Month: July 2014

Goldman Sachs is predicting a slow decline for Walmart and Target as customers look elsewhere for convenience.  The two companies are fighting erosion but haven’t been successful in stemming their declines so far.  They are facing one of the toughest business and PR/marketing conundrums — how to win back customers.  There is no easy answer once a shopper has changed habits.  There are multiple considerations including price, quality of goods and service.  Falling down in any of these three categories is a death sentence. In other words, convenience is only the beginning of the sales equation.  A Big Box store may have everything one wants but one must able to navigate it to find an item — a constant problem, especially when store personnel don’t know themselves.  It is easier to go to a place where there are fewer choices that are easier to find in the aisles.  This is a secret that some food retailers have discovered — i.e., Trader Joe’s. Target and Walmart are filled with experienced merchants so there is a good chance that they might turn around, but the longer it takes, the less likely that will happen.

The Israeli shelling of a UN school in the Gaza Strip was a misstep for the country and its military.  It was most likely an accident but tell that to the Palestinian families who are grieving at this hour.  Relations between the two peoples could hardly get lower at a time when they should be improving.  As an outsider, it is hard to blame Israel.  Shelling suspected sites is part of the “fog of war.”  As much as one tries to protect civilians, they inevitably get into the line of battle.  And, Hamas’ random firing of rockets into Israel is an open attempt to terrify Israeli citizens.  Violence begets violence unless one side is utterly defeated and will broken.  There doesn’t seem to be any move yet on either side in the conflict to give up warfare, so more civilians will be killed.  One can only hope that both sides come to their senses sooner rather than later.

One wonders why anyone would feel it necessary to copy another’s work verbatim and claim it as his own.  But that is what this fellow did, and it could cost him his Senate race.  He is claiming Post Traumatic Stress Syndrome as the reason for doing it.  That seems to be a stretch. Other classmates at the US Army War College had been in battle as he was.  Granted that he has a history of depression and is still taking medication for it, but how does that contribute to copying without attribution?  Senator Walsh has created a PR problem for his campaign and reputation.  It will be interesting to see how he handles it.  It would be best if he comes clean, confesses to plagiarism and takes the consequences early on.  The more he tries to quash questions, the worse it will get for him, especially since the War College is investigating his 14-page paper and thesis.  He should be convicted of laziness.  It takes little time to footnote and only a little more time to write in one’s own words.  What he has done, unfortunately, is open a question about his character that will be hard to dismiss.

And not good publicity either…  Say, you have a client, a mayor of a city, and you fake a press release for the client.  A reporter picks it up and calls the client who knows nothing about it.  That is what happened here.  It comes under the category of “What was the PR person thinking?”  There is a rule in the agency business.  Clients approve all releases that go out on their behalf.  There is never a time when that rule is violated, especially for flackery.   I don’t know what has happened to the publicist who sent then tried to justify the release.  In agencies I have worked in, it would be a firing offense, one that would also have the client leaving for another firm.  The Raleigh mayor might not be so upset, but he should be.  If you can’t trust your agency to do the right thing, who can you trust?

So, you short a company’s stock and set out to destroy it.  You give public presentations explaining why the company is fraudulent.  If people believe you and sell the stock, you will win big.  If they don’t, you will lose billions.  That’s the position that Bill Ackman, a hedge fund manager is in in his quest to destroy nutritional supplement company, Herbalife.  Yesterday, after his detailed presentation on the company, its stock rose rather than fell.  The feeling was that he didn’t produce a smoking gun that proves the company is a culprit rather than besieged.  There is something about Ackman’s anti-PR that makes one want to see him fail.  On the other hand, if Herbalife is shady, he will have done a public service.  Time and stock trading will tell soon enough whether his shorting the stock was a good or bad idea.  And the government has yet to weigh in based on its investigation into the company.  Should the FTC sue the company, Ackman will be a winner.  If it decides against penalties, Ackman will have to start over to rebuild his fortune.

Russian citizens are being given a broad range of excuses and conspiracy theories over the downing of Flight MH 17 in rebel-controlled Eastern Ukraine.  The reasoning is preposterous and outrageous and one wonders how any citizen could swallow such drivel.  But then, during the previous disappearance of a Malaysia Air flight this year, CNN explored the possibility that aliens had taken the plane.  Fortunately, there were many news agencies covering the event so one could get a variety of views on what happened.  However, in Russia’s case now, there doesn’t appear to be reporting that alleges the plane was shot down by a missile.  In other words, Russian citizens are being given an altered perception.  How many of them believe their government?  Putin has vested interest in keeping the spotlight away from him and so far, he seems successful at home, if not in the rest of the world.  Sooner or later, however, the reality of the tragedy will reach Russian citizens and will create a public relations problem for Putin and his autocracy.  Will it be enough to cripple his power?  Probably not, but his strong man image will be dented, and that is a first step in eventual downfall.

A food retailer like McDonald’s depends on suppliers for its fare.  The fast-food chain sets standards for quality and cleanliness and suppliers pledge to abide by them.  To make sure, restaurant companies audit suppliers regularly.  Still, it is possible for suppliers to cheat when not watched.   That is why this incident is maddening for McDonald’s and Yum brands.  It is expensive to stand over a vendor’s employees to make sure they are following rules.  Yet, that is what the fast-fooders might have to do.  They cannot continue to grow in China if they are compromised regularly by their supply chains.  It seems part of the problem is cultural.  Chinese employees might not be concerned about picking something off the floor and throwing it back onto a conveyor belt or mixing old meat with new.  The vendor, OSI Group LLC, works around the world, and it is unlikely that it tolerated what its workers were doing.  Almost certainly, it didn’t know.  This means management at the Chinese plant was lax and should be changed.  Now, McDonald’s and Yum have to rebuild their reputations in China.  It won’t be easy, but one can be certain they will watch their suppliers closely.

The death of 298 passengers and crew from a missile is a tragedy not only for the families affected but also for the company — Malaysia Airlines.  The company must feel it is snakebit to have two major accidents just a few months apart and both mysterious.  We may never know what happened to the first plane but one theory is that it was flying on auto-pilot until it ran out of fuel.  If it was on auto-pilot, something dreadful happened to the pilot and co-pilot.  As for the present situation, it is unlikely anyone is going to “fess up” to having fired a missile.  Rather each side will blame the other, and only a careful examination of the wreckage might lead to a conclusion.  Meanwhile, Malaysia Airlines must calm the nerves of potential passengers who might be leery of flying in its aircraft.  An airline can go years without an accident then suddenly, something happens.  It is a blow to the reputation of the company and there is nothing one can do but carry on and make adjustments, such as no longer flying over Ukraine.  There are times when business is crappy, and this is one.

You’ve probably seen a news story and heard the recorded customer call to Comcast that has gone viral.  Comcast has apologized for the rudeness of its service rep who wouldn’t accept that a customer wanted to cancel.  The company is already one of the lowest rated for customer service and this incident only confirms the view of many.  It is one more example of a bad egg supporting the public’s perception of a company’s reputation.   One would think Comcast would be working overtime to win favor, and employees like this one would be reassigned or rooted from the ranks.  But, apparently not.  Hence the company continues with the poor reputation for service it has had for years — and that is too bad.  When our family was a Comcast customer, its service was prompt and their techs easy to work with.  We left Comcast, not because of outages,  but because we could get faster line speeds.  Our present vendor has proven stable and easy to work with as well.  Comcast has lost us, probably forever, as it has lost millions of others.  Had it a better reputation that needn’t have been the case.

The best PR is a melding of self-interest with the interests of the public.  Under that definition, what Google is doing to fix the internet is PR at its finest.   With the name, Project Zero, the company is hiring the best programmers it can find to roam the internet and close off vulnerabilities wherever it finds them,  whether or not the software is Google’s.  This is the kind of big project that only the largest of companies can afford to undertake.  One might have expected Microsoft to handle the project since it has worked hard to identify and isolate hackers, but Google acted first.  The internet, in spite of Google’s efforts, will never be perfect.  There are too many holes that brilliant programmers can exploit.  However, it can make it more difficult for rogue hackers and that alone will be a benefit to the world.  Some fear Google because it is a large and pervasive company, but if it keeps acting like this, there is little to worry.