The best advice

NARESH GOYAL
CHAIRMAN, JET AIRWAYS
“I try to maintain complete transparency in my principles and never compromise with them. I don’t remember precisely who gave me this advice, maybe it came from my own learnings in the corporate world.”

ARNAB GOSWAMI
EDITOR-IN-CHIEF, TIMES NOW
”Well, largely I’ve been pretty much doing my own thing without following anyone’s advice. But I recall that at the time I was quitting NDTV a few years ago, my friend Uday Shanker (Star India CEO) advised me on the merits of flying solo. He said that ‘one’s real abilities are not tested until and unless they fly solo’. I joined Times Now and have not looked back ever since.”

AMIT BURMAN
VICE CHAIRMAN, DABUR INDIA
“My father always advised me that you should think about the welfare of Dabur first and then only cater to your personal emotional needs. I took that advice and today don’t regret passing the baton of Dabur Foods to a professional.”

M.A. MADHUSUDAN
CEO, VIRGIN MOBILE INDIA
A dear colleague of mine once told me that if you feel that something is right and it can give positive results just go ahead and do it – don’t deliberate too much. I treasure this mantra.”

ANN OLLESATD
AMBASSADOR, ROYAL NORWEGIAN EMBASSY
“I learned a lot from my daughter and one of the best advices she gave me was to be courteous to everyone, but to share your private thoughts with only a few. Also, India as a country always advises on the importance of living in harmony. ”

CHANDER M SETHI
CHAIRMAN AND MD, RECKITT BENCKISER
“Never howl on any situation, rather try to take all possible benefits from it.”

B.S. NAGESH
MANAGING DIRECTOR, SHOPPER’S STOP
“The best advice that I got was from one of my friends who advised me never to force people into anything. Consensus is better.”

ARVIND SHARMA
CHAIRMAN AND CEO, LEO BURNETT INDIA
“I got this advice in the first week of my MBA at IIM-A by Professor Balakrishnan. He said, you must define the problem correctly and chances are that you will solve the problem correctly.”

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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Waiting for the dawn...

Moreover, the bank has not just increased its ad volume, but it has also worked on a new branding strategy altogether. Right after the hurdle, it came across last year, the bank was quick enough to tweak its communication strategies. It moved away from its arrogant communiqué of ‘lead life on your terms’ to the ‘power of belief’. The new campaign not only echoed a soft voice of communication, but also presented the bank, which till then believed in aggressive growth alone, in a different manner altogether.

However, the biggest turning point for the bank could be its change in focus on the operations front. The bank, which once discouraged its customers from going to its branches and promoted the use of ATMs, is now persuading customers to visit its branches. Perhaps, it expects that a direct contact between the bank and the customers will not only help create a better relationship between the two, but also strengthen customers’ faith on the bank. Keeping that in mind, the bank has also reduced its huge army of direct selling agents by almost 70% with a target of zero reliance on any outsourcing for business acquisition and collections by next year. This certainly will help the bank gain some ground in the eyes of the customers, who have been irritated for the irrational behaviour of those external recovery agents.

But then, changing the way they operate alone won’t help it much. The internal workforce too has to deliver the best to the customers. Krishnan agrees, “No doubt, under Chanda Kochhar the bank is trying to regain lost grounds through advertisements and removal of external recovery system. But until and unless the bank improves its services it won’t be able to gain back the trust of its stakeholders.”

In the mean time, the bank is also working on its asset quality and capital adequacy, which actually brought them the crisis last year. As a result the asset quality of the bank has shown some signs of stabilisation. In absolute terms, the Gross NPAs of the bank have declined marginally, both on a y-o-y basis by 3% and on a sequential basis by 2%, to Rs.9,201 crore. In terms of capital adequacy too the bank is now at a stronger position. Explains Vaibhav Agrawal, VP – Research, Banking, Angel Broking, “Driven by a large net worth capital adequacy of ICICI Bank remained strong at 17.7% (Q2 FY09-10), comprising a substantial Tier-1 component of 13.3%. This puts the bank well for the imminent improvement in credit growth as the GDP outlook continues to improve.”

Moreover, as a part of its strategic change in focus and restructuring, the bank has now largely exited all its businesses outside its core competency including the small-ticket personal loans, which kept on bringing troubles every now and then for the bank. It has also reduced its non-India related exposures in international business. Though the books of the bank still do not reflect the results of such initiatives, analysts like Vaibhav believe that the bank is now well poised to grab the opportunities that would come in its way on account of the recovery. Investors too recognise the fact. As a result the share price of ICICI Bank has rallied from merely Rs.350 at the beginning of the present fiscal to over Rs.900 today.

However, the critical challenge for the bank will continue to win customers’ faith. K. J. Singh, CEO, Evolve Brands avers, “Riding on its campaigns since the beginning of the year, ICICI Bank’s image has certainly come a long way compared to the situation at the end of last year. However, service deliverance and right marketing strategies would help the bank in the long run.” Though the bank’s brand value has recovered by a fair margin as on date, critics say that it still has a long way to go. Apart from ad campaigns, the bank also needs more transparency in its operations, which perhaps has been a key reason for complaints against it in the past. By now, they’ve surely understood how even the smallest of ‘glitches’ can turn out to be an ultra-expensive ‘marketing’ proposition if customers lose faith in them?

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
Outlook Magazine's B School Ranking Scam Exposed
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Don't trust the Indian Media!

IIPM enters into media education
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TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
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NO CHILD’S PLAY

The success of child insurance plans actually rest on the need to secure one’s child’s future and fulfill their dreams. And this is exactly what Bharti AXA is targeting at as Mathur further adds, “Child Insurance policies are designed to keep money aside for higher education and further requirements of the child until he/she is completely self-sufficient. Hence, through our products, we aim to ensure that the dreams and future of children are safeguarded, even in the case of an unfortunate eventuality befalling the parents.”

However, all these plans can be fruitful for the insurers only when they manage to change the orthodox attitude of the general Indian parents. As a matter of fact in India, parents are not too keen on insurance products for their child’s education. Thus, the insurers (through advertisements/ agents/ advisors) have moved to the basics and talked to them about the financial implications they are likely to face if they don’t save enough for the D-day. The simple point raised by these campaigns (Max, Bajaj, Aviva, HDFC SL, et al) in a way has awaken and reminded them of their responsibility – to ensure their child’s future. And thus it has given a boost to the insurers. Anisha Motwani, Executive VP–Marketing and CMO–New Markets SBU, Max New York Life Insurance discloses, “The Karo Zyaada Ka Iraada campaign has successfully impacted our brand metrics in terms of brand awareness & consideration scores. With the launch of the campaign in Aug’08, Max New York Life witnessed an increase in brand awareness scores from 64% (Aug’08) to 73% (Nov’08).”

A similar line of thought comes from Aviva with their “Education is Insurance” campaign, wherein cricket icon Sachin Tendulkar (brand ambassador of Aviva) says, “Mein bhi ek pita hoon, aur mein yeh samajhta hoon.” The statement by the legend vividly captures the essence of the very idea that when it comes to children even the greatest cricketer is just another concerned parent. And no doubt, the Aviva, which holds 2.5% market share in the life insurance industry, has seen some real benefits accruing from the campaign over last one year. Share of revenue from child plans has grown smartly from a paltry 3% to a respectable 15% during the period.

Talking about Bajaj Allianz’s new campaign on child plans, Head of Marketing of the company Akshay Mehrotra avers, “It targets parents with a simple and honest question, put forth to them by their children, ‘have you planned for my future?’. This direct communication aims in awakening parents to their responsibility to financially plan for their child’s future.” As per the company the campaign emanates from the thought of having a clutter breaking message on the child plans in the crowded life insurance industry. The campaigns directly point out the importance of planning for the future of one’s child. Interestingly, despite the fact that there is already a rush of child plan campaigns, this particular one from Bajaj Allianz have not gone unnoticed. As per the official sources, Bajaj Allianz has received SMS and calls from as many as 7,500 parents who wanted to plan for their child’s future within the first four days of the launch of the new campaign (the campaign was launched on October 25, 2009).

It is true that child plans are not new to the Indian insurance market and also that the plans put forward by the insurers are not very different from each other both in terms of features and deliverables. But then, the way the insurers are marketing the ‘old wine in new bottles’ and creating awareness among the Indian parents is certainly praiseworthy. However, what is more crucial for the insurers is that they have to add depth to their products by these campaigns. Because, if they fail, their brilliant effort in creating the buzz may finally end up landing them no where. After all, even good ads kill brands too. Hope they know this.

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here

Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com

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New, insane endorsement-economics is blitzing B-town. Does it add up to make sense?! Monojit Lahiri tries to decode this new phenomenon...

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Celeb Advertising & Brand Endorsements have always come with the territory in Adville – especially in the last decade and a half. The Big B, SRK and M. S. Dhoni have (for example) rewritten the rules game to showcase every conceivable FMCG product category, attracting fee-deals that could wake the dead … or finance a couple of five-year plans of newly, independent countries – which ever came first! Revered icons with proven track record, their insane package (swear advertisers) is in direct proportion to their astonishing connect with every section of a celeb-hungry nation and thumping brand-equity they invest in the products they endorse. Fair enough … although TAM surveys and reports continue to indicate that less than 10% of the consumer-base of these ads actually purchase the products these (or any) stars endorse. Despite this, the fever rages on…

If that is difficult to fathom for the sane and logical mind, imagine hearing about new stars nowhere near the power and glory of the older lot, with no great earth-shaking track-record, charisma or mass-appeal (‘theek-theek’ according to a young Bolly-junkie) demanding and scooping up crazy paychecks on the endorsement front. Ranbir Kapoor – with one spectacular dud and one decent hit – is said to be hitting the Rs.4 crore mark! Imran Khan, with one decent hit and two dabbas is reportedly asking Rs.3.5 crore per endorsement. (It’s another matter that no one is playing ball, as yet!) Deepika Padukone – possibly the most successful of the lot – is in the Rs.2 crore bracket with Genelia D’souza, a little behind with Rs.1.5 crore. Interestingly, all of them (except Imran) have tripled their endorsement fees in the last few months and – well – are getting takers! So, who’s lost it, guys – the Advertisers, these new kids or the celeb-hungry bozos dedicating their life and times to B-town moves?

“The Dodo Advertisers who believe that casting a celeb will instantly rock their product’s image and bottom lines!” That’s the iconoclastic Pritish Nandy, forever ready to tilt at windmills. While it is totally true that movie stars and cricketers are perceived as the nation’s most glamorous, popular and favourite role-models, Nandy believes that there are two bigger truths defining the space “both advertiser-driven. One is the desire to do a quick kill in terms of public attention without the appropriate consideration to the brand fit. Two, the hysterical anxiety to be seen with these stars to go up the social ladder among his peer group.” The best advertising (ZooZoo, HDFC, Vodafone) don’t need to pursue this track, says Nandy, and are none the poorer for it. Ogilvy’s resident dude Sumanto Chat comes in next. He believes that it has to do with the huge youth-connect that these star-kids enjoy in a space and categories that cater to youngistan. Then, of course, there is a celeb-struck nation and finally “a leg-up in image for the Advertiser and his company!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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WHEN SCIENCE MEETS POLITICS!

A. P. J. Abdul Kalam, Former President of India

Columnist Shobhaa De feels that Brand Abdul Kalam represents simplicity, humility and wisdom. “As President, he brought a great deal of down-to-earthness at the imposing Rashtrapati Bhavan,” she says, adding that Kalam’s compassion towards the underprivileged sections of society, and for children in particular, touched a billion hearts. The son of a boatman (he sold newspapers to fund his school tuition fees), who finally occupied place of pride as the Indian President (2002 and 2007) – A. P. J. Abdul Kalam continues to command immense brand value in India’s political and social sweepstakes. Hailed by many as India’s Missile Man for his work on the development of ballistic missile and space rocket technology, Kalam also played a major role in the famous Pokhran-II nuclear test of 1998. Whether you bow to his intellectual will that helped India touch the highest frontiers in science and technology or his unambiguous love for children, this brand commands a huge premium...

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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What an Impact!

IIPM: An intriguing story of growth and envy

so it turns out that Walmart’s ambitious five-year long ‘Project Impact’, to redesign the overly cluttered stores and to create a shopper-friendly environment by reducing the merchandise, has resulted in declining sales of the Bentonville retail major. Reason: Less merchandise on display and losing on to millions of square feet of merchandise space has affected per square feet sales. So what should be the way forward for Walmart? Abandon the project, or continue with it? “Changes generally don’t go too well with consumers. Starbucks’ sales were impacted similarly when it underwent a transformation last year and Starbucks was forced to go back to its original positioning. Cutting down on unwanted merchandise may be impacting sales currently, but in the long run, it will help Walmart to rationalise its SKUs,” avers Beth Higgins of Euromonitor.

Savreen Gadhoke

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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AEGON RELIGARE - AGENCY: MEDIACOM

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CHALLENGE: Being the 18th private player to enter the overtly cluttered insurance sector (which not only had similar products & services, but also much the same communication); grabbing TG’s attention toward the brand was the challenge in front of this brand.

SOLUTION: Contrary to the predictable conventional launch, the brand engaged TG by generating curiosty around the brand by a two-pronged strategy: devising communication that fosters interest in the brand and reaching out to him where he is most susceptible and responsive. Eye-catchy acronym ‘KILB’ – “Kam insurance lene ki bimari” created awareness about the need to evaluate the correct amount of insurance cover required. Phrases like ‘Kya aapko KILB hai?” created instant inquisitiveness amongst TG.

TOUCH POINTS: The brand reached out to the TG at relevant touch points – sometimes even by entering his daily routine so that KILB could gain maximum attention. New media was created and used innovatively – screensavers, ‘KILB +ve’ stickers beneath nameplates in offices, seal marks in newspapers, viral CEO mailers, financial portals, et al.

RESULT: Overall, the slickly executed campaign managed to generate over 42,000 leads for the brand agents – almost double the number usually generated by top players in the category who work with nearly 50% higher budgets.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
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B-schools expect higher rate of campus placements this year

Many would like to forget the tyrannical dictators, but a new AIDS awareness campaign uses them to portray AIDS as a mass murderer.

Sheer shock value makes this one worthwhile says Aditi Prasad

Creative Director at the Hamburg, Germany-based ad agency Das Comitee, Dirk Silz can’t believe that the one campaign, which has managed to win him global recognition may never see the light of the day. But that is precisely what may happen if AIDS associations across Europe have their way. The 45 second video campaign, created by Silz, shows a couple having sex. Towards the end the face of the man becomes that of Adolf Hitler. The closing message: ‘AIDS is a Mass Murderer.’ The campaign also includes radio spots, music videos and posters featuring Saddam Hussein and Josef Stalin. “Until now 28 million people have died of AIDS all over the world. And even today more than 5,000 people succumb daily to the deadly disease. We knew we’ll have to make a hard campaign and so zeroed in on the cruelest mass-murderers in history – Hitler, Stalin, and Saddam Hussein,” Silz told this magazine in an e-mail interview.

Designed to promote World AIDS Day in December and scheduled to run on German TV and movie theaters, the campaign (posted on YouTube till recently when it was pulled off for hurting sentiments) has expectedly set off a storm of protests from organisations representing people with AIDS across Europe. They believe that the ad, commissioned by Regenbogen (an AIDS charity in Germany) seems designed for little more than shock value and is downright offensive to HIV infected people. Even the National AIDS Trust, which coordinates World AIDS Day in Britain, has distanced itself from the commercial believing that it further stigmatises HIV positive patients.

Whether or not the campaign sees the light of the day, the sheer reach of the World Wide Web and particularly YouTube has ensured that both Silz and the campaign have already earned more than their five minutes of fame in the global advertising industry. Affirms Silz, “We thought that the campaign will polarise in Germany because of Hitler. There may be just a local discussion on whether it’s okay to make advertising with Hitler. But interestingly, we’ve got e-mails from England, France, US, Canada, Spain, Venezuela, South Korea... People from 125 counties visited our homepage to view these ads.” If the idea was merely to get everybody talking about AIDS again, this one’s sure achieved it. And Silz certainly has no regrets about giving the face of Hitler, Stalin and Saddam to perhaps the most controversial virus to hit mankind!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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You are under my umbrella!

IIPM 3-year full-time Integrated (MBA BBA) Programme

The insurance industry certainly seems to be the cynosure of India Inc. In fact, the industry, which posted a whopping growth to the tune of 45% (life insurance) and 16% (non-life insurance) for FY 2009, is all set to see the entry of new players. Be it Bank of Baroda, Larsen & Tourbo (L&T), Edelweiss or State Bank of India; the renewed interest in the sector certainly signals a positive future for it. While L&T plans to foray into the general insurance business by 2010, Bank of Baroda is expected to commence its life insurance business in the next seven months. Even SBI is expected to start its general insurance business by the end of this fiscal year. Moreover, what is interesting to note is the fact that while there is no clear indication of reforms flowing in from the government, the capital intensive business is attracting the interest of major groups. Perhaps, the low penetration (4% for life insurance and 0.6% for general insurance) and the regulator IRDA’s recent initiative is guiding their decisions. Agrees Debashis Sarkar, Sr. Director & Chief Marketing Officer, Max New York Life Insurance, “The exclusion of mortality and morbidity charges from the cap will ensure that there is no compromise on growth in sales of valuable life cover. This is of critical importance in a country like India where 96% of the households are vulnerable. In addition, the life insurers will not have to resort to cross subsidisation across age groups to meet charge cap. The decision clearly indicates that IRDA wants life insurance to be viewed as a long-term protection product.” This clear cut long term objective from the regulator has further given a boost, not only to the domestic players, but also to the international players. Moreover, despite the current hurdles, it’s certain that the FDI norm will be eased for the sector (sooner or later), a reason why many more are mulling over the insurance business!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here

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Airtel has always used strong marketing messages to get to the consumers’ hearts. Surbhi Chawla communicates the true brand within...

IIPM 3-year full-time Integrated (MBA BBA) Programme

Raman Roy,
MD, Quatrro, BPO solutions

“Airtel Today, is considered to be synonymous with a force that can bring about a big change in the Indian wireless industry. Today one cannot imagine life without a cellphone, as our entire life seems to be revolving around the same. A mobile phone from a luxury item, has become a utility tool and Airtel has played a very important rolE in bringing about this change. it has also in its own way, played a very important part in our lives. It is very hard to imagine that about 15 years ago, Airtel was not there as a brand or a product. but today, it is difficult to imagine the country without the brand airtel, which stands for being valuable and most innovative. It has a great width and the spread of its network is something that not many can match upto.”

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
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600 down! More to go?

Starbucks’ expansion has presumably backfired; so the coffee king has put in place a new plan of action. But why will this work better than before?

It’s a classic problem of plenty. If you had limited money and if you had to invest in either expanding retail outlets or maintaining/improving quality in current outlets (with each choice being mutually exclusive of the other), which one would you have chosen in the current times of economic slowdown? One line of thought would say that people don’t stop drinking coffee even when there is slowdown, so it’s better to expand. Another line of thought would say that people would surely stop drinking coffee during economic slowdown ‘if’ the coffee was a premium (relatively) high priced brand; and therefore the focus should then be on consolidating current customers, improving and maintaining quality rather than on expansion.

The $10 billion turnover Seattle based Starbucks, the world’s largest coffee chain, went in for the former; that is, expanded. But more interestingly, in their expansion drive, they adopted a mixed positioning strategy (that is, they positioned Starbucks as a coffee for masses, yet tried to hold on to their premium positioning). The result? It was forced to shut down 600 stores across the globe – a hefty number considering that Starbucks has 16,000 plus stores globally. While the share price was at a high of close to $17 a year back on Nasdaq, it fell rapidly to the $7-8 range by the first quarter of this year.

Starbucks, because of a focus on expansion rather than delivering a quality coffee product, ended up in a situation where the brand was definitely available to a wider consumer group; but because of the premium price, it was still not affordable to everyone,” explains Elizabeth Higgins, Consumer Foodservice Industry Manager, Euromonitor International. But all was not lost; as Starbucks perchance realised the mistake and immediately started correcting the positioning back to a premium one. To that effect, the coffee king has taken in many measures. For example, Starbucks is planning to roll out coffee in small quantities and also is adding items such as wine and beer to its menu for evening visitors. Apart from this, it also plans to offer live entertainment to its customers by way of movie screenings, live music, dance, community theatre, et al. “Their recent [changed] focus on the product should help them win back consumers that were turned off previously by the quality or service,” adds Higgins.

However, the challenge that lies ahead of it is that if Starbucks wishes each one of its stores to be on the same pattern, it may have to shut down some more stores, especially those in areas where consumer segments are not interested in spending more for coffee. What has been the current result? Net revenues for the quarter gone by (Apr-Jun 09) fell 6.6% to $2.40 billion from $2.57 billion in the same quarter previous year, more because of outlets being closed down. What about profit? For the quarter in question, Starbucks got in $151.5 million as net profit. This is considerable, as last year same quarter they had a huge loss of $6.7 million. So are things looking up? Well, the share price has already crossed 52 week high barrier of $17 in Jul-Aug 2009...

Savreen Gadhoke

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Source : IIPM Editorial, 2010.

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

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All roads lead to... !

Government’s new found love for private enterprises seems to be finally taking shape in the form of PPPs. No doubt, they are the only way forward for the Indian economy towards growth at present, but then, there are areas which need immediate attention, if the government doesn’t want to hit a road block, feels Niharika Patra

What can be more surprising to a person, who is visiting India after a long time, than a host of long and shimmering roads, swanky buildings and above all, a sudden increase in the quality of basic amenities provided by the government. After all, it’s a never-seen-before India for him!

All thanks to the government’s new found love for private business houses, an impressive combination of public projects and private money is finally making India a place to be. Though, one cannot disagree that the results have been few and far, but the good thing is that the whole concept of mixed economy is finally coming up with the combination, which is certainly making the idea click.

In fact, public-private partnership (PPP) is that one thing which can make India rub its shoulders with the dragon nation, when it comes to world-class infrastructure coupled with the much needed push for the Indian economy. Agrees M. Y. Reddy, Committee Head, Infrastructure, FICCI, “Applying PPP model to the infrastructure is what can give the sector the necessary boost that it wants as of now.”

Though the idea is not new for the Indian policy makers, PPPs have been utilised to a greater extent only during the last decade or so (and that have been mostly limited to roads, airports, ports, bridges, et al). However, the recent announcements made by Finance Minister, Pranab Mukherjee, to provide infrastructure sector the much needed push, through clearing of pending PPP projects, would surely open new doors, not only for the private sector, but will also make projects like that under National Highways Authority of India (NHAI, which requires 60 highways to be built across India with an upward investment of Rs.70,000 crore) get going once again.

Even steel, ports and the Railways have been waiting for long for some big programme implementations under PPP. In fact, a latest report by BNP Paribas shows that the Railways alone provides for an investment opportunity close to a whopping Rs.2.7 lakh crore in the next eight years. Of the whole corpus, an investment of Rs.68,000 crore is alone needed by the Dedicated Freight Corridor, which covers 2,800 kms of rail corridor across seven states of India.

But then, that’s not all. Poverty eradication and social reforms too are reaching ground levels and this is where the PPP model is eying for a big opportunity. In fact, Food Security Bill, which talks about providing grains to the poor at Rs.3, can do wonders coupled with a proper distribution system. For instance, the use of Smart Cards (for the distribution of food grains), the latest innovative step that allows the holder to check the status of their application and stock while facilitating easier and more transparent distribution of stocks, provides huge business opportunity to Smart Card producers, who have been eagerly waiting to tap the huge potential in the public sector. The initiative (which has already tasted success in National Health Insurance Scheme) can be seen as a win-win solution for both the government as well as private players. Avers S. Kumarswamy, Chairman, Agrochemicals Promotion Group, “Public distribution has been a problem not only for the BPL families, but also for the ingredient suppliers of fertilisers and seeds because of the rampant corruption.” Certainly, Smart Cards would to a great extent also help in removing that devastating loophole.

Education too, has seen PPPs mushrooming up. The latest plans of Education Minister Kapil Sibal to make vocational training more accessible indicate a bright future for PPP based ventures in up-gradation of ITIs. Till now 171 ITIs have already been identified by the government for upgradation under PPP basis. If implemented in a proper manner it has the potential to transform the education system in the country.

But then, PPPs don’t come without hiccups. While PPPs are proving to be a good means of turning out quality projects, there are long-term troubles attached to the model. The first and foremost is the time. While the tenders are given with a time-frame attached to them, the projects, most of the times, don’t end up on time. Raison d’être: the regulatory loopholes. Price too contributes heavily at times to such conflicts.

For instance, even with PPPs in line, power is one sector that has seen conflicts between the parties, both at the cost and price front. In fact, coming to a fair price agreement is the biggest hurdle in effective use of PPP model. “For augmenting investment, it is critically important to move from fixed rates to market determined rates,” agrees T. N. Thakur, Chairman, Power Trading Corporation.

Moreover, the number of PPPs on the social infrastructure front is also too small at present. In fact, it’s the current policy environment in the country that is discouraging private players from lending in their hands to the government for such projects. Further, wherever a PPP model exists, it’s mostly an Indian company doing the Tango with the government. The contribution from foreign players’ is almost missing.

“Decentralisation of power and quick decision making is what will make the PPP model click in India. Further, it’s important that empowered monitoring mechanisms are put in place so that all such projects are implemented in a time bound and phased manner,” Satish Bagrodia, President, PHDCCI tries to suggest a solution to the problem.

No doubt, in order to make the elephant dance, both private and public players have to dance together too. After all, it takes two to tango, they say! But then, the harmony somehow seems missing as of now and that is certainly not a good sign. If you don’t believe us, ask a dance instructor!

Niharika Patra

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Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
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How the hand Rocked the Lotus, Elephant, Bicycle, Lantern...

Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You

The revamp of the 124-year-old party and brand continues. Says Santosh Desai, CEO of Future Brands, “Congress as a party has understood that Indian elections are the largest marketing exercise in the world and that inclusive growth can be the best USP of the Congress brand.” But, inclusive growth does not mean literally going back to the villages embracing the old dogmas of socialism. The appointment of Nandan Nilekani as the head of the Unique Identification Authority with the rank of a Cabinet Minister sends out another powerful message about the new brand Congress – talent is welcome, even if it is from the private sector. If and when Nandan Nilekani succeeds in his mission, the Congress would have used a private sector entrepreneur to execute one of the most critical ‘public’ tasks. Tamper proof I cards can ensure the poor actually get the benefits from social welfare schemes. And if money meant for the poor actually manages to reach the poor, brand Congress would have nurtured a massive base of loyal consumers (Voters). There are twin benefits of this ‘private-public strategy, according to Congress insiders. Having Nandan Nilekani lead this mammoth task will be a big hit with the Gen Next that idolises successful and ‘ethical’ entrepreneurs like Nilekani and looks up to them as role models. Then again, Nilekani’s success means more than 400 million rural consumers will have a solid reason to choose Congress over other brands.

This unabashed and unapologetic ‘coupling’ of Brand Congress with the aam aadmi can be seen even in the Budget presented by Finance Minister Pranab Mukherjee. He has simply junked the old – and insidious – habit of finance ministers of doling out largesse to corporate titans and Dalal Street while paying lip service to the poor. This Pranab budget is all about rural India, about farmers and about poor Indians everywhere. And more importantly, the Budget has not taken any step to take the Indian economy back to the bad old days of crony ‘socialism’. This aam aadmi socialism yes; but of a kind where entrepreneurs and wealth creators will have a key role to play. Senior Congressmen understand the potential power of this strategy. Says Congress spokesperson Manish Tiwari, “ The Budget is a judicious mix of short term stimulus, medium term fiscal prudence and long term institutional reform.” When asked about how the market is perceiving the Budget as a marketing exercise, the politician Tiwari is quick to retort, “I don’t think the Budget can be really seen as an image building exercise or a kind of a political platform. A Budget can be evaluated in the context of circumstances.” Tiwari may be coy, but the marketing and advertising world knows that the budget is actually a huge boost for the new brand identity of Congress.

And lest you think that brand Congress is now all about doling out sops to the poor without a future vision, please re-examine what the Minister for Human resources Kapil Sibal has been saying for a while. Sibal has loudly and persistently made it clear that the private sector must play a key role in revamping India’s messy education system. Sibal and his team understand clearly that India can never reap the demographic dividend with the current education system where rent seeking and corruption is rife and rampant. Sibal is laying down a vision where the young – both rich and poor – will have more choices when it comes to education and careers. Once implemented, this strategy will create one whole generation of loyal consumers who have not yet reached the legal age of voting!

And of course, no matter what you and I say or the aam aadmi says, Brand Congress will also be closely identified and linked with Brand Gandhi. Like it or not, it is Sonia Gandhi who first gave a new lease of life to the dying Congress in 2004. In 2009, the CEO to be Rahul Gandhi is getting ready to take over from his mother, with sister Priyanka always around as a strategic advisor. Says Ad guru Prahlad Kakkar, “While Sonia resonates to dignity and simplicity, Rahul implies to modernity.”

That, as rivals of Brand Congress have realised painfully, is an unbeatable identity for a brand to have!

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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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IIPM, GURGAON

3 ghosts of the future?!

IIPM Admission Detail

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!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION

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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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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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).

For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM Admission Detail
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
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IIPM : EXECUTIVE EDUCATION
Why Study Abroad When IIPM Gives You 3 global Advantages!