Marketing `investment' big part of game plan

I am thinking Adidas might just kick some real ass with this smart strategy...

Adidas, the world's second-largest sports goods maker, plans to keep marketing spending stable despite the global downturn, in contrast to moves at bigger rival Nike.

"We will continue to spend about 13 per cent of our (annual) net sales on marketing," Adidas CEO Herbert Hainer told a news conference in Germany yesterday.

Industry bellwether Nike, Adidas and Puma all launched recent, broad cost-cutting programs to offset the recession-linked downturn in consumer spending. At Nike, cost-cutting includes reducing marketing spending by focusing more on digital campaigns than on traditional media such as TV.

Adidas sees marketing "as investment" so will cut jobs and close offices and stores to save money. Its goal? Record sales of soccer-related products in 2010, a World Cup year, of "more than 1.3 billion euros ($2 billion Canadian)," Hainer said.

Lulu "LEMON"?

Not sure if this brand has staying power, yet I continue to see lot's of women doing their shopping in ..... I think this brand might be having an identity crisis - anyone agree or disagree?

Lululemon shares slip as profit drops
The Canadian Press

VANCOUVER — Fashion retailer Lululemon Athletica Inc. stock fell 11 per cent in early trading Thursday after the yoga wear retailer reported a drop in first-quarter net income and said it expects more of the same lies ahead.

Lululemon's stock fell $1.55 to $15.27 on the Toronto Stock Exchange in early trading after the announcement.

The company said its net income in the three months ended May 3 was $6.5-million, down 23.5 per cent from the same time last year

The first-quarter profit amounted to nine cents per diluted share, down from $8.5-million or 12 cents per share a year earlier.

Lululemon's outlook calls for earnings in its fiscal second quarter to be in a range of eight to nine cents per share — about the same as in the first quarter.

The reduced profitability comes as Lululemon's revenues increase but margins fall.

In the first quarter, net revenue rose to $81.7-million, up six per cent from $77.0-million a year earlier. Lululemon says second-quarter revenue will be even higher at between $85-million to $90-million.

But gross profit as a percentage of net revenue decreased to 42.8 per cent in the first quarter, down from 53.4 per cent a year before.

Income from operations was $9.9-million, or 12.1 per cent of net revenue — down from $11.9-million or 15.5 per cent of net revenue a year before.

Lululemon's outlook calls for comparable-store sales to decline in the second quarter compared with the year-earlier period.

My GM Survival Plan

As you know from my recent Facebook and blog postings, I have been a bit obsessed with the GM situation.

So, in the spirit of "walking the walk, not just talking the talk", I hereby submit my list of what I think GM must do - at breakneck speed - not only to flourish, but ensure survival.

1. There is only one priority - Restore consumer confidence in the GM brand. This is job one - without it, we all lose our money (and more jobs). Consumer confidence in the brand and the corporate reputation have hit all time lows. This has to be the focus - from executive level on down to dealers and the assembly line folks. This is a long term excercise and must be the focal point of the "new GM".

2. Revolutionize the culture. This might be even harder than number one, but if we regress to union fighting managment it's all over. Every single employee has to drink the Kool Aid and be part of the new GM - including dealers. A new spirit is essential and it must focus on the customer - not the pension plan or more bailout dollars. The culture must be innovative and aligned to compete in the new global realities. Pride and workmanship and quality must shine through.

3. Evangelze dealers as brand ambassadors. No more plaid jackets and gimmicky pricing. Dealers and staff are the front line for GM - they must be smart, professional and "consultative" in selling - not high priced commission types.

4. GM must re-invent marketing - especially their web site and advertising strategy. GM's web site compared to best of breed Mercedes, is a joke. The experience is dismal and does not even allow you to book a test drive online! This is 2010 - that stuff is basic! As for the millions spent on advertising, - time to hire a new agency and re-visit strategy - starting with alignment between the manufacturer/brand spending and dealer or association campaigns. We are tired of "specials " and "deals" and "rebates' - give us great ads, that tell us why we should buy the cars and simplify the price message (Benchmark Hyundai!)

5. Make global supply chain managment a core executive competency. If you cannot accurately forecast demand, and constantly overproduce and end up with high ivnentories you do not deserve a dime of tax payer money. GSCM needs to be executive mandated and drilled into product managment.

6. Deliver and experience. Exceed expecations across the board - from early online looking to dealer test drive visits to service and follow up - integrate the customer experience from top to bottom. Bring this to warranty - make it easy for us to love you.

7.Drive innovation across the organization. This is part of the cultural mandate and innovation in product planning through to retail experience is essential to win back customers. Don't confuse "no charge oil change" with innovation!

8. Stop the infighting. By now everyone has skin in the game - the unions, managment, government, dealers, bondholders, and the enitre auto eco-system. Focus on the basics and the customers - this constant internal warrring is winning you nothing.

9. Bring in some outside talent. Year over year results have proven the need for some expertise beyond "car guys". Hire some creative folks with unique skill sets in areas of retailing, product development online and web marketing - forget hiring guys from other car companies.

10. Prove you can make decisions fast. You need to demonstrate intense managment capabilities now more than ever - and truly move at the speed of light. Not everything is going to go as planned, even with the influx of new cash - so don't vascilate - make changes quickly.

Will this work?

Latest on GM Canada's Restructuring Progress

The Governments of Canada and Ontario have approved our comprehensive plan, enabling General Motors of Canada to complete our restructuring and launch a more competitive, stronger new GM Canada, building on our award winning vehicles.

GM customers can confidently continue to purchase and service their vehicles and take full advantage of GM’s leading warranty coverage throughout this process. We stand by our commitment to deliver vehicles with world-class fuel economy, safety, quality, and innovation.


Thank you to our loyal customers, the largest customer base in Canada, for your unwavering support. I would also like to thank all our stakeholders, including employees, retirees, the CAW, dealers and suppliers, as well as the Canadian and Ontario Governments, who have made it possible to lay the foundation for a new GM Canada. We are intensely focused on building a leaner, greener company that will be competitive over the long term.


As we move forward with the reinvention of our company, I hope you share in our enthusiasm for a great new future. To track our progress visit gm.ca


Thank you for your continued support.


Arturo Elias
President,
General Motors of Canada Limited