Post Fukushima, French Still [Heart] Nuclear Power

Just when a nuclear power revival was supposedly in full flower, troubles with the technology at Japan's Fukushima facility are prompting a global reassessment of its costs and benefits. Yes, it's a virtually carbon-free technology. Yes, it weans you somewhat from importing fossil fuel from perpetually unstable parts of our world. But, as Fukushima reminds, safety challenges associated with the technology come in all sorts of shapes and forms. End result? The Germans are actually going backwards in forsaking nuclear power for old-fashioned coal power. Some progress.

However, the same sentiment is not shared by their French counterparts. As you probably know, over three-quarters of France's energy needs are accounted for by atom splitting. Such is their overall level of public comfort with the technology that few have complained about it in Fukushima's wake. The prestige of being the chief of France's nuclear power firm remains undimmed as its current head and that of the nuclear services firm EDF are battling for the honour of leading Areva (whose famous ad featuring the 70s disco hit "Funkytown" is featured above).

Part of the reason why nuclear power is so firmly entrenched domestically in France is that it sets an export base to sell these engineering wares. Although the French haven't developed cold feet in using nuclear power, the fear is that foreign customers may be. So, a primary task is assuaging them that, yes, modern French technology is more advanced (read: safer) than that of 70s-era nuclear plants in Japan.

For reasons familiar to those who've studied some European history, the French usually punch above their weight in international diplomacy, whether it's dealing with the aftermath of the global financial crisis or erstwhile arms customer Moammar's slaughter of Libyan civilians. Hence, it should be of no surprise to anyone that the French are once again at the forefront of proposing international rules to ensure the safety of nuclear power. To say that they are self-interested would be an understatement, but you can't argue with the sheer energy they put into jumping the gun. From the coverage of President Sarkozy's visit to Japan a few days ago in Reuters:

France -- the most nuclear-dependent in the world -- called for new global nuclear rules and proposed a global conference in France for May as President Nicolas Sarkozy paid a quick visit to Tokyo on Thursday to show support. "We must look at this coldly so that such a catastrophe never occurs again," said Sarkozy, who chairs the Group of 20 bloc of nations, during his brief stopover.

It was the first visit by a foreign leader since a March 11 earthquake and tsunami battered northeast Japan, leaving nearly 28,000 people dead or missing. The damage may top $300 billion, making it the world's costliest natural disaster.

Prime Minister Naoto Kan, under enormous pressure as he struggles to manage Japan's toughest test since World War II, welcomed the gesture of solidarity. "I told him a Japanese proverb -- 'a friend who comes on a rainy day is your true friend', and thanked him for coming to Japan from the bottom of my heart," he said.

While there is of course a humanitarian concern in assisting the Japanese deal with their nuclear woes, you can't help but believe that the French are eager to lend their disaster containment expertise to once again demonstrate their engineering prowess to would-be clients:

France is a global leader in the nuclear industry, and Paris has flown in experts from state-owned nuclear reactor maker Areva to work with Japanese engineers. "Areva is one of the companies that will make the most out of a nuclear revival and therefore will be in most trouble if there isn't a nuclear revival," said Malcolm Grimston, an expert from London's Imperial College. "Certainly Sarkozy or France generally have a very strong interest in getting things moving as quickly as possible and trying to ensure that there isn't a major backlash (to nuclear power). France would be one of the biggest losers from that."

Other nations are also scrambling to help Japan. The United States and Germany are sending robots to help repair and explore the damaged Fukushima Daiichi plant. Kyodo said some 140 U.S. military radiation safety experts would soon visit to offer technical help.

The International Atomic Energy Agency (IAEA), which says the situation at the Fukushima plant remains very serious, already has two teams in Japan, monitoring radiation levels. The Japanese disaster, the worst nuclear accident since Chernobyl in 1986, has appalled the world and revived heated debate over the safety and benefits of atomic power.

It isn't hard to decipher where the French stand on this issue alongside their nuclear national champions. As the events in Japan unfold, they're busy lauding loan guarantees the US is making for developers of new nuclear power plants Stateside. The business of atom splitting will go on for the French.

The PR Art of Selling Authoritarian Regimes?

Here we go again with the alleged dark arts of the marketing trade. Flipping through the London dailies, there's apparently a new cause celebre here in Britain. And no, I'm not talking about fish pedicures--that's so 2010, dahling. As a business major from days long gone, I think of marketing concepts as general-purpose tools of persuasion whose principles can be applied in many realms--selling products, services, candidates, or even countries. (Remember the notion of "nation branding.") As you will read, it turns out that among the most avid users of advertising and public relations services here in Blighty are authoritarian regimes from the Middle East and elsewhere. For the benefit of IPE Zone's international readers, the graphic to the right is supposedly illustrative of these activities--Persil is a major brand of detergent sold by Unilever here in the UK.

On one hand, you can say that it's a perfectly legitimate enterprise. For instance, any number of them are keen on branding themselves as financial services and tourist destinations in that part of the world. Bahrain has (had?) seats to fill for its F1 race, for instance, On the other hand, you have articles like what follows that attribute more sinister motives to these activities in attempting to conceal blood on their hands while suppressing dissent. Reputation laundering, they call it. Which way you see it is up to you. From the Evening Standard:

London's public relations industry has got a PR problem. Top firms such as Bell Pottinger, Brown Lloyd James, Portland and Grayling are coming under intense scrutiny because of their work for foreign governments or in regimes of dubious repute. The catalyst has been the Arab uprisings in Libya, Egypt, Bahrain and Tunisia, which have raised questions about the ethics of these PR firms. Critics claim that London has turned into the global capital of reputation laundering.

Bell Pottinger, run by Margaret Thatcher's former image adviser Lord Bell, has already faced protests outside its High Holborn office because of its work for Bahrain. But it is not just spin doctors working in the Middle East that are being accused of "propping up" unplesasant regimes. Tonight, opponents of the authoritarian regime in Belarus are demonstrating outside the Victoria HQ of Grayling because the PR firm has opened an office in the former Soviet republic. Actor Jude Law and playwright Sir Tom Stoppard are backing the protesters, who are then marching to the House of Commons to hear the two theatre stars speak at a rally, organised by Index on Censorship and the Free Theatre of Belarus.

Tory donor Lord Chadlington, boss of Grayling's parent company Huntsworth, is adamant that his firm is not an "apologist" for Belarus and does not work for any foreign government. Grayling's office in Minsk is just to help international clients keen to invest and explore privatisation opportunities. But Mike Harris, public affairs manager of Index on Censorship, says: "We are targeting Grayling because it is currently working in getting inward investment in Europe's last dictatorship and it is the only major PR firm in Belarus."

For Index on Censorship and other critics, there is a wider point about PR firms in dubious regimes. "They are not just the messenger," says Harris. "They try to normalise these regimes with nice pieces in the papers about holidays in these places and business features on investment. They are instrumental in keeping the economy of these regimes going."

If there is one London firm synonymous with this international spin it is Bell Pottinger - even though, as Britain's biggest PR agency, it also represents many uncontroversial UK household brands. Recent clients have included the Egyptian Ministry of Information, the Economic Development Board of Bahrain and the governments of Belarus and Sri Lanka, and it has also worked in Yemen.

I am of two minds about these practices. Positively, you can say that helping authoritarian regimes solicit business is welcome insofar as their citizens can benefit from the arrival of commercial opportunities. Negatively, you can say that these firms are indirectly contributing to inflows which help solidify these regimes' financial stature.

Unless you have a Bushian-Manichaean world view--or an intractable aversion to all things Libyan, for that matter--there are no easy answers.

Anna Chapman: Political Economy of Lousy Spying

Oh, I just had to make a post on this bit of kookiness out of respect for my boss. What do Andrei Arshavin, Roman Pavlyuchenko, and Anna Chapman have in common? They are all boosters of the pro-Putin United Front. I have mentioned the now-infamous Miss Chapman previously in connection with the notion of "erotic capital." As it turns out, I may have underestimated her hypermarketing in Mother Russia. All this because of being a rank incompetent at what she was supposed to do--spying. I am beginning to think of her as another Russian Anna who was not really a top-rank tennis player but was a looker nonetheless--Anna Kournikova. Men are suckers for this sort of this non sequitur titillation; trust me. In any event, Vladimir Putin is oddly singling her out as a shining example of modern Russia (after being deported from the United States from not doing her job right, obviously). She is also being feted by the Putin Youth, better known as Nashi. The Guardian sheds light on the Russian government's efforts to create a cult of personality around Chapman; she is even being advanced as a political candidate:

A month after their deportation, Putin joined up with the failed spies for a karaoke-type evening, where they crooned together the Soviet-era song – and unofficial Russian intelligence service anthem – "From Where the Motherland Begins". After that cosy night out, things moved fast for Chapman. She was awarded a top state honour by President Dmitry Medvedev, posed for erotic – and lucrative – photos for men's magazines, and was handed her own primetime TV show. She did, however, turn down a role in a porn film, despite being offered a "substantial" fee by the Vivid Entertainment adult-film company.

Hmm...you may not be attracting the right crowd when the triple-X crowd is knocking on your door. Then again, you might as well make some hay when the notoriety shines on you, I say. Fancy public office?

Chapman has also been made the face of the ruling United Russia party's youth movement and has been tipped to win a seat in parliament in upcoming elections. On top of all this, she has registered her surname as a trademark; has brought out a poker app and a slew of Chapman-own products, including perfume, watches and vodka, is expected to hit the shops soon. The 29-year-old provincial Russian also has a Max Clifford-type agent to handle "commercial projects", which include highly paid interviews and photo shoots.

And then, of course, there's the naked truth that all these commercial and political opportunities stem from Keystone Kops-quality "espionage":

The irony is, of course, that Anna Chapman is being rewarded for doing her job badly. Not only was she duped by the FBI into blowing her cover, but she apparently failed to turn up any useful information for Moscow. Espionage charges were not brought against a single member of the spy ring, as there was no indication that any classified information had been accessed. Prosecutors instead had to settle for charges of "failure to declare foreign agent status" and money laundering. Chapman and the other nine agents were exchanged for just four American spies. As US vice president Joe Biden put it: "We got back four really good ones. And the 10, they've been here a long time, but they hadn't done much."

Meanwhile, let's say the Russian blogosphere is not as taken by this dumbing down of public discourse as yours truly. I suppose that Putin's attempts to become the Eastern Silvio Berlusconi isn't going down too well with the intelligentsia:

But despite her ubiquity, it's arguable whether Chapman is popular among ordinary Russians. As ever in this country, it's the internet where people's true feelings find a voice. And Russia's assorted bloggers and message-board users seem to be unequivocal in their disdain.

"Citizen of the world Anna Chapman is undoubtedly the major hero of our vast country," writes one user on Live Journal – Russia's most popular blogging platform. "We all also dream of dropping our knickers abroad and stealing enemy secrets." "A true symbol of our time!" offers another. "How we need such people! Those ready to join whatever they are told to! To sleep with whomever they are told to!" Other comments are more explicit, involving combinations of the words "Putin" and "whore".

UPDATE: Don't miss her video interview, too.

Save Our World, Create Chinese Consumer Culture

So the post title is a bit hyperbolic, but not much. If global economic imbalances imperil the existence of the contemporary trade and globalization, then job#1 is alleviating them. In case you missed it, the New York Times Magazine had a very interesting article over the weekend on the challenges of getting China to move towards a consumer culture. While the US has swung too far in that direction, China is arguably at the opposite extreme. Both must change.

There are certainly many examples of PRC noveau riche splurging (see the accompanying photo essay), but that's not what will get consumption up in China but Jiang average opening up his or her wallet. I have actually written an academic piece that makes similar points--it's in China's best interest to become less manufacturing intensive on environmental grounds, revaluation of the renminbi will encourage domestic consumption by increasing local purchasing power, etc.--but I'll save that for a later day. In the meantime, the NYT article gets the general outlines of this story right, although I have more to say about the marketing aspects of creating Chinese consumer culture:

In China’s halting efforts to build a new economy today, there is an intriguing parallel to the United States: Both the world’s largest economy and its latest challenger need to remake themselves. As Guo bluntly told me, “You are facing transformation, too.” The United States needs to shift away from debt-financed consumption with little long-term benefit and toward investments that can create good-paying jobs, like education, infrastructure, energy and scientific research. China needs to invest less and consume more — to keep growing rapidly and, in the process, to stimulate economic growth around the world. In both countries, significant changes are necessary to create more sustainable growth. And in both countries, they inspire fierce internal opposition.

We tend to think of the United States and China as rivals, and they will continue to compete in coming years, over which will build the industries of the future and which will be the dominant power in Asia and the world. But our problems are also linked, just as the Chinese export boom and the American consumption boom depended on each other and, together, helped create the financial crisis. The worst outcome now, for both countries, might well be economic stagnation in China. That would slow U.S. growth and could lead to political chaos in China. The best outcome would be for both countries to reshape their economies gradually, benefiting both. In neither country will it be easy.

Also see another post that questions China's inability to create globally recognized brands, hindering its companies' abilities to move up the value chain.

Why Aren't There Famous Chinese, Indian Brands?

A very fair criticism I do understand as an undergraduate and masters level business major is the non-emergence of internationally recognized Chinese and Indian brands. While there is no shortage of world-renowned German (think automakers) and Japanese (think automakers and consumer electronics) makes, there are no real Chinese brands with similar name recognition, let alone one amongst Interbrand's Best 100 Global Brands in terms of valuation. It is very odd, don't you think, that the world top merchandise exporter which surpassed Japan and Germany in fairly quick succession during the past couple of years has singularly failed to develop recognizable brands. To no small extent, the South Koreans have managed this feat with Samsung (#19--my favourite brand and that of the computer I'm pecking away at right now BTW) and Hyundai (#65). Taiwan is no slouch either. While not on the list just yet, the likes of Acer and Asus do ring a bell among the electronic hardware cognoscenti. While India's rise has not been as rapid as that of China, something it shares with the PRC is a lack of recognizable brands.

A reply I've used in the past is that it is very expensive and time-consuming to build brands. Hence, firms from both countries may have thought it better to buy established brands. So if you can't build 'em, buy 'em! A few years back now--my blog is becoming "venerable"--I discussed the phenomenon of "reverse colonization" wherein Indian concerns were buying up British marques at a rapid clip. Think of the Tata Group which I like to think of as "ICME": Indian Company Making Everything for those of you weaned on a steady diet of Road Runner cartoons. Especially for Anglophiles, don't the names Tetley Tea, Jaguar, and Land Rover ring a bell? The same holds for China to some extent with the example of Lenovo buying the rights to use the IBM name together with its ThinkPad line of laptops.

However, these examples should not obscure the broader fact that a lack of recognizable brands is truly a handicap with IPE implications. Most of the value-added in the global supply chain emanates from higher-level, intellectual property-heavy concepts such as branding. Indeed, many global corporations like Apple are little more than a logo stamped on products largely manufactured elsewhere to their spec. With labour and other manufacturing costs in China not bound to stay at a permanently low level forever, there is certainly pressure to move towards these value-added upper echelons of the supply chain instead of being stuck with the grunt work. Despite much criticism about China's efforts to promote national champions to the exclusion of foreign competitors, it remains true that the Chinese haven't managed the feat which Germany, Japan, and South Korea have. Ditto for India with a somewhat longer time frame in mind.

While perusing a recent Business Horizons issue in which I myself have a contribution (more on this later), I came upon an interesting article by marketing bigwig Jagdish Sheth and folks at Interbrand and the National University of Singapore discussing this very conundrum: How can we speak of the rise of China or India if they are still stuck in the second division at building recognized brands? Make no mistake; this erstwhile "marketing" issue may have important social and environmental consequences insofar as China may hold on too long to labour and environmental arbitrage when it's in its best interests to move up the value chain. Here is the abstract:

During the past quarter of a century, Asia has risen to become the world's factory. This trend has, however, coincided with the relative decline in value of manufacturing compared to other value adding activities, including R&D, design, and branding. This significant “value shift” has eroded the margins of manufacturing firms and sparked considerable interest among executives in Asia to design, brand, and market their own products. To date, though, this transition from being manufacturing oriented to becoming brand owners has largely only been accomplished by Japanese and Korean firms. In the rest of Asia—including in the rising giants of China and India—there are very few valuable brands. In fact, there is not a single Asian brand from a country other than Japan and Korea in Interbrand's 2008 valuation of the world's top 100 brands. Our article discusses, in depth, the challenges that Asian manufacturing firms encounter as they try to become “branders” and how these challenges can be overcome. Based on our collaboration spanning academia and consulting, we have been able to tap a wealth of information made available through research, case studies, and Interbrand's database of completed brand related assignments across Asia.

Why does branding matter more than manufacturing nowadays? Here's a brief history:

During the past few decades, we have seen a significant shift in value away from manufacturing toward design, marketing, and customer service. This is in sharp contrast to the Industrial Age, when manufacturing contributed the most to value creation of all activities undertaken by firms. The Industrial Revolution was largely a revolution in manufacturing that led to a mobilization of resources and an increase in productivity beyond anything previously achieved throughout millennia of human civilization. The industrialization recipe also proved highly replicable, spreading across countries in Europe and North America before arriving in Asia. In just a few decades, industrialization catapulted Japan from an isolated feudal state to a modern industrial nation capable of defeating Russia, a major European power, in war. Industrialization subsequently spread across Asia in what was often labeled the “flying geese” pattern during the 1980s. This initially transformed the “tiger economies” of Hong Kong, Singapore, South Korea, and Taiwan. Industrialization subsequently spread to other Asian countries including China, India, Malaysia, Thailand, and Vietnam.

However, during the past 25 years the rules of the game have changed significantly. In the post-industrial world, manufacturing is no longer the same engine of value creation that it was during the Industrial Age. As high quality products can now be produced anywhere, manufacturing has increasingly been re-located to emerging markets with low labor costs. As a result of these changes, manufacturing has largely become a commoditized capability characterized by substantial competition and declining margins. Those capturing the most value in the post-industrial economy now are firms which control critical capabilities relating to design, marketing, distribution, and service. The actual manufacturing of products is increasingly outsourced to manufacturing specialists. In this new world of outsourcing, companies no longer necessarily compete based on the manufacturing assets they own.

And here is what I believe is a key takeaway concerning the need for increased customer-centric focus as opposed to building "national champions" and similar nation-centric notions that have so far failed to achieve what they aimed for:

Defining the offering becomes the next key priority. This includes specifying the products and services that the company seeks to offer its target segments based on the key hooks identified in the market research. For many firms, this seems to be the end of the process to define the offering. We argue that it is equally important to look at the customer journey across all touch points; this includes marketing communications, sales, payment, installation, ongoing usage, and customer service. In short, it takes the perspective of the prospective customer, and follows how the customer will interact with the company at all stages. Only by aligning all touch points will the customer undergo a consistent brand experience. This means tilting the company away from traditional functional silos toward an end-to-end process thinking, with the customer at the center. Many firms we have worked with lack strong cross-functional teams that are empowered to operate transversally across the organization. Such teams are critical to conduct comprehensive feasibility studies and specifications of what it takes to deliver the offering. As previously discussed, it is important that the underlying quality and performance of a company's products and services are sufficiently high in order for the emerging brand to become successful. Achieving this usually requires a high degree of cross-functional collaboration.

It's a rite of passage that China has yet to make, but the authors do provide some thought-provoking ideas on how to get this task done. Needless to say, it's better accomplished through clever marketing than through protectionism. Proton, anyone?

And no, I will not spend good money on something called a "Chery Tiggo." More focus group work on naming products, pretty please.

Korean & Indian Carmakers Rise, Japanese Stumble

Let's talk about cars as affected by international currency war. We begin with more Japanese tales of woe involving the mighty yen among other things before shifting focus to more dynamic manufacturers in South Korea and, perhaps surprisingly, India. It may be true that Japanese carmakers have become less sensitive to the strength of the Japanese yen by locating more production abroad, but its home market is still quite important. And, with Japan entering its third decade of moribund economic growth, the current prognosis for local demand looks bleak. A mighty yen is sure to eat into sales figures as well after conversion. In particular, the recent withdrawal of government subsidies for retiring older models reveals that they might have stolen from future sales:

New vehicle sales in Japan tanked 23.2 percent in October, the first full month after government subsidies to replace cars older than 13 years expired, industry data showed. Excluding 660cc minivehicles, sales in Japan slid 26.7 percent, the lowest on record for the month of October, an official at the Japan Automobile Dealers Association (JADA) said. It was also the first time that sales fell short of 200,000 vehicles in October in 42 years.

"We have no way of telling how weak demand will be in coming months," said Michiro Saito, a manager at JADA. But he added: "Many dealers were fearing bigger falls of 30-40 percent, so in that sense we're a bit relieved." There was one fewer selling day in October compared with a year earlier. Among the worst hit were brands with a relatively high ratio of models eligible for the government subsidies, Saito said.

Nissan Motor Co's sales, excluding 660cc microcars, dropped 30.6 percent, Honda Motor Co's fell 29.9 percent, while Mazda Motor Co's sank 52.5 percent. Leader Toyota Motor Corp, whose hybrid models still enjoy exemptions on some taxes under a separate government incentive scheme, saw a comparatively tame fall of 24.7 percent, including its high-end Lexus brand.

However, the picture is not as bleak across the Asia-Pacific. South Korean carmakers appear to be doing quite well not just locally but globally as the balance of automotive power (OK, so I made that up since it sounds cool) shifts. There's also the matter of a Korean won that's relatively less mighty than the yen that's helping price competitiveness:

South Korean companies are expected to continue to outperform the global market in a weak recovery, driven by new model launches. Although the Korean won is firming, the Japanese yen, which hit a 15-year high against the dollar on Monday, remains far stronger, hurting the price competitiveness of Japanese vehicles sold overseas. Growing optimism for Korean car makers sent their shares surging on Monday, with Hyundai Motor shares jumping 6.2 percent and Kia Motors shares up 10.2 percent up in a broader market up 1.7 percent.

"Things cannot be better for Korean automakers," said Michael Sohn, an analyst at Macquarie Securities...Korean automakers are expected to log higher profits than Japanese peers this year, but their valuations are cheaper than Japanese makers. I expect rallies of Korean automakers to continue for the time being," Sohn said.

While demand for cars in developed markets [like Japan] is stuck in low gear on anaemic economic recovery and the end of government subsidies, global automakers have been increasing their focus on emerging economies such as China, now the world's largest auto market, and India.

Hyundai Motor, South Korea's top automaker, saw its sales rise 10.4 percent at home and abroad in October from a year earlier, while second-ranked Kia Motors saw its total sales jump 29 percent. The latest figures marked record highs and reinforced the bullish outlook for South Korean carmakers, which are expected to post strong earnings in the current quarter after reporting forecast-beating profits for the third quarter last week.

And let's hear it for Indian manufacturing! Long derided as a laggard compared to India's dynamic services sector, it is actually making it big:

Indian carmakers maintained double-digit sales growth in October on robust demand in one of the world's fastest-growing markets as a rapidly expanding economy, expected to grow over 8 percent this fiscal year, boosts incomes and consumer spending. India's top car maker Maruti Suzuki reported a 39 jump in October auto sales from a year earlier, while Tata Motors posted a 21 percent rise in sales. Mahindra & Mahindra's vehicle sales for the month rose 34 percent.

India's automobile industry is likely to grow by 18-20 percent in the fiscal year that ends in March, according to the sector body, Society of Indian Automobile Manufacturers (SIAM). Demand in India usually rises during the festive season that starts in September and peaks in November after Diwali, the Hindu festival of lights, when most employees get their annual bonuses.

It wasn't too long ago in 1997 that Kia declared bankruptcy amid the Asian financial crisis, but look at it now. The world has moved on and Japanese carmakers should have ample cause for alarm.

Banking on Diasporas: The Case of Israel Bonds

Here's another serendipitous discovery I found merely traversing the Internet. While reading the Wall Street Journal online, I came across an advertisement for Israel bonds. Certainly, I don't need to tell you that funding the state of Israel is a politically charged act. Surrounded on practically all sides by those who've threatened its very existence in the past and still the epicentre of a religious dispute that almost never fails to rouse passions for and against, Israel isn't one for fence-sitters like yours truly.

A few days ago, I made a post on "nation branding." With the entire Jewish diaspora as possible components of the wider nation, there certainly is a large target market that might be suitable for a patriotic appeal in purchasing sovereign debt. And so clicking on the banner ad brought me to the graphic above. Clever wordplay aside, this effort to market Israel bonds stateside makes no bones about identification with the nation. Moreover, there is no doubting this effort has the sanction of the state of Israel.

There are also some appeals to the safety of one's return on investment...

Where the Money Goes: State of Israel Bonds Laying The Foundation for Economic Achievement

It’s a fact — a strong economy is built on a foundation of modern infrastructure. For nearly 60 years, Israel Bonds has been developing and expanding this essential component of economic growth. Today, Israel Bonds is focused on forward-looking infrastructure projects that will secure Israel’s place in a 21st century global economy.

Increased infrastructure development will:
• Connect cities and towns throughout Israel
• Create state-of-the-art communications systems
• Accelerate technological innovation that will attract billions in foreign investment
• Provide new opportunities for Israelis from all walks of life

It's very interesting stuff even if it's certain proceeds from these bonds may go to less, how shall we say it, ad-friendly wares. While Israel bonds have proven to be a safe investment over the years, the point is that such considerations are secondary in the marketing material to identifying with the nation. Can successful "nation branding" in getting diaspora communities be another way of guaranteeing financial viability? I certainly think it's worth a try for others--especially if they can evoke as strong a commitment.

"Nation Branding" in the Global Political Economy

Nation branding: The strategic self-presentation of a country with the aim of creating reputational capital through economic, political and social interest promotion at home and abroad (Gyorgy Szondi)

It is perhaps inescapable in this day and age that countries keen on promoting tourism embark on "nation branding." As a marketing major from my undergraduate years, I tend to see this world through such a perspective. For instance, the Chinese brand is certainly beating the American one in the global political economy sweepstakes as the former's more easygoing and less hypocritical approach to making friends and influencing people is certainly upending the Yankee flunkies on virtually every continent.

Today, however, I will relate the example of a "nation branding" exercise gone awry that belies the imagination. Apparently, the Danish tourist authorities thought up a campaign involving someone portraying an unwed mother parading her son on YouTube (see clip above). While tending to the little 'un, she narrates a story in which she got drunk, had fun in bed, and woke up to discover that the father to-be had fled Denmark. So, she appeals for the (foreign) father to come forward. As it turns out, the storyline was entirely concocted for tourist promotion. Worse, the confusion that it caused has been immense while offending many Danes. Instead of portraying an uplifting image, some thought it depicted Denmark as a land of dumb, easy blondes. Many thought it was a condom ad and not any sort of tourist promotion ad:

In September 2009, VisitDenmark, the tourism arm of the Danish government, launched a marketing campaign on YouTube. The video introduced to the world a beautiful 20-something blonde protagonist, Karen, and her adorable baby, August. Nothing quite extraordinary there, except that Karen had a small Mama Mia problem – she had no idea who August's father is.

Speaking candidly into a webcam and computer microphone, Karen related a story of how she had met the August's father some 1.5 years ago. He was visiting Denmark, presumably as a tourist. They went to a bar, got drunk and went back to her place. He was gone by the time she awoke in the morning.

Karen explained that she could not recall the name of the man that she had slept with or his country of origin, but that she would like to get in touch with him again. She is certain that he is August's father as she had not been with any other man ever since. She was hoping, through the powers of the internet, that her message would somehow reach this man. To add a final catalytic touch on this viral video to be, Karen recruited her audience, towards the end of her video plea, to help in her search. There was no indication anywhere within the video or on the webpage to suggest that VisitDenmark was, in any shape or form, involved. Also, the story was fabricated – entirely.

The video spread quickly; more than 200,000 views in 24 hours. Many people were engaged and responded empathetically. They also did as 'Karen' had asked and shared the link with friends. The national media quickly took the bait as well, appealing for information that could possibly shed light on this overnight internet sensation.

In just four days, the YouTube counter showed more than 770,000 views. But by that time, the Danish media had exposed the hoax. People wrote emails and letters to newspapers, claiming that 'Karen' is an actress, and, as far as they were aware, not a mother. What followed was a massive public outcry. Those who were kind enough to share the video felt duped. Some opposed the portrayal of Danish women as irresponsible and 'easy'. Many felt it was an inappropriate use of taxpayer money as the video misrepresented their country and culture.

VisitDenmark's rationalisation, that it reflected the country's liberal ideals, did little to calm the furore. Following a storm of criticism, the tourism organisation's director issued an official apology and stepped down. The video stayed online for a mere two weeks.

It might not be necessary for tourism campaigns to be understood or liked by the locals, said Rhonda S. Zaharna, an associate professor at American University's School of Communications. "But the one thing that I found was that great campaigns usually enjoy strong, positive, internal resonance. That's when you know you've hit the nail on the head and you've got that defining campaign."

Speaking at Global Strategic Thinking: Managing Public Relations in a 21st Century Global Society – a conference organised by SMU's Lee Kong Chian School of Business and the Institute of Public Relations of Singapore – Zaharna explained that nation branding campaigns walk the tightrope between managing 'image' (how others perceive the nation) and 'identity' (how the nation and its people see themselves).

And me? I'm kind of excited to visit Denmark again. I've always wanted to er, see Legoland ;-) This stuff is very interesting indeed. Certainly, tourist promotion is not an activity to be taken lightly. In fact, I have come up with my own viral campaign for the United States. Really. Given America's fearsome weight management issues, I've decided to turn them into something positive. See for yourselves:

I kill myself, but not via burgers and shakes, baby.

World Cup's Curse of Nike (& Bad American Mojo)

Leave it to an American company to mess up its advertising efforts at the 2010 World Cup, bigtime. Oftentimes, listening to Americans talk about football is like listening to Obama talk about deficit reduction--an exercise in raucous hilarity since they so obviously don't know what they're talking about. So, we shouldn't expect much better when an American company opens its wallet while choosing the wrong ad pitchmen for the biggest football tournament on Earth. Sure, the Adidas Jabulani ball received some bad press from those who couldn't master it like Uruguay's Diego Forlan, but when it came down to it, the Spanish victors still wore the three stripes. Which, of course, leaves us with Nike. In essence, it banked on the most highly compensated and recognizable names to strike gold in South Africa but ended up with a bevy of own goals.

I first glimpsed the three-minute-segment above on ITV. Nike feted the Alejandro G. Iñarritu-directed "Write the Future" prior to the World Cup. Given the characters involved and that a typical ad segment lasts 30 seconds, you can bet it cost a a small fortune. Worse, extended involvement in this megabuck commercial seems to have predicted World Cup failure (some Spanish players appear in a cameo but for less than 3 seconds or so). Consider what happened to some of the prominent characters involved:

• Didier Drogba - His Ivory Coast crashed out of group stage;
• Fabio Cannavaro - Italy didn't make it out of the group stage, defending champs didn't win a single match;
• Wayne Rooney - much-hyped England star didn't score in a second straight World Cup, England thumped by (Adidas-clad) Germany 4-1 in second round;
• Theo Walcott - England midfielder was left at home by Don Fabio after not following orders and didn't go to South Africa;
• Franck Ribery - Also didn't score a single goal as France went on strike, didn't make it past the group stage
• Ronaldinho - Former Brazilian team coach Dunga left him at home, too
• Cristiano Ronaldo - Scored only once as Portugal wasn't able to in three of four matches; left South Africa a "broken man" [?!]

Friends, if there's any firm that best epitomizes the current American spirit for spending big on losers, it's Nike. Just as the American government spends hundreds of billions on pointless, non-stimulating stimulus, so did Nike waste millions featuring non-performers in its ads. Alas, it was rather subprime. But hey, in its own way Nike does "Write the Future" of the US, eh? Crass commercialism imitates life or something like that.

When an ordinary octopus at a humble German water park gets oodles more attention and its predictions right, I guess that says something about the future of sports marketing. Creativity and spontaneity often attract favourable public attention in a way doomed megabuck play-it-safe efforts don't. It's the private sector equivalent of ladling out pork. I guess some people never learn: Nike, just don't do it.

Michel Foucault, Meet FIFA's No Instant Replay

When I was a wee lad and didn't know better, I liked watching "pro wrestling" with its wacky, deliberately staged antics. My favourite moment would be when, while the referee wasn't looking, one wrestler would grab a folding chair and slam it into his opponent. When the referee's attention returned to the action after some distraction--a tag team partner arguing with the referee, a player's manager blocking the referee's view, or whatever--the opponent hit with the chair would invariably be flat on his back and pinned for the three count. Ting, ting, ting! An instant "controversial" decision designed to elicit heated discussion among commentators and fans alike.

On the face of it, there is no explicable reason as to why instant replay is still not sanctioned by FIFA despite several football associations, players, owners, and who else have you clamouring for the technology. During the qualifying stages for the World Cup, France famously "defeated" Ireland via a Thierry Henry handball. The pathetic display by the French team during the World Cup itself only soured matters further. Today, we had two more sorry incidents that could've been resolved easily with instant replay. First, England's Frank Lampard had a fine strike that was disallowed since the officials weren't paying attention (in true "pro wrestling" fashion). Insofar as it would've tied the game 2-2, it certainly was a turning point in the game. Second, Mexico was incensed when the first goal by Argentina's Carlos Tevez was allowed to stand when he was clearly offside.

Now, any reasonable person would think FIFA President Sepp Blatter couldn't stop this avalanche of criticism regarding what were clearly poor decisions. In terms of procedural justice, it makes little sense. Yet, in the wake of the Thierry Henry handball incident, FIFA decided otherwise:

The International Football Association Board has ruled out the use of goal-line technology and video replays. "The door is closed. The decision was not to use technology at all," said Fifa general secretary Jerome Valcke [my emphasis]. The decision was reached after watching presentations of two systems, Cairos - a chip inserted in a ball, and Hawk-Eye - used in tennis and cricket.

The Football Association and Scottish Football Association had both voted in favour of further experiments. FA chief executive Ian Watmore was outvoted after the Irish FA and Welsh FA voted in line with Fifa. "In the end it came down to a difference of opinion about whether you believe the future of football involves technology or not," said Watmore. "We had supported the idea of investigating experiments into the use of technology on goal-lines and we would like to have seen it. But some of the arguments were very powerful and persuasive and we have to accept them."

Fifa has been under increasing pressure to use some form of technology to eliminate mistakes which are highlighted by TV replays.

As BBC commentators Gary Lineker & Co. noted afterwards, instant replays are banned from being shown on the stadium screens while matches are underway as to not provoke fan unrest over controversial refereeing decisions. However, during the Argentina versus Mexico game, a replay inadvertently showing Tevez clearly offside raised passions to the point that Mexican players were positively livid at halftime.

My French flatmate probably has it right: bad decisions are allowed to stand not in spite of technology, but because of deliberate design. Now, some French tend to be utterly cynical people who hold much in contempt (like "reality"), hence the entire postmodern genre that stands in stark contrast to the often dangerous naivete of the Americans.

If you go by Michel Foucault, disuse of instant replay is akin to enabling "tactical polyvalence": Powerful folks like FIFA honcho Blatter would rather retain the randomness of human errors of judgement not because the technology doesn't exist to make better informed decisions, but to make things livelier--to give commentators, fans, and the rest of the circus maximus that is world football something to fume about long after the action on the field is finished. Doing so can build rivalries. The storied England versus Germany one traces much of its history to the disputed goal of the 1966 final by Geoff Hurst. Today, many wags noted that England's goal being counted in 1966 was levelled out by today's judgment that a clear goal wasn't so.

And so the storied rivalry continues as counterfactuals that can never be proven will linger. Would the game have turned out differently had Lampard's clear goal been allowed to stand? Perhaps the English side would've continued in better spirits and not have felt hard done by, leading to an eventual victory. Could've, should've, would've. Regret is the stuff of high drama. Or, you can take the postmodern interpretation: perhaps Blatter foresaw the spectacle arising from such debacles. Imbibing pro wrestling "hit 'em with a chair" logic, the German goalkeeper Manuel Neuer has admitted to (quite successfully) pretending that the ball didn't go in by gathering it quickly and giving it the boot.

Surely, future fan interest on both sides will be driven by the build-up of these incidences. For, the bumbling referees without instant replay are meant to show incompetence like distracted referees in pro wrestling. That is, they play the villains others love to hate. And, in so doing, they create more perceived slights that must be avenged during future events that promise atonement--or, in the continued absence of instant replay, more controversial decisions meant to last a lifetime.

Final verdict after 90 minutes (+ stoppage time): Foucault = cynical, brilliant. Blatter = cynical, brilliant. Heck, WWE = cynical, brilliant, It's good marketing, pure and simple!

29/6 UPDATE: Or maybe not. Blatter has apologized to the English and Mexican football associations and seeks to reopen investigation of instant replay when FIFA reconvenes in July.

29/6 UPDATE 2: The text of the initial ruling maintaining the disuse of instant replay does indeed highlight Blatter's idea that controversy is part of the package in addition to quite frankly dubious assertions about the cost of introducing instant replay:

The human aspect: no matter which technology is applied, at the end of the day a decision will have to be taken by a human being. This being the case, why remove the responsibility from the referee to give it to someone else? It is often the case that, even after a slow-motion replay, ten different experts will have ten different opinions on what the decision should have been.

Fans love to debate any given incident in a game. It is part of the human nature of our sport [my emphasis]...

The financial aspect: the application of modern technologies can be very costly, and therefore not applicable on a global level. Many matches, even at the highest level, are not even televised. For example, we have close to 900 preliminary matches for the FIFA World Cup™, and the same rules need to be applied in all matches of the same competition. The rules need to be the same for all association football matches worldwide.

The experiments conducted by companies on technology in football are also expensive. The decision of the IFAB, after careful consideration and examination of studies conducted in recent years, to give a clear answer on technology in football is also positive in this regard as these companies will now not spend significant amounts of money on projects which in the end will not be implemented.

Al Jazeera's Genius of Western-Hating Commerce

In the Eighties (for those old enough to remember them), Eddie Murphy came out with a novelty song called "Kill the White People" that parodied those ostensibly decrying all things Western while harbouring essentially commercial motives:

We sing of freedom and ooh equality
But we really don't care we just want money, money, money
We want to drive in a big black limousine
Get so high off ganja we can't even see
And then we kill the white people - ooh we gunna make them hurt
Kill the white people, yeah, ooh but buy my record first...

Which brings me to this interesting feature from The Economist on the rather nefarious cable channel Al Jazeera. Aside from pillorying the West endlessly, it also takes aim at any number of other Arabic governments that don't happen to be Qatar's. See, the Qataris--now owners of that rather decadent symbol of Western consumerism Harrods, if you remember--have been the funders of Al Jazeera from the get-go. Unlike the more sedate Saudi-funded Al Arabiya, Al Jazeera's declamatory--and, to be honest, inflammatory--style has made it far more of a success in the Arab world. As with many successful propaganda campaigns, you must have a simple message and pound it in relentlessly.

That, of course, contrasts with the essentially Western-ish commercial motives and production values behind Al Jazeera that you'd otherwise think its powers-that-be would decry. Yes, it's very much in the tongue-in-cheek kill the people, but buy my record first mould. The slyness of Al Jazeera, however, is that it clears up its tracks adequately enough while inflame passions on the Arab street in a way many others haven't--for commercial gain, of course:

The influence and reach of Al Jazeera continue to astound. It is certainly the most powerful news-and-current-affairs channel in the Arab world, well ahead of Al Arabiya, its Saudi-owned, more pro-Western rival. Al Jazeera claims to beam its main Arabic-language channel into around half of all Arab homes. Its English-language channel is said to reach 200m elsewhere, making waves in Africa, Asia and Latin America. Quite a lot of Europeans watch it, too.

This year, thanks to the munificence of the emir of Qatar, who is said to put at least $400m a year into its coffers, Al Jazeera’s clout may yet strengthen. The English-language channel and the Arabic one between them have at least 60 bureaus, with 12 in Africa alone, a number unthinkable for their shrinking Western rivals. Ten more, beyond Al Jazeera’s hubs in Doha, London, Washington, DC, and Kuala Lumpur, are expected to open by the end of next year. Coverage of events such as Sudan’s recent election, to which seven staff reporters and a score of technicians were assigned, put Western media in the shade.

The two language services are editorially separate. The English one’s choice of topics reflects the third-world interests of its viewers, concentrating more than its Western counterparts do on global poverty and the anger often felt towards America and the West. But it offers a wide range of opinion and covers Western politics well too. Both language services have bureaus in Jerusalem, Gaza and Ramallah (the Palestinian Authority’s seat), regularly giving Israelis a voice.

The Arabic service is a lot more controversial. Pro-Western Arab governments, particularly those of Egypt and Saudi Arabia, which denies Al Jazeera a bureau, repeatedly accuse it of bias. In particular they say it favours the Muslim Brotherhood, Egypt’s chief opposition, and Hamas, the Islamist movement that runs Gaza and refuses to recognise Israel...

Al Jazeera’s anti-Western populism was strongly echoed at its recent forum on “the Arab and Muslim world: alternative visions”. Many speakers, denoting piety or loyalty to political Islam, prefaced their remarks with incantations of reverence for the Prophet Muhammad. On Palestine, not a single one of 200-odd invited participants spoke up for a two-state solution...

On Iraq, not a single speaker, apart from a forlorn parliamentarian from the Iraqi prime minister’s party who made a desultory comment by video-conference, expressed a flicker of sympathy for the new Shia-led order, which several voices denounced as wholly illegitimate. The Gazan who edits al-Quds al-Arabi, a populist London-based newspaper that resonates in the Arab world, drew the loudest applause with a ringing call to back the continuing Iraqi “resistance”, even though the fight is now almost entirely between Arabs. No wonder Al Jazeera makes pro-Western Arab leaders, excoriated as puppets, feel queasy—Qatar’s, of course, excepted.

What can I say? Like it or not, more coverage will emanate from it as traditional Western media shrivels due to the unprofitability of selling newspapers and the like. Al Jazeera, like its near-polar opposite in terms of message Fox News, is brilliant in its own way even if the end product isn't what you'd consider as the pinnacle of journalism. While their messages may differ, both have a similarly masterful grasp of the medium. Just as the former has Fox News Babes, you can rest assured that the (rather better clad) anchorwomen on the latter do not fall short in the looks department. To paraphrase Eddie Murphy's incisive brand of satire, on Al Jazeera 24/7 it's kill the white people--but watch my channel first!

Largest World Cup Patrons are...the Americans

Most people--including the Americans--believe that the US is indifferent to football or what they call "soccer." Certainly, the big money in American professional leagues is in American football, baseball, basketball, and to a lesser extent, ice hockey. There's also the impression that the American soccer leagues are where washed-up players go to finish off their careers Sunset Boulevard-style. Think of David Beckham. The current England coach, Italian Fabio Capello told Beckham that to have any chance at playing for his country, he had to come back and play in ["real"] European competition. Becks' injury ended such hopes, but still.

This interesting contribution I came across by Scott Gulbransen, Senior Director of Global Public Relations for Sony Online Entertainment, begs to differ with this impression. He says that Americans not only have paid the most for TV rights, but their contingent of fans in South Africa is the largest one. Further, he suggests that increasing popularity of the sport in America is due to a continuing influx of Latin immigrants:

There is no doubting that soccer is popular and growing in the United States, with the influx of immigrants from Mexico, Central and South America. With that increase in popularity, the World Cup is becoming a bigger deal here in the U.S.. More and more Americans are joining their neighbors from all parts of the globe to live the spectacle that is the Cup.

This year’s Cup in South Africa has a very American feel to it. Not only does the United States have its best chance to advance in the tournament in 60 years, but Americans are flocking to the country buying up tickets and wielding our substantial financial influence.

In fact, U.S. fans have bought more tickets than any other nation outside of South Africa. U.S. television networks have also paid the highest media rights fees of any nation. The US is a finalist to host the World Cup (in either 2018 or 2022) for the second time ever. The last time (1994) was the first and only time every ticket to every game was completely sold out. American affluence and hunger for the sport fueled the greatest financial success FIFA had ever seen.

With that in mind, you’d think FIFA would be excited about the fact the US is driving such interest in the sport. You'd think the "sleeping giant" of U.S. soccer would excited the governing body. Not so says one of its leaders.

And here is an interesting quote that demonstrates that football's high priests understand IPE [!] UEFA President Michel Platini argues that unlike the World Bank or the IMF, football governing bodies are much more egalitarian to Third World interests. Even the IMF blog tells you the IMF is in need of reform. Hence, the commercial clout of US broadcasters, fans, and sponsors (it needs to be mentioned) should not sway matters too much in America's direction--especially as it bids to host another World Cup according to the powers-that-be:

With that in mind, you’d think FIFA would be excited about the fact the US is driving such interest in the sport. You'd think the "sleeping giant" of U.S. soccer would excited the governing body. Not so says one of its leaders.

"You may be confusing the world of football (soccer) with the IMF or the World Bank," says Michel Platini, a top executive of FIFA, the international governing body of international soccer. "When it comes to decision-making in international football, the U.S., like Germany or China, has as much power as San Marino, Vanuatu or Belize."

Whether Platini admits it or not, the World Cup needs the US more than ever. With a global recession, Americans and their wallets – including the large television networks – throw more money at the tournament than everyone else combined. FIFA and the World Cup increasingly need American interest and money to keep the expensive show afloat. Yes, it might be the world's most popular sport, but America is its richest and most important benefactor.

The Washington Post reports that FIFA figures do indeed show Americans have bought the most tickets to the events after the host nation.

British Airways Strike: Scabs Better Than Strikers

The newswires are buzzing here in the UK about how British Airways cabin crews have been ordered back on the job by the High Court just a day before they were scheduled to go on strike again. Due to technical reasons in the way the Unite union (which 97% of cabin crew belong to) handled the strike ballot, BA has been able to secure an injunction. As if the airline isn't losing enough money from the sporadic belchings of Eyjafjallajokull. From Auntie:

British Airways has won a High Court injunction to stop the latest strikes by its cabin staff. The decision was based on a technicality and whether Unite followed rules in contacting its members with strike result details. The first of four five-day walkouts had been due to begin at midnight, but will not go ahead following Mr Justice McCombe's decision.

The union has said it will appeal against the injunction decision. BBC business editor Robert Peston said the decision created more uncertainty for passengers, and for employees. "Although the company may regard it as a victory, it doesn't appear to have solved what is a very serious industrial relations problem," our correspondent said.

However, the real question to me is whether British Airways should care to go to such great lengths to retain its regular (and quite militant) cabin crew. As these folks are paid significantly more than yours truly despite their apparent surliness, I am not exactly sympathetic to their cause. Given that there are literally thousands of unemployed here in the UK who would gladly fill in these posts, you can argue that they have greater incentive to do a good job than the strikers do.

Well, what do you know? As rolling strikes are expected to start once again depending on the outcome of the ruling, keep in mind that customer satisfaction ratings were actually higher for the replacement crew (or scabs in "industrial action" terminology than for the regulars. From the Evening Standard comes this insightful article:

Air passengers preferred the volunteer staff who replaced the regular cabin crew during the latest British Airways strike. A survey found there were small but key improvements among satisfaction levels when employees from other parts of the company took over during the seven-day industrial action at the end of March. The regular “Think Customer” questionnaire found overall satisfaction levels rose to 76 per cent, a one per cent increase on the previous survey. When passengers were asked whether they were happy “with the presence of staff” 75 per cent reported they were — a rise of two per cent.

There was also a two per cent increase when travellers were asked if problems were dealt with correctly. One passenger said: “My memory is how great the overall experience was from all members of your team bearing in mind they must have been under enormous pressure.” The survey was published in the in-house magazine BA News.

A company insider said: “We are delighted with the results. Although the increases are small they are key factors in showing how well the volunteer staff did their jobs — and they were clearly appreciated by our customers.” Union sources said: “BA would say that wouldn't they – it's a company survey which we would dispute.”

A further 20 days of strikes begin on Tuesday in the long-running cabin crew dispute. BA expects to have to cancel more than 5,000 flights and is preparing for a busy weekend with passengers trying to get away early.

Yes, you can complain that the surveys were conducted by BA, but the point is that I can think of no airline that farms out its customer feedback operations to, say, Deloitte. An economist type could have a field day with this finding--"people respond to incentives," whereas the strikers have a sense of (misplaced?) entitlement. All I can say is, why be so keen on keeping the strikers when there are apparently many out there who are at least as able to satisfy the customers?

And, of course, you can follow the latest news on the strike from the BA site.

Barcodegate: Ferrari Retains Marlboro Advertising

Being a liberal in the classic sense, I've always thought it overstepped the mark when Formula One decided to ban tobacco advertising in its entirety after the 2006 season. It's not as if I came into close and regular contact with second hand smoke (which is indeed harmful) watching TV. As a non-smoker, it did not harm me any watching cars painted in the livery of tobacco brands. If people want to smoke away from those who do, it does not bother me at all. However, the industry's critics have had two longstanding objections. First, association with F1 glamorizes smoking. Second, impressionable youth may be particularly susceptible to ad pitches of this sort. To both I retort that it is highly unlikely that those in their teen years or beyond are unaware that none of the current drivers are habitual smokers. Super-fit F1 drivers lighting up a pack or two daily? You must be joking.

So, I was quite amused when a brouhaha erupted recently over Scuderia Ferrari Marlboro and its alleged use of barcodes to represent the now-missing Marlboro advertising. Unlike Mild Seven which left the sport (and then-world champion Renault) after 2006, Marlboro remains very much involved with Ferrari. Having just watched the Barcelona Grand Prix, the Ferrari team has indeed replaced the controversial barcodes with just a simple box outline. A few days ago, they justified their change thusly to placate their nannying critics:

Together with Philip Morris International we have decided to modify the livery of our cars starting with the Barcelona Grand Prix. This decision was taken in order to remove all speculation concerning the so-called “bar code” which was never intended to be a reference to a tobacco brand. By this we want to put an end to this ridiculous story and concentrate on more important things than on such groundless allegations [my emphasis].

Previous to that, Ferrari denied that the bar codes stood in for Marlboro advertising:

Neither of these arguments have any scientific basis, as they rely on some alleged studies which have never been published in academic journals. But more importantly, they do not correspond to the truth. The so called barcode is an integral part of the livery of the car and of all images coordinated by the Scuderia, as can be seen from the fact it is modified every year and, occasionally even during the season. Furthermore, if it was a case of advertising branding, Philip Morris would have to own a legal copyright on it.

The partnership between Ferrari and Philip Morris is now only exploited in certain initiatives, such as factory visits, meetings with the drivers, merchandising products, all carried out fully within the laws of the various countries where these activities take place. There has been no logo or branding on the race cars since 2008, even in countries where local laws would still have permitted it.

That's quite a spirited defence, Ferrari. But common sense suggests the following -

1. Marlboro remains a title sponsor of the Ferrari F1 team despite tobacco advertising being banned from most countries where races are held;
2. The barcodes appear on the racing cars and drivers' uniforms where Marlboro logos used to be;
3. It makes no commercial sense to place these "coordinated" barcodes when they're space that could've been sold for literally tens of millions to sponsors had they no symbolic representation as Ferrari claims;
4. You must be *&^%$£ gullible to believe Ferrari's argument that these barcodes were placed to enhance the car's aesthetic appeal as none of their other cars feature them.

Let's look at a few photos to sort this matter out quickly and definitively. First, here is the 2006 car or the last one prepared in traditional livery prior to the tobacco ad ban:

Yes, it was very much I Love You Philip Morris. And here is this year's car prior to barcodegate. The placement of the barcodes has been more or less consistent since the ban took effect:

Today's car has reduced the barcode thingamajig to just a box outline, but still. It doesn't take a genius to figure out what goes into the box:

And, of course, contrast the driving suit of Herr Schumacher in his Ferrari prime with that of Felipe Massa in more recent years. The same phenomenon holds on the back of their suits as well:

Those hellbent on a tobacco ban can certainly make the point that, ah, vapours of Marlboro advertising are still there. It's a corporate social responsibility (CSR) issue all the same regardless of the team's protestations as no other sponsor in any other sport goes to such lengths to do what Ferrari has for Philip Morris. It removed the barcodes from the car, but not from its drivers' outfits as far as I can tell from Barcelona. Until the Marlboro name is excised from the name of the team, I doubt whether critics will be satisfied with these half-hearted gestures.

Come to where the flavour is. Come to Scuderia Ferrari! (And cue the Magnificent Seven theme while you're at it.)

An Era Ends: Al Fayed Sells Harrods to the Qataris

Here's another of my periodic stories that I hope shed light on London's brilliant parade. Love it or loath it, there is no town quite like this one. I've had a morbid fascination with the spectacularly tasteless Dodi and Diana statue in the foyer of Harrods for the longest time. Recalling the tragic death of his son Dodi Fayed and Princess Diana, longtime Harrods owner Mohamed Al Fayed commissioned what I still think is one of the most questionable monuments of our age. In a bit of historical revisionism, Dodi is depicted as having the body of a Greek god ready for Men's Health cover duty. But, of course, the ultimate historical revisionist account has long been offered by his father, Mohamed Al Fayed, who claims that their deaths were the result of an MI6 hit job. A lover of crackpot conspiracy theories would be delighted with Al Fayed's version about Prince Philip ordering this hit while Diana was pregnant with the child of Dodi Fayed. Needless to say, no evidence has ever been marshalled to either effect, and he eventually gave up pursuit of this far-fetched claim.

Now, one of my as yet unrealized get-rich-quick schemes has involved crafting figurines modelled after the "Innocent Victims" statue and selling them to Japanese tourists. I thought about the wax figure of Mr Al Fayed in the men's section, too, but it doesn't have a similar grip on the imagination. I'd set up a makeshift stall outside the stores and, voila, loads of easy money. (For some reason, I never thought Chinese tourists--as plentiful as they are nowadays--were quite as camp as Japanese ones, but who knows?) Dodi and Di consipiracy theories aside, you must still give credit to Al Fayed for remaking Harrods into what it remains today: the world's most famous department store. Those old enough to remember the store prior to Al Fayed's purchase in 1985 still recall how its merchandising was not up to par to the global emporium which it is now regarded as. The premises were also in need of refurbishment.

But alas! The newswires are abuzz with the news that Al Fayed has now sold it to those natural gas magnates of the world, the Qataris. Or, more specifically, their holding company. This news comes hot on the heels of him showing potential suitors "the finger" just a few weeks ago. Yes, great sales talk as usual:

Harrods, the world famous department store, has been sold for more than £1.5bn to the Qatari royal family, Times Online can confirm. Mohamed al-Fayed, the Egyptian owner of the London landmark, has decided to retire and will hand over the reins to Qatar Holding. The firm was chosen because they would "maintain the traditions of Harrods", said Ken Costa, chairman of Lazard International - the investment bank advising the family trust on the deal.

Fayed received advances from Gulf-based suitors in the last two months, but initially offered them “two fingers” in a vehement refusal. “People approach us from Kuwait, Saudi Arabia, Qatar. Fair enough, but I put two fingers up to them all,” Fayed said last month. “It is not for sale. This is not Marks & Spencer or Sainsbury. It is a special place that gives people pleasure. There is only one Mecca.”

But today Costa confirmed that the owner of Fulham football club has changed his mind. "After 25 years as chairman of Harrods, Mohamed al-Fayed has decided to retire and to spend more time with his children and grandchildren,” Costa said. Costa said Fayed’s family trust agreed to sell because Qatar Holding had “both the vision and financial capacity” to support the long-term growth of Harrods.

Fayed “wished to ensure that the legacy and traditions that he has built up in Harrods would be continued”, he added. The Egyptian has invested around £400m in the Knightsbridge icon to restore it to its former glory, including £75m for an Egyptian-themed escalator flanked by sphinxes. Qatar Holding, which handles investments for the Middle Eastern state’s royals, will become only the fifth owner of Harrods since its creation in 1840.

The Al Fayed story at Harrods may be diminishing but remain intact as he will remain its honorary chairman. However, the real question for me is, what will become of "Innocent Victims"? Given my druthers, it would be bound for the wrecking ball right this instant, but Al Fayed's continuing role may mean it staying on the premises as well. So, maybe my dreams of amassing a small fortune flogging Dodi and Di figurines to tourists is still in the cards.

For all his foibles, the highest tribute you can give to Mohamed Al Fayed is that he's still the top retailer in a nation of shopkeepers. He is one international owner who understood the tradition of the brand he purchased and definitely improved it.

My Pick for UK Campaign Ad of the Month

The deficit-loving Gordon Brown is receiving his comeuppance in the latest Tory advertising. This is, after all, the man behind the golden rule. In America, I think the Republicans will probably try a similar tack in the midterm elections; more so in 2012 by which time the US racks up some unbelievable amount of debt. Still, something the Tories share with their Republican counterparts is an unwillingness to raise taxes as part of the solution. Repeat after me: revenues less spending equals deficit (or, somewhat improbably, surplus).

Political marketing aficionados will note that these (punctuation challenged) ads are the first out since the Tories returned to Maurice and Charles Saatchi--the advertising whizzes behind many of Conservatives' pitches during the Thatcher era and even the pre-Blair era [1, 2]

Note that the brothers Saatchi have formed another firm, the self-explanatory M&C Saatchi, after they were ousted from the advertising giant they founded, Saatchi & Saatchi. Interestingly, Saatchi & Saatchi--the firm, not the brothers--is rival Labour's advertising agency. Cameron's previous ones with the tagline of "We Can't Go On Like This" have been mercilessly parodied (see below), so we'll see if these ones get a better reception. The new ones certainly look grittier, but if that's the sort of thing that works, well, you can't argue with results.