service chains looking to leverage this by creating numerous… Read more

Aperol – Aligning an Authentic Italian Alcohol Brand with Contemporary Consumer Needs

MarketLine

Amid volume declines in spirits generally, Gruppo Campari’s Aperol brand has achieved dramatic growth since 2004, with total sales quadrupling off the back of expansion both throughout its core Italian market and into Austria and Germany. This article examines how the Aperol brand has managed to achieve strong resonance among a geographically widening range of consumers despite its focus on the premium and on-trade aspects of the alcohol market in the middle of the global economic downturn. The Aperol brand has been one of the most notable success stories in… Read more