Business Dialogue - CorD Magazine No.166

Business Leaders’

MEETING POINT

ACO TOMAŠEVIĆ General Manager of Neoplanta

MILAN DAMJANOVIĆ Director of KOSJERKA S.P.T.R.

High Ambitions Tradition Supported Nurtured

By Quality With Love Products PAGE /30

PAGE /31

ENTREPRENEURSHIP

Creating A Multi-Million Dollar Brand PAGE /36

SCENT MARKETING

The Power Of Fragrance PAGE /28

ACO TOMAŠEVIĆ, GENERAL MANAGER OF NEOPLANTA

High Ambitions Supported By Quality Products The mission of Neoplanta is to utilise innovative products of superior quality, constant development and responsible operations to make every day more delicious, and to become one of the region’s leaders in food production

N

eoplanta is a company where all employees are dedicated to making it one of the region’s leaders in food production. They are convinced that they can achieve this through innovative high-quality products, continuous development and a responsible approach to consumers, partners, colleagues and the community in which they work. An additional advantage of theirs lies in an enduring tradition and experience in creating brands that are recognisable favourites on the market.

High quality products that adhere to Halal, HACCP, ISO 9001 and IFS standards rank you at the very top of the meat processing industry. Has this secured the possibility of you penetrating other markets, and where do you see the greatest potential?

Neoplanta is the leader in the production of processed meat products in Serbia.

The quality of our products is well known in Serbia, but also in the countries on practically four continents to which we export – in Europe, Asia, North America and Australia. The European market has potential, especially in the countries of the region – BosniaHerzegovina, Montenegro and Macedonia, where Neoplanta realises 90 per cent of its exports. However, due to current regulations regarding vaccinations against swine flu, we currently export pâtés and ready-meals to Europe.

30

July

On the other hand, our greatest strength and the category in which we can compete equally with European players is that of products with long shelf lives. If the issue regarding swine flu vaccinations can be resolved, we could successfully export products in our durable goods range to the European market. This is particularly important if we remember that Vojvodina is a pioneer in our country in the production of sausages with a long shelf-life, and that consumers rate Neoplanta tea sausages the best in Serbia for taste and overall quality.

In order to have a successful brand, it is essential to have high-quality raw materials, original recipes, cutting-edge equipment and technology, respect for the highest standards in production processes, as well as a dedicated team that will convert the product into a brand How would you rank in terms of importance in your production processes: good raw materials, modern technology and professional personnel; what is your recipe for success?

In order to have a successful brand, it is essential to have high-quality raw materials, original recipes, cutting-edge equipment and technology, respect for the highest standards in production processes, as well as a dedicated team that will convert the product into a brand. The most successful brands are those that adapt the quickest to market trends and changes, to the needs and habits

of consumers, without deviating from their mission and vision. We will continue, as a market leader, to strive to set standards in the production and marketing of processed meat products on both the domestic and foreign markets.

What are Neoplanta’s future plans?

Neoplanta is known among consumers for its brands – Pipi and Gudi, Neoplanta Delikates, Prego, Patelina, Moja. Unlike many companies that generally only build one brand, Neoplanta is one of the few that has opted for the strategy of developing a wide range of successful brands, while of course adapting to market trends and respecting the habits and tastes of consumers, as well as the motives for purchasing from different categories. Viewed in economic terms, such a strategy is more challenging, but, on the other hand, it is also in line with our goal and plans – to approach consumers in the right way and to build enduring, sustainable and healthy brands that consumers will love for decades.

Of our current activities, we are completing construction of our state-of-the-art wastewater treatment facility, which has a value of 1.7 million Euros and which is expected to become operational very soon.

Apart from the fact that it will secure reductions in water usage within actual production processes, with the construction of this plant Neoplanta has acquired conditions to apply the standards of the best available technical requirements adopted by the European Commission.

Innovations are an integral part of our operations, because we want to distinguish ourselves from the competition through innovation and quality. This will also be the focus of our business in the period ahead, along with a desire to achieve even better results.

MILAN DAMJANOVIĆ, DIRECTOR OF KOSJERKA S.P.T.R.

Tradition Nurtured With Love How an old recipe led to the creation of a top product – KRUNSKA rakija brandy. The Damjanović family tradition of distilling this brandy dates back over a century

P

lum, quince and apricot brandies are made exclusively from fruits grown in Western Serbia, from the Kosjerje region, while the bottles are produced in Verona. Quality and modern design have become synonymous with KRUNSKA The tradition nurtured by your company for generations has become synonymous with the top quality product that is KRUNSKA brandy, which was primarily created out of a love for tradition and the region... What are KRUNSKA’s characteristics?

This brandy originates from Kosjerić, Western Serbia; a region that’s always been known for its good brandies. The Damjanović family tradition of producing this brandy dates back over a century and that tradition is today continued by Milan Damjanović, who learned the roasting recipe from his father Miloje, who in turn learned from his ancestors. That’s how Miloje Damjanović decided to continue this tradition dating back many decades and to offer the market his brandy.

Krunska rakija today has three varieties of fruit brandy: plum, apricot and quince. All three are winners of multiple quality awards. In addition to the consistent quality of its products, Krunska rakija

also distinguishes itself on the market with its characteristic modern packaging.

In the production process we exclusively use fruits from Western Serbia, while plums come only from the Kosjerje region, and those are only the best quality fruits, whether that’s plum, quince or apricot. With double distillation, we produce brandy of exceptional quality that is left to age in oak and chrome barrels, before being later extracted and placed on the market. The bottles used for our brandy are produced in Italy, specifically at the Vetri Speciali factory in Verona, using extremely high-quality glass and

To what extent have foreign markets recognised KRUNSKA’s quality?

We export our brandies to Australia and Austria. We previously also exported to France and are currently in the process of renewing sales in this country. This coming autumn we expect to launch cooperation with German and Bulgarian distributors. The international market has recognised the quality of Krunska rakija brandy and we hope to expand our exports to other countries. Our plan is to expand our production capacity, because demand for our brandy is constantly increasing.

AWARDS: Novi Sad Fair • 2012 Krunska plum – silver medal • 2013 Krunska plum – silver medal • 2013 Krunska quince – silver medal • 2017 Krunska quince – gold medal • 2017 Krunska plum – silver medal Rakija Fest Belgrade • 2011 Krunska plum – silver medal • 2012 Krunska plum – silver medal • 2013 Krunska plum – silver medal • 2014 Krunska apricot – silver medal • 2014 Krunska plum – silver medal

our protected mould.

We are particularly proud of the fact that our brandy is produced exclusively, in a traditional way, in copper tanks, with wood used exclusively as the fuel.

Festival Užice • 2016 Krunska apricot – gold medal • 2016 Krunska plum – silver medal • 2017 Krunska apricot and quince – silver medal • 2017 Krunska plum – gold medal

July

31

LOCAL NEWS

Results “The new arrangement with the IMF is very important because it shows that the Republic of Serbia in the previous period achieved good economic results and that it no longer needs financial assistance.”

– SINIŠA MALI, SERBIAN MINISTRY OF FINANCE FIAT CHRYSLER AUTOMOBILES

HEAD OF FIAT CHRYSLER’S EUROPEAN OPERATIONS QUITS

GAZPROM

NEW INVESTMENT IN NIS “In the past nine years, Russia’s Gazprom Neft has invested around €2.5 billion in the development of Naftna Industrija Srbije (NIS),” said Alexander Dybal, member of the board at Gazprom Neft.

He also stated that NIS had transformed from a national Serbia company into an important player in the energy market of the entire Balkans and that the development of the company continued. He added that he was satisfied with the way Gazprom Neft operated in Serbia and with the cooperation with the Government of Serbia.

Dybal said that, thanks to the new facility for deep processing of oil at the Pancevo oil refinery, the construction of which will soon be over, NIS will become one of the most successful companies in the world by the key efficiency indicators.

Source: Večernje novosti

Alfredo Altavilla has stepped down from his role as chief of Fiat Chrysler’s operations in Europe, the Middle East and Africa, Following the stepping down of former CEO Sergio Marchionne due to illness. the company announced end last month.

The Free Press previously reported that Altavilla’s name was among those frequently mentioned as a potential successor to Sergio Marchionne, who was set to retire in 2019, but was replaced after his health took a dramatic downturn. Jeep and Ram brand chief Mike Manley was named the new CEO. In a statement, Fiat Chrysler said “The departure of a leader as lauded as Sergio is bound to cause a major shakeup in leadership, but the news of Altavilla’s departure is rather unfortunate. The good news is Manley isn’t walking into his new role off the street, and he’s coming in with the success of Jeep and Ram under his belt.”

ALFREDO ALTAVILLA

SD HIRSCH AUTOMOTIVE

SERBIAN CAR PARTS FACTORY TO BECOME OPERATIONAL IN 2019 SD Hirsch Automotive company, which develops and produces high quality auto parts for 30 years, will open a factory in Backi Petrovac, Serbia The German company signed a contract for leasing industrial space in the Business Park in Backi Petrovac, a small town in Vojvodina district, Serbia. This will be the third factory of the Hirsch Automotive Company that delivers components for some of the biggest car producers – Volkswagen, Audi, Skoda, Mercedes and Jaguar.

The producing facility is supposed to become operational in 2019 and initially it will employ 20 engineers. The company now works with 170 specialists and produces individual product solutions for sliding roofs, convertible systems and cooling and fuel injection systems. Source SD Hirsch Automotive

SERBIAN GOVERNMENT

INITIATIVE TO CHANGES NATURE PROTECTION LAW OVER SMALL HYDROPOWER PLANTS Serbian Minister of Environmental Protection Goran Trivan has announced an initiative to change the country’s nature protection law to avert the construction of small hydropower plants (HPP) in protected areas, after his recent attempt to pull approval for the Pakleštica small HPP, threatening to hurt biodiversity in the Visočica river basin, was quashed by a court.

According to Trivan, permits already issued to build small HPPs in protected areas can be discussed with the Ministry of Mining and Energy and the investors in question, with the aim of providing the investors with other locations better suited for hydropower projects.

Meanwhile, Minister of Construction, Transportation, and Infrastructure Zorana Mihajlović said it is Trivan’s right to seek to change laws regulating his ministry’s portfolio, adding that she has “nothing against anything” that can improve environmental protection, local media reported.

However, Mihajlović also bemoaned the fact that Serbia has used less than 50 out of some 800 locations designated for small hydropower plants.

Source: balkangreenenergynews.com

32

July

Cooperation “I hope this visit will result in better understanding between the US and Serbia and much better cooperation, business and private alike.”

– SERBIAN PRIME MINISTER ANA BRNABIĆ, AFTER VISITING THE NEW YORK STOCK EXCHANGE

Placements postings

&

appointments@aim.rs

JUGOIMPORT SPDR

NEW CARTRIDGE FACTORY IN UZICI The new ammunition plant will produce some more 50 million units of small weapons ammunition. The plant will produce the most popular cartridges for the Serbian Armed Forces: 5.56 mm, 7.62 mm and 9 mm. The new Serbian cartridge factory equipped with advanced equipment for the production of ammunition supplied by Lachaussée from Belgium. Its construction took 14 months. Jugoimport SPDR has already hired 47 employees in the factory, as their number will rise to 250 by the end of this year. The number of employees at the Uzici factory will reach 470 by the end of 2018. In April 2016, the Serbian government said Jugoimport SDPR plans to invest a total of €90 million in the construction of the factory. The factory will also launch the production of ammunition of 12.7 mm on a later stage, Serbian public broadcaster Radio Televizija Srbije (RTS) said.

Serbian President Aleksandar Vucic has attended the opening ceremony.

Source: Army, News, Photo

RTB BOR

TENDER FOR STRATEGIC PARTNER Serbian economy ministry has announced a tender to select a strategic partner for copper mining and smelting complex RTB Bor. The strategic investor needs to recapitalize the company with €350mln. The call is opened for domestic or foreign companies engaged in the exploitation or production of copper and other precious metals in the last 10 years and that have business income of at least $500mln in the past business year. Those interested can submit bids until Aug 20.

Serbian Energy Minister Aleksandar Antic said that eleven investors from China, Canada, Russia, Turkey and a KazakhEuropean consortium have expressed interest for a strategic partnership with RTB Bor. This will be the fourth attempt for the sale of the company in the past 18 years. RTB Bor is implementing a reorganization plan that prevented its bankruptcy and under which 90% of its €1.2bn debt has been written off.

VLADIMIR NOVAKOVIĆ, NEW CHAIRMAN OF THE NALED BOARD OF DIRECTORS

Apatin Brewery CEO and Molson Coors Managing Director Vladimir Novaković has been selected as the new Chairman of the Board of Directors of NALED, following a decision of the members of this organisation’s management body. Novaković has headed Apatin Brewery and Molson Coors operations since October 2016. Until recently the president of the Brewery Association of Serbia, he was also a member of the NALED board. Apart from Apatin Brewery, Novaković built up his professional career at companies Fresh&Co, Henkel and Carnex, where he held sales director and general manager positions. “With more than 300 members, NALED is the largest public-private association in Serbia, and we want to continue to be the leader in the promotion of public-private dialogue in the region and in Europe,” announced Novaković.

SVETOSLAV ATANASOV, NEW CHIEF EXECUTIVE OFFICER OF COCA-COLA HBC SERBIA AND MONTENEGRO

Svetoslav Atanasov has been named Chief Executive Officer of Coca-Cola HBC Serbia and Montenegro. He arrives at the helm of this company from the previous position of CEO of Coca-Cola HBC Bulgaria. He began his career at this company in 1999, under the auspices of a practical work experience programme, and soon gained employment within the marketing team. Since 2006, he has held several key positions in the sales and marketing sectors, while since 2010 he has also been in charge of cooperation with key customers. He quickly earned the role of manager for nationwide sales, before progressing to CEO after three years. Atanasov will continue developing operations in Serbia, with a special focus on the continuous education of employees, the further strengthening of relations with customers and improvements in quality of life within the community.

NARCIS POPESCU, NEW GENERAL MANAGER OF OMV SERBIA

Narcis Popescu comes from the Romanian branch of OMV Petrom and will be in charge of the strategic direction and development of OMV’s business in Serbia, andat the same time functional lead for the related Product Supply & Logistics.

From 2001 to 2003, Narcis Popescu studied in the US at the State University of New York in Binghamton, where he obtained an MBA. He joined OMV Petrom in 2005 as a management consultant, taking and active part in the turnaround of the Marketing Division. Since 2011 he was appointed Head of Supply & Logistics sector for Region East, where he has managed operations in Romania, Bulgaria, Serbia and Moldova. From 2012 to 2015, he was a member of the Board of Directors at OMV Petrom Marketing, and in 2014 he became the Head of Sales East, responsible for managing the Bulk, OilCo and Marine businesses in Romania, Bulgaria, Serbia and Moldova.

VUKOTA PEKOVIĆ, NEW GENERAL MANAGER OF VERIEST SOLUTIONS, SERBIA

Veriest Solutions, a leading provider of design and verification engineering services, has appointed Vukota Peković as general manager of its Serbia-based operations.

Peković, who holds a Masters’ degree in Electrical and Computer Engineering from Novi Sad University’s Faculty of Technical Sciences, joins Veriest after having amassed more than 20 years of experience with RT-RK Computer Based Systems. Peković was responsible for one of the company’s main business units, as well as its marketing & sales activities from 2014.

He has published more than 50 articles for international and domestic conferences and submitted several patent applications related to test systems and audio/video processing. Veriest Solutions’ Serbian operations were previously led by the company’s Vice President of Engineering, Haim Moshe.

July

33

Education “By providing access to a digital education, this funding will help foster the next generation of innovators and entrepreneurs, both in the Western Balkans and UK.” – EKATERINA ZAHARIEVA, BULGARIAN FOREIGN MINISTER

REGIONAL NEWS BULGARIA

BULGARIA’S RICHEST ENTREPRENEUR

BOSNIA AND HERZEGOVINA

NEW TYPES OF MILK ON EUROPEAN SHELVES SOON

Bulgarians Vladimir Tenev (31) and his partner Baiju Bhatt are creators of Robinhood Markets - an online platform that allows US investors to invest in publicly traded companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission for each transaction. Their shares in Robinhood Markets are valued at $1.3 billion.

Robinhood recently got $110 million in Series C funding. It’s valued at about $1.3 billion and its user base is made up mostly of young Americans.

“There’s a lot of wealth being created on Wall Street and it was coming to the top 1%.The name Robinhood is very aspirational to us because it’s a little bit rebellious,” said Vladimir.

Both Baiju and Vladimir are the children of immigrants. Vladimir’s family emigrated from Bulgaria, and he moved to the U.S. when he was five years old. They met at Stanford University where they became friends and eventually roommates.

HUNGARY

Minister of Foreign Trade and Economic Relations of BiH, Mirko Sarovic, and Veterinary Office of BiH are conducting intense final activities in order for BiH to get the permission for export of the remaining types of milk and dairy products to the EU. This milk and dairy are products with a lower level of processing.

The report of the European Commission on fulfilment of the conditions for putting BiH on the list of the European Commission is expected in the upcoming days, as noted in the statement.

BILL OUTLINES HIGHLIGHTED BUDAPEST DEVELOPMENTS

VLADIMIR TENEV (LEFT) AND BAIJU BHAT

ROMANIA

J.C. FLOWERS & CO AND EBRD TAKING OVER PIRAEUS BANK The EBRD has bought 19% of the Piraeus Bank, J.C. Flowers & Co investment fund has 76.1%, while the bank’s management will hold 4.9% of the bank. The takeover had been announced since the end of last year, but no further details had been officially released back then.

Nicolae Danila, the former executive president of BCR and ex-member in the National Bank of Romania managing board is rumored to take over the president position of Piraeus Bank Romania, according to sources quoted by Hotnews.ro.

NICOLAE DANILA The Magyar group OTP Bank had been also racing to take Piraes.

JC Flowers had a previous attempt to enter the Romanian banking market by taking over Carpatica bank, but the transaction failed. The fund wanted to buy Piraeus Bank and Carpatica and set up a group that would enable it a higher visibility on the local banking market.

34

July

Hungarian government submitted a bill on highlighted developments in Budapest. The bill defines how the state will be involved in major developments in Budapest, including a new Student City.

According to the bill future developments in Budapest will receive highlighted status if, among other conditions, they are financed by the government or by the European Union. A state nonprofit will be responsible for the preparation of key developments in Budapest, investments, planning and licensing, as well as the organisation of major international sporting events.

It also seeks to amend legislation on investments of major importance for the national economy, complementing it with the term “high-priority public investment” covering related investments in energy, transport development, environmental protection, water protection, disaster management, defence, national security, public administration, education, health, research and development, culture, heritage, sport and urban development.

Source: Hungary Today

Stablility “History shows that a stable and secure Western Balkans region means a more stable and secure Europe.”

– THERESA MAY, UK PRIME MINISTER

SLOVENIA

THE MOST INNOVATIVE COUNTRY IN SEE Slovenia scored highest in Southeastern Europe (SEE) in the Global Innovation Index (GII) ranking published by the Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO).

Slovenia ranked 30th, followed by Bulgaria at 37th place, Croatia at 41st, Moldova at 48th, Romania at 49th, the GII report shows.

Outside the top 50, Montenegro placed at 52nd, Serbia at 55th and Bosnia-Herzegovina at 77th and Albania at 83rd. Macedonia was the lowest ranked country in the region, ranked 84th out of a total of 127 countries reviewed.

Almost all SEE countries improved their previous positions in the ranking, except Macedonia, Moldova which lost 23 and two places, respectively, while Montenegro and Romania dropped single place each.

The top gainers in the region were Serbia and Bosnia-Herzegovina, climbing ten places each. Albania was up nine positions and Slovenia gained two. Bulgaria, in turn, went up one place.

MACEDONIA

MACEDONIAN GOVERNMENT RATED MOST TRANSPARENT IN THE WESTERN BALKANS The Macedonian government is the most open and transparent in the Western Balkans region, a survey published by Skopjebased foundation Metamorphosis.

The Regional Openness Index was created within the framework of the regional network Action SEE, which is a Western Balkans citizens organizations’ initiative. The last survey on the openness, accountability and transparency of institutions in Albania, Bosnia & Herzegovina, Kosovo, Macedonia, Montenegro and Serbia was conducted in the period from December 2017 until the end of February 2018. This is the second such survey.

The survey showed that the openness index of the Macedonian government was 75.61%, considerably up from 52.34% a year earlier.

Macedonia is followed by Montenegro, whose openness index fell to 68.94% from 81.8%. Serbia is on the third place with an index of 56.66% slightly down from 58.97% in the previous survey. Albania is fourth with an openness index of 54.92% compared to 57.94% a year earlier. Bosnia’s index dropped significantly to 45.9% from 60.66%.

Kosovo is ranked on the last place with an index of 41.29%, falling sharply from 60.82%.

The index also measures the openness of the ministries, with Macedonia now in third place, behind Montenegro and Serbia.

July

35

Entrepreneurship

Creating A Multi-Million Dollar Brand The Stuart Weitzman shoe brand is associated with some of today’s most famous pop stars, actresses, and celebrities, including Taylor Swift, Beyoncé, Kate Middleton, Gisele Bundchen, Kate Moss and Gigi Hadid. Its stores are located on the most fashionable shopping streets in the world including Rodeo Drive, Via Sant’Andrea, Via Condotti, Michigan Avenue, Faubourg Saint Honore, and Madison Avenue 36

July

H

ow did the entrepreneur and designer of the same name build this globallyrenowned business? Stuart Weitzman shared tales of his success at a recent Wharton Leadership Lecture. He got into the shoe industry at a young age, working at his father’s Massachusetts shoe factory while still in college at Wharton. Later, he ran the family business with his brother. In 1986 he struck out on his own, launching his company under the Stuart Weitzman brand. In 2015, handbag maker Coach acquired the business for $574 million but kept Weitzman on as creative director. Weitzman continued in that role until his retirement earlier this year.

Weitzman talked about the DNA of his brand.

Sexiness is a key element, he said. “There’s an expression that ‘sex sells,’” he said. “If you can incorporate something sexy about a fashion product… you’ll get more business out of it.” That’s been proven from the fashion industry to the automobile industry, he added.

This idea was certainly reflected in his controversial ad campaign last year, which featured three supermodels in a tight embrace, all completely nude except for the brand’s sandals.

“If you can incorporate something sexy about a fashion product … you’ll get more business out of it.”

But sexy isn’t everything: “stylish comfort” is important, too. He calculated that it costs him $8,000 to get a new customer into his store, based on the total investment in advertising, PR and editorial placement. If she leaves empty-handed, he’s lost that $8,000. “There’s no logic in getting you through [my] door, putting a shoe on you that’s going to kill you, and you’re not coming back.” Any new design that wasn’t a hit with his shoe tester was always taken out of the line.

Weitzman told the story of what he called the company’s “tipping point,” quoting the book by the same name by Malcolm Gladwell that analyzes how certain trends become enormously popular. Early in his business, Weitzman was trying to figure out how to offer his products to “a billion people around the world” and said that there wasn’t enough money “on the planet” to get his message out to all of them.

“I needed the help of something else, someone else, without them even realizing it because I certainly couldn’t pay for it,” he said.

That “something” was a breathtaking, one-of-a kind pair of sandals created by Weitzman in collaboration with a diamond company, each sandal encrusted with 464 diamonds with an 18-carat diamond hanging in the center. The “someone” turned out to be actress Laura Harring, co-star of the

David Lynch movie Mulholland Drive, who agreed to wear them to the 2002 Academy Awards. She even pinned up her floor-length Giorgio Armani gown so the sandals would be more visible.

As Weitzman tells it, his bet paid off. Harring stepped onto the red carpet and the late comedienne Joan Rivers commented on camera, “Laura, come over here. Everyone wants to see Stuart Weitzman’s million-dollar sandal.” Weitzman said there were 400 million viewers for the Academy Awards that night, and the next week, a picture of Harring showing off the sandals appeared in more than 500 news outlets worldwide. The shoe got nicknamed the “Million Dollar Sandal.” “[Now] everyone knew who we were,” said Weitzman. “They didn’t yet know all our products … but there was now a positive association with our brand.” Of this stunt that launched his company into public view, he said that luck may have played a role but he personally believes “you have to be good to be lucky.”

Weitzman continued over the years to place his products in the hands (and on the feet) of celebrities to get more exposure for the brand. For example, he cultivated an acquaintance with Jennifer Anniston at the height of her career, and Anniston began wearing the brand’s new high-wedge espadrille around town. “She fell in love with it … she kept wearing and wearing it, and it had so much impact.” It was the first espadrille to be designed with an elevated heel and it became one of the company’s topselling products, he said.

He talked about the subtleties of working successfully with the rich and famous. Making sure that items are quickly and easily available is key.

“These people need things at the last minute. They don’t know where they’re going tomorrow; they don’t know what outfit they’re wearing…. You need to be able to play their game or you’re not going to be on the field with them.” He noted that the business keeps inventory of its most important items, in all sizes, to ship to celebrities at a moment’s notice.

A big celebrity promotional opportunity opened up in 2015 when Taylor Swift was preparing for her “1989” tour. Weitzman said a stylist was aware that other performers such as Jennifer Lopez and Beyoncé were very pleased with the shoes he made them and had suggested to Swift’s stylist that she contact Weitzman for attention-getting footwear designs. One design needed to be a thigh-high boot that Swift wanted to attach to a garter belt for the performances.

The boot, said Weitzman, was “what we still call, in our slang from Brooklyn, New York, a ‘home

Weitzman calculated that it cost him $8,000 to get a new customer into his store, based on the total investment in advertising, PR, and editorial placement run.’” He said that a million of Swift’s followers wanted to know where they could get “Taylor Swift’s boot.” A version of the boot was added to Weitzman’s commercially available collection. “Now when [ f a n s ] found out it was $900, that dropped down to about 25,000 [people],” said Weitzman, to audience laughter. “But think about the impact of someone like that.”

He added that it had been important to translate the custom-made boot into a

saleable product that most customers could THE NUDIST SSANDAL wear. For one thing, the original boot had run very high on the leg to accommodate the garter belt. “When we created this for the exact height that I thought every girl would want, the story is that it became our biggest boot.”

The Power of Store Design Weitzman said he’s always looked to do things that are exclusive and unique with an eye toward getting low-cost publicity for his brand, such as his “Million Dollar Sandal” escapade. (Not to mention the custom-made “priceless” sandals the company created the following year, which were topped with Swarovski aurora borealis crystals from earrings owned by Marilyn Monroe.) Moreover, his approach has extended beyond the product to the look and design of his stores.

When Weitzman was ready to launch his Madison Avenue store in New York, he was concerned about measuring up to the luminaries already there: Barney’s, Prada, Gucci and the like. His wife

suggested putting artwork in the window. The idea inspired a display of “art shoes” created principally by professional artists as well as talented local art students, he said, with fanciful shapes like race cars, flower bouquets, Alice in Wonderland characters, and baskets of puppies.

Weitzman used this type of display for two years. Shoppers kept coming in, and the business continued to flourish. Many of the company’s print advertisements also displayed unusual shoe-inspired images rather than products, which Weitzman said conveyed to potential customers “the whimsy and creativity of Stuart Weitzman and company.”

Sometimes the goal of being one-of-a-kind has required knocking on doors more than once.

A few years ago Weitzman got the idea of having a famous architect create retail stores for him. He approached the late Zaha Hadid, a prominent IraqiBritish architect who had received distinguished awards for her work including the Pritzker and Stirling Prizes.

At first, she didn’t even want to answer his phone calls, said Weitzman, and had no interest in making a shoe store. But, he said, “After persistence, a no sometimes can become a maybe, and a maybe can become a yes.” The first Hadid-designed boutique was opened in Milan in 2013, and others followed in Hong Kong, Rome and New York. The dramatic, unusual spaces of course got plenty of attention. “Nobody else had used an architect of this type to build a store like this,” Weitzman said.

Reflecting on having chosen the path of entrepreneurship, Weitzman spoke enthusiastically. “When you’re in your own business — not everybody’s going to be — but boy, if you can, it’s a great thing to do.” He talked about the “passion” of building an entrepreneurial company and observed: “It creates a love for it, and it becomes a hobby more than a business. You don’t count the hours and you don’t count the time.”

Weitzman was asked how it felt to step away from designing shoes for the now Coach-owned business, especially since it would continue to bear his name. He responded, “I still have an attachment to [the company], but I really have no issue with what goes on from here being Coach’s legacy.”

He said that the last Stuart Weitzman collection he had designed was “great” and that “everybody loved it,” which was a source of deep satisfaction.

He compared his exit to that of legendary Boston Red Sox player Ted Williams: “In his last at-bat, the last game of his career, he hit a triple, a double and a home run.

July

37

Investment “The important thing now is that we need to invest more (in NATO)- we need to get more money. And the good thing is that, very much because of that very clear message from President Trump on this meeting, I think that allies understand this need to do that”.

– JENS STOLTENBERG, NATO SECRETARY-GENERAL

WORLD NEWS EUROPE

HUGE GROWTH OF GAMBLING BUSINESS

WORLD

RISING NUMBER OF MILLIONAIRES AND BILLIONAIRES Personal wealth around the globe reached $201.9 trillion last year, a 12 per cent gain from 2016 and the strongest annual pace in the past five years, Boston Consulting Group said in a report released Thursday. Booming equity markets swelled fortunes, and investors outside the US got an exchange-rate bonus as most major currencies strengthened against the greenback. The growing ranks of millionaires and billionaires now hold almost half of global personal wealth, up from slightly less than 45 per cent in 2012, according to the report. In North America, which had $86.1 trillion of total wealth, 42 per cent of investable capital is held by people with more than $5 million in assets. Investable assets include equities, investment funds, cash and bonds. Last year’s big winner was China, which now ranks second globally in terms of financial wealth after overtaking Japan.

The biggest driver of growth in China was its socalled affluent segment, or those with $250,000 to $1 million of investable assets. Eastern Europe and Central Asia had the greatest concentration of wealth at the top, with billionaires alone holding almost a quarter of investable assets. The 28 Eastern Europeans in the Bloomberg Billionaires Index have a total net worth of $294 billion, which includes a gain of $3.4 billion so far in 2018. The Middle East was the region with the greatest share of wealth held in investable assets —- $3.1 trillion of a total $3.8 trillion. Western European residents held 56 per cent in currency and deposits, while in North America the emphasis was on equities and investment funds, with 62 per cent of $47 trillion of investable wealth parked in those assets.

38

July

Gambling is a huge business. The combined market of Landbased and Online Gambling is estimated at a Gross Gaming Revenue (GGR) of €91.8bn during 2017. Online Gambling is expected to grow at a much faster rate than its older brother Landbased the coming years. Within the Online market, mobile gambling is expected to produce a GGR of €7.1bn, and is expected to grow with an annual rate of 15% the coming years. The total GGR in Europe for sports betting was estimated at roughly €7.8bn in 2017. For the last ten years, the CAGR has amounted to about 12%, and the market is expected to grow annually by 6% for the coming five years. Players mainly bet on sports events. New technology has enabled instant and live betting during matches with “micro” stakes on different types of events like; which team that takes the next score or who wins the tennis set. The market comprises mainly slots machines, roulette, and blackjack but also live casino (live dealers through a streaming service).

CHINA

TESLA’S SHANGHAI PLANT TO ROLL OUT 500,000 VEHICLES US electric carmaker Tesla will set up a wholly owned factory in Shanghai, which will be the city’s largest foreign-invested manufacturing project.

“With an annual capacity of 500,000 cars, the factory in Lingang in the Pudong New Area will be Tesla’s first Gigafactory outside the United States and a leading electric car factory which is expected to be a good example for sustainable development,” said Tesla’s Chief Executive Elon Musk. As per the agreements, Shanghai will support Tesla’s development, including the establishment of Tesla (Shanghai) Co and its research and development unit. The city government says it will promote innovation and accelerate the pace of development of high-end manufacturing.

The city aims to turn itself into a leading automobile center. Tesla currently imports all the cars it sells in China from the US. The company ships more than 15,000 cars a year to China. A factory in China will cut Tesla’s shipping and tariff costs while also meeting the demand of the world’s largest auto market.

US

HOW ‘FASHION’ BECAME A BAD WORD Many New York designers are so frustrated with the state of America’s fashion system that they want to break away entirely. In New York, the epicentre of America’s fashion industry, fashion is not so fashionable anymore. And designers, the ultimate arbiters of trend, can feel it.

It’s not like people aren’t spending money on clothes and accessories. The luxury market grew 5 percent last year, but upstart digital brands and European luxury houses with highly creative designers and direct-to-consumer business models have captured much of this growth. For many Americans, traditional name-on-the-door designer labels don’t have the emotional impact that they once did. Consumers are more likely to spend on internet-born, un-fashion brands, or an experience that plays well on their Instagram feed.

On the other hand, all of this uncertainty, frustration and confusion could actually result in something better. Americans, after all, remain the ultimate optimists and hustlers. More US brands will no doubt have to shrink or die, but perhaps the growing disdain for fashion will force the industry to shake off its shackles and build something entirely new.

Situation “We’ll have to talk about to what extent we can do more on defense. We presented the current situation. But considering the discussion among the European allies, not only the Americans, I think we need to ask ourselves consistently what more we can do.”

– ANGELA MERKEL, GERMAN CANCELER UK

MURDOCH’S FOX RAISES OFFER FOR UK’S SKY

JAPAN

GOVERNMENT TO GIVE FLYING CARS A JUMP-START

Rupert Murdoch’s 21st Century Fox has raised its offer for Britain’s Sky in an agreed deal valuing the pay-TV group at US$32.5 billion, seeing off rival bidder Comcast for now.

Analysts said the bid threw down the gauntlet for Comcast, the world’s biggest entertainment company, to return with a higher offer.

The US cable group gatecrashed Murdoch’s attempt to buy the 61 percent of Sky his group did not already own in February, when Fox was still firmly stuck in the regulatory process.

One top-40 Sky shareholder said they expected Comcast to come back with a counter bid for Sky. The fight for Britain’s leading pay-TV group is part of a bigger battle being waged in the entertainment industry as the world’s media giants offer tens of billions of dollars in deals to be able to compete with Netflix and Amazon.

Investors argue that Sky’s continued strong trading performance, and its deal this year to secure the rights to English Premier League football at a lower than expected price, meant it warranted a higher offer.

The government will launch a public-private council this year to discuss the practical use of flying cars in hopes of bringing more companies outside the automobile industry into the effort. Given the slow development of such vehicles among Japan’s automakers, Suga said at a news conference Monday the government wants to “urge new players to join” the field.

Flying cars, which include those taking off and landing vertically or operating without drivers, are expected to help ease traffic jams in urban areas.

The council, involving the Ministry of Economy, Trade and Industry as well as the Ministry of Land, Infrastructure, Transport and Tourism, will likely draw up a road map. In Japan, Cartivator, a group of volunteers working in the auto and aviation industries, aims to demonstrate flying vehicles during the opening ceremonies of the 2020 Tokyo Olympics.

RUSSIA

WHO IS GETTING RICH OFF THE WORLD CUP The 21st FIFA World Cup in Russia, with billions of people watching soccer’s superstars play for national pride is the world’s most prestigious tournament.

It is the most lucrative and costliest soccer event because those who pay for the tournament are not necessarily those who see its profits. FIFA, soccer’s organizational leader around the world, rakes in billions of dollars in revenue every four years from the World Cup, while the nations that host the tournament foot a bill of $10 billion or more. Russia may not be spending quite the $51 billion it did for the 2014 Winter Olympics in Sochi but costs have continued to rise, most recently to nearly $12 billion. State officials in Russia claim the World Cup will add $26 billion to $31 billion to the national economy. Arkady Dvorkovich, Russia’s former deputy prime minister, claimed that preparations have already added about $14 billion to the country’s GDP — the equivalent of 1 percentage point — as well as about 220,000 jobs.

The 2018 World Cup is expected to rake in about $6 billion in revenue for FIFA, up 25 percent from 2014.

With as many as 3.2 billion people expected to watch the tournament, broadcast revenue is expected to rise to $3 billion.

July

39

Scent marketing Building a brand by using fragrance is a formidable task that demands a coalition of professional marketing skills that take years to perfect. More than one thousand new scents are launched world wide every year, and for companies creativity as well as superior marketing strategies are what keeps them in the public eye, aided by press releases, fragrance launches and the like

The Power Of Fragrance A

s the owner of any brand, you are taking a leap of faith when you enter the realm of scent marketing, and you want to do it right, which translates into understanding this phenomenon and how it works.

Generally speaking, scent marketing,

40

July

scent branding and aroma marketing are synonyms, referring to a type of sensory marketing targeted only in part to the consumer’s sense of smell.

Specifically, scent marketing goes beyond just diffusing a pleasant aroma in a given space.

Scent branding is about creating a signature

scent that is associated with a brand and evokes certain emotions. It involves blending a company’s brand identity, marketing messages and target audience and developing a fragrance that intensifies these values.

Many companies are specialize in manufacturing scents for everything from fine perfumes to personal care products, diffusers, candles, etc.

The phrase, scent marketing, is defined as using scents “to set a mood, promote products or position a brand.” Airlines, hotels, retail stores, and casinos are creating sensory signatures by infusing scents into the consumer environment in the hopes that this will affect the moods of consumers and translate into increased traffic and ultimately, revenue.

Ambient scenting is a little different only because it is not quite as brand-focused. It is similar in the sense that it is a marketing

strategy employed to introduce a specific scent in order to influence the consumer experience within that space. In other words, it adds to the experience of a first impression but is not necessarily a fragrance that will become associated with a company brand.

Experts in scent marketing understand the power of perfume in the world of modern commerce. Their vast selections of fragrances are customized to blend with lines of personal care products, fine fragrances, private labels and more.

Recent research indicates that that human beings breathe in about 20,000 times a day. Our sophisticated olfactory systems can discriminate among and between at least one trillion different smells. The global fragrance market by the year, 2021, is estimated to be worth about US43.6 billion. Several important studies over the years have cemented the

power of the human nose when it comes to marketing and selling almost everything. A Samsung study found that when consumers were exposed to a company scent, shopping time was increased by 26% and they visited three times more product categories.

Well known author and brand consultant, Martin Lindstrom, conducted a study which indicted that scents trigger up to 75% of human emotions related to memory, and that brand impact increased by 30% when more than one sense is engaged and by 70% when three senses are integrated into the brand message.

Aroma and/or scent marketing should be considered as a brand’s olfactory logo. Familiarity in this case does not breed contempt as the old saying goes, but rather an indelible association with the brand. Consumers will know they are entering a particular store as soon as they step inside and the aroma invades their nostrils. In the words of Dawn Goldworm, a fragrance expert, “Scent stimulates your olfactive nerve and the limbic system, the largest part of our memories. It instantly taps into your emotions without you even being aware of it.”

When we are children the world is new, and so are the millions of scents that comprise our cosmos. Aromas are triggers for childhood memories because our first experiences with them usually occur when we are very young. That first fragrant encounter becomes permanently linked with both emotion and

July

41

Scent marketing

episodic memory, which refers to those events in our lives that are highly personal and relate specifically to the individual Episodic memory is the recollection of an experience that is unique for every person.

Each time a new episodic memory is formed, three distinct stages occur, each of which involves a separate section of the brain. The first concerns encoding; the second consolidation at which time the event is cemented into long-term memory. The final process is recollection, where the brain retrieves information relative to a specific incident.

Recollection is sometimes instantaneous and at other times may need a trigger, such as an image or a smell.

At the Mercedes-Benz Technology Centre in Sindelfingen, Germany, Sabine Engelhardt is responsible for tracing social developments, cultural movements and sociological changes. Until recently she was plagued with the question, what should a Mercedes-Benz smell like? With the help of Marc vom Ende, the senior perfumer at Symrise, they have come up with an answer.

Together, using catchphrases and mood boards, they settled on the words for the brand that the aroma would need to reflect; namely, luxury, urban and quality of life. They came

42

July

Several important studies over the years have cemented the power of the human nose when it comes to marketing and selling almost everything

up with four distinct scents: Freeside Mood (smooth citrus); Sports Mood (naturally fresh with green tones and lightly floral nuances); Nightlife Mood (heavy leather with mild fruity tones) and Downtown Mood (warm musk notes with a subtle metal effect and a touch of sensual tones.)

Conjuring images of tropical gardens and sparkling emerald waters, this fragrance is sensual and floral with nuances of soft bamboo. A top note of citron followed by middle notes of sweet creamy gardenia, delicate and sexy pikake, fruity and tropical plumeria, lily and aromatic star anise melds into a finishing

base note of bamboo, musky patchouli and rich and woody sandalwood. This scent would fare well in travel companies, hotels located in tropical locations and stores featuring attire for the warmer months of the year.

Burnt Vanilla and Amber scents are associated with early autumn, a time when leaves of red, orange and gold drift away from their summer core and apples bake in the oven, their warm and spicy aroma wafting through a country kitchen. A fragrance with a top note of refreshing citrus followed by a middle note of cozy, musky cinnamon, this scent is both mystical and alluring, finishing with a base note of earthy, woodsy, sandalwood and burnt vanilla. A retail store featuring seasonal clothing could utilize this scent for their fall line of apparel. It would also work well in cafes and bistros featuring coffees and desserts and in vacant homes realtors are trying to sell.

While it is said that the heart wants what the heart wants, a consumer’s mind and decision-making process is a fickle thing influenced by many factors. Building a brand by using fragrance is the best way to insure an increase in traffic, brand loyalty and that all-important bottom line. So don’t be non-scentsical.