Saturday, May 30, 2009

Buyer beware!

What we have all noticed in supermarkets has been confirmed by Statistics Canada; for the period of 12 months ending in April, the price of food bought in stores has increased significantly. The average increase is 8.3%, but this statistic hides another reality; the price of some foods has increased much more. Such is the case of fresh vegetables (+26.0%) and fresh fruits (+16.8%), of which Health Canada recommends between 7 and 10 portions daily for adults. For these products, the consumer must absolutely compare prices in different stores, because differences are important and prices vary considerably from week to week.

The consumer must also be vigilant with respect to changes in product sizes, a phenomenon that manifests itself in recent years, but gains momentum it would seem. Thus, I have recently noticed that the large size of cheese bar of a well known brand has recently diminished from 600 g to 500 g... while its price increased.

Friday, May 1, 2009

Why abandon the Pontiac brand?

April 27 2009, GM announced that it will phase out the Pontiac brand as part of a restructuring effort to reduce costs. Is this decision wise? Consider this.

Pontiac is a grand and old brand to which millions of people were and are still loyal. Introduced in 1906 by Pontiac Spring & Wagon Works, it derives its name from the famous Native American Chief Pontiac (Obwandiyag, 1712-1769) who led a rebellion against British occupation of the Great Lakes (1763-1766).

Over the years many distinguished cars have appeared. Amongst other the Star Chief with its rounded shapes (1955), the Bonneville with its rear fins (1959), the famous Firebird (1967) introduced to compete with the Ford Mustang, the GTO (1969), the Gran Am (1973), the Trans Am (1985) descendant of the Firebird, and the two-seater Fiero Coupe (1985), to mention but these few.

I understand the necessity for GM to cut its costs; its survival is at stake. However, I believe that the same savings could be achieved while keeping the Pontiac brand whose value is not only sentimental and cultural, but economical; in fact, if GM abandons it, I would not be at all surprised to see investors propose to buy it.

Pontiac’s problem originates from the duplication of several models with the Chevrolet brand; this leads to excess costs as much for manufacturing than for marketing. Those costs could easily be reduced by eliminated Pontiac models for which a corresponding Chevrolet model already exists; doing so would reduce manufacturing costs. In addition, sales of Chevrolet and Pontiac product lines, now complementary, could be grouped under one banner, thus reducing marketing costs.

Obviously, Pontiac and Chevrolet models will need to be adapted to present economic and environmental requirements, and of course to customer expectations.

Are you a Pontiac fan? If so, I would really like to read your comments on the subject.