The GST Advertising By Retailers Has Zero “Net” Effect

The recent advertising to try to get GST put on purchases of goods and services under $1,000 seems to be continuing despite the fact that a very large majority of Australians are not in favour of assisting major retailers spearheading their campaign.

Our study independent national Consumer Sentiments Study before Christmas showed that 69% of Australians did not feel that a GST on goods and services under $1,000 was warranted. 

After the full page newspaper campaign, the Herald Sun and other major newspapers gave results of around the high 80% mark for consumers not wanting to have a GST on goods and services under $1,000.

In recent days, Bunnings via their owners Wesfarmers, have also joined major retailers in asking for the GST to be applied on all online sales of goods and services.

Are they right, and are the majority of consumers wrong in their attitude?

Well, it really doesn’t matter because consumers are king, and they have the buying dollars.  If they don’t want it, then it must be right because if government and large retailing groups force the issue, then they will drive them to further online sales and build consumer resentment.  You can’t win from this situation.

Perhaps what is more important is the fact that by taking on this campaign, retailers have “shot themselves in the foot” in a number of ways.

Firstly, they have told everyone in Australia that their online shops are not doing the job that other global organisations can do in terms of product, service, speed of delivery, and even quality.  Myer has announced that they will go online as a result of the GST.  Didn’t they have an online shop that failed?

Secondly, retailers have run a very successful campaign informing and converting those consumers who did not shop online to online shopping advantages, while having to “cop” the criticism of poor in-store service, attitude and even selection and quality of product compared to online offers.  In the price area, they are non-competitive.  The result will be increasing online shopping by future Australian consumers.  Perhaps they would have been better donating the lost GST revenue to Australia to the Queensland flood relief.  It would have given them credibility, leadership on the issue, driven home the benefit to ordinary Australians, and beaten “whinging” hands down.

Thirdly, many of these retailers are super chains that use their bargaining position to control markets, and in that role as channel leaders, to squeeze wholesalers and others in the distribution chain that supply them.  If suppliers complain about them, it will lead to further lost orders and lost business.  You have to suffer it because there is no other place to go to gain distribution outlets to consumers.  They are hardly an example of “level playing fields”, and giving ordinary Australians a fair go.

On the other hand, these retailers are large importers who have helped diminish Australian manufacturers and their role in this country.  They have always put price before customer, employment, quality and warranty.  Try complaining about a faulty product to any of these stores, and you will wait weeks and still not necessarily be satisfied according to Australian national customer complaint statistics. 

These retailers led the import revolution under the global banner, without placing ads in the newspapers, but now wish to control global markets when overseas competition they and the Internet impact on them and their business. 

Fourthly, the loss of jobs promised from the GST backlash may already be happening because they have practised suicidal markdowns and back-to-back sales programs that have delivered reduced retail margins and profits over the last few years. 

Their sales record is not really about the GST.  In reality, it’s more about the style of management that has focused on strategies for extended credit free terms, casual employment which translates to customer self-service in the store, misusing price as the basis for continuous promotions, and sacrificing product selection and quality, the store environment, customer relationships, trust and loyalty.

How come that the “stretched” Australian consumers have the funds to buy online anyway?

Altogether, I think the program will fizzle unless the Gillard government wants to fall on yet another ugly knife, which is very miniscule compared to the large policy swords it is currently evading.

The agencies and the print media are the beneficiaries, and consumer  sentiment is the winner.

The retailers will be reminded that nothing happens without a sale backed by money, and consumers are now taking back the market place and their sovereign right to shop where they want, with whom they want, how they want, when they want, and for what they want.

By:                  David Higginbottom

                       Competitive Edge

Date:              January 6, 2011

Reference:    www.consumersentiments.com.au

How consumers are feeling now – A national study of sentiment, emotions and advocacy

At this year’s SOCAP Australia Symposium in Sydney, Peter Gillson, director of SFI International, and David Higginbottom, of Competitive Edge Consulting, presented the results of a national study on ‘Consumer Sentiment, Emotions and Advocacy NOW’, commissioned by SFI International and conducted by Competitive Edge.

Click here to download the Key Findings of the Study

Visit Competitive Edge Marketing & Business consultants

TRADE MARKS FORCED TOWARDS GRAPHIC FORMULATION

In past years the Australian Trade Marks Office has worked closely with patent attorneys and other legal professionals to make the cost of trade marking very prohibitive for Australian companies. This not only worked against the interests of trade marking in this country and the work of the Trade Marks Office, but also made it very difficult for Australians to protect their trade marks internationally because of the expense, and length of time and considerations undertaken by the trade marks examination process.

In recent times, with the growth of the Internet and online practices, the system has become streamlined, and it became very easy to carry out trade marking activities to assist companies to support their business names and branding with proper trade mark registration that increased their intellectual property control, management and wealth.

Recently we have noticed that the Trade Marks Office has started on a process of “knocking back” nearly every trade mark where there is a market name or generic name in the actual trade mark registration. For instance, if you engaged in innovative gardening and you wanted to trade mark the name “Innovative Gardening Activities” or “Innovative Gardening Practices”, or Innovative Gardening Landscaping”, there is a very good chance that the first report that results from the $120 fee from the Trade Marks Office will immediately say that you cannot claim a trade mark and a monopoly through the trade mark of the word “innovative”.

They may even say that the words “gardening” and “innovative” together give you a monopoly, which seems ridiculous given that you probably have the trade name registered in one or more States, and even if you don’t have it registered in all the States, then someone else will register it in another State anyway.

In addition, the practice of registering trade names through the States has become so much out of control that a name such as “Innovative Gardening Landscaping” could be changed to “Innovative Gardening Landscaping WA”, “Innovative Gardening Landscaping NSW”, etc. With a name like Competitive Edge, we have noted the number of “knock offs” that go on at the registration level.

We are now advising clients in our practices to cease putting forward words or names as a basis for trade marking because of the lengthy process and the build up to another costly system involving patent attorneys and the legal fraternity.

Instead we are suggesting that our clients put in graphics that are more eye-catching and visual, closer to modern branding technology and techniques, and avoid reference to words that can be refused by the Trade Marks Office using the pretext that you are trying to monopolise a particular area at the expense of competition.

This means that when you consider trade marking in the future, you are best to try to look for a graphic change that may involve one or two letters in the word, or the way in which you present the wording of the business name.

This could include boxing the wording, changing the slant on the wording, adding a graphic such as a leaf outline or something else, so it has a unique characteristic and cannot in any way be considered to be:

1. Monopolising the wording at the expense of the competition, because there is a graphic involved that is distinctive and unique.
2. Restrictive in that other people cannot develop a different form of graphics that will give them unique branding and as a result, a unique positioning and trade mark in the market place.
3. Preventing others from seeking alternative ways of representing their trade mark in the market place.
This also avoids the costly fee hikes that an examination by the Trade Marks Office and possible legal involvement entails.

Trade marking is an important part of modern business, just as it has always been an important part of ancient business. The signature, through the signature ring (signet ring) carried by early merchants, was their “mark” or their trade mark, and this was used to sign off documents, important shipping papers etc., and to seal deals as far back as the Merchant of Venice-type transactions referenced by Shakespeare.

Today everybody has a trade mark, and this is their signature.

Making it difficult and expensive for companies to trade mark their signature, especially when they have been operating and have a legal trading name in Australia, is restrictive and not to the benefit of Australian business both here and in a globally connected world.

It is unfortunate that this has now become a practice. We know that as the wheels of evolution turn, this will eventually be overturned and there will be a return to normality, and a clear distinction in “fee for service” roles and direct blatant revenue-raising from a registration monopoly, restored to the benefit of globally competitive Australian businesses.

In the meantime, it is a good idea to consider the use of graphics, and to tie these closely to the packaging of your branding, and your unique positioning in the market place.