To buy or not to buy? Are consumers really unaware of the cost of things - especially in today's economic climate? Will putting the image of the latest big name in cartoon characters on merchandise really increase sales? In his two part series, Cutting prices in a recession? No way!, Alan Radmall attests to both. Refering to research published in the Harvard Business Review, Radmall says that manufacturers and retailers can often push their prices higher than they think and still make the sale, as consumers depend on retailers to tell them what a good price is. And as horribly gullible as it makes consumers seem, what other choice is there? Pricing comparisons can only be made between stores, and if there is little to no difference between the stores' pricing points, consumers just have to accept the stated figure. The only real choice they have is whether to buy the product or not; and in the case of basic necessities, most will pay now and not bother to ask questions later. This, of course, leaves the playing field wide open for price-fixing scams by manufacturing cartels, as our recent history has shown us. As for cartoon-branded merchandise - it just goes to show what a little famous imagery can do for sales, especially when kids are concerned. All in all, it just goes to show, consumers will pay anything for what they want. Shan Radcliffe, Retail editor retailnews@bizcommunity.comResponses to this column welcomed in our new online editor's column archive. Image courtesy of FreeDigitalPhotos.net. Top stories
Retail
 [Alan Radmall] In Part 1 I covered how the Harvard Business Review showed that people are not as price savvy as we may think, and there are some opportunities to increase margins in these difficult times as a result. So what does this have to do with character licensing and my company, retail agency Revolution? Read more >>[Thabang Mokopanele] JSE-listed property loan stock company Acucap Properties has entered into an agreement to acquire a further undivided half share in the Bayside Mall in Cape Town from Old Mutual Life Assurance for R280m. Read more >>  [Sindy Peters] Live Out Loud, an exclusive monthly retail publication aimed at high net worth individuals, held its annual media bash at the Villa Zest Boutique Hotel in Green Point. The evening, themed retro-glam, saw the likes of Marcus Brewster, CEO of Marcus Brewster Publicity, and winner of the SA Blog of the Year 2009 award, Two Ocean's Vibe editor, Seth Rotherham, on the VIP guest list. Read more >> [Sipho Masondo] The Industrial Development Corporation (IDC) has started paying out desperately needed loans to save companies in the motor industry which face closure because of plummeting vehicle sales. Read more >>[Nicola Mawson] The luxury goods sector in SA is starting to feel the pinch of the global recession as heavily indebted consumers seem to have stopped conspicuous spending. Read more >> While wine sales were flat in South Africa it appeared that wine sales were worse in the UK, with the amount of wine being bought in pubs and clubs shrinking by as much as 1% - adding up to 12 million bottles during the last year, said Colin Collard, chairman of the Wine-of-the-Month Club, South Africa's largest direct wine marketer, on Tuesday, 19 May 2009. Read more >>British retail inflation rate fallsLONDON: Britain's annual retail price inflation rate fell to minus 1.2% in April from minus 0.4% in March due partly to falling home loan payments, official data showed Tuesday, 19 May 2009. "There was a large downward pressure from housing where the largest effect came from mortgage interest payments," the Office for National Statistics said. Source:I-Net Bridge and AFPFood group Tiger Brands on Tuesday reported a 16% decline in diluted headline earnings per share of 624.5 cents for the six months ended March 2009 from 739.5 cents a year ago. Read more >>Banking & Finance
[Proffesor Ndawonde] The Tshwane Metropolitan Municipality is to increase property rates by 13% from 1 July. Read more >> One very simple way to insulate ourselves from the impact of financial fall out is to manage credit effectively. This may sound glib, however effective credit management has far reaching effects especially when we view it from a broader perspective. Read more >>[Neo Semono] The Banking Association of South Africa has confirmed a meeting would take place on Thursday, 21 May 2009, between itself and South African Reserve Bank Governor Tito Mboweni. Read more >> Brand news
Food and beverage group Pioneer Foods on Monday, 25 May 2009, reported interim diluted headline earnings per share for the six months ended March 2009 of 166.4 cents, up from 140.0 cents during the previous period. Read more >>The world's second biggest brewer, SABMiller plc, on Wednesday, 20 May 2009, announced that Dr Dambisa Moyo has agreed to join the SABMiller board as an independent non-executive director. Read more >>Nokia will cuts its production and logistics workforce by 170 and offer buyouts to 320 manufacturing employees. The cuts are over and above the 2,400 worldwide and 2,500 domestic layoffs the company announced earlier this year. The latest round of layoffs represents about one tenth of 1% of Nokia's worldwide workforce. Read more >>SHANGHAI: Coca-Cola launched a juice marketing offensive in China on Tuesday, 19 May 2009, making good on a vow to put more power behind its brands after Beijing shot down its purchase of a local juice maker. Read more >>New rosé on 4th Street“Where there's a party, there is 4th Street” is the spirit of the naturally sweet new rosé that has just launched onto the South African social scene. 4th Street is an is easy drinking wine, inspired by friendship and sharing. “Neighbourhoods are where friends get together for impromptu good times that can spill over into festivities on the pavements and into the streets. 4th Street has tapped into this exuberant community life force with this new natural sweet, palate pleasing rosé,” says 4th Street brand manager, Jeanne de Wet. 4th Street is sealed under screw cap for added convenience and comes in regular 750ml and 1,5 litre bottles, at an recommended retail price of around R21.96 and R39 respectively at supermarkets and liquor stores countrywide.  [Naseem Javed] Overnight, things have suddenly changed; over-exposing of corporate credibility and governance, like Richter scales gone wild, are thumping the global populace in sheer panic while shattering thousands of mega corporate name brands worldwide. The good and sober companies of the world not only must weather these credibility quakes but also must project their clean image and stay protected during these monstrous shifts of global image. Read more >>Distribution
[Shoks Mzolo] You have to hand it to Aspen. A few weeks after it won a chunk of the state tender to provide Aids drugs last year, Aspen signed a R2,7bn deal with GlaxoSmithKline (GSK) that gives the local firm access to more than 100 markets. Read more >> [Sure Kamhunga] Chicken producer Country Bird, which has secretly built a 13.4% stake in Sovereign Foods in which competitor Afgri wants to reverse list its foods business, now wants to acquire the whole company. Read more >> e-Commerce
[Paul Hartsock] Two things that online shopping has going for it: You can probably find just about anything for sale online, and you don't even have to get dressed to buy it. Working against it are having to wait for it to get shipped to you, and the fact that shipping sometimes adds a few bucks to the price you pay. Read more >> Napster, currently owned by retailer Best Buy, is trying out a new plan: For US$5 per month, users can stream unlimited tunes and download five songs. Streaming, of course, means most users can only listen while on a Web-connected computer, but Napster is counting on the rise of portable media players that are always wirelessly connected to the net. Read more >>While thousands of vehicles are being sold online by vehicle auctioneers in the United Kingdom and Europe, a leading local car auctioneer believes that the South African market will not follow suit in the near future. Read more >>Hospitality
Claremart Auction Group will soon sell the building that houses one of Cape Town's most frequented seaside restaurants. CEO Jonathan Smiedt says the landmark site — which includes the Sandbar, located on the Camps Bay promenade — will be auctioned next Tuesday, 26 May 2009, at noon. Read more >> [Xolisa Mgwatyu] Dining out is becoming a casualty of the recession and restaurants are having to come up with creative solutions to entice cash-strapped consumers to eat out. Read more >> Food services company Famous Brands on Wednesday, 20 May 2009, reported that its headline earnings for the year to end February 2009 increased 11% to 159 cents from 144 cents the year before. Read more >>Import/Export
 BOGOTA: Coffee production in Colombia, the world's number two producer of the beans, plunged 33% in the first four months of 2009, with exports sinking by 21%, officials said. Read more >>Logistics
[Nicola Mawson] Listed recruitment specialist Kelly Group last week said a subsidiary had expanded into the freight industry through an acquisition. Read more >> Transport and logistics group Cargo Carriers (CRG) on Wednesday reported a drop in earnings per share (EPS) of 88.8 cents from 206.3 cents previously in its full year results ended 28 February 2009. Read more >> Vector Logistics has been named Best Distributor of the Year at the 2009 Famous Brands awards. Read more >>Manufacturing
[Mathabo le Roux] The Industrial Development Corporation (IDC) faces an intractable competition conundrum as it considers bailing out textile producer Frame Textiles, a subsidiary of SA's largest clothing maker, Seardel. Read more >> [Claire Bisseker] Retailers and manufacturers in the clothing and textile industry have at last agreed to work together to test the commercial feasibility of sourcing more apparel and fabric locally. Read more >> [Mathabo le Roux] The Department of Trade and Industry has finally launched the clothing and textiles customised sector programme, or CSP, a huge task that has been four years in the making, to prop up the perennially embattled industry. Read more >> Industrial design students from Holland's Technical University of Delft, with the help of nongovernmental organisation Kids Rights and local and international sponsoring companies, are set to take the Dutch fashion scene by storm with a range of leather sandals manufactured at a Durban company, which is putting its profits back into the community. Read more >>[Linda Sparg] When the going gets tough, the tough get knitting. In this recession, where retrenchments are the norm and people are pulling in their belts, a growing number of South African women are turning to knitting to supplement their incomes. Read more >> [Michael Hamlyn] The brand new ministers of Trade and Industry and of Economic Development, Rob Davies and Ebrahim Patel, have leapt into a valiant effort to save the loss-making textile and clothing firm Seardel's loss-making Frame textile division from closing down. Read more >>  While businesses in the renewable energies sector may be struggling to take off, more existing business owners in the manufacturing and services sector are realising the potential in marketing greener solutions to clients. Read more >>Packaging
 Foodcorp's Nola division has upgraded the packaging of its Yum Yum Smooth peanut butter bulk packaging containers. Read more >> Kellogg's Corn Flakes has refreshed its image by upgrading the design of its packaging. The distinctive packaging will be available in-stores next month with the aim of making it contemporary, discernible on shelves and easy on the eye. Read more >>"Given that electronic distribution of music will not overtake physical products until sometime in the next decade, there is a need currently to consider options to reduce the environmental impact of CD packaging,” states the executive summary of Comparing Packaging Options for Compact Discs: An Environmental and Toxicological Assessment - a new report from the Sustainable Packaging Working Group (SPWG). Read more >>Regulatory
[Sanchia Temkin] Companies that fail to keep accurate accounting records may be in for hefty fines of up to R1m or their directors could even face jail time, according to new company laws. Read more >> Vandalism, the weather and illegal handsets are just some of the apparent causes of South Africa's recent cellphone coverage problems, according to cellphone companies. Read more >>South Africans have until 2 June 2009 to submit their comments in relation to Eskom's proposed 34% tariff increase, according to the National Energy Regulator of South Africa (Nersa). Read more >>Research
PARIS: Global mobile phone sales fell a record 8.6% in the first quarter to 269 million units and will likely decline 4.2% for the full year, the Gartner research group said. Read more >>[John Driscoll] With more and more scrutiny being focused on advertising that is specifically directed to kids, many marketers are hesitant to even consider a through-school marketing program. What they might not realize, however, is that a through-school marketing program directed to moms (versus kids) is one of the most effective ways to build brand awareness and purchase intent for their products. Read more >> Retail marketing
 [ActivRetail] Fore Good and The Harding Group have announced their first activation for Pringles following the announcement that Procter & Gamble's leading snack brand will be sold and marketed in South Africa by the local FMCG group. The new campaign was developed from a total tactile perspective reinforcing the brand's unique value proposition. Read more >> [ActivRetail] Engen and Brandactive, a Smollan Group division, have teamed up to create a new initiative called EngenActive, which gives suppliers a new opportunity to market brands directly to targeted consumers in Engen Quick Shops. Read more >> [Alan Radmall] We must sell cheaper and cheaper in a recession. Not according to the Harvard Business Review. Read more >> Unilever's Sunlight brand plans to expand across Africa, Middle East and Turkey, with the campaign driven by South African advertising agency, The Hardy Boys. The announcement was made earlier this month in London that Bartle Bogle Hegarty (BBH) had landed the global account for the brand. Read more >>Kids' party bus hits the roadToys R Us is bringing kids in Durban its first ever kids' party bus. Enclosed within a London-style double decker bus is a complete soft play facility with slides, ball pools, climbing nets, a maze and, of course, lots of toys to play with. The Toys R Us Kids Party Bus is a mobile venue for children's birthday parties and functions for children aged 2 - 8 . Decorated both inside and out, this specially converted and modified bus can park outside your home or nearby, in a park, outside schools - in almost any location as long as there is adequate room. The party bus also offers a jumping castle and face painter. For more, go to www.kidspartybus.co.za. Retailers
BERLIN: Century-old German department store chain Hertie, owned by British financial group Dawnay Day, said it was going out of business and closing all 54 of its stores. Read more >>LONDON: Prestigious British retailer Marks & Spencer said Tuesday, 19 May 2009, that annual net profit slumped nearly 40% in 2008-2009 and cut its dividend by a third due to an "uncertain economic outlook". Read more >>Furniture retailer Lewis Group on Monday, 18 May 2009, reported diluted headline earnings per share of 634.1 cents for the year ended March from 688.1 cents a year ago. A final cash dividend of 179 cents per share was declared. Read more >>Security
How can IT departments keep a grip on security when employees are using an ever-expanding variety of mobile devices with no commonality in terms of hardware, platforms or applications? Centralized management is essential, but accomplishing that goal can be daunting. A few best practices are emerging, though. Read more >>Supply chain
Supply chain business Super Group announced last week that shareholders had approved the resolutions relating to the rights offer in which Super Group will raise approximately R1 billion through the issue of new shares. Read more >>With its rolling green fields, fat dairy cows and state-of-the-art milking enclosure, the Fort Hare Dairy Trust outside the Eastern Cape university town of Alice could easily be a shining symbol of how successful land reform could be in SA. Read more >>Technology
SEOUL: South Korea's LG Display said on Tuesday, 19 May 2009, it has developed a liquid crystal display (LCD) television panel that is thinner than a pencil, describing it as the world's slimmest. Read more >>Training
 The Shoprite Group yesterday, 19 May 2009, announced the first graduation class of 38 deaf learners who have completed a four month Sales Skills Programme and who are now employed in Checkers stores in Gauteng. Read more >> The Cape Winemakers Guild has awarded bursaries for the first time to final year Viticulture and Oenology students who have been earmarked for the Guild's Protégé Programme once they have completed their studies. Read more >>Brand news
 Vital has launched a new product in its condition specific range to help relieve the unnecessary pain associated with arthritis. Read more >> Vital has launched a new product in its condition specific range to fill a gap in the market. Cranberry Complex can bring relief to those that suffer with urinary tract infections. Read more >>Retail services
Vacancies still exist for the Quo Vadis Organisational Communications course being held in Cape Town in mid year. The course runs over six days in June and July. Read more >>
  Live Out Loud hosts media bash in CT
 
"There is only one valid definition of a business purpose: to create a customer." - Peter Drucker"If you don't quit, and don't cheat, and don't run home when trouble arrives, you can only win." - Shelley Long"Your brand's power lies in dominance. It is better to have 50% of one market, instead of 10% of five markets." - Al Ries"You've got to be success minded. You've got to feel that things are coming your way when you're out selling; otherwise, you won't be able to sell anything." - Curtis Carlson"Clearly no group can as an entity create ideas. Only individuals can do this. A group of individuals may, however, stimulate one another in the creation of ideas." - Estill I. Green
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