National / International News

Sochi Olympics isn't a guaranteed winner for sponsors

Marketplace - American Public Media - Wed, 2014-02-05 12:11

Russia passed a law last year forbidding "propaganda" that promotes LGBT rights. That ban extends to visiting foreigners — like athletes, or the brands sponsoring the games. Some of those companies — including McDonald's and Coca-Cola — make a point of promoting their support for gay rights in the U.S.     

"Well, this is all just a terribly awkward situation for the sponsors," says Tim Calkins, a marketing professor at the Kellogg School of Management at Northwestern University.  "This is the sort of thing that sponsors just don’t want to talk about, and they really hope that this story dies down." 

Meanwhile, Calkins thinks brands like Coke have been doing their best to placate their friends here.  Coke’s Super Bowl ad included images of a two-dad family: 

Calkins thinks the timing-- so close to Sochi--carries a message:

"I think there they were saying, 'We get it. But hang with us, folks. We’re going to put this in our Super-Bowl spot, but when it comes to the Olympics, we’ve got to act differently.'" 

In fact, Coke’s written statement about the Sochi controversy refers to the Super Bowl ad.  And it doesn’t mention Russia at all. In their words:

As one of the world’s most inclusive brands, we value and celebrate diversity.  We have long been a strong supporter of the LGBT community and have advocated for inclusion, equality and diversity through both our policies and practices. We do not condone intolerance or discrimination of any kind anywhere in the world.

As an Olympic sponsor since 1928, we believe the Olympic Games are a force for good that unite people through a common interest in sports. We support the core values of the Olympic Movement – excellence, friendship and respect – and are proud to continue our role in helping to make the Olympics a memorable experience for athletes, fans and communities all around the world.

As a business, it is our role and our responsibility to ensure that we embrace human rights practices in our own workplaces.  It is also appropriate for us to help foster diversity, tolerance, unity and respect among all people.

We will continue to demonstrate our support of the LGBT community and, more broadly, promote our values for diversity through our policies and actions. Most recently, we ran a television commercial in the United States, in front of the largest Super Bowl audience in history, that provides a snapshot of the lives of real Americans representing a diverse slate of ethnicities, religions, races and other groups. The ad has a powerful message that we believe spreads optimism, promotes inclusion and celebrates humanity - values that are core to Coca-Cola.

The advertisement, other videos and additional information can be found on our Journey website at: AmericaIsBeautiful

Information on our support for the Olympics and the LGBT community can be found our our Journey website at: Sochi Olympics Sponsorship

 Not so fast, says Fred Sainz of the Human Rights Campaign.  "You know, at the end of the day, you have to choose up sides," he says.

His group, and 39 others, including Human Rights Watch, have asked Coke, McDonald’s, Dow Chemical, and the other top Sochi Olympics sponsors to issue statements repudiating Russia’s anti-gay law.  

Sainz knows the choice isn’t easy.  He says that's the point.

"Sponsorships are calculations, right? You clearly sign up hoping that sponsorship will accrue entirely to your benefit," he says. "But in some cases, it may not. And this is one of those situations in which it's not going to be all upside for these companies."

The rise of social media makes it tougher for brands like Coke and McDonalds, says Brian Ellner, an executive withthe PR firm Edelman, who previously worked for the Human Rights Campaign. 

"It’s a global conversation, and it’s being powered on social media," he says. "And this is the new reality."

In Sochi, the Opening Ceremonies begin tomorrow.  On Twitter, the contests have already started.

Why CVS is giving up smoking

Marketplace - American Public Media - Wed, 2014-02-05 12:10

If you’re used to getting your cigarettes from CVS, you should start coming up with a backup plan. The pharmacy convenience store chain says it’s no longer going to sell them after October 1.

IS THIS REALLY ABOUT CIGARETTES?

CVS is definitely going to lose money on this. $2 billion a year in sales, out of $123 billion total (in 2012).

"In the short run," says Columbia Graduate School of Business professor Rita McGrath, "it's clearly going to be something that their shareholders will have to swallow hard, because it will cost them cash flow."

NO.

Cigarettes sales in the U.S. are declining anyway. CVS’ decision is part of a modern business phenomenon of rapid redefinition in order to keep up, says McGrath, who is author of "The End of Competitive Advantage".

"They’re exiting a business that’s got flat growth, or is in modest decline, in order to pull resources out to fund things they see as brighter prospects of the future."

McGrath says it’s much like Verizon ceasing to print phone books, or Hilton Hotels quitting room service. 

"Not that they’re bad lines of business," says McGrath, "but they’re not the future."

SO WHAT IS IT ABOUT? MONEY.

"They’re trying to tap into this vast market for providing more comprehensive healthcare solutions," says McGrath.

If this pays off, CVS will make a lot more in the long run than it lost on cigarette sales. 

CVS wants to be somewhere between a pharmacy and a doctor’s office. It wants to become the place you go to get your shots, to get medical advice, to get prescriptions. And if that’s where CVS wants to go, then it really doesn’t look good to be selling cigarettes.

ALSO, RETAIL ISN’T HOT.

John Palizza is a retired lecturer from the Jones School of Business at Rice University, and worked at Walgreens for 23 years.

"The retail side, the general merchandise side of the pharmacy business is slow growth," he says. "If you look at same store sales on the general merchandise side, it’s a higher margin business, but a slower growth business."

On top of that, online sales have been a source of brutal competition for many retailers.

CVS has, for a number of years says Palizza, been pushing much harder to get more of their dollar revenues from the higher growth health care arena.

"This is another step in that direction."

WILL THIS BET PAY OFF?

Ceci Connolly, managing director of consulting firm PwC’s Health Research Institute, says for businesses ranging from pharmacies to communications, "we see enormous opportunity for nontraditional players to deliver more and more healthcare."

The drivers opening up this space for retail healthcare are the oldest in the book: convenience, cost, and technology. 

Already, "more than 10 million Americans get a flu shot today at pharmacies, many other millions get them at grocery stores or big box retail stores," says Connolly.

It’s cheaper and easier than scheduling a doctor’s appointment for something so simple.

"That’s a perfect example of people voting with their feet, and we believe much more of that is coming in the very near future."

Advances in technology – and advances in people’s comfort level with that technology -- allows more to be done outside of a hospital, says Columbia’s McGrath.

"As we get smarter with certain technology, it becomes possible for less skilled providers to do something," she says. "You don’t need a trained super-specialized doctor to say 'Yes you have the cold,' or 'Yes, you have pinkeye." 

What’s more, the industries currently occupying much of the healthcare industry space are damaged.

"We know from our research that insurers and pharmaceutical companies do not rate high on trust or popularity scales, so some of these new players may have an advantage with brand identity," says Connolly. CVS, capitalizing on its corner-store image – and now its anti-smoking cred – is adding capital to its branding bank.

IS THIS WHERE THE WHOLE PHARMACY INDUSTRY IS MOVING?

It’s more than a pharmacy industry thing, according to PwC’s Connolly.  

"Right now in our conversations with clients, we see a lot of interest in getting into the healthcare space," she says. "We’ve studied the top Fortune 50 companies, and 76 percent of them say that today they are in some way in the health care business."

This includes communications companies, retailers, sporting goods stores, and "folks you would not think of as being hospital or insurance companies."

These efforts range from offering healthcare services to healthcare gadgets, like those that count your steps or calories burned.

"These are the little initiatives that they can break into healthcare and get a foothold and see if they will expand."

It’s a reflection of the pressure and the opportunity that is facing the pharmacy industry as a whole, and CVS is trying to get out ahead.

LEADING THE WAY, OR TESTING THE WATERS?

"They’re trying to position themselves as a leader for the healthcare side of the retail business," says Palizza. "Whether others follow suit, or say 'we’re happy to pick up the dollar volume that CVS doesn’t want,' is an open question."

Panama Canal work stoppage denied

BBC - Wed, 2014-02-05 12:08
Spanish building company Sacyr denies that work on the expansion of the Panama Canal has been halted, but confirms a breakdown in negotiations.

Ghostboxes: What's left behind when Target shuts its doors?

Marketplace - American Public Media - Wed, 2014-02-05 12:03

Big-box retailers have hit on hard times lately — Best Buy, Sears, and Kmart have all closed hundreds of stores since 2011. Online competition and a changing suburban landscape are among the challenges, but it turns out shuttering big-boxes has some unanticipated consequences. Eight Target stores are set to close across the country on May 3, which has caused an uproar in one Ohio town.

Since January, residents of the middle-class suburb in Trotwood, Ohio, have been up in arms over Target's announcement  that it will close a store there. On a dreary Saturday morning, protesters stream into the store's parking lot, but they’re not marching or chaining themselves to the doors. It’s a "shop-in." These protesters are rolling out those red Target carts and buying stuff, from crock pots to toothpaste to underwear.

The shop-in was organized by Trotwood residents as a last-ditch effort to show Target they have buying power. But Target shows no signs it will change its plans to close eight stores around the country, including the one here.

"It was like, ‘What? Target?!'" says Trotwood's mayor, Joyce Cameron.  "It was devastating."

Adding insult to injury, Mayor Cameron says Trotwood’s leadership heard about the closure from the newspaper, not from the Target corporation.

One of the biggest problems Trotwood faces is population loss: more than 10 percent of the population has left in the last decade. The poverty rate here has shot up, too, from 6 percent in 1989 to 18 percent in 2011. Now big-boxes are bleeding out of this middle-class suburb, taking jobs and property taxes with them.

"Sears, Penney's, Lazarus, Wal-Mart, Kmart, we’ve slowly, one by one watched them leave," says Trotwood City Council member Bruce Kettelle. "There’s a shift going on and we’re part of that shift. Unfortunately, we have to live with it. But we don’t want to live with it."

As to what exactly that shift is, it depends who you ask. Target wouldn’t give an interview, but it issued a statement saying closures are generally due to a store’s weak long-term financial performance.

Plenty of experts will say closures don’t necessarily signal an overall decline for a chain or an industry.

"Brick and mortar stores, in other words, physical stores, are not going to go away," says Serdar Durmusoglu, a retail expert at the University of Dayton. "There’s movement from one suburb to the other.

"Target in particular is still opening more stores than it’s closing—reorganizing, but not reducing, its big footprint.

What’s going on in Trotwood, though, is more about a trend towards boarded-up big-box stores. There’s even a name for them: "ghostboxes."

Sarah Schindler, a law professor at the University of Maine, has researched the legal implications of ghostboxes for municipalities. She says ghostboxes are expensive to demolish, and it’s difficult to turn these buildings into something else. In her opinion, that points to poor planning decisions.

"I think a lot of communities are coming around to the realization that this sort of big-box, single-use commercial district wasn’t necessarily the best idea," Schindler says.

"Other than just to shutter the doors and get out of town, there really needs to be a better exit strategy," says Mike Lucking, the Trotwood city manager. He says if towns are going to bring in big-box stores, they need to think ahead about what happens when the companies move out.

Lucking remembers when Trotwood was the shiny new shopping destination outside Dayton: "Things really do go full circle."

Without Target and all the other big-boxes that closed, Trotwood won’t be much of a destination at all.

Getting out of his car at last Saturday’s shop-in, Doyle Copeland says it will now be a 20-minute drive to the next discount retailer

"It’s the last thing we got, we need this Target," Copeland says.

Fletcher 'very fortunate to be here'

BBC - Wed, 2014-02-05 11:58
Manchester United midfielder Darren Fletcher reveals the true extent of the chronic bowel disease that disrupted his career.

VIDEO: 'Owning a team is a dream' - Beckham

BBC - Wed, 2014-02-05 11:53
Former England football captain David Beckham launches a new Major League Soccer team based in Miami and says '"to be an owner of a team is a dream".

Bionic hand allows patient to 'feel'

BBC - Wed, 2014-02-05 11:46
Scientists create a bionic hand which allows the amputee to feel lifelike sensations from their fingers.

VIDEO: Bionic hand feels real, says amputee

BBC - Wed, 2014-02-05 11:38
Danish amputee Dennis Aabo talks about using a hand wired into his nerves that allowed him to `feel' objects.

Electronic Tongues Are The Beer Snobs Of The Future

NPR News - Wed, 2014-02-05 11:36

Researchers in Barcelona have developed an electronic tongue that really knows the difference between a pilsner, a lager and a bock. It's still a prototype, but its creators say it could some day replace human taste-testers.

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Hapless arsonist sets himself ablaze

BBC - Wed, 2014-02-05 11:34
An arsonist goes up in flames as he tries to set fire to a recovery truck in Greater Manchester.

Met chief apology over 'Plebgate' PC

BBC - Wed, 2014-02-05 11:33
Metropolitan Police chief Sir Bernard Hogan-Howe has met MP Andrew Mitchell to apologise for one of his officers' roles in the "Plebgate" affair

Car chase ex-officer wins damages

BBC - Wed, 2014-02-05 11:29
A former police officer whose videoed arrest of a pensioner after a car chase was leaked and shown on the internet wins £430,000 damages for constructive dismissal.

VIDEO: Officer unrepentant over video pay out

BBC - Wed, 2014-02-05 11:26
A former Gwent PC whose arrest of a pensioner was videoed and shown on the internet is awarded at least £430,000 damages after winning a case for constructive dismissal.

Top secret drone makes first flight

BBC - Wed, 2014-02-05 11:09
A top secret unmanned drone, said to be the most advanced aircraft ever built in the UK, carries out its first successful test flights.

Pietersen - the unanswered questions

BBC - Wed, 2014-02-05 11:07
Claims and counter-claims about Kevin Pietersen's England exit have left cricket fans confused - BBC Sport looks at the questions that remain

An Artificial Arm Gives One Man The Chance To Feel Again

NPR News - Wed, 2014-02-05 11:05

Many scientists have been trying to create neural implants that will let amputees regain a sense of touch and control. One version has let a Danish man feel the texture of things he's touching. But it's an experimental model that's not yet ready for use outside the laboratory.

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Prior dismisses Piers Morgan claims

BBC - Wed, 2014-02-05 10:56
Matt Prior dismisses claims by Piers Morgan that he openly criticised former England coach Andy Flower during the Ashes.

Hoffman body tests 'inconclusive'

BBC - Wed, 2014-02-05 10:54
Tests on the body of actor Philip Seymour Hoffman are inconclusive, the New York city medical examiner says.

Nigeria oil money 'not missing'

BBC - Wed, 2014-02-05 10:52
Nigeria's state oil firm denies an allegation by the central bank chief that it has failed to account for at least $20bn (£12.2bn) of oil revenues.

Ladies: Good Bacteria In Yogurt May Be Good For Waistlines, Too

NPR News - Wed, 2014-02-05 10:52

Women who took a probiotic commonly found in yogurts daily while on a diet regime lost significantly more weight and fat than their counterparts who received a placebo. The findings offer interesting hints about how probiotics might be interacting with the tiny microbes that live in our guts.

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