Greek Elections delay the inevitable.

Global Leaders hailed the results of the Greek elections on Sunday which resulted in a win for the New Democracy party over the leftist Syriza party who had vowed to tear up the terms of the bailout under the premise that the European Union could not afford to have Greece leave the Euro. With the victory of the New Democracy party led by Antonis Samaras there is a common understanding that Greece will push for a review of their bailout terms as they believe they have accepted considerable pain by electing the pro bailout party to power. Reports coming from Germany suggest that the terms of the bailout are non-negotiable however they would be open to discussing the timeframe surrounding the arrangement.

The problem with the continued financial aid being given to Greece is it is just building on their already insurmountable debt and what they really need is not more funding but a complete write down of what they owe to the Eurozone governments (€161 billion) as well as the European Central bank (€50 billion). One of the major arguments against this is the potential of other indebted countries such as Ireland seeing Greece receiving these huge cuts in what they owe and wanting similar treatment. So the dilemma remains, if the EU continue to enforce these austerity measures on Greece then it is more then likely that the Greek economy will continue to shrink and therefore they will not be able to raise the funds to repay there loans and will require further aid from the European Union.

There is a growing number of people who believe that Greece leaving the Eurozone is no longer a case of “if” and more a case of “when”. This could result in a number of disastrous scenarios with investor confidence in other nations damaged. Confidence in other highly indebted countries such as Spain and Italy could suffer and cause them to move money from these banks to the safer banks in Germany or the Netherlands which may result in more banks defaulting on their payments. Another problem with Greece leaving the Euro is the fact that a switch to the Drachma would result in a huge devaluation of the currency which would make repayments of Greek debts even more difficult. It is time for more radical action to be taken as it is clear that the measures being taken at the moment are not enough to save our faltering economy. If major changes are not made in the near future then this will spiral further out of control and this is something that the vulnerable Irish economy can ill afford.

Last week saw the launch of Kellogg’s first ever 3D interactive cinema ad, which was created by glue Isobar. The ad falls under the ‘It’s all lies’ campaign and was launched in line with the new Men In Black movies. It claims to be the first ever ad that can be tasted and, that by the end of the advert, consumers will be able to taste their Rocky Road Rice Krispies Squares bar. Kellogg’s claim that taste will be achieved through ‘audio taste technology’ which has given them high hopes for the success of the ad. Sally Tribe, Rice Krispies Square’s brand manager, has said that Kellogg’s are always trying to push the boundaries with their brand.

Upon watching the ad, it is clear that it fits perfectly under their ‘It’s all lies’ campaign as it is not possible to actually taste the product. It cannot be argued that the ad doesn’t show high levels of creativity, but there is a fear that younger consumers may be confused, or even disappointed, that they cannot actually taste the product. This is a risk that Kellogg’s are happy to take. They have supported the launch of the ad by explaining that interacting with customers adds ‘real value to the product’ and they feel that it will help bring many more followers to the Squares brand.

The launch of the cinema advert appears to follow in the steps of a new trend of interactive movies, which are moving into 4D. These movies are getting customers to interact on an increased level through smell scratch and sniff cards, rain and vibrations. Is this something that we are going to see more from marketers in order to interact more with their consumers?

It is clear from the advert that Kellogg’s are looking to integrate their customers into their advert and interact with them on a new level. All in all, the ad has given the snack bar a whole new dimension and has shown that Kellogg’s aren’t afraid to think outside the box. Looking to the future it appears that Kellogg’s are one to watch out for. The question is, what will they think of next? 

Diversification of Fashion Labels into the Cosmetic Market

Tapping into a $170 billion market sounds appealing to fashion designers in today’s world. They just cannot resist. The cosmetic and perfume industry in the world is worth an average of $170 billion worldwide with the USA and Japan having the largest market. Europe alone leads the cosmetic market representing almost €63 billion with sales in France exceeding €6.5 billion alone. The Cosmetic and Perfume industry is one of the industries that has had consistent growth over the past 40 years and has not suffered greatly in the decline from retail sales over the past couple of years.

In saying that, it also has been one of the most developing industries in terms of celebrities. Celebrities have been developing their own range of perfume, celebrity affiliates with brands such as Rimmel and Kate Moss and the increasing amount of online retail outlets being set up and the growth of online sales.

In terms of fashion designers and the luxury clothing market well any one can see in  current times that it’s a declining market but the large brands are still there and going strong. In order to overcome this period in the industry,  they are expanding their customer reach to lower price range.  The dilemma being that people want the brand, but cannot afford the cost of a €600 pair of shoes or €2500 bag. In so why not develop an accessories or cosmetic range to target customers, keep the brand awareness out there, with diversifying your product range and in the process increase sales as well as hopefully targeting potential new customers that were previously not attainable.

But that is the very thing that luxury fashion brand designers are doing such as Christian Louboutin who has decided to diversify his iconic read soled shoes to hand bags and men’s shoes but more recently announced the launch of a Louboutin cosmetics range for launch in early 2013. The cosmetic range will be collaboration between Louboutin and Batallure Beauty ltd. Batallure Beauty already has a famous clientele of Madonna and Justin Bieber. Also following close in his footsteps is the renowned fashion designer Marc Jacobs who has also announced that he also will be adding a cosmetic line to his current clothing and fragrance range.

Does this diversification into the cosmetic industry damage their reputation and their new found lower price points in the retail industry? That will only be decided over time, but until then we will enjoy the anticipation of the new lines.

Facebook goes Public

Last Friday Facebook finally went public. This means that for the first time members of the public can buy shares in the social media website. This transition has been long awaited for the eager investors that are ready to start buying one of the most valuable commodities that Facebook offers, personal information. 

All the comotion surrounded the Nasdaq offer as shares of the company - now worth between $80 billion and $110 billion - rose and fell all day on Friday the 18th. Increased doubts surrounding Facebook's business model meant the social network’s stock failed to launch as expected on its first day. Instead the IPO’s underwriters were forced to step in to prevent the shares slipping below their offer price of $38. At the market’s close the share price ended at $38.23, giving the company a market capitalisation of $105 billion.

How Facebook CEO and founder Mark Zuckerberg handles the now public company and if it can continue to grow and make stockholders happy are questions that stock market analysts will debate for months. Zuckerberg and his team, need to show they can increase revenues fast enough to justify a stockmarket valuation that is more than 100 times Facebook’s 2011 profit.

Just days before going public GM Motors withdrew their advertising from Facebook which was reported to be 10 million dollars. They obviously felt that this form of advertising wasn't effective enough. This could be worrying for Facebook in the future.

One other possible concern is that they don't have an operating system or browser to guarantee its presence on mobile phones. Apple has iOS and Safari. Google has Android and Chrome. Microsoft has Windows Phone and Internet Explorer. The company depends on apps and the mobile Web. This could be dangerous, particularly because Facebook's mobile apps aren't very well regarded. Zuckerberg identified this problem and at a recent IPO roadshow he stated that improving the mobile app is his number one priority.

These concerns among others will lead to interesting times ahead for Facebook. One thing is for certain, when they release their financial information it will be scrutinized in minute detail which will produce some eagerly anticipated findings.

The Future of the Catholic Church in Ireland

This week the Catholic Church held a conference in Dublin which was attended by over 1,000 people, to discuss the future of the Church in Ireland. The conference was aimed at planning a way forward for the Church in Ireland by discussing controversial issues and discussing ways in which to overcome them. A number of different issues were discussed ranging from the sex abuse scandals to the question of whether or not priests should be allowed to marry.

However, with the increasing number of scandals which have developed surrounding the Catholic Church in Ireland, are conferences like this likely to have any significant effect? Can a formal conference with a mere 1,000 attendees; considering the overall population of Catholics in Ireland, help to reverse the negative effects of all the bad media coverage which has affected the Catholic Church in recent times? The answer to these questions would appear to be no. The Church’s reactions towards many of the scandals which have become apparent in recent times and their attempts to deal with them have been less than effective. Time and time again new scandals have emerged and yet the Church still can’t seem to get it right.

Is it time for them to just give up on trying to restore their image in Ireland? Some may think so; and the declining attendance numbers at mass may signify that there is simply no point anymore. The scandals combined with the decreased emphasis on religion as part of the Irish lifestyle is obliterating the demand for the Catholic Church in Ireland. It seems that the Vatican may have this view, considering their reaction to the latest scandal which was reported involving the Irish Cardinal, Sean Brady, who failed to report sexual abuse cases which he became aware of during the 1970’s. It was reported that the Vatican has decided to simply try to reduce the negative effects that this story has elsewhere by trying to downplay the situation, rather than taking a significant stand on the matter in Ireland. It seems they may be prepared to sacrifice the Church’s image in Ireland in the hope that the Irish stories won’t have a detrimental effect elsewhere.

In any case, it seems the Church has lost significant face in Ireland and unless it suggests radical measures to try to overcome their problems here, the situation is likely to worsen. Unfortunately ineffective actions such as conferences, as radical as the ideas put forward at them are, seem unlikely to restore faith in the Catholic Church for the people of Ireland.

Facebook Ignoring Women in the Board Room

Facebook, which is currently preparing an IPO, has come under fire for lack of diversity on its board of executives. Currently, the seven directors are all white and male, leading to Facebook being attacked for its lack of female representation on the board. Organisations such as Ultraviolet have protested outside Facebook’s headquarters in an effort to encourage Zuckerberg to add women to his board before the proposed IPO occurs. CalSTRS has also previously appealed to Facebook to diversify their board, highlighting evidence that companies with varied board members perform better.

According to recent surveys, 58 percent of Facebook’s 900 million users are female. Is it ill-informed for the company to ignore the voice of so many of their users- nearly two times the population of North America?  In terms of Facebook’s business, is it naïve to completely negate the influence of half your target market? This is the argument many opponents are currently positing towards Facebook.  Many activists are sighting Zuckerberg’s reasoning for not employing a female director as sexist, claiming that he does not believe there is a woman with the technological experience suited for the job. If this is the case, look towards your management structure- Facebook’s own Chief Operating Officer, Sheryl Sandberg, could be appointed. Or, as Facebook needs to look towards advertising and media revenue streams, why not examine someone currently working in these sectors as to diversify the board’s experience also.

However, Facebook is not the first Silicon Valley company to ignore the benefits of creating a diversified and gender balanced board of executives. The longstanding Adobe Systems Incorporation does not have any women directors, with companies such as Apple, Groupon and LinkedIn only having one female director. It appears to be a reoccurring trend to ignore the power and opinion of women in the technology firm's board rooms.

However, at the end of the day it is important to consider not only the gender balance argument. Is it really the best policy to employ an equal amount of male and female directors if they are not best suited to the job? 

The Plight of the Not-For-Profit Sector

Sony has revealed that they experienced a loss of 159 billion yen (2.1 billion US dollars) for the October-December quarter. Unconfirmed reports are predicting that this will mean a six percent decrease in Sony’s international workforce, which in real numbers means that 10,000 people face losing their jobs.

In today’s economic reality stories like this are neither shocking nor surprising. We have become desensitised to the everyday losses of businesses. However it is not just businesses that are facing tough times. A study released by Grant Thornton highlighted the plight of the not-for-profit sector.

It has emerged that one in ten not-for-profit organisations will cease to operate in the coming times due to an inability to plan for the next six months. Over 80 percent said they were unable to plan beyond two years because they were unsure if they would have enough money to survive that long.

Of the nearly 1000 organisations surveyed it emerged that government contributions account for approximately 60 percent of their funding and due to cut backs their future is now questionable. Other contributing factors to their uncertainty were increasing challenges in financing organisations from non-governmental sources and continuing struggles with corporate governance.

In an interview with the Irish Independent, Turlough Mullen, partner at Grant Thornton, said the not-for-profit sector has never been in such a “perilous state”. Mr Mullen added that, "as the crisis continues to deepen, we see that no sector is unaffected. The reality is that, in spite of the fact so many of these organisations do excellent work, we will see consolidation and rationalisation in the not-for-profit sector, just as we have seen in many areas of business".

So what does the future hold for these organisations? With so much good work being done can we live without them? The answer is no! The not-for-profit sector is a sector that if it diminishes many will suffer. The vulnerable will suffer. These organisations will have to find new means of survival. Seven out of 10 charities have had to create new forms of fundraising in the past two years as Government spending was slashed, but is enough being done to save this sector?