New-Age Ads Irresponsible Or Reality-Driven?!

1 lakh copies sold in less than 10 days of Arindam Chaudhuri’s “Discover The Diamond In you”

Leo Burnett’s Pops Sridhar agrees. He believes it’s a “generational thing” and strongly requests the kill-joy brigade not to drag morality, values and integrity into it. As Mathias pointed out, advertising hypes life to make it look sexy for the viewer – but it’s almost always rooted in fact and truth. Be it Ogilvy’s Mentos ad, or Perfetti [Papa at a party. Papa in the office. Papa at home] ad, Bates’ Virgin Mobile ad, Ogilvy’s MotoYuva ads – it’s a throw-back on the times we live in. “Relationships, codes of conduct and ways of expression have undergone a sea-change. It’s a cooler, more informal and chilling time. The old authoritarian dad-kids relationship, in urban India is a thing of the past. They are more buddies and engaged in closer, warmer bonding. Kids are cheekier and adults are cooler. That’s the truth and that’s what these ads show, say and express,” avers Pops. Mridu Manjrekar, however, is neither amused nor impressed. “These ad-wallahs are master spin-doctors, ready with glib explanations that appear both truthful and convincing, but scratch the surface and its bullcrap!” The school teacher and mother of two teenage kids, “sees this brand of advertising as insidious and dangerous.” Couched in entertainment, it hits the target spot-on and instantly – at a subliminal level – creates mischief through propagating wrong values. [Its no sin to bullshit parents; cheat girlfriends; mock teachers! Nothing is sacred, precious or non-negotiable. Nothing is a big deal. Its ‘just- chill-yaar’ time.] Scary!

At the end of the day, one thing needs to be recognised and realised in a cool and objective manner. Barring some overtly vulgar ads, most of the stuff discussed is not really offensive, either in terms of morals or values. Remember, the rigid good and bad, moral and immoral, done and not done zones don’t exist anymore. It’s an age of confluence, not conflict. To be cheeky or naughty is ‘not’ perceived as a cardinal sin, which calls for capital punishment! Humour [audacious or irreverent] is cool. As for influencing and corrupting kids, 10 is the new 15! Good, sensible parenting is the answer. Besides, don’t forget that if you give kids wings, they’ll surely develop roots…

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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3 ghosts of the future?!

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US giants need a bailout package of $75 billion. Now!

The newly elected US President Barack Obama recently met the current president George Bush and spoke about a series of issues, including bailout packages for the US auto majors. The situation of the US auto sector is even worse than that of India, as the auto majors are begging for bailouts, with all urgency! The accused in this case are the three Detroit giants – Ford, GM and Chrysler, whose financials are getting worse, every passing month! The three automakers have asked for a $50 billion package from the US government, which will help them combat the current crisis. Interestingly, this figure doesn’t include the additional $25 billion which the government has agreed to grant to the automakers to produce energy efficient vehicles.

Well, in a situation where almost five million jobs rely on the auto sector, falling apart of the sector surely means a state of urgency! It is a situation where the stock prices of these auto giants is tumbling by the trading hour and their operating cost shows no signs of falling. Surely, for now, it’s about breathing hard, underwater for the giants. Strange though, it was the same trio that once ruled the world of automakers. Today, they have been reduced to brands that might just becomes ghosts for the American future. Obama, you there? Bailout is the word!

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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SOME UNUSUAL BUSINESS

The last year had not been easy for Hindustan Unilever (HUL). But India’s largest FMCG behemoth fought the blues and posted a net profit of Rs.24.96 billion for the 15-month ending March 2009.

HARISH MANWANI, CHAIRMAN, HUL

How did HUL do it? Well, in Chairman Harish Manwani’s words it was via a paradoxical strategy of “business as usual on growth and business unusual on costs.” At first, struggling with increasing prices of critical raw materials, HUL tried every known trick in the trade to balance its cost, price and profit equation. They raised prices of their shampoos, detergents and tea brands and even reduced grammage of some products. While these measures helped HUL in achieving decent sales growth, increased prices led to a simultaneous decline in volumes. But when inflation reared its ugly head, HUL was again forced to cut prices of its key brands to stay competitive.

It was then that Manwani took the decision to convert the impending crisis into an opportunity. Realising that those conventional strategies would be unable to bail HUL out of its predicament, Manwani implemented three crucial strategies to balance the company’s toplines and bottomlines. He first declared a ‘war on waste,’ wherein the company reduced its fixed cost component. Primarily, HUL began buying its raw materials (commodities) on a monthly basis instead of the previous annual cycle to take advantage of the fluctuations in the commodity market. Says Dibyajyoti Bora, FMCG Analyst, CII, “In the long term, the move will help HUL take advantage of futures contracts and save costs.” The company followed this up by ‘straddling the pyramid’ to capture uptrading opportunities. Actually with an increase in prices, HUL had started losing market share to cheaper rivals.

To counter this, they rationalised their stock keeping units (SKUs) and spread out their vast product portfolio at new price points. Tweaking their go-to-market strategy to cut flab at the front end added more push. For FY10, HUL has decided to revamp its entire product portfolio and relaunch several brands like Rexona, Breeze, Kissan Fruit Jam, et al. The bid is to enhance ad budgets for brands like Hamam and Liril. Business unusual? Naah!

Savreen Gadhoke

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Grandiose as the Taj

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Their hospitality matches the grand name. There’s nothing left to say when its employees don’t leave their guests even during a terror attack...

When Jamshed Ji Tata created history way back in 1903 with the opening of India’s first luxury hotel, little did he know that Taj will be hitting the headlines of global media after a century. But it did, although for all the wrong reasons - a terror attack. Nevertheless, the tragic incident displayed the heroics of the employees of this prestigious hotel. Ratan Tata, Chairman, Tata Group, gets emotional when he talks of the incident. “The heros of that evening were members of staff, many of whom lost their lives. But people used their head and saved people, and sheltered so many of the guests who were there either for dinner or otherwise, and got them out.” The incident showcased the commitment of Taj employees towards their service who refused to escape even in that situation of extreme terror. Small wonder that the Taj emerged with an even more glowing reputation after 26/11. The daily routine of a Taj employee is nothing similar to the incidents of that fateful day, but the dedication to serve its guests is almost similar.

We spoke to a 30-year-old chef at Taj on conditions of anonymity (as it’s against the company policy to allow its mid-level staff to interact with the media) to get a hang of his activities through the day. He told us that his day starts early and begins with planning the day - staff duty planning, updating staff about kebab & curry, stabilising hygienic standards of the kitchen, looking after the staff’s personal hygiene, receiving various supplies (which come on daily basis like butchery, dairy et al), co-ordatinating with managers in charges of banquet functions, setting the menus for the day... phew! And the fellow is not even complaining! In fact, he says, each of his colleagues have a similar level of commitment to serving guests at the hotel.

No wonder that the foreign tourist arrival in the Taj increased by a whopping 6% and summed up to 5.37 million tourist’s inflow in 2008 despite fears of recession looming around. Even the RevPar along with ARRs increased at a good rate. Taj has an edge over others as it has changed itself with time. They were among the first in the country to introduce 42 inch plasma TVs in all rooms along with ergonomic imported chairs worth $500 each, L-shaped work stations, steam baths in place of traditional bath tubs and more. Hospitality analyst Amol Rao avers, “What makes Taj best among the lot is its constant drive to provide customised services to its customers.” Truly, a day at one of the icon brands of India has to be as great as the name itself.

Neha Saraiya

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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If music be the food of ads, Rahman rocks!

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Brand: World Space Radio
Agency: O&M

It was a music everyday-everywhere overdrive with maestro A. R. Rahman himself. And while the satellite radio is not doing too well now, within 45 days of the campaign’s launch, WorldSpace had 2,00,000 queries & awareness shot up from 40% to almost 80%.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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MANISH BHATT, SR. VP & ECD, CONTRACT

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1. Fevicol’s shadow ad
2. Hutch’s ad campaign prior to its transformation to Vodafone
3. Coke’s ‘Thanda matlab Coca Cola’ campaign featuring Aamir Khan
4. Happydent’s light ad campaign
5. The Times of India’s ‘Lead India’ campaign

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Health ka funda

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For years, Britannia had known only Parle as competition and that too primarily in the glucose segment. The premium cookie segment of the market was dominated by its own brands, including Good Day, 50:50, Little Hearts, Treat, et al. A few years ago, an aggressive ITC sauntered in with its Sunfeast brand and Britannia’s cookie cart showed signs of tumbling. To deal with the challenge, MD Vinita Bali launched Britannia’s new healthy positioning last April. She re-jigged Britannia’s portfolio by dividing it into ‘delight and lifestyle’ and ‘health & wellness’ and even hired two independent category directors for the same. The strategy hit bull’s eye. The cookie major has grown at an average of 21% (till December 08’) ever since and is eyeing a $1billion turnover by 2011 (see cover story)!

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Sun Microsystems is a pale shadow of its former ‘dotcom’ self.

IBM’s proposed takeover would be the last nail in its coffin, says Ratan lal Bhagat of 4Ps B&M

Dark and dense clouds are engulfing it from all directions. And the Sun of Silicon Valley does not appear to have very strong chances of making it beyond this rough weather. Moreover, a ‘big blue’ monster is just waiting to devour it.

“The economic downturn continues to weigh on our customers, especially those that contribute to our traditional high-end businesses,” said Jonathan Schwartz, CEO of Sun Microsystems while declaring Sun’s results for the quarter ending March 2009. The player has registered heart shattering successive losses of $1.677 billion and $209 million for the last two quarters. One of the primary reasons is that around 40% of Sun’s total sales are generated from companies in the financial services and telecom domain. The ongoing financial crisis has seriously crippled the funds of its present and prospective clients, thus forcing them to pull back on technology spends.

However, that is not the only reason for the dismal performance of Sun Microsystems. The Santa Clara, California-based software giant has been beset by problems galore, ranging from slowing demand leading to falling revenues, product slip-ups, growing competition and a stock that has lost three-quarters of its value in the last fiscal year alone.

It all began when this dotcom darling was unable to make its much touted hardware to software shift. Moreover, competitors took the advantage of Intel chips and Windows software to push cheaper machines into the market, a strategy ex-CEO Scott McNealy rigidly refused to deploy.

“Strategically, we continue to focus on two core areas - creating the world’s largest, and fastest growing developer communities – for whom we build the products, services and technologies on which they’ll build their products and services. And secondly, we deliver compelling commercial offers in the form of systems, software and services to those deploying applications – across a diversity of industries – through commercial subscription, services and optimised system products,” explains KP Unnikrishnan, Regional marketing director- Emerging markets(LATAM, EMMA, Greater China & India), Sun Microsystems. Surely, Sun has relentlessly poured billions of dollars into new products for a decade to overcome the dot-com fallout, but with its high-cost business model, many products are taking way too long to hit the market and revive its fortunes.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Marketing of Nimbooz and LMN

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As for Nimbooz and LMN, both offer 200ml tetra packs for Rs.10. Nimbooz also offers a 200ml RGB for Rs.10. However, while Nimbooz may gain a competitive edge on its 350ml PET bottle (Rs.15) as compared with LMN’s 500ml PET bottle for Rs.23; LMN will gain on its 110ml tetra pack, which Parle Agro intends to sell for Rs.5. Says Parle Agro’s Chauhan, “The strategic price point is developed keeping in mind the distribution opportunity for the brand LMN. Considering we are fresh and natural lemon drink, our main competitor was the product at the stalls and the home made nimbu pani. At stalls, a glass of nimbu pani is sold for Rs.6. We’ve made it possible to have packaged and hygienic nimbu pani at Rs.5. Considering it has huge opportunity to penetrate into all kinds of markets, we wanted to have price points that spanned across a wide range, allowing anyone to be able to afford our beverage.” Titus of PepsiCo too is not wary of competition as she says, “Sooner or later competition will arrive. We welcome competition as it helps to stimulate the category.” As far as reach is concerned, all four viz. PepsiCo’s Nimbooz, Coca-Cola’s Fanta Apple and Parle Agro’s LMN and Appy Fizz have up to one million outlets each through which these drinks are sold to customers across India. To ensure the success of these drinks, the honchos of respective drinks have wasted a lot of chalk at the drawing board. For instance, Fanta Apple was first launched in Andhra Pradesh and Tamil Nadu in November 2008 before going for a nation-wide launch. Ask Venkatesh Kini, VP-Marketing, Coca-Cola India the strategy behind this move and pat comes the reply, “These states acted as testing grounds for our products. Hyderabad is a cosmopolitan city, which has a lot of affinity for Coca-Cola brand. In Tamil Nadu, the launch was aptly timed around Pongal so the response was good.” Titus avers, “An extensive consumer research was carried out to validate Nimbooz.” LMN, on the other hand was not test marketed but launched after an intensive study undertaken by Parle Agro’s in-house R&D team.

Another vital determinant deciding the success of the products is their advertising and communication strategies. Fanta Apple has roped in Genelia D’Souza (of Jaane tu ya jaana na fame) to endorse the product. A TVC conceptualised by Ajay Gehlaut of O&M hit the small screen soon after the product launch. “The commercial for Fanta Apple gives a fresh dimension and a different expression to the message. It highlights how subtly yet intelligently youth gives it back to those who irritate them,” says Gehlaut. Furthermore, Fanta Apple will also support an integrated 360-degree marketing campaign involving BTL, POS and POP marketing, digital advertising, et al. On the other hand, PepsiCo too has launched an intensive consumer activation campaign to promote Nimbooz. Besides releasing an ad-campaign (which highlights Nimbooz’s ‘Ekdum Asli Indian’ proposition) created by BBDO India, there is also a 360-degree marketing plan including multi-city launches, road shows, comprehensive 3D activation, OOH, radio and press. As part of its BTL initiative, a Nimbooz Highway Gaddi will visit the four major Indian highways to promote the product and educate consumers. Talking about LMN’s marketing plans, Chauhan says, “LMN’s launch is being supported by a 360-degree marketing campaign comprising of TVC, print advertising; point of purchase promotions and BTL activities. Creativeland Asia has designed the complete brand communication for LMN.” A closer view of the marketing initiatives reveal that most of the marketing plans of the drinks revolve around the same lines. Activities around POS and POP will definitely be vital to the success of the products. Says Chauhan, “Retail visibility is always of key importance and host of unconventional POS will support the brand in establishing itself in this space.”


Be that as it may, the war is on in full swing. If Fanta Apple has its pricing strategy right, Appy Fizz has a first mover’s advantage. If LMN is thriving on a strong brand positioning, then Nimbooz has the strong backing of PepsiCo’s legacy. Undoubtedly, Coca-Cola India and PepsiCo India score high by the virtue of the fact that they are legacy brands with a high brand recall and consumer loyalty. At this point, it becomes imperative for Parle Agro to pull up its socks as it is pitted against industry leaders. However, given the success of Parle Agro’s flagship brand, Frooti, it won’t be too difficult for it to catch up with PepsiCo and Coca-Cola India. Also given that the target audience for LMN is much diverse as compared to that of Nimbooz, you never know, LMN may soon zip past Nimbooz... It’s all a matter of who isn’t addicted to Vitamin-C (Vitamin-Cola?), right? Or is it?

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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It’s called the Boomerang Karma and it doesn’t need stuporous intellect to fathom

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Even the biggest listed retailer in the country, Pantaloons Retail Ltd, exited its JV with the Alpha Group Plc. to set up an airport retail venture (“We are completely out of this business now as it doesn’t fit our style of working,” said a company spokesperson). And if you’re thinking that the newly done up (and relocated) airports at Bangalore, Hyderabad, and even at Mumbai, are something to cheer about with respect to retailing, they stand simply nowhere when one compares a walk through the shopping stadiums (if one can use that usage) at Singapore’s international airport, or at Heathrow’s five terminals in London or in the Zurich or Geneva international airports in Switzerland, where most intelligently, to reach the boarding point, one has to first board a train from the shopping area (showing how expansive is the land dedicated to retailing). Anurag Mathur, Joint MD, Cushman & Wakefield deliberates, “Globally, airports derive a large portion of their income from non-aeronautical revenue. Heathrow, San Francisco, Vancouver and Brisbane, bring in as much as 50% of their revenues from retail and other non-aeronautical resources.” But currently, a passenger spends $3 on an average in an Indian airport, which stands too low as compared to the global average of $15.

However, despite the most discouraging response of private companies to airport retail tenders, market experts are still optimistic about the growth of the segment. Binit Somaia, Director, CAPA, comments, “The airport retail environment will improve significantly as the airport development projects move ahead. At non-metro airports, this trend is likely to progress more slowly and less dramatically, however we will nevertheless see changes in these locations as well.” Cushman & Wakefield estimated in a September 2008 study that India will have seven new airports by 2015, by when, even the 40 currently operating airports will need (and hopefully undergo) huge upgradation. And if that goes as per estimations, the non-aeronautical revenues will shoot up to a gargantuan 54% of gross airport receipts. But the segment will take much more time to match up to western levels of 70%.

There is no denying that airport and petrol pump (or gas station) retailing are still at a very nascent stage in the country. But keeping in mind the overall growth of the retail sector, one does wonder logically why private companies are playing doppelgangers when it comes to exploiting an available and purchase ready captive audience. Perhaps it will still take a lot of time for Indian retail companies to actually think beyond selling wafers and water bottles at airports and petrol outlets.

Perhaps a final port of call might convince private players. Forbes has rated Indian airports as being the most delayed ones in the world! Rather than looking at this negatively, imagine the possibility. A traveller who normally would’ve spend just a half hour looking around, now gets perchance beyond that! How much more ‘boomeranged’ karmic could that get?!

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An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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THAT FLYING PHOENIX

IIPM set to beat economic slowdown

Air fares are being slashed left, right and centre. Low-cost air travellers are again picking up where they left off. LCCs are back in vogue. ‘Small’ fares reign, for now...

“Indian Low Cost Carriers (LCCs) would soon cease to exist!” experts had declared just a few months ago. Such presumptuous predictions were in tune with the then turbulent aviation sector, reeling under the impact of higher ATF costs (which forms 40% of the operating costs for carriers) and galloping inflation that deterred low-cost travellers from flying and prompting them to choose the services of the Railways instead. A slump in consumer sentiment fuelled the de-growth cycle for LCCs.

But proving all doomsayers wrong, the tide has now reversed and no-frills airlines are rising from the ashes like the proverbial phoenix! Falling inflation, a steep fall in ATF prices–by approximately 55% since August 2008, improving infrastructure, et al are giving wings to the once-dying ambitions of players like Indigo, SpiceJet and GoAir, KingfisherRed and JetLite. Says Aditya Ghosh, CEO, Indigo Airlines, “At IndiGo it has been our commitment to provide them with best in class affordable air travel at all times.” Changing market dynamics are encouraging no-frills aviation players to go back to their earlier ambitious expansion mode. Many have restored flights to destinantions that had gone off their route map, others are even adding new routes, and still others like (JetLite and Kingfisher Red) even adding facilities to revive the previously-declining demand. “As oil prices decline, LCCs will once again be able to offer fares that will be low enough to stimulate market growth,” explains Binit Somaia, Regional Director, Centre for Asia Pacific Aviation.

What’s more, despite the ‘red’ splashed across their balance sheets, major player like SpiceJet, IndiGo and GoAir are planning a further 10% cut in their fares to lure more customers. “Lately, there has been a reduction in ATF prices and we want to pass that benefit to the passengers immediately in the form of this latest fare scheme,” says Ghosh. A decline in inflation levels is an added benefit for the LCCs as their target audience has enough in their pocket to come back to low fare air travel. “The recession has also given a setback, but things look positive. We promise a double-fold growth in the segment soon,” says an optimistic M. Madhavan Nambiar, Secretary, Civil Aviation. Further, as airport infrastructure improves, LCCs will also be able to improve their asset utilisation capabilities by reducing turnaround time and increasing efficiency.

But the most important demand stimulant for LCCs remains the Indian travellers facination for the skies. “Only 2% Indians fly in a year. The untapped potential therefore is huge,” adds Somaia. Moreover, in a price sensitive market such as India, with more first time flyers joining the market each year, there will always be a strong market for airlines that offer low fares. The winning 3E mantra forever remains: Exceptional Customer Service, Extreme Operational Efficiency and Effectual Price Discrimination. Who knows, what direction oil prices will take tommorrow, but for now, it’s ambition reloaded for LCCs...

Ratan Lal Bhagat

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An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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THAT’S HOW YOU DESCRIBE THE JOY OF THINKING ‘NANO’

NO OTHER EXAMPLE CAN JUSTIFY THE MIGHT OF BRAND TATA MOTORS THAN THE MAN HIMSELF. HE HAS BEEN THERE ALL ALONG AND STILL GOING STRONG

When pundits write paeans over how entrepreneurs must dream ‘big’; this man was contrarian. He dreamt ‘small’, shared his dreams with the nation and the year 2008 saw him make aggressive efforts to realise that ‘Nano’ dream. Yes! Ratan Tata’s pet project - Nano - installed the perfect halo over brand Tata Motors in 2008. Mamta Banerjee and the Singur controversy may have taken some of that sheen away, but the subsequent acquisition of European marquee brands Jaguar and Land Rover (JLR) brought the halo right back on the brand’s forehead. And while we could have given all credit to CEO Ravi Kant; yet it is undeniable that both Nano and the JLR initiative were personally handled by Ratan Tata himself, thereby making him our chosen brain that fuelled brand Tata Motors this year.

The Rs.1 lakh car, as it’s known, is expected to hit the market in 2009 and will undercut Maruti 800 in both pricing and practicality. Who could have thought that a truck maker would challenge the dominance of the small car maestro, Suzuki! With 62 years of truck making heritage, Tata Motors is today India’s largest and world’s seventh largest H&MCV manufacturer, holding over 65% market share. Considering that this is the company’s primary métier, Tatas are in a position to take the market pretty much anywhere they want. But this is where perception and rationale find themselves on a collision course! When the Indica compact did come in the year 1998, analysts were skeptical. They argued that a truck manufacturer will never be competent enough to fight it out in the excessively competitive small car market. Armed with modern technology and years of small car making experience, the competition was just not ruthless, it was smart! Ratan Tata was, however, convinced that his car was innovative enough to outsmart any established player irrespective of the latter’s brand. What Tata has is the unparalleled ‘brand equity’ of the group. “Tata has always been a major brand since it is present in almost all automotive segments. It started with the trucks, then entered SUVs and now cars,” says Auto Expert Murad Ali Baig.

Ratan Tata’s bag of tricks is overtly dependent on innovation and astute market reading. He knows that for an upwardly mobile customer (wanting a ‘sensible’ car), operational cost is a major influencing factor. Consumers are susceptible to oil prices volatility, which hugely impacts their buying decisions. Ratan Tata understood this and reinvented the small car marketing model, making Tata Motors an instant hit! Moreover, Tata has made the well-heeled competition rethink its strategy and with the launch of ‘new’ Indica in 2008, it has perhaps taken the game forward! And if the JLR acquisition is any thing to go by, Tata Motors has arrived on the global scene as well! But what indeed makes this automotive brand different is the legendary ‘Tata Group’ stamp and of course Ratan Tata himself, the smart old man who actually knows what really sells...

Karan Mehrishi

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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1500-plus IIPM students placed across the country with 44 bagging international offers
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Cricket ka Karmyudh?

1500-plus IIPM students placed across the country with 44 bagging international offers

They called it the cricketing extravaganza and ‘Manoranjan ka baap’ and it truly turned out to be just that along with a spectacular show for TRPs. The combination of Bollywood and cricket was just the thing that made viewers fall hook, line and sinker for the Indian Premier League! It all started with an audacious “bid” for cricketers, in which the who’s who of India Inc. along with savvy Bollywood stars, went up on stage and “bought off” the best bets for their respective teams. This BCCI prodigy then managed to remain in the news consistently for one reason or the other. First, it was Vijay Mallya firing team CEO Charu Sharma and taking on Dravid for his average performance. Then, the Shreeshant-Bhajji spat happened, adding more masala to the IPL dish; SRK turned up at the stadium wowing fans and Preity kissed Yuvraj, adding to the glam quotient. As the tournament reached its climax, the thrust shifted to merchandising, et al, that have kept alive IPL’s memory.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Oil Minister, Murli Deora recently revealed

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Allegations of cartelisation notwithstanding, aviation companies do need to come out of their ‘losses’ misery or else they will soon die a natural death. Given their miserable situation, creditors are getting jittery, including oil companies and airports that have started to pester them for clearing their outstanding dues at the earliest. On the one hand, Mumbai International Airport is demanding its due bill to be cleared at the earliest, and on the other, Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (HPCL) have even issued a deadline of 15 days for dues clearance.

Oil Minister, Murli Deora recently revealed that Jet had defaulted on fuel-bill payments of $53 million to IOC. And the situation is grim for the entire industry. Jet, Kingfisher and Nacil together owe nearly Rs.1,800 crore to oil companies (beyond their credit limits), out of which almost 60% needs to be paid to IOC, and the rest to HPCL and BPCL. IOC has further revealed that Jet Airways has exceeded its credit limit of Rs.600 crore by Rs.330 crore, while Kingfisher, whose credit limit is around Rs.60 crore has exceeded by around Rs.40 crore. Nacil has no credit limit, but the company owes a staggering Rs.606 crore to them.

Moreover, the real problem faced by the industry is that of fixed costs that includes salaries and other operating costs. Figures unveil that the number of employees in Jet went up from 11,088 as on March 31, 2007 to 13,163 through March 2008 because of which salaries, increments and benefits for the same period also swelled up by 28.5% from Rs.938.1 crore to Rs.1,205.2 crore. Jet alone is anticipating a quarterly loss of over $103 million and this is when overall revenues are estimated to shoot up by nearly over 50% as against the same quarter of the previous year (due to growth in its international services).

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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India and Egypt have had a strong link for centuries

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What potential does Egypt hold for Indian business houses?
If you consider India, particularly, then India and Egypt have had a strong link for thousands of years and this cultural legacy has helped Egypt to become unique for India. We offer cheap skilled labour, and the geographical richness makes Egypt one of the best place for investment.

Both India and China have adopted different strategies for Africa. Which is a better approach?
We think both the approaches by India and China are equally important for Egypt and Africa. Egypt needs both FDI in heavy industry like iron ore and at the same time buoyant entrepreneurs from India who can develop the economy. The aim should be in making a win-win situation and in such condition; both the approaches will keep on helping African economy.

Is Africa becoming the new testing ground for India Inc.’s ‘brand’ war with corporate China?
I think Mr. Manmohan Singh in the India - Africa Summit, made it very clear that India is not competing against China in Africa, rather both of them are complimentary and Africa always welcomes those countries, which work for the benefit of this continent. In Egypt, both India and China have been contributing and working on different grounds and we don’t see that there’s a ‘brand’ war.

What, according to you, are reasons behind their (India and China) renewed focus on Africa?
We don’t think that the focus is renewed but I think there are certain areas, where the focus has increased like in Iron ore, IT and textile. African Governments are facilitating the code of investment and in Egypt we have created a very strong banking system. We also organise exhibitions, last year we had 16 ministerial visits.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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“We do not see much competition from China”

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V. VENKAT, CEO AND EXECUTIVE DIRECTOR , EMAMI LIMITED

Can you share your plans for the African market? Where and how much are you planning to invest in this market in the near future?

Currently we export personal and healthcare FMCG products to East and North African countries. We have distributors who buy and distribute in the respective countries. However, we have plans to look at a manufacturing facility in one of the appropriate African country. But that’s sometime in the future.

Is Africa fast becoming the testing ground for India Inc.’s ‘brand’ war with corporate China?
We feel this question is not applicable to personal and healthcare FMCG organisations at this point of time as we do not see much competition from China in the personal care space.

What, according to you, are reasons behind their (India and China) renewed focus on Africa?
For Indian personal care products Africa is certainly an attractive market place as it offers a reasonable size of market and lower entry barriers.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Carrefour, Target, Metro, Tesco and others are right on the heels of Walmart, threatening its dominance as the number one retailer in the world

Circa 1988: Walton gave up his post of CEO of Walmart but remained on the board as Chairman until his death (1992). Walton created a great business out of the idea that came from a barber, Herb Gibson, “Buy it low, stack it high, and sell it cheap.”

Cut to the present: Walmart is still the number one retailer in the world and has recently undergone a brand makeover. It’s new logo has the ‘hy phen’ missing and Walmart is one word! But is this something new? Not if we tell you that Walmart has done this several times before! What is however unique here is the idea of remodelling the existent Walmart stores. During the year, the company has promised that it would remodel 350 stores in US. And if this excites you, Eduardo Castro-Wright, President & CEO of the U.S. stores division has some better news for you. “The number of remodelled stores could double to about 700 each of the following two years,” he claims. Indeed, Walmart had banked on the low-cost factor for a truly long time, and had ignored the essence of marketing and in-store experience and appeal to its consumers. Agrees Susan Rider, President, Rider & Associates, “Sam Walton was an example of a businessman that cared to provide a low cost product so that people could afford a better way to live. I believe that is still the mantra for Wal-mart but when you have thousands of managers and executives, the concept may get lost...”

However, senior officials at Walmart continue believing in the low-cost model, so much so that they have even extended their private label portfolio to combat shrinking margins. But somehow, Walmart’s image (after all the legal suits) is getting tarnished by the day, even when it comes to the quality of the cheap products it sells. “Most of this ‘cheap’ inventory comes from overseas and has tarnished Walmart’s reputation of providing quality items,” affirms Doron Levy, President, Captus Business Consulting who further recommends the importance of ‘minimum’ quality focus for Walmart’s brand longevity.

As Sam Walton notes in his autobiography Made in America, “Walmart wouldn’t be what it is today without a host of fine competition, most especially Harry Cunningham of Kmart, who really designed the first discount store, and who in my opinion, should be remembered as one of the leading retailers of all time.” But Lee Scott, current CEO of Walmart wouldn’t want to use such positively expressive words for his competitors... Why you ask? During the past few years, Target, Metro, Carrefour and Tesco have emerged as the ‘new-age’ retail giants globally. To talk about US alone, Target is the one giving nightmares to Walmart as a recent Global Markets Survey by Citigroup on the latest shopping trends illustrates that Target’s prices are only 3% higher than that of Walmart’s on an average. The report further went on to warn that the reported in-store experience of Target was far better than that of Walmart’s. As Nikki Baird, Managing Partner, RSR Research remarks, “It took competing retailers longer than it should have to realise they couldn’t compete with Walmart on price. Customer-centric strategies have emerged very much as a response to Walmart. Today the retailers say that: if I can’t beat Walmart on price, then I’m going to change the basis of competition.” Really, Walmart has to move beyond the myopia of keeping its faith tucked in the blanket of just low prices!

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Ramalinga Raju has grown satyam into a billion dollar enterprise by betting on encouraging entrepreneurs within his firm...or so he says!

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When 4Ps B&M caught up with Rama Raju, CEO, Satyam Computer Services Ltd. and asked him about how Satyam plans to be among the Big 3 rather than the Big 4, he strongly asserted that investments in leadership will be a key differentiator for Satyam. Indeed, leadership in itself can be a very important barometer of the company. The trends with regard to CEO succession for the top IT giants in India do make for quite an interesting comparison. The Tatas seem to have an immensely unshakeable faith in S. Ramodarai, who has been CEO for over the past 12 years. The Infosys CEO baton, in contrast, has passed from Narayana Murthy to Nandan Nilekani in 2002 and then to Kris Gopalakrishnan in 2007; which has been hailed as an outcome of outstanding succession planning. As far as Wipro is concerned, the less said the better about CEOS. Azim Premji had famously quoted in 2005, “Wipro doesn’t need a CEO!” Nevertheless, the company is now following a unique joint CEO structure, with Girish S. Paranjpe and Suresh Vaswani at the helm since early 2008.

Which brings us back to Satyam, and also back to Rama Raju, who, besides being the brother of the iconic Chairman Ramalinga Raju, has been the MD of the company since 1996 and CEO since 2005 (there was no CEO designation at Satyam before that, as company officials tell us). If we go by first impression, also considering how Ramalinga Raju is the most visible face since inception; it appears that Satyam is a case where ownership and management are one.

Do note, however, that we used the word ‘appears’. On the contrary, within Satyam, a powerful entourage of leaders is being created as we speak, who, the company claims, will enable it to make the next big leap soon. Rama Raju tells us that distributed leadership and minimal bureaucracy are the key aspects that Satyam is focussing on. He says the company has “some 2000 value creating entities and 800-900 projects for a few hundred customer relationships.” Furthermore, he says that even as far as succession planning goes, he has people in mind, though he did not wish to name them, who could take up his position when he retires in another 10 years. If we look at the senior management, there are a number of knights in Raju’s army who, though they are not so well talked about, are actually quite ‘mission critical’ to Satyam’s hitherto elusive ‘Big three goal’.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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With elections ‘09 looming, India’s politicians are also gearing up for the kill.

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Back home, you only have to flashback to December 2007 to see how the political marketing fever has seized India’s once dogmatic and rhetoric-oriented netas. The Gujarat election campaigning was at its peak that time, and political supporters of firebrand BJP leader Narendra Modi thronged election rallies wearing slickly designed Modi masks, which added the hysteria value to the overall brand Modi. Reminiscent of the successive Reagan, Carter, Clinton, Bush and now Obama masks that have defined US election campaigns for decades, the made-in-China Modi masks were conceived by Modi’s campaign managers.

40-year old fine-arts professional, Manish Bardia, who designed the Modi mask still remains in awe of the CM’s understanding of media. “The masks were a small part of the Modi campaign, which started at least a year before elections. Whatever the government did - however small - was communicated via media,” says Bardia. Incidentally, 20-days prior to the election, Bardia was asked by Modi’s team to design the website - Gujarat Gaurav Fan Club, on lines of Clinton and Obama’s websites. “It was to tap the NRI Gujarati base and youngsters in the state,” explains Bardia. The website was a hit with target audiences, registering almost 15 lakh hits in 20 days and visible across Facebook and Orkut.

Strangely though, while Modi’s over-the-top image makeover, backed by a pro-communication & technology strategy was lapped up by Gujarati voters recently; BJP’s similar national strategy did not cut much ice with the electorate when the nation went to polls in 2004. BJPs $20 million India Shining campaign hogged TV spots and print media at the time. Conceived by ad agency Grey Worldwide, the advertising zing was combined with top-of-the-line online presence, bulk e-mail, blogs, posters and India Shining rhetoric during election rallies. Political watchers were convinced that the slogan and its accompanying promise would win the day for BJP. But when election results came in, the saffron party crumbled. Some grudgingly even admitted that what works for the US does not necessarily work in India.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...