September 24, 2010

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.

September 22, 2010

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. 

September 20, 2010

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. 

September 11, 2010

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

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