Monthly Archive for May, 2008

Globalisation of knowledge: branding yourself

Published
by
Donkey
on May 25, 2008
in business
. 0 Comments

Let’s start with a review of history. In 1945 industry covered 37 percentages of all work places in America. Today the unemployment figures are not shaking the ground, thus industry employees represent only 11 % of the working force. No one would deny what has happened: long transformation has been shifting workplaces from industry to service and knowledge industries.

If one would keep eyes in the Asia of today, she would see the phenomena that shaped the Americas in the past 60 years. The universities of China currently educate more than a million students. Every one of them eager to learn, penetrate, conquer and get rich. And compete for the same positions with the students of the old continents. To keep it short, without the income transfers it would make no sense paying an European or an American employee more of the work that an Asian or an African one makes with the same quality.

Universities or nationalities as brands won’t last long competing with hard working and better behaving masses. Maybe the competitive edge could be found from branding personalities. Skilful and well educated, but anonymous, odourless, and tasteless people might be good to be deployed by knowledge industry. But where it comes other than routine brainwork, the personality matters.

From the forties till nowadays we have seen a shift from product to brand. Now it might be time for a shift from anonymous identities to personality brands.

Chinese products: are they really cheap?

Published
by
Monkey
on May 24, 2008
in economics
. 0 Comments

Producing in China is extremely cheap. At least, that’s the appearance, especially when we hear that western production units have been transferred in China. However, appearance is often misleading.

Manufacturing in China is cheap to the detriment of workers. Holidays, social security contributions, unemployment insurance and safety on the job are expensive. Since China is on his way towards development, it is hard to imagine that there could be any job protection or whatsoever insurance or social security.

If Chinese workers are hard-hitting machines, the machinery used substantially lag behind the international standards of efficiency and pollute more than plants situated in other countries. The laws to protect the water, air and soil exist, but the real problem is the enforcement of environmental regulations. Very often, the production objectives established by the local factories in an area have to be pursued at any cost and the environment has to pay the expenses. It has been estimated that 60 % of the precipitations are constituted of acid rains for more than 1/4 of the Chinese territory (World Bank, 1997). As a matter of fact, China is the world leader in production of SO2 and NOx. Taking a look at the lakes, we see that 75% of them are considered to be polluted. The drinking water available to each inhabitant is estimated to be just a quarter of the world average. The machinery and plants used in China use more energy and produce more waste and pollution.

Most worryingly, the products made in China are made with materials that are not in conformity with western standards of safety because toxic. Very often, the products are of such a lousy quality that you have to throw them away after two usages, thus augmenting the amount of waste existing on our planet.

Is it worth to produce such expensive and often useless goods that require a huge amount of labour and raw materials? Besides everything, China is very thirsty of raw materials, such as oil or steel. The boosting demand of raw materials from China is driving up the world prices. If prices increase, and firms want to keep margins, manufacturing becomes more expensive and many firms have to close down or to move their production units where something else (the labour- the environment) is cheaper. More and more people will lose manual skills and craftsmanship, thus production could be nowhere else than in China.

World eats from the same pie: if someone gets a bigger slice, then someone else has to grab smaller slices. A price is not just a tag that have influence on your wallet. If decisions are price oriented, they should take into account the costs of environment and labor rights.

Generic China experience

Published
by
Donkey
on May 21, 2008
in business and marketing
. 0 Comments

Nowadays price matters less. Internet is full of free services, product prices and features can be compared fast and easy, and second hand consumer-to-consumer market places have strenghten earlier often forgotten life cycle stages of goods.

More often marketers clashes a situation where income does not reflect wheather consumer buys cheap or expensive. Small income furniture freak might eat Lidl just to get her vintage Arne Jacobsen’s. At the same time when branded products are produced more and more in China, also generic China products are facing their second upswing. Generic brands provide often consumers physically same good, but without the label. Would you really care buying Uncle Ben’s instead of a white label one, assuming the source is same, but price just the half. So China is good. At least at the glance.

Besides often carrying a brand name that reflects several expectations and experiences of perceived image, product itself is an experience. World carries thousands of examples where a product has become self-feeding cult (Starbucks, Google, Diesel, Apple, PlayStation, etc), some of them being advertised, but all of them with “build-in-marketing mechnanism”. As Paul Isakson said or recycled “make the product so great, people can’t help talk about it”.

But is a product an experience also without the brand name? For sure you can enjoy nameless cola drink as much as the Coca Cola or Pepsi if you are thirsty. For sure you could drive non-branded car, if it would go smoothly as Rolls Royce. But would it still be the same? Besides boosting the ego or setting the social norms, brand has a promise and at the stage of consuming the good, it turns to a satisfaction. Marketing is not dead, its living better than never before. Greating huge stories like Coca Cola Happiness Factory or expensive co-branding like Coke + Faithless would not make sense in rational world where consumer would buy the cheapest soda. Our world is not a brainwash, it’s all emotion.

So maybe a product can’t be an experience without label and a generic China experience is not realism. And the price matters, after all. Whether being a brand or not, my pocket experience tolds the truth. “Designed in California, Assembled in China.”

iPhone - generic or not?

Photo: Apple.com

World is small

Published
by
Donkey
on May 15, 2008
in ASIDE
. 0 Comments

Nightly cuisine requires a pinch of salt to emphasize the flavor. Daily politics requires a handful of commentary to maintain the reality. Abstract economic models flavored with marketing require a framework.

Boxlife spices up your economy.