Welcome 2011

Once More Let Us Raise Our Arms Skywards & Welcome the Billion New Hopes in Our Lives! Wish You Grand Gorgeous New Year 2011 

Product Ideas for Success

All marketers know that a great marketing strategy has to have a highly differentiated product at its core. But most products have tend to look & feel the same leading to confusion in the mind of the customer. Well you would say that there are limits to incorporating the functional or augmented differentiations built into the offer.

Packaging comes very handy but do not go far to the second moment of truth for the customer experience. Shapes, sizes,  pricing, distribution points etc could crate sustainable differentiation too. Its possible to create a core product for each category and then go on augmenting it to the fully loaded version. Lets take a case of newspaper.

A daily newspaper carries sections like politics, technology, business, sports etc bundled together into one whole inflexible offer, What if you need only tech & sports sections only? Noo, you can't have them? Why not? Its time we have newspaper who show greater respect to readers and provide news strictly as per requirement. Days are over of the pontificating editors telling how to tie our shoe laces or address a political boss. The new democratic global order warrants that the customers be respected for any success in the marketplace. Hope we shall have such customized papers soon in the market and like we choose our news, entertainment or sports channels we could also have the freedom to select the newspaper portions too.  

New Year Resolution for 2011

Honestly let me admit that i am not very fond of new year resolutions, as i do not feel that new year begins necessarily on 1st Jan for everyone on Earth. A true new year would be when we make a new beginning of sorts in life. If we continue with our past routine in the new year too then whats new about the new? Therefore we must strive to initiate something new in our respective lives to make them more meaningful & worthy. My best friend has already left me in 2010 for a better future without me so i can learn my lessons from there and move on with my new life in 2011. Thank you friend!

A New Year resolution must not be along the trodden insipid lines like a desire to buy a new dress or eating out at a fancy restaurant or buying a new car, that would be what i call ordinary. Okay let me list few new year resolutions here so that other could add to the list:

1.Wear your trousers that you acquired in 2008, lose enough weight.
2. Run 10 kms without stopping.
3. Travel to some new place alone for a week
4. Resolve to hear no one for a week
5. Avoid bad friends for one year
6. Work 24x7 for one month least
7. Help a friend in need with money
8. Seek no help from anyone for one year
9.Walk alone for 100 kms without a break
10.Eat same food 3 times a day for one month
11. Forget that friend who left  you shaken & hurt
12. Be genuine for a year, avoid all classical smartness
13. Break free from at least one social norm
14. Fall in love with life again
15. Tell your teacher you don't understand the lessons in the class at all
16. Shout out loud at a public place

I invite suggestions to expand the list

Case Study for MBA- Marketing Management: Leopard Bath Fittings

Some twenty years ago a group of professional with diverse backgrounds working in different companies in Bath & Kitchen fittings industry segment decided to set up a venture. There were number of small units in the area around Chandigarh engaged in manufacturing taps and showers. They would sell their products to the local traders at a wafer thin margin and would also do job work for the leading players in the trade.  So some professionals and few small manufacturers decided to come together and project their newly acquired critical mass into the market.  Consequently a new company by the name of Leopard Aqua was born.

Leopard Company was thus a mainly marketing company with a minimal production capacity. Its corporate office was set up in a 5 canals plot in the industrial area at Chandigarh.  Besides serving as HQs it had a well appointed showroom for selling the products from the premises.  The company was jointly owned by the eight directors having equal number of shares. However their responsibilities were defined but some overlaps remained as more than one director were engaged in the same function. One of the directors was appointed as the Managing director and other assumed responsibilities of accounts & finance, production and other important tasks. In fact three directors choose to be sleeping partners leaving the management to the remaining five. After 6-7 years two directors left the company but the management remained unchanged. It has been incorporated as a closely held limited company.

In the FY 2006-2007 the Leopard Company had a gross turnover of over INR 200 Million (Annexure 1). The company produced several lines of bath & kitchen fittings from low to high price/quality segment at different plants owned by different directors. It is usual for revenue based target driven sales force to push the fast moving low price products in the market. Such products by their nature have very thin margins.  This would result in low sales of quality high end products having good margins.  The Leopard sales team despite repeated reminders kept pushing the low price middle quality products into the market without giving a significant push to the high quality good margin items. Therefore there developed an imbalance in the market.  

The sales team that joined Leopard 20 years ago remained with the company as the growth in sales resulted in consequent growth in their commission earned. Subsequently the company started hiring sales people on salary basis as they needed to employ MBAs and other professionally qualified people. Like many other SMEs in India the top level sales team at Leopard remained less educationally qualified as compared to the new recruitments.  It was felt that people who worked on commission basis would stop pushing the sales once they had attained their personal financial goals. 

A company is known more by the quality of its products than by the tall claims in its advertisements and promotion messages. Hence despite having top quality products in its portfolio the Leopard Company suffered from the lack of proper positioning of the brand. Till late 90s such companies did not take to mass media advertising seriously and kept to Word of Mouth promotion only.   There was a general thinking in the industry that since end user buys taps (faucet) & shower only once or twice in a lifetime therefore it would be a waste to convince them through mass media.   Moreover consumers largely depend on the advice of architects and masons in purchase of such products.

The Leopard Company kept a reasonable amount as promotion budget every year since its inception following the all you can afford approach.  But even then it did spend 2-3 percent of its turnover yoy since first year. The company engaged a marketing expert and repositioned the brand from rational to emotional appeal with a shade of Indian nationalism. It was felt that rational appeal does not seem to lead to any unique positioning as most brands in that domain had similar appeal to the customers. Moreover since most of the sales came from domestic market it was proper to appeal to the local sentiments.

The Leopard Company has a national direct sales force of 30 people working at various levels reporting to the MD and other indirect sales force of 20 feet on street people. It has national distribution network across India comprising 250 dealers. The company has robust sales and marketing systems. There is no significant amount of credit outstanding as the goods are cleared through bank only. The leopard’s inflexibility in extending accredit to trade buyers speaks volumes for its brand loyalty and product quality.  It has achieved leadership position in Gujrat and has significant market share in remaining southern states, it does not enjoy significant market share in the north India where its head office is located.

The Directors in the company have reached their middle ages and their children have taken different career paths. Till recently no director asked the board to appoint his child in the company. In the year 2007 one director got his appointed in the company against the wishes of the majority.  And also some directors also have lost the enthusiasm to keep working with the same energy.  The situation has been complicated by two directors complaining that products manufactured at their plants are not being sold in good numbers leaving them mired in problems regarding working capital management and high inventories.  Though Leopard can raise capital from debt or equity route but there is no mechanism to route it to the independently incorporated pvt limited company owned by the indebted directors. As those organizations has already been leveraged. 

The recent entry of international players like Kohler, Roca and American Standard has increased the competition in the market at the high end. The lower stratum of the market has been invaded by numerous small players as the technology barriers are too low. Most companies in India in bath & kitchen fittings segment use very basic technology in the casting and mould making. Therefore there are no significant entry barriers for new players to make inroads into the market. The new players having lean infrastructure have the capacity to compete on very thin margins can drive out an established product from the middle to low segment.

Due to multiplicity of challenges the Leopard Company has decided to look for alternatives such as partial or complete divestment of equity.  In your opinion should the company go for full divestment mode in 2011? What would be a reasonable price to ask for such company in case of full divestment? What would be the brand value of its Leopard brand?

Myth & Realty of CRM in India

A corporation must strategize its engagements plan with the customer in order to have a healthy top line over longer period. A corporation must attempt to create an engaging dialogue with target consumers and stimulate their engagement with the brand.

Reams of literature exist that stresses the need for focusing on the Consumer engagement & Delight in order to have financial profit from the enterprise. But what is the reality of the real market in India? How many consumer durables companies have a customer complaint/feedback button on their website? In the FMCG domain the scenario is no different. The E2E or B2B markets have different mechanisms to deal with negative feedback. No durable or FMCG company in India has a formulated Customer Grievance policy that could be set in motion in case of negative feedback & assist the executive to remedy the hurt/loss. What does it mean? All that ‘marketing talk’ on customer comes first are mere sham or myth? Check any company budget templates and try search the allocation &appropriation for complain redress?  Where is the marketing in India?

Another important misunderstanding about marketing in Indian context is about the relationship between Consumer engagement & consumer satisfaction. As per wiki,” Customer engagement has been discussed widely online; hundreds of pages have been written, published, read and commented upon. Numerous high-profile conferences, seminars and roundtables have either had CE as a primary theme or included papers on the topic. Customer engagement marketing places conversions into a longer term, more strategic context and is premised on the understanding that a simple focus on maximizing conversions can, in some circumstances, decrease the likelihood of repeat conversions (Customer engagement interview with Richard Sedley). CE aims at long-term engagement, encouraging customer loyalty and advocacy through word-of-mouth.”

Customer Engagement in services is more critical than in the products because of the nature & ownership issues. Most Marketing managers focus more on satisfying the customers at the primary product level without strategizing the process of engagements. In a scenario of less importance to marketing in the deficit markets of India/ China nature most companies are confused in allocation of resources between Engagements & Satisfaction. Such a situation would mean the once you have a strategically great product, price & promotion you need not factor in the issues of engagements.

I have researched the problems with my client organizations and the market at large. The service companies must have a defined engagements policy that could maintain the consumer trust resulting in financial success for the corporation. Some of my recommendations are:

1.    Engaging consumer in pre, sale & post sale needs strategic stance.

2.    A satisfied customer can forget you so needs reminder

3.    A bad situation can be converted into a gain with the help of quality engagement.

4.    An engaged customer has more value than the satisfied only.

5.    Quantity & quality of the communication must be calibrated with a bias for quantity in deficit markets like India. 

Gurinder S. Ahluwalia

http://anahadmc.blogspot.com/

Online Free Marketing Management Lessons for MBA/PGDM India

Some of my students have been asking me to use the social media for study of Marketing Management for MBA students in India. Well let us begin today! But i would not not be posting any lessons unless asked particularly & also would write in brief only. But it goes without saying that you could ask me anything under the Sun on Marketing Management in India...and you would get an answer to the best of my abilities.

What would you gain from this interaction? Firstly, how many of your MM faculty has industry experience? Secondly how many of them share industry data in the class room? Do they ever go beyond Philip Kotler, wonder if most even understand that standard text book? Moreover how many are tech friendly? and have a blog? Enough said about they way i handle Marketing Management.

Firstly let me clarify that i do not agree with the general trend they way MBA students opt for specialization in Marketing Management in MBA course. You would agree that it has become a practice that students with higher grades go for Finance major whereas less bright go for Marketing. Marketing management has become the favorite course of the wimp, and thats the problem. In fact  Marketing management graduate need to know finance as well otherwise s/he would not be able to make profitable marketing moves.

How to select a proper specialization is a million dollar question for the students in the mid course. And the job is not over once you have opted for Marketing Management. Because you need to learn to appreciate that the application of Marketing would vary depending upon the product/service you wish to market. B2B marketing is whole lot different than B2C. Theory of Marketing Management may remain almost same but their would be several finer points that a student must understand. Marketing in a growing economy like India may not have an actual customer relationship focus as you would see in the mature markets. Even the way the business activity may be organised on different lines. Therefore when you select Marketing major please take the next step of gravitating your studies around your select area of work/career. Once you have decided, and you must decide, to pursue a career in consumer durables, FMCG or B2B then focus on the working of corporations in that field only. Begin with the local market and go on to the global scene.

Philip Kotler texts are very basic that you would need to supplement with regular visits to industry websites, cases, discussions and workshops. Go for Marketing so that a we could have iconic Indian brands, and home grown fmcg companies with effective distribution networks.

Groupon Clones in India

It had to happen, anything that starts working somewhere else must be cloned and tried out in India too. It happened to organised retail, once wall mart topped Forbes list our smart business managers thought it would be easy to replicate it here, the blue collared IIM guys thought that with little deep pockets they could roll it out like a Bihar flood. No, i repeat, no retail company in India has been able to achieve there goals despite several corrections. The simple answer lies in the nature of indian consumer markets, we are not like the USA in any manner therefore how could the hope replicate an american business here?

Once again, whoever you meet these days at seminars and business dinners they would be raring to share there newest passion about groupon clone they have put together for India. Lets wait & see what happens to these indian groupons?

Indian consumer has demonstrated very clearly that except for convenience goods they are averse to buy any other stuff online. We indians buy slowly, very slowly and internet would take little more time to build up among the numbers comparable with the mobile phone. And i don't expect a guy who owns a 2G phone to buy online with mobile interface! How many subscribers have gone for 3G phones?

The most important bottleneck to the online buying through bidding is not the technology or the disposable rupee but the the prevalent trust deficit in India that has been the perpetual nemesis of the marketeers in India.

Online bid based buying would continue to be a like a multiplex film targeted at only 80 years old!  

HR policies in tune with Pareto principle

I often wonder why some corporate managers fail to recognize a mundane need for flexibility in organisation wide policies. Recently i worked with a first generation diversified corporate from Delhi  that faced such challenges. This company has presence in construction services industry and have forayed into higher education. Since India is growing economy for the past decade therefore many companies finding it difficult to keep pace with the rate of change. Some are so scared by rapid pace of change that they happen to do more damage in their unplanned  effort to control the flow of work. In there desire to put systems into place they end up choking the growth of the organisation.

The rant for having one kind of policy across the organisation may look pretty rational but it could seriously  stymie the growth. Let us examine a case. All organisations consists of people that have varied level of productivity. As per Pareto' law: its your 20 percent that matter more than the other 80 percent. Therefore its not false to argue that most companies have important 20 percent human resources that would be difficult to replace! So the HR need to have a plan that takes care of the challenge.

How many companies have solved the riddle of having flexible HR policies that could serve the need of both 20 & 80 percent pool?

Sales & marketing have figured a way out by implementing variable performance linked pay & growth path. This would mean that if you are a hard working, no-nonsense guy then you would take home more bucks at the end of the month. But is it enough? My experience at Indian Express Chandigarh, a decade ago  was different. Since the 20 percent guys were in minority the other 80 percentile ganged up against them and forced them out of the company, resulting in huge damage to the growth.

How to safe guard your 20 percent deliverers against 80 percent maintenance guys? If you are a professional who desire to keep your productive force together better have two-tier HR policies.One size does not fit all so its wise to have a two-tier system of management.

Catch them Fresh

Bomb disposal is child's play in India !

We have long been known as one of the most corrupt society on the face of Earth. We the Indians have been brought up listening to the stories of high & mighty politicians, bureaucrats & industrialists who lived happy lives post a sleazy run. Therefore the moral of the story, as we learnt from our parents, and have religiously passed on to our children, is that you got to emulate them to make a mark in the society. Don't be a paranoid crusader who lives by honesty & hard work, be practical and join the mainstream! Well some of my friends, & most Indians make money & lead happy lives following the mainstream path only.The fringe are always knowns as lunatics.

And once you have accumulated wealth by the mainstream means of India then the hands of the law are there to do your bidding. I too have many close encounters with morality and i too have not swayed away from our mainstream path many times, but on occasions when i decided to deviate from the well established path i always got deserved drubbing & lessons too. But still the rebel in me, like most Indians, does still take some liberties.

The recent scandals in India in the end of 2010 look like just gifts from Santa.Lets discuss them and enjoy the talks in media. And soon everything would be all right in the real mainstream way. Life has been like this India for the last more than 5000 years. Yesterday on the NDTV, a senior journalist Barkha Dutt was giving her side of the story in the famous Nira Radia episode. She was hurt for being singled out for condemnation, from a gang of 30 odd other journalists, by a less-circulated magazine whose editor pretends as if his marketing boss has not instructed him to carry the story for obvious gains. He firmly believes that he alone is responsible for this story of the decade. Hahaa. Well his journalistic ethics do not allow him so.

I do not wish to participate in this national debate, as i am convinced that we Indians have already known everything that needed to be discovered in this world, have noted that in our ancient books that are known to the many yogis living along Ganga river, therefore lets chill and or go watch some movie. After-all we have known since ages that bombs & bomb disposal is mere a child's play! Why i say this? My profound apologies for offending your feelings. I too am an Indian, no less patriotic than anyone else, probably i have given more to India than taken from it. Yes. I have always felt that i have given more to India than India had returned to me. I have given to India a tax paying, educated, law abiding & productive citizen but it has failed to give me freedom, justice and suitable work.

India must not try to debate about truth in public it could misfire and change its course in the the direction of truth & justice. If media does not stop talking about corruption in higher places then soon it would discover that its own ilk is no different than the rest. Its fashionable for the masses to blame the leaders when actually there can not be many corrupt leaders if the masses are not corrupt. We as a society gives God's status to money, no other society on earth has a god of money except us, therefore everything else like sacrifice, beauty, hard work comes second to pursuit of making money.

India must not bring discussions about corruption in society to the forefront, otherwise we must be forced to change our path away from pursuit of money, and that would be a catastrophe.

Indian Newsmedia

If you want to know a country tune into its news channels. Well i see lots of media as it is one of my prime field of study & work. I don't see much of Hindi news channels as i lack the courage & intelligence both to understand their content which certainly can't pass off news as i learned in my mass communication classes. If astrology wasn't enough, you may hear plain farce dished out by stupid astrologers with approvals from idiotic editors.Large parts of India still believes that you can not drink or eat meat on Tuesday,  Even the Earth does not have a Tuesday all over it at the same time so how come you can drink in the USA not in India at the same moment? Crazy!

Times Now is a news channel of timesgroup that has an editor by the name of Arnab goswamy, at least he should justify the later part of his name and go become a swami. Go swami. His hollow attacking mannerisms & equally tasteless commentary scares the shit out of a decent intelligent  person. He justifies attacks on Kashmiri leaders because according to him they are subverting arnab's idea of India. What the hell is Arnab's idea of India? Any Indian can criticize India, its our fundamental right. If i can criticize my father i bloody well can criticize India too. My forefathers have sacrificed more for India that Arnab's. Political boundaries of India has been changing as in the rest of the world depending upon the social movements of the time and they would continue to be so for time immemorial. India is the present form was born in august 1947 only it my change in future so whats arnab's problem? Goswamy knows pretty well that one need not be intelligent, erudite, deserving, honest & talented to get a job in India. We are a corrupt society and jobs are obtained on the basis of your caste, religion & other funny criterion too.

Arnab Go swamy must not attempt to poison young people and shut up free debate in the name of puerile nationalism. He should learn few lessons from ManMohan Singh & Sonia, Rahul Gandhi and tone down his vitriolic shibboleths for the sake of democratic peaceful India.

Higher Education & Global Education in India

We still await the government green signal to entry of global education organisations into India. Once they arrive it would sure change the domestic market dynamics as happened in other sectors like electronics & auto etc. Its time that local education organisations prepare for the battle ahead. Once global competition hits services sector in India the customers can look forward to mush better quality & availability of services.The professional education sector would be particularly hit hard initially unless they pull up their socks in right earnest.

Firstly the quality of the service has to be improved. That would involve putting together good faculty, content, pedagogy/andragogy, technology, & interactivity besides building and official approvals. Good quality faculty is certainly in short supply therefore this has to be managed strategically through guest or part time faculty route. First of all the promoters must allow the directors/principals some little role in the functioning of the institute. Current scenario in the privately run universities & institutes is very serious with as most,perhaps all, the directors/principals are appointed for AICTE/UGC purpose only. Its a pity that so called leading academicians accept such jobs with high flown pragmatism & prudence. Otherwise its sick.

Content & delivery in classroom needs to be looked at very closely. We have talk down one way  method of teaching with no interaction at all. The faculty must take prepared content into the class and allow free discussions. The content must be updated & must reflect the present technical/managerial status of the fields under study. Fundamentals of the disciplines must be introduced to the students. For example MBA students must be informed about the real macro industry profile of India so that they can appreciate the nature of work opportunities available. Same could be done for the global markets.

Most students seek professional education not because they have aptitude for it and they want to pursue study of that field, most students are forced to join professional education for the sole aim of finding a job. What an institute can do? In the short run, focus on developing the students' aptitude as far as possible in the current field of study and in the long run the institute could make aptitude test a compulsory requirement for admission.

Higher education organisations do not have to restrict themselves to proximity criteria for student enrollments, i would recommend that such firms must vigorously focus on complimentary markets for growth. This would require creating a central admissions team that takes care of all students enrollments in a strategic manner.

Marketing would have to be the cornerstone of success in any scenario. An education enterprise that works on its marketing would benefit hugely. A tailored marketing campaigned would be needed to weather the churning after mushroom growth. Different institutes would have to develop & adopt  a suitable strategy for attracting students & delivering value to the customers for success in the competitive market.

Creating & Managing a Distribution network

Several SMES go through the pain of trying to set up a distribution network and most seem to fail in the process.  So you have many flourishing & established businesses in north India that have tried to strategise their distribution  but later on accepted the cumbersome traditional system that does not serve the organisation's growth plans.

A business must be able to leverage the distribution network in order to stay competitive for a medium to long term. The myth of financial leverage associated with existing trade channels has long been dispelled by many players across India. Just having a good product, an attractive trade policy and transport network is no longer enough. You need to have great packaging, trained sales force, marketing support and strategic & tactical plan to get your share of the market. You need to benchmark  certain percent of repeat sales from your market otherwise you may look like those primary agriculturists who used to burn the jungles and cultivate it once and then move on to the new pastures.

You must ask yourself how much repeat sales are you getting from your served markets and which direction you are headed?

Generally we start thinking about marketing & sales after manufacturing has been taken care of.  Recently i came across a this same classical dilemma facing a food company from ludhiana, Punjab. The CEO wanted a sales & Marketing network that could handle higher volumes, whereas the Marketing head rue the bad production planning for poor sales. The conflict between production & marketing is normal untill the organisation is not riddled with inventories.

Having no inventories or moving all your production could not be the aim of a good CEO/CMO, you must strive to get the max share of market on a given day & plan for that. If you are happy with moving everything you make then you are complacent about the competition just eating away your share. That in turn would lead to fierce competition in future.

Its wise to plan marketing well in advance & test the network before you get into real battle. Integrate all nodes of supply chain into one whole with help of readily available solutions. Must look for contract manufacturing and concentrate on brand building and supply chain. There are many suppliers for manufacturing operations available but hardly any for managing the distribution in a manner that amy suit your growth plan.

Start up  companies must negotiate the trap of creating a corporate brand in comparison to product brand. A product brand is easier to market than communication the umbrella brand. I have observed many SMEs trying to do a corporate brand. Most ludhiana based hosiery & apparels companies suffer from this problem they spread their brand too thin. They thought they were emulating a Nike or Adidas without  understanding the nature of those company.

Its necessary to have a well oiled distribution network served by a motivated sales & marketing team to match the competition in the growing India.

Obama in India

President Obama could not go to see the Taj Mahal in India, and few other places of his interest, due to security concerns but most of us had the pleasure to see such a sublime person from a close quarter. How often do you get a chance to see & hear an under 50 years old who has worked his way up to dream, desire & occupy the highest office in the most powerful nation on earth. If thats not enough, he has already been conferred a Nobel prize. So if you wish to see a successful noble person, what else is there on earth?

What if

What if one stops the car on highway and breaks into a roadside dance, What if one screams aloud and disturbs the silence in the plaza, what if one go to job interview in khakis and sneakers, what if one refuses the uniform.....What if I do not follow rules, morality & wisdom to eek out happiness in life. 


Lets us free our thoughts and accept the world with all its imperfection

Corruption & India

TI has ranked India at 87^th place in survey of 178 countries, almost near the middle of the pile. So in a way we are well placed as we don’t seem to be alone on an island. I often wonder why we are a corrupt country. How could a country with national tag line of ‘Satyamev Jayte’(Truth shall prevail) could happen to be corrupt? Should we not estimate the economic & social impact of corruption on us? Can we develop despite corruption amidst us and become developed country?

India is known to be deeply religious society, so could be trace the role of religion in fighting or promoting culture? The western society has begun to blame the Church for problems faced by the society, could we do the same? There is nothing new about it as Mahavir, Budh & Nanak did express such a view.  Why can’t the social & religious leaders launch a crusade against corruption? Would that be not a better temple for our pantheon of Gods in India that fighting over size of the temple?

One yoga teaching swami has become very popular of late. His success has been engineered by a vested interest group that want to promote yoga for the their social race genda than anything else. Some two decades ago Doordarshan ( Govt. owned TV Channel in India)had done so to another yoga guru who was close to the then prime minister. Swami Ramdev talks about fighting corruption, why can’t he start a micro finance venture and save millions of Indians from falling sick? Most of the MFIs are in the direct control of influential people including parliamentarians & politicians.

Corruption erodes the quality from a system. It has eroded away India’s potential to compete globally. We have become chalta hai jagaroo country. Look at our companies, most of them survive on borrowed or copied ideas, products & processes. Some of our visionary industry leaders after independence had influenced the politicians to protect them from competition so that they could survive. Look at any sector and tell where we have leadership? How could we have victory without going through the competition? Copying an idea is a form of pure corruption and most of so called Indian products like Cinema, auto, and chemicals etc are based on borrowed ideas. India needs original ideas to become a better country.

We grow up listening to chants of India being a land of culture, saints and family values. Our rivers have been given the status of God/Goddesses but no one thinks twice before polluting them. If our rivers are polluted & revered at the same time, do we take it as a sign of our way of life? Such unimaginable ambivalence? If you ask an average middleclass guy about such issues they would blame it on the lower strata of society. Indians of all economic class lack civic sense. They would not think twice to spit out from a moving vehicle or defecate at any public place. I have, you must have too, seen people bathing in rivers & other water sources that not suitable for human consumption just to please Gods. How could the Gods like unclean people?

Our social structure is based on group dynamics with family as the unit. So a large family has greater influence over the smaller one. You may find it natural? But these results in destruction of individual talent at the hands of might of family number? Our ancients text Mahabharta portrays the struggle between two families, depicting the defeat of the bigger size family and projecting individuals as Heroic. Could we learn some lessons from there and cap the corruption at the source? 

US Fast Food Franchises are heading for India/China

Global fast food market is estimated to be round US $ 13 billion in 2009. With the western economies under pressure due to many factors the leading MNCs have been scouting around the world for new markets to sustain themselves. The global food franchise managers are no different. KFC, PizzaHut, Macdonals, Subway..etc have already found feet in the indian subcontinent, so the its natural that other food retailing major follow suit. Indian food industry is expected to touch US $ 400 billion by 2025.

Food has always been very complex business for branding as well operations. One of the major challenge to this industry is the cost of real estate. It makes it very difficult in income surplus states in India. Operations is the second major challenge. There are approximately 6 million street vendors in India that service the hunger pang in an express manner. Its not going to be easy for the global fast food giants to settle down in India sooner as the food habits are very different here but then persistence would be rewarded very highly.

Creating differentiation for Car brands

Open any paper, you will see the adverts of almost all the major car makers in India. Could you notice the difference? Hardly, all the adverts have a visual of the product, against a color background and some description about what is featured. Does that make a compelling ad? Agreed that print has its limitations but what happens to the sacred objective of achieving the differentiation?

If you have decided that a car is a commodity put together using exactly same technology covered with a differently contoured steel panels, then well lets us not waste time on looking for a differentiation. A wise man told me once that cars are sold on the basis of market leadership, market entry timing, Salvage value, price, service, spares and the mood of the buyer during the purchase month strictly in the same order. Could you guess how much time does a person/family takes in finalizing the purchase?

I wonder why all the car ads look & feel the same? Why do we show the same profile angle in every advt? Its time to make this interesting. How could we expect the reader spend a second on an already digested visual? Unless each brand creates a special look about it in the print its impossible to cut through the clutter during this festival season even with an atomic ad spend.

Fiat Linea could have ruled the market if they had targeted the indian middle class family by wresting the positioning from smaller 5 door hatches. It is possible entirely in the current economic growth period. Only if Fiat could create an Italian aura for sometime in its communication strategy it could do wonders. An ad is meant to tell  story & create drama, lets bring it back in print medium.

Laloo may race ahead on his Motorbike in Bihar elections

Laloo’s promise of giving motorcycles to the youth in Bihar has put Nitin on defensive. There is nothing new about giving away goodies in elections in India. Southern states have been using the power of giving free televisions etc to the electorates with great results. There is nothing wrong about making a public promise of giving things to people to improve their lives. How many people are can afford to buy a bike in Bihar?  Such tactics are good for our democracy & would catalyze the economy of the state.

Infact it would be ideal if our political parties can make similar promises during elections so that citizens may have a better standard of living. Criticism of such policies is both wrong and devoid of any moral & legal force. I would love to live the day when a political party promises housing to their voters.

The way political & social system works in India would take centuries for people to get rid of their poverty and have some life.  The political players raise billions of rupees for their election campaign & use it for their own benefit. The voters get nothing in return except a lame promise.  It certainly does not amount to bribing the voters as there is nothing hidden about the promise. This kind of practice may strengthen the system.

The political parties have been known to give money & liquor to electorate during elections. That is immoral & corrupt practice. I would be pleased to see parties entering competitive mode in giving gifts to people so that ordinary people could raise their standard of living. Just imagine how the enhanced mobility with a mobike would add to the economy of the individual & society at large.  

This would lead to greater production of goods & services that in turn would contribute to the economic progress of the nation.  Let the political parties come forward and make such promises to the voters.  The skepticism about resources to fund such give aways is completely misplaced as we all understand the fund raising ability of our politicians and also know a thing about the size of parallel economy in India. It’s a win-Win for all.

Volkswagen India: Poor Branding

Germany, in India, has been known for Mercedes, Engineering, Football & Hitler. The consuming class in India loves the well established powerful brand equity of trust, engineering & solid quality of Made in Germany products.  All that has been altered by a dramatic full page ‘talking print advertisement’ by Europe’s largest car maker Volkswagen for the launch of a ‘luxury’ car into the fast expanding Indian passenger car market. The agency & the MarCom head at Volkswagen India has been all over the media claiming success of their strategy to get greater bang with smaller buck.

Lets us not get into the structure & size of the Indian car market but let us understand that the forecast of passenger car segment for the year 2010-11 is pegged at around 2.25 million units. And we all know that the largest share of this market goes to small car segments. Volkswagen does not have products in sub 4.5 lac segment as yet.  But I would like to analyze the issues that were the target of this interesting media innovation.

When MUL had launched their ALTO years ago with huge decibel level generating mega campaign so that masses could feel the launch it did not help them getting the trust of the customers. Volkswagen innovation is in sheer bad taste for the way Indian consumer behaves. Having a Chinese contraption blurting out crude words about an aspirational involvement product associated with serious engineering pedigree could only have worked to discourage the prospective buyers. My research with students at b-schools has established it beyond doubt that the talking innovation lacked the sophistication required for a serious product like a german car. I am afraid that some other innovative marketing guy may not suggest a similar company to get the car endorsed by a Swami to get immediate adulation.

If their budgets were tight then a full page bleed could easily be hived into two 40x6 releases to get greater OTS. Volkswagen India has to learn their India lessons by understanding the Indian car market, the buying behavior and socio-economic profile of Indian car buyers.  There are various serious ways to involve the customers with the product than vain media innovations meant to entertain the agency/media guys only.

This certainly is a body blow to the Volkswagen brand & the image of Made in Germany in Indian market.

The politics of population

Many of the participants & visitors at the CWG Delhi are completely baffled by seeing swarm of people around them at all places. Well I too fell uncomfortable in Delhi coming from Chandigarh seeing so many humans around me all the time.

We all agree that India has too large a population. But the agreement ends there only as two diametrically opposite opinions begin to emerge from this point onwards. One set of Economists and politicians consider it as a daunting challenge to the very survival of India whereas the other group takes it as an opportunity for greater progress in future in terms of more hands to produce more goods & services. I wonder how could these ‘additional’ workforce could be economically productive when there are not enough jobs for the present number of youth in India.  Population explosion is leading to alarmingly high numbers of stressed out unemployed youth looking for work.

Our economy even with double digit growth cannot provide jobs to most if not all the youth in another 3-4 decades. So what will happen to us in 2020 when large numbers of youths would be out there without gainful employment on our city streets? Over supply of labour in a free economy has its own dangers expressed in terms of under employment and low wages etc. The stress of competition to succeed in school exams is driving our kids mad, there joy has been sapped. How could you expect them to enjoy life on this planet when they find even the survival is threatened at home in India?

Population in India is a political issue. Some Indians may be giving birth to more than 1-2 children due to lack of education etc but majority of them are doing it deliberately to add numbers to their tribe.  What will happen to the progress & stability of India? Where will we accommodate such large population? We cannot wait till all Indians get enlightenment to restrict the family size to reasonable number of 1 or 2 only.  The government must discourage citizens from producing more than 2 children, I fully understand that many political parties & politicians would not agree to this suggestion citing many laughable reasons. At the back of their mind is the hideous intent of swelling their numbers to have more power in a democratic India. What will those guys do with power when the country may fail under the weight of ungovernable population?  If you love India please do not have more than 1-2 children.

PTV'S TOP 10: The Greatest Political Web Videos of All Time

Gujarat Tourism Ad Campaign- New Khushboo?

I happen to see the first of the three TVCs of the Gujarat government featuring Amitabh during a program titled called ‘Mega structures’, which was showing how China is planning to build world’s largest building while our national channels were agog with the CWG failures. As a student of political marketing I was keenly awaiting the release of much hyped campaign of the gujrat government. Gujarat government’s campaign has a celebrity anchor which is different from NDA government’s India Shining campaign that was message centric. Amitabh did feature in a slick political marketing, campaign of the Smajwadi party which had equally great production values, but it failed to convince enough voters to get the party an election victory.  

     

Gujrat government have been claiming all round economic progress in the state therefore being an outsider I was expecting to see the face of new India in Gujrat.  The three TVCs presented on Gujrat tourism website do not offer any new appeal. Those are about temple, lions & Kutch salt producing area. How many global & domestic tourists would want to visit Gujarat to see tigers, temples and salt farms? What’s new about these three messages? Off course Amitabh too is as well known as the three things mentioned in the advertisements. Image of India in the global minds has been changing rapidly. We are no longer thought of only as a land of snake charmers, slumdogs, & traditional stuff but a fast growing economy with huge modern consuming middle class that has taken the world by storm with its IT & ITES knowledge.

Therefore Gujrat being a foremost state in India having large number of gujratis living abroad all over the globe it was expected to showcase an image of an advanced, global, metropolitan, centre of education & business friendly state to persuade the visitors. You would have more non-gujratis interested in visiting the state if they are told that Gujrat has great cities, international educational centers, friendly people, Garba dance festival and the land of the Mahatma.

History of Somnath temple is taught to every Indian in school days. It certainly does not attract the faithful as the Tirupati, Haridwar, and Varanasi etc do.  Corbett reserve is more famous than Gir park. Kutch salt area offers no attraction to any tourist looking for culture- that place in India ahas been occupied by Rajasthan and UP for obvious reasons. So what’s new about Gujarat in this campaign? I am not sure if it will serve any political purpose for Modi government either as Modi is a dominant icon who needs no endorsements from any ambassador for acceptance by his voters.

It would have been great if Gujrat had done the campaign differently by showing the following;

1.    Spirit of Gujrat expressed through Gujratis living all over the globe & succeeding in their enterprise

2.    Modern city centers and infrastructure.

3.    Presence of globally reputed education centers with cultural diversity.

If the purpose of the campaign was to showcase Amitabh, well who has not seen him? Gujrat certainly smells better than this campaign suggests.

Strategic alternatives for Slowdown period

The slowdown in the advanced economies of the world led by USA has had ripple effect in the global

integrated world.The US seems to be struggling to shrug off the impact of poor economic performance.This scenario directly has a bearing on the global trade hurting the economies of the countries & companies dependent upon the US market. China’s manufacturing engine has corrected  its course to serve the internal consumption but same does not hold true for Japan who has been bitten sharply by fall in exports.

Indian IT sector has been hit too as the Americans have begun talking in terms of protecting their labor market & so on. So what are the strategic choices available to Indian IT players?  Let’s understand that strategic alternatives are a product of resource base of an organization. A cash strapped company would have no wait & watch choice in these turbulent times. Lets us examine what an organization can do to tide off the crisis successfully. Before we enlist the choice lets understand that selection of alternatives depends on two major factors; the size of the company and the state of the slow down period.

Size (resourses) of the company would determine the availability of strategic choices in front of the company. Generally conventional wisdom would suggest that you must keep on the established course whatever the state of the demand is. It could hold true for already factored in & expected fluctuations in the demand curve but a skewed number must get the special attention it deserves. The market share of the company must be taken into consideration before chartering a new path.

Second important factor is the state of the slowdown itself. You need to figure out if the slow down period of economy is at the beginning phase, middle or in the ultimate stage. By any stretch of imagination the present crisis do not seem to have reached the final stage though Ben & Barack would want it to be so. US economic data & consumer confidence do not allay our worst fears. Let’s hope President Obama injects the economy a second time with much needed funds.

Therefore if your business has been hit by slowdown, you have following three choices:
1.    Focus on domestic market & lower the revenue projections

2.    Vigorously look for new international orders at lower margins

3.    Invest more in marketing and retain margins

4.    Wait for the good tide & reposition the company

Most traditional companies would go for the first alternative as this looks appealing on the face of it. Others led by dreamer CEOs would go for the second alternative. Third alternative would appeal to those organizations that have a strong need to keep the order books flowing over. And the alternative number four would suit to large corporate that have high liquidity. What’s your choice? Future is always uncertain and most things in the universe are spherical, therefore the chances of recurrence of a phenomenon are always positive. 

Directory of SMEs in India

My experience of working with SMEs has brought out that there are several structural and strategic challenges that keep the SMEs away from success in the global markets. I would make two points in this regard in this note. 

Firstly, its the trust deficit and lack of intra-SMEs cohesiveness approach to present themselves as a leveraged group to the global markets. How many clusters have we formed in last few years?

Secondly, Its the crass incompetency on the part of the officials at MSMEs, industry organisations (like FICCI, CII) etc in giving minimum promotional support to the SMEs.Why don't our industry associations  and MSME, have not cared to create an online directory for SMEs so that buyers could find them on the net? Unfortunately i have personal experience of a couple of cases where State electronic development corporation partnered with an entrepreneur, PPP model, for creation of such a directory and in both cases they have failed because the objective was to make money not promote the SMEs. Maharashtra is the only state where we have a directory of the SME. Others state industry departments could show you their large & medium companies directory but no one has one on the SMEs.

I can help any industry organisation or industry body to create an online directory of SMEs. 

Our SMEs require positive contribution by some competent hands in the government to be able to survive. We the land of SMEs have bleak future. 

Branded Desires: Hosiery & Fashion Apparel industry of Ludhiana

Punjab has several well established hosiery & apparel manufacturing companies that have been struggling to go up the value chain by creating & establishing a clear brand identity for their products. They understand the financial benefits of such a strategy in terms of higher margins & customer loyalty. There have been several discussions organized by various stakeholders in the process to enlighten the entrepreneurs about the value of investing in brand building but nothing noticeable has been achieved till now. On the contrary many established brands have lost their equity to poor management of the brand.

Ludhiana industry has been serving as sourcing base for many global brands for couple of decades now but it has failed to create a brand of the same stature.  I remember one such company brining an international sports brand to India but utterly failed to market it successfully.  Why can’t those companies produce a brand when they can manufacture for the globally recognized brands?  Let’s try find out answers.

Let’s agree that Ludhiana hosiery & apparel manufacturers have the requisite technical knowledge & technology to produce great products for the most demanding buyers globally. But same could not be said about the marketing skills & knowledge.

Foremost challenge is the lack of knowledge about the product & business. You must be wondering why I made such an acerbic remark. Well please approach a hosiery & fashion apparel manufacturer and ask them if they are in FMCG business? The answer would be an emphatic no! Its lack of formal knowledge about the business that is keeping them away from a real success they deserve.  Since they do not understand that they are in FMCG business therefore they do not follow the accepted principles of the business. They continue to run the business on their gut feel without investing in knowledge systems crucial for competing in global markets. An FMCG company requires a certain level of regular investments in marketing to maintain & grow the consumer base.

Most companies in Ludhiana tried using services of leading advertising agencies but could not keep them engaged due to various factors. The national level advertising agencies also failed in delivering convincing marketing plans & demonstrating the value of retaining them at such high costs. They agencies have a view that they were not given freedom and time needed to create strong brands in this segment.  After trying to work out with agencies the industry went into retail mode after a gap of certain time.

Ludhiana hosiery & apparel industry is closely connected socially and otherwise. Therefore if some tactic seems to working for one player others immediately follow onto the bandwagon.  Marketing requires strong differentiation any imitation would sure end up in a medium term loss.  After trying with the advertising industry most players took to retailing in almost undifferentiated manner.  With the exception of one player almost everyone else took to multibrand  tier two towns route with advertising that worked against the very nature of branding.

If an advertisement promises a 65% discount, would you believe that? If another one declares get 4 products on purchase of 2, could it build trust & loyalty in the market. A serious business would never treat their customers with such utter disdain.  So if everything is wrong what could the industry do to create a true brand from the land of hosiery & apparel commodities?

If Colorplus & Hidesign can do it despite global competition, a Monte Carlo or Duke too can also create big brands. Firstly, focus on creating an entirely new brand for a small market segment. Invest in branding as per FMCG lines. Pay attention to packaging as it forms a crucial parameter of success in this industry.  Devise a distribution plan based on the consumer than the supply side. I have always believed that sooner or later we will have a brand from Ludhiana that will conquer the markets again.  Lastly, Hire outside professional help from an outside agency like us to keep checking the feedback required to keep you on the correct course

Myth & realty of Customer Delight!

A corporation must strategize its engagements plan with the customer in order to have a healthy top line over longer period. A corporation must attempt to create an engaging dialogue with target consumers and stimulate their engagement with the brand.

Reams of literature exist that stresses the need for focusing on the Consumer engagement & Delight in order to have financial profit from the enterprise. But what is the reality of the real market in India? How many consumer durables companies have a customer complaint/feedback button on their website? In the FMCG domain the scenario is no different. The E2E or B2B markets have different mechanisms to deal with negative feedback. No durable or FMCG company in India has a formulated Customer Grievance policy that could be set in motion in case of negative feedback & assist the executive to remedy the hurt/loss. What does it mean? All that ‘marketing talk’ on customer comes first are mere sham or myth? Check any company budget templates and try search the allocation &appropriation for complain redress?  Where is the marketing in India?

Another important misunderstanding about marketing in Indian context is about the relationship between Consumer engagement & consumer satisfaction. As per wiki,” Customer engagement has been discussed widely online; hundreds of pages have been written, published, read and commented upon. Numerous high-profile conferences, seminars and roundtables have either had CE as a primary theme or included papers on the topic. Customer engagement marketing places conversions into a longer term, more strategic context and is premised on the understanding that a simple focus on maximising conversions can, in some circumstances, decrease the likelihood of repeat conversions (Customer engagement interview with Richard Sedley). CE aims at long-term engagement, encouraging customer loyalty and advocacy through word-of-mouth.”

Customer Engagement in services is more critical than in the products because of the nature & ownership issues. Most Marketing managers focus more on satisfying the customers at the primary product level without strategizing the process of engagements. In a scenario of less importance to marketing in the deficit markets of India/ China nature most companies are confused in allocation of resources between Engagements & Satisfaction. Such a situation would mean the once you have a strategically great product, price & promotion you need not factor in the issues of engagements.

I have researched the problems with my client organizations and the market at large. The service companies must have a defined engagements policy that could maintain the consumer trust resulting in financial success for the corporation. Some of my recommendations are:

1.       Engaging consumer in pre, sale & post sale needs strategic stance.

2.       A satisfied customer can forget you so needs reminder

3.       A bad situation can be converted into a gain with the help of quality engagement.

4.       An engaged customer has more value than the satisfied only.

5.       Quantity & quality of the communication must be calibrated with a bias for quantity in deficit markets like India. 

Myth & realty of Customer Delight!

A corporation must strategize its engagements plan with the customer in order to have a healthy top line over longer period. A corporation must attempt to create an engaging dialogue with target consumers and stimulate their engagement with the brand.

Reams of literature exist that stresses the need for focusing on the Consumer engagement & Delight in order to have financial profit from the enterprise. But what is the reality of the real market in India? How many consumer durables companies have a customer complaint/feedback button on their website? In the FMCG domain the scenario is no different. The E2E or B2B markets have different mechanisms to deal with negative feedback. No durable or FMCG company in India has a formulated Customer Grievance policy that could be set in motion in case of negative feedback & assist the executive to remedy the hurt/loss. What does it mean? All that ‘marketing talk’ on customer comes first are mere sham or myth? Check any company budget templates and try search the allocation &appropriation for complain redress?  Where is the marketing in India?

Another important misunderstanding about marketing in Indian context is about the relationship between Consumer engagement & consumer satisfaction. As per wiki,” Customer engagement has been discussed widely online; hundreds of pages have been written, published, read and commented upon. Numerous high-profile conferences, seminars and roundtables have either had CE as a primary theme or included papers on the topic. Customer engagement marketing places conversions into a longer term, more strategic context and is premised on the understanding that a simple focus on maximising conversions can, in some circumstances, decrease the likelihood of repeat conversions (Customer engagement interview with Richard Sedley). CE aims at long-term engagement, encouraging customer loyalty and advocacy through word-of-mouth.”

Customer Engagement in services is more critical than in the products because of the nature & ownership issues. Most Marketing managers focus more on satisfying the customers at the primary product level without strategizing the process of engagements. In a scenario of less importance to marketing in the deficit markets of India/ China nature most companies are confused in allocation of resources between Engagements & Satisfaction. Such a situation would mean the once you have a strategically great product, price & promotion you need not factor in the issues of engagements.

I have researched the problems with my client organizations and the market at large. The service companies must have a defined engagements policy that could maintain the consumer trust resulting in financial success for the corporation. Some of my recommendations are:

1.       Engaging consumer in pre, sale & post sale needs strategic stance.

2.       A satisfied customer can forget you so needs reminder

3.       A bad situation can be converted into a gain with the help of quality engagement.

4.       An engaged customer has more value than the satisfied only.

5.       Quantity & quality of the communication must be calibrated with a bias for quantity in deficit markets like India. 

What you must learn in an MBA

When the name of the department of commerce & business management at Punjab University Chandigarh was changed to the University Business School it was considered an exercise in ‘marketing’. ‘Marketing’, in India particularly, is understood as an additional activity of hyperbolic nature. MBA is still taught in many [most] b-schools in India as another commerce course.

An MBA student wishes to learn about the ‘business’ scenario around her/him so that they could develop an understanding about it. Most MBA classrooms can be heard discussing myths about industry that has no relevance to the actual shop floor. You have scores of MBA graduates who have never written a business/marketing or financial plan in a class room. The first and foremost part of learning in an average MBA program is to develop skills to write a plan. Though plan writing is mentioned in the syllabus but the student never gets a chance to learn it.

Knowledge about the industry in the local & global context is very crucial. I have met many MBA students & teachers who have heard about the TATA, Reliance & Bhartis of India but have never bothered to visit their website or care to read the reports to find the crucial numbers. A student must understand how various corporations work so that they could prepare to deal with them.

The functional approach in MBA should be mixed with sectoral knowledge. What I mean is that discussions about a particular sector of industry are necessary to develop a deep understanding about it amongst students. Why should a student learn about FMCG sector if s/he is aspiring to join durables industry? Agree that all knowledge is good but let us first develop understanding about one’s own domain before spreading thin into another plane.

Generally it is seen that beyond few management institutes others places do not study about b2b and the industrial goods industries. This results in lack of appreciation amongst the students about this important sector that discourages them for joining it for a career.

MBA/PGDM course seems to be losing its attractiveness in India due to factors that are controllable if the owners, managements and faculty care to look seriously at the quality of the the content in the class room.