Keep it short and sweet! Believe it or not, it works for the insurers.

Instead of blowing customers’ brains out with a plethora of financial functions, one can do the trick with a sweet emotional one liner. At least Bajaj Allianz has done just that says Gyanendra k. Kashyap

A boy jumping into a river from atop a rock, a woman riding a bike with a carefree attitude, a girl with a fractured leg on a wheelchair and an old man sky-gliding; well, these are the last things that you can probably think of while describing a financial product. But then someone, somewhere has found a reason to use emotional branding even when it comes to financial products. And that someone is Bajaj Allianz life insurance, that has taken a good shot at fame, all with the same idea and has only emphasized more on emotional communications based on real life situations. “Ye kis pyari hifaazat mein ho, befikri ki halat hai…” very subtly portrays the twin concept of Hifaazat (protection) and Jiyo Befikar (live carefree). The deliberate shift from functional communication to emotional communication speaks volume about the insurer’s belief in staying by the consumers’ side at every stage of his/her life. It is no wonder that 15 million customers across age groups, geographies and income classes have placed their trust with them. Banking on that trust the insurer is now set to strengthen its retail business. In an exclusive interaction with 4Ps B&M, Akshay Mehrotra, Head - Marketing, Bajaj Allianz Life Insurance, reveals that the insurer is now eyeing at increasing penetration of life insurance in the country.

4Ps B&M: Ever since its inception Bajaj Allianz has shown impressive performance. Where do you see it a few years down the line?
AM: Bajaj Allianz Life Insurance has significantly improved its performance. In fact if one traverses its journey since its inception in 2001, it has been a roller-coaster ride. For three years since inception, Bajaj Allianz was ranked no.7 among all the private insurers. In 2005 it emerged as no. 2 and was no. 1 for a brief period. We feel that these rankings are purely ego-boosters for our sales force. In the FY 08-09, inspite of the recessionary pressures, Bajaj Allianz Life Insurance was the only private life insurer to generate profits of Rs.45 crore. As a prudent insurer, Bajaj Allianz believes in managing growth with profitability.

4Ps B&M: How do you plan to further strengthen your retail business?
AM: Bajaj Allianz has a vast network of over 1100 offices spread across the country. The field force is over 2.5 lakh agents, bancassurance partners, retail outlets and other channels to strengthen our retail business. Bajaj Allianz is now on a consolidation mode to effectively use these channels and network to increase penetration of life insurance in the country. In the coming months we would further beef-up our distribution network to increase our penetration.

4Ps B&M: Have you given enough importance to the marketing mix?
AM: Bajaj Allianz is a mass insurance brand, our communication strategy and marketing mix needs to be very broad based. We still need to be heavy on TV and radio.

4Ps B&M: How different is insurance selling in rural areas? Does brand play a role while convincing the rural customers?
AM: Insurance is always sold and seldom bought. This is true irrespective of whether it is urban or rural consumer. The challenge in insurance selling in rural areas is the awareness level. When we started our expansion model, we increased our presence in tier 2 and tier 3 towns so that we can have the first mover advantage in that area. This has worked well and almost 40% of our sales comes from these areas. When it comes to an intangible product like life insurance, trust plays an important role in convincing a customer, the brand is secondary. But when the market is crowded with over 20 players, strong and powerful brand does invoke trust and friendliness. But finally it is the convincing power of the field force that makes customers buy insurance products.

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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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Rajan Bharti Mittal, MD, Bharti Enterprises

“It’s not fair to indulge in unjustified expansion”

4Ps B&M: Why should a retailer shift from traditional wholesalers and buy from Best Price Modern Wholesale?
RBM: Because Best Price will provide a retailer with whatever he needs to buy for his store under one roof at the best price and a much better quality. A normal kiraana store carries around 700-800 SKUs and for that he has to deal with 20-25 wholesalers and distributors. We’re committed to maintain a long-term relationship with our buyers. It’ll be highly beneficial for resellers to become partners with us.

4Ps B&M: What monetary benefits will a retailer stand to gain if he buys from Best Price?
RBM: There will be a huge margin on our goods. For instance, on commodities a retailer will have a margin of 3-5%, while on FMCG goods he can save up to 8-10%. On certain goods, a retailer can even save up to 20-25%. All our prices will be benchmarked with the mandi prices and our goods will be sourced directly from producers and manufacturers.

4Ps B&M: And the supply chain?
RBM: Our supply chain is robust and strong. It’s very strong. People have been asking us why we chose the Punjab belt for the roll out of our convenience store, Easyday, and for our cash and carry business. We’ve our distribution centre here and our supply chain is pretty much fixed.

4Ps B&M: Earlier, retailers focussed on increasing their retail space. Now that the Indian retail saga is set to enter a new revolution, what changes do you foresee?
RBM: I think a couple of challenges that were there in real estate seem to be easing out now. The markets are bouncing back and the Indian GDP growth is hovering around 7%. We believe that the new government will bring certain reforms in the retail sector and ease out the FDI norms. The organised retail sector is still at a very nascent stage and I believe that there is room for more players to co-exist and contribute to the growth of this sector.

4Ps B&M: What are your expansion plans for Easyday?
RBM: We’re currently operating 26 stores. We’ve covered Punjab and Haryana and now we’re looking at expanding in the Delhi & NCR region.

4Ps B&M: Bharti has been very low-key with the launch of its retail outlets…
RBM: No, I think we’re pretty much on track. We’ve opened two retail models – corporate & retail. We’ve set up a strong back-end and are now ready to meet customer requirements. We’re working for long term and until we’ve cracked the code, its not fair to indulge into unjustified expansion.

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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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ROHIT SHARMA, COO, ZAPAK DIGITAL ENT.

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1. Tata Tea’s ‘Jaago Re!’ campaign
2. RCOM’s launch campaign as well as the ‘Monsoon hungama’ campaign
3. The Times of India’s ‘Lead India’ campaign
4. Surf Excel’s ‘Daag acche hain’ campaign
5. Hutch’s ‘Where ever you go...’ campaign

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

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TITUS UPPUTURU, ECD, DENTSU INDIA

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1. Ericsson’s ‘One black coffee’ campaign
2. Afghan Telecom’s ‘Let’s talk something new’ campaign
3. N.C.E.R.T’s ‘Sooraj ek, chanda anek’ campaign
4. ‘Kucch toh log kahenge’ campaign from Motorola
5. Happydent’s ‘Tera tan roshan, tera man roshan’ campaign

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Monojit Lahiri quizzes a cross section of people from the ad and film world...

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“Come, grow old with me. For the best is yet to be,” spouted dada Shakespeare. Quirky, edgy genius Woody Allen marched to a different beat. “When I told my 15-year- old kid some years ago that I planned to visit the museums in Rome, she said, make sure you keep movin’ pops … or they might mistake you for an exhibit!!” So what is old (read: anything over 40) age: Blunder years? In a country where 44% of the population is said to be under 25, is old more cold than gold? Extending the logic, is ‘creativity’ then, most definitely, given an expiry date? Has grey-haired eminence and wealth of experience, been suddenly (and dramatically) shoved into the dustbin, considered irrelevant and useless? Does all this get even more magnified in a here n’ now profession like advertising where new-age fads and trends, powered by nano-second technology, demand being in-the-loop all the time to seduce the impatient, promiscuous and impulsive youth market?

“Absolutely boss! I think – with some exceptions – most of the plus 40-types in the adbiz must be handed out VRS slips! Or moved out from the main frame and given stuff they can handle. The change, across the spectrum, is too fast for them to keep pace. The very concept of creativity is being re-defined everyday.” That was 28-year old Atul Bishnoi, CD of a Mumbai based ad agency. The grand old [evergreen?] man of adville laughs away these broadsides with characteristic flamboyance. Retorts Alyque Padamse, “Before uttering another word, I’d like to invite Bishnoi to sit on my lap and finish his orange juice, milk, Complan, Bournvita, Horlicks or whatever it is that he has!” Ego intact, he proceeds to offer his educated take. He believes that “creativity addressing human needs can never be dated” and remains skeptical about agencies suddenly moving to youth-mode because of the buzz. “That is insecurity and a complete lack of smart thinking. As long as your ideas are young and fresh, you rock. Age is only a number. My advice to the paranoid oldies: Don’t retire – re-tyre!”

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

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Much before Danny Boyle sold India’s shit-soaked poverty to a global audience

Ratan Tata had already made an example out of the nation’s spirit of innovation – with the world’s cheapest car, no less! But can the Nano revive Tata Motors, which recently posted its first quarterly loss (of $58.5 million) in seven years? Pawan Chabra & Surbhi Chawla’s incisive analysis...

When mentor JRD Tata tapped Ratan Naval Tata in 1991 and asked him to take over the baton of the Tata Group, Ratan, then 54, gregariously went ahead and appointed himself Chairman of the group’s largest companies. The ageing old guard at these units sniggered and viewed the move as an ego trip by the younger Tata. But Ratan was thinking differently. The economy had just got deregulated and he realised that old, pedantic strategies would be insufficient for Indian businesses to deal with the unfolding era. His emphasis on flab-cutting and a new strategic direction for the group put Tata’s businesses on the fast track.

Almost fifteen years later, the word ‘ego’ has come back to haunt Ratan Tata. This time the scenario was spanning continents. What we do know is that he initially wagered 220 pence per share, but eventually paid almost triple that amount – 660 pence per share – for the Anglo-Dutch steel major, Corus. What we don’t know however, is whether he was prompted by the strategic implications of creating the world’s 5th largest steel producer or by the mere desire to pander to his ego, which refused to accept defeat in the face of a fierce takeover battle with Brazilian rival Companhia Siderurgica Nacional (CSN). Tata Steel’s balance sheet has still not recovered from the Corus onslaught!

But it was with the Nano (the world’s cheapest car) that Ratan Tata’s ego applied for top honours. Combined with the $2.3 billion JLR acquisition, Tata Motors and Ratan indeed became top of the mind on the global automotive map. He announced the Nano launch for end-2008. Then Singur happened and Tata had to shift his Nano dream to Sanand in Gujarat. The Nano got delayed – anathema for the now global auto czar.

Simultaneously, the global recession began digging deeper holes into Tata Motors’ financials, input costs began going up and the Rs.1,00,000 price tag for the Nano was not looking conducive any more. Recalls Abhishek Jain, Exec. Director, Precision Pipes (a vendor for Nano), “There was a lot of pressure on cost through out the production process of the Nano!” But does that stop Ratan Tata? Hardly! The man is on a roll – he announced the launch of Nano for March 23, 2009 – at least the bookings are slated to start on that date! The ‘ego’ word is being bandied about yet again! “It’s all about ego for Ratan Tata. The date March 23 is strategically chosen as he wants to launch it in this fiscal, overshadowing his inability to launch it in the last calendar year,” concludes an industry insider on condition of anonymity.

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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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O.P. Bhatt & M.V. Nair are not alone.

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Most CMDs of state-run banks have taken a leaf out of Barack Obama’s ‘change’ mantra to send out fever-pitch messages to consumers. Stylish TV ads, chic logos and slick new launches are communicating their change. But just as Obama is discovering the difference between ‘campaigning’ and ‘implementation’, PSBs will need to wake up and smell the coffee, says Aditi Prasad. For now however life rocks for PSBs - as the global turmoil is boosting their credibility among the young and old alike

Sujeet Beura is the dapper, 33-year-old Accounts Director at a thriving ad agency in Mumbai. When he is not fighting the mad traffic to get to work, Beura concentrates his creative energies on ways to add value to client State Bank of India (SBI) – his agency is one of the eight empanelled with the bank. The fact that the global financial crisis has cast a shadow on SBI’s biggest competitor and private bank ICICI is simply a convenience that divine intervention has pushed his way. So convinced is Beura of SBI’s expertise that sitting in his plush office at Church Gate, all he can think about is shifting his personal savings account to the state-run bank, a move he wouldn’t have contemplated a year ago. After all, SBI then was for the old and doddering, while smarter and sexier private & foreign banks were for his generation.

But things have changed over the last few months. For one, ATMs of his ‘private bank’ are almost always ‘out of order’ – or at least when he needs urgent cash; and two, the global crisis has made him jittery and he wants his hard-earned money safe from the clutches of private and foreign banks. “SBI is more reliable. God forbid there’s some financial chaos here; then at least my money would be safe,” he avers. He swears that his preference for SBI is not dictated by the mere fact that the bank is a client but because of their long-standing credibility. “Besides, I’m 33 and planning to take my first home loan now and SBI is offering the most competitive interest rates,” he adds.

Beura’s musings are not unfounded. The findings of the exclusive 4Ps B&M and ICMR survey echo a similar sentiment. More than 51% respondents said that they trust state-run banks more when it comes to credibility and future security. Interestingly, the survey has been conducted in India’s five metro cities (across 836 respondents) – where till only some time ago private and foreign banks dominated both in actual market share and in consumer mind space. Welcome news for PSBs, many of whom are now vying to win back market share in these very metros. SBI for one, which hogs the chunkiest market share at an all-India level (42% of its branches are located in rural areas, with little competition from private banks), is planning its next ad campaign in a sleeker avatar to appeal to both retail and corporate consumers in these big cities. Explains Beura: “Currently SBI is reassuring people with the slogan The Banker for Every Indian. The next quarter, they are likely to launch a new positioning for SBI, targeted specifically at the metro audience.” Nationalised banks had lost the plot in metros and big cities when private banks came in. In aggregate deposits, the share of PSBs declined from 92% in FY 1991 to 73.9% in FY 2008; in advances, the share of PSBs fell from 92% to 72.5% in the same period, the losses mostly accruing from metros.

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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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TAX PLANNING? for 2009-10 Naah... It’s wealth creation!!!

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Noted chartered accountant G. D. Singla explains, “Early tax planning provides ample time to analyse the options, assess the risk and returns and above all, it allows greater bargaining power to the tax payers to an extent that in many cases, one need not even pay advance taxes!” If that sounded Hebrew, perish the painful thought, as this cover story is made with an atypical contrarian objective of putting penny to the foolish and pound to the wise. Revisiting the books, and at the cost of sounding back to the basics, we put forth the well respected S. Kumar of the leading chartered accounting firm Simon & Cailand, who explains, “In simple terms, tax planning means availing of the benefits of deductions, rebates, exemptions in taxation law to reduce the total tax burden of an assessee.” He further explains that tax planning does not merely imply putting money in some designated options; if envisaged properly it can be a great source of prudent wealth planning that could help to focus primarily on post tax yield taking into consideration the basic parameters of safety and liquidity. Ergo, if the philosophical Zeusian change has been implemented by thyself, you could test new waters with your second move.

And that is to make tax planning a monthly feature rather than an end of the year quarter feature beginning in January and calling it quits by March. The ‘instead’ approach sprains and strains one’s cash flow many a time; some even are forced to borrow to make these investments, certainly a double whack. Add to this the fact that the individuals suffer losses on account of compounding benefits (in case the investment avenue happens to be public provident Fund) and the rupee cost averaging (in case of investment in ELSS, Equity Linked Service Scheme). Change in government’s economic policies, closing of several attractive investment schemes, et al may further add on to the loss. Tax planning early on in the year can actually take care of all such losses. As the tax payer in such a case tends to spread his tax saving investments over 12 months rather than concentrating in three months.

And then we come to the third move. Apart from ‘when’, a tax payer also needs to know ‘where’ to invest. It is of prime importance that he is aware of the investment avenues so that he does not lose out on any opportunity. A host of investment avenues exist in the market: Mutual Funds, National Saving Certificates (NSC), Public Provident Fund (PPF), Monthly Income Scheme (MIS), Employee Provident Fund (EPF), Life Insurance, Systematic Investment Plan (SIP), Unit Linked Insurance Plan (ULIP), et al. The choice of these instruments rests on the individuals need for liquidity. The stock market benders could favour Equity Linked Saving Schemes, or ELSS, as the dividend income earned from units invested in ELSS are exempted from IT Act; and moreover, on redemption of the units the capital gain income is also tax exempted. And the otherwise bent could favour PPF, as the interest paid on it is on a compounded basis and tax free on withdrawal. Also, any amount lying in the PPF a/c cannot be attached by a court of law, thus providing maximum social security.

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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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Pirates of the ‘Online’ Carribbean

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2008 is done with. But have you done away with your fears of a possible cyber attack in the New Year? Clearly, the chances are – if you are an online surfer, you are still a likely target. Steven Philip warner & Arun Kumar Roy warn...

News like the fifth man pleads guilty over Citibank ATM hack scam, browsers fail password protection tests, German card leak delivered by microfilm, electronic votes mysteriously vanish in Ohio election et al have become too common to be surprised about. But just like surprises never end, shocks too don’t. And though it’s a brand new 2009 (and you’d want to enjoy a security threat-less year), there’s no guarantee of a threat-free year from anyone or anywhere! We discuss such threats here; threats that are not your ‘typical’ enterprise security issues but are more dangerous – mainly large-scale Internet threats that could well trickle down to your organisational mainframe. The good news/bad news is that your organisation is more likely to suffer a simple ‘Website hack’; but that doesn’t mean you can gleefully put your security officers to rest! And we are caught helpless many a time, as Kevin Prince, chief architect for Perimeter eSecurity avers, “These aren’t something IT administrators or everyday Joes can do [much of] anything about.” So before you turn out the office lights for the night, check out these lesser-known potential threats that security experts are watching out for in 2009.

1. An Internet “e-bomb”: The attacks of 2008 indeed were focused on applications as the network perimeter was more secure. But before we knew it, our faith was shaken by disclosure of some major vulnerabilities in the Internet’s TCP/IP architecture: the Domain Name Service (DNS) cache-poisoning flaw and a denial-of-service vulnerability in the Transmission Control Protocol (TCP). David Maynor, CTO, Errata Security, opines, “2009 could be the year when the first large-scale and widespread attack occurs on the Internet’s infrastructure.” He thinks that we’ll see the first wide-scale ‘e-bomb’ that will make large portions of the Internet unreachable.

2. Radical extremist hackers: iDefense predicts that 2009 will be the year that Middle-Eastern cybercartels expand into online fraud. According to the agency, a recent wave of fatwas issued by radical Islamic religious leaders in that region authorise these groups to use cyberattacks to defend Islam. This has opened the door for these groups to wage ‘open’ cyberattacks in the name of God and religion. “They will do it openly to fund the Islamic agenda,” avers Rick Howard, Intelligence Director, iDefense. iDefense also opines that US financial institutions would be the prime targets. The fact that Islamic extremists have already hacked into Israeli websites over the past few days with more than 300 sites defaced with anti-Israeli and anti-US messages might just be the start.

3. Attacks on online ad-revenues: Internet ads could be hit too, as enterprises and users increasingly begin to deploy technologies that block third-party content. ScanSafe says that the volume of Web-borne malware is growing at a considerable rate of 6% a month, and the rate that a user is exposed to this malware is increasing at a rate of 16% per month.There are many incidents where attackers target Google AdWords. We’ve seen them inject iFrames for SQL injection attacks or other things inside ads on websites also. Till date, users are mainly blocking pop-ups rather than legitimate ads, but now attackers could wreak havoc on online ads and their potential revenue by compromising the ad’s source. 2008 is over. But can you put your fears to rest? Not yet, dear netizens!

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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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Business

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The Sleepy Heads
Last Year ITC Bingo shook up the snack food industry with its peppy flavours and peppier advertising. But the newness has worn off and one can only just stifle a yawn at their ‘No Confusion-Great Combination’ lingo. Worse, competitor Frito Lay has caught up with their ‘Chala Change Ka Chakkar’ campaign. Time for another big idea?

And a Wake-Up Call...
Linking waking up with awakening one’s conscience was the big idea for Tata Tea. Their Jaago-Re slogan must have robbed many netas off their deep slumber. If not, blame it on their super thick hide ;-)

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

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RATAN TATA

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I don’t know if this humble missive will reach 10, Janpath or if Sonia Madam will even read it. But I hereby nominate you for the next Bharat Ratna for your pioneering efforts to save corporate India. Your efforts are so refreshingly different from the controversial actions of Vijay Mallya and Naresh Goyal, who have acquired a nasty habit of going hat in hand to the government. After announcing global conquests a la Vasco da Gama through Kingfisher and Jet, the duo have now hunkered down and want a series of bail outs from both the government and the consumer. (As a frequent flyer, you might have heard of how consumers are bailing out Mallya and Goyal by paying through their noses for air tickets). You are also so refreshingly different from the likes of Rahul Bajaj who claims to bat for India Inc. by allegedly asking for more protection from foreign competition.

Mighty sir, I also want to apologise for words written two years ago in the sister publication Business & Economy. At that time, I had the temerity to suggest that the Tata Steel takeover of Corus (hailed by many in the media as the reverse of East India Company) will saddle your company with unmanageable debt. The temerity transformed into untrammeled insolence when this humble hack suggested that the double whammy of a falling rupee and falling demand and profitability for steel could lead Tata Steel to an unprecedented crisis. When you took over Corus, the rupee was about 40 to a dollar. Now, it is about 50 to a dollar.

So the $6 billion odd loan that you took for the Corus takeover seems an even steeper mountain to climb now. Of course, your letter to the Prime Minister has nothing to do with this niggling doubt about the future of Tata Steel. It has also nothing to do with fears that foreign institutions might recall loans. The letter is purely selfless. And really, how does it matter that the debt-equity ratio of Tata Steel increased from 1:1 in 2006 to 2.74:1? Only the cynics will say that a mighty entrepreneur like you will worry about these trivial matters when you are on a noble mission to save India Inc. And I will be the last one to suggest that P. Chidambaram imposing a 5% duty on steel imports to protect domestic players from global dumping as steel prices crash has anything to do with the future of Tata Steel.

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

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Lentils@40% premium, anyone?

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The jury is out on the benefits of organic food. Will producers be able to lure the masses without compromising on their hefty price tags? By Savreen Gadhoke

“I was on a diet for the last two weeks, and all I’ve lost is 14 days,” read the slogan on the T-shirt of a 20-something over-weight girl, whom I saw rummaging through the organic foods shelves in a departmental store. Unable to control myself, I decided to eavesdrop on her conversation with her friend: “I’ve heard organic foods help lose weight. Which brand should I buy?” even as she compared rates of different packs. I went back and did my own little research on how far the craze had travelled in India. To my surprise, the segment had really found its ground amidst consumers with names like Fabindia and Khadi Gram, investing heavily in organic foods. But however fast-growing the demand in India may be, the real moolah for organic food is found in global markets, which according to a RNCOS report is pegged to touch $70 billion by 2010. B.L. Dalmiya, Director, Centre of Organic Farming reveals, “Internationally, the demand for organic foods is rapidly growing because of increased consumer awareness.” In response, India has increased its production of organic foods and exports to a whopping 45% of the estimated Rs.560 crore organic food market in the country.

According to National Centre for Organic Farming, the area under organic cultivation is likely to quadruple in the next couple of years and cover two million hectares of land by 2012, as compared to the present area of 5,28,000 hectares. In fact, various state governments have also announced incentives and tax benefits to farmers who opt for organic agriculture. But R&D is one area where organic foods manufacturers are facing problems. Grins Dalmiya, “To keep pace with the global demands, we have to regularly invest in R&D, which is a big problem for small farmers,” adding that it eventually adds to higher costs. Within the country, organic foods enjoy a relatively niche demand and so far mass appeal has evaded. The reason, according to a January 2008 Assocham survey, is largely to do with premium pricing. The price differential between organic and non-organic products ranges from 35-40%, which finds little takers among even the educated and health conscious urban lot. Over 1,000 lead retailers selling non-organic and organic products participated in the survey.

Despite that however, the fast-multiplying growth of the industry cannot be entirely attributed to the increase in global demand. The Indian consumer too is getting savvier, fed by Internet information overload and satellite connectivity. Like their NYC counterparts, uber crowds in Gurgaon and Bengaluru alike, are getting hooked to the supposedly healthier organic alternatives. When asked, a local organic foods retailer in south Delhi explained that while there weren’t too many regular buyers for this category because of its higher price tag; amidst the swish set (premium segment consumers), these products were really sought after. Organised retail has in fact spawned dozens of private labels in the category, led by retailer Kishore Biyani’s Food Bazaar. As for the 20-something girl I saw in the departmental store the other day, I hope she has found her choice of brand in organic food and is working toward losing more days... oops, kilos!

Savreen Gadhoke

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Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
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It’s the latest entertainment channel on the tube and it’s showing potential

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Colors is the youngest kid on the block, yet within just three months of its launch, it has made its presence felt very strongly in the General Entertainment Category (GEC) segment. The channel has received exceptional ratings over the past few weeks and has outsmarted Zee TV from its number two position. The channels’ rising TRPs are clearly a threat to Star Plus, which has been invincible for the last 7-8 years. But can this neonate from Viacom 18’s stable uphold audience interest and the ratings for long? And how are Star Plus and Zee rolling up their sleeves to face this challenge? What’s happening at Sony’s end and where do the recently launched NDTV Imagine & 9X stand? 4Ps B&M analyses to find out more…

Sample this: Colors has got 250 Gross Rating Points (GRPs) during the week, September 24-October 4, clearly outshining Zee (220 GRPs) and Sony (105 GRPs). Not only that, the difference between leader Star Plus and Colors during this week is of merely 28 points (TAM ratings). This clearly indicates the strong potential the new channel has. As Keertha Adhyanthaya, EVP and GM, Star Plus frankly acknowledges, “The GEC landscape has seen a lot of competition in the last year, with deep pocketed players entering the fray. However, only Colors has come up with engaging content & has made significant headway.” So what is it that has clicked for Colors? We would say it’s the right combination of strong marketing at the time of launch and refreshing content to meet the expectations created by that initial hype.

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Source : IIPM Editorial, 2008

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

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

DAD, A BUNCH OF SUVS JUST ROBBED US!!!

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The Outlander’s launch in India has reignited the debate whether SUVs really have the wherewithal to run the full mile in present day conditions. The ever cynical Karan Mehrishi of 4Ps B&M refuses to die, er, a believer...

Along with defibrillation, Cardiopulmonary Resuscitation is an emergency procedure that is left for the last, when all else has failed. Not that I have ever been trained in CPR [though I do end up giving a few heart attacks to the men in my life... I mean those who’ve travelled in my car, geez], but there was no better a metaphor I could find to logically justify Mitsubishi’s launch of the Outlander in India. Well, if you thought the Lancer was the hottest babe to hit the east of Govindpuri [extn, if you please], Jack, pack your bags, the shuttle to Mars is about to leave... and I have space for just one more!

Yes, yours truly was one of the ‘Incredibles’ forecasting many years back that Mitsubishi’s Lancer launch would pole-vault it to the number one position in India! If I was wrong, they were wronger, and the Lancer the wrongest! But perish the thought Schumacher, for when Mitsubishi launched the super smooth designed Outlander in India on October 3, 2008, there was a similar resurrection of sorts doing the rounds. CPR is what I call it! This was/is the product that could rewrite Mitsubishi’s history... and future in India! And all in one go! There, I said it, as I had said it in the past. The visions of my past great glory and greater forecasts came rushing back. For the only small issue with the Outlander is that, well, er, it’s an, umm, SUV! Phew... That wasn’t so hard, was it?!

Try as hard as I may to believe to the contrary, the fact is that the SUV market globally has taken a hit worse than what Bachchan’s gut did in Coolie [I know, the simile sucks; kill me and burn my SUV down]. But first, some facts about the Outlander, and then some more about the SUV conundrum I’m facing paradoxically.

Along with its tenth generation Lancer range, the Outlander is an important pillar of Mitsubishi’s global turnaround strategy. As per its global aspirations, even the 2.4L MIVEC engine is a product of collaboration with Hyundai and Daimler. India is a rapidly growing market and can give Mitsubishi an avenue of expansion, but strangely, Mitsubishi has steered clear of volumes! At a price range that starts from Rs. 2.2 million, the Outlander will be positioned in the E segment and will be part of the newly formed SUV bandwagon. The Mitsubishi will compete with able competitors like Honda CR-V, Hyundai Tuscon, Chevrolet Captiva, Ford Endeavor and its own half brother Mitsubishi Pajero 2800. So far so good... Bachchan’s gut from here.

According to claimed figures provided by Mitsubishi-HM officials, the company sells no more than 250 units of its three prominent SUV models in a month. The company expects to sell no more than 100 units of even the Outlander in a month’s time. The competition is in a no better situation. As per SIAM data, falling to 1299 units, the sales of market leader Honda CR-V declined 12% in April-August 2008. The same fate was destined for Suzuki Grand Vitara and Hyundai Tuscon that recorded a sales decline of 47.6% and 79.6% respectively.

But what has confounded my genetically inherited cynicism [well, I’m overworked, underpaid, underweight, don’t have an SUV, and need a ‘brake’ goddammit] is that I see no hint of worry amongst the manufacturers. “The Indian market is evolving and there is a niche market where people are sporty and have an outdoor lifestyle. From next year onwards, things should start looking up,” said R Santhanam, MD HM- Mitsubishi.

Manufacturers are believers in the cult-view that even though the volumes are low in the high end SUV segment presently, there is a great scope for margins in the long term. With raw material prices like that of steel and rubber declining, players claims SUVs could indeed become – god save the BCG matrix – future Cash Cows.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...

With competition on the rise, American Express has to re-think its strategies in India.Ratan Lal Bhagat writes...

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Wall Street could never have had a worse nightmare... But it saw one in broad daylight and became Fall Street in a matter of a few days! Giant after giant tumbled, and all in the white collar zone fled for cover... First the Fannie Mae and Freddie Mac episode happened. Then Lehman Brothers filed for bankruptcy. This was followed by AIG being bailed out. Next, Merrill Lynch was sold off and then followed Morgan Stanley’s and Goldman Sachs’ announcements that they would transform into commercial banks! Banks like Citi and HSBC are still hanging on, all thanks to their retail presence. In the face of all this, there is a giant who feels extremely uncomfortable, a giant by the name of American Express Banking Corporation (AEBC; it was known as AMEX prior to 2008) which sold-off its global retail banking arm to Standard Chartered during September 2007 for a mere $860 million! So does it make AEBC more susceptible to the ongoing bushfire, considering that it has a huge risk credit card business model in place? One primary reason why there still are survivors in this financial mess is because the survivors had invested in emerging nations like India, where high growth rates and low credit and default rates insulated them from becoming history. The story of American Express Banking Corporation (AEBC) is one of them...

Resilient and determined to fight the on-going battle of survival, this banking giant managed to find its way into the Indian sub-continent decades back. India soon became a huge hub, especially for its credit card and travel-related services. And the country soon proved to be a major engine of growth for AEBC globally.

But all things aren’t as rosy as the previous paragraph reads... Even in the country, AEBC has faced many obstacles – like the small urban consumer base (considering that as per World Bank, 47% Indians live below poverty line), increase count of defaults, intensified competition et al. So what is the future for AEBC in India and its strategies to achieve the imagined?

We caught up with Rob Hennin, Country Head, India, American Express Banking Corp. (read interview) and other officials in this American banker’s India unit to discover more about how it plans to grow, using India as the epicentre

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Don’t let a card test your intellect!

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With consumers failing to put a pause on consumerism despite rising interest rates, it becomes all the more essential for credit card users to be prudent in use and payment of dues to avoid a fatal debt trap that can wreck their financial health, says sunanda roy

“Oh, they are so essential these days.” Well, those were the words of an executive of an online portal when he was asked what he thinks about the usage of plastic money. He even showed some 2-3 credit cards of different banks and equal number of debit cards on the flip side of his wallet to prove that he is not lagging behind others in the use of plastic money. Definitely, plastic has transformed itself from a mere status symbol to a very essential commodity in recent times.

Both the volume and the value of transactions on credit cards are on rise like never before. As per the Reserve Bank of India’s Annual Report for financial year 2007-08, total value of transactions made on credit cards during the year amounted to a mind-boggling Rs.579.58 billion, up 40.1% from Rs.413.61 billion, the total amount spent by credit card holders during FY 2006-07. The total number of credit card transactions too have jumped from 169.5 million to 228.2 million, registering a whopping 34.6% growth as against a measly 8.6% growth in the previous financial year. A mere look at these figures clearly justifies the fact that the ideology of cashless shopping is roping in more Indian consumers than ever. In recent months, banks have been able to tempt more people to use more of their credit cards, simply by putting in place schemes like cash-back, discount purchases, free air tickets and so on.

Rabindra Gupta, a modern day executive says, “It makes your life really easy. You cannot carry cash in your wallet always; but with a card you can just swipe and shop whenever you feel like.” As per a banking analyst, “While simplicity of making payments is one of the primary drivers for growth of credit cards, growth of e-commerce has also stimulated its usage. So much is its utility in the modern times that it has become an integral part of our lives.”

But while the dependency on plastic money has made our lives easier, it is also driving toward a fatal debt trap. The best as well the worst part of using a credit card is you can buy today and pay later. And you can get your hands on a product even if you don’t have sufficient money with you. Now for the worst part, which many of us don’t take seriously, is that you tend to defer your payments and in the process incur huge amount of penalties and other charges. As a result, consumers end up paying an obscene amount for something which is higher than what they should have actually paid.

How the sharp increase in the usage and average spend through credit cards has led to piling of outstandings and payment defaults can be well understood, in fact, from the latest RBI statistics. According to the RBI Report, outstanding on credit cards went up by a massive 87% to Rs.265.96 billion by the end of May this year.

To be fair, another reason that has contributed to this large credit card outstanding is the surge in interest rates recently. Correspondingly, the financial load on existing and new consumers of personal, car or home loans has gone up, condensing their disposable income. But clearly, this has not put paid to their already high aspiration level and therefore conspicuous consumption. With the result that plastic money usage and defaults in payments have seen this alarming rise. Amount due on these people now constitute a major chunk of the huge credit card outstanding at present. What’s more relevant is the fact that if these people do not pay up in the near future, this debt trap will continue increasing.

To stay away from such chaotic situation, banks are now encouraging more and more borrowers to convert their credit card dues into personal loans in a proposal to stave off defaults prompted by inflation and rising rates. For a consumer with a large credit card debt, such a scheme is not bad. Because, dues under a credit card debt after the initial interest-free period draw interest rates to the tune of 18 to 38% per annum, where as personal loans are still hovering at rates starting from 14%. According to Robin Roy, Associate Director, PricewaterhouseCoopers, “The darker side of the story says that in the course of using a credit cards one keeps on postponing the payment. But while it’s a personal loan, there is a fixed repayment schedule. You are compelled in some kind of discipline.” This, for sure, will help you move out of the vicious circle of the debt trap. To err is human, but to recover from it is definitely intelligence. And in today’s world of high consumerism every one, who uses a credit card, has to show some of that intelligence to be safe and sound in terms of their financial health and planning.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

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

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