Lack of Switch Effect in Advertising

Switch Effect is not new phenomena in advertising but with competition between products intensifying and more brands fighting for the same target market share, it has became more important than ever.

David Ogilvy saw it coming long ago and called it ‘Changing Brand Preference’. It is an element which is necessary if the product advertised has established substitutes. Switch Effect is called for when purpose is to make consumer switch from buying a product over other, specially buying a new product over established one.

According to Advertising legend Alyque Padamsee“‘switch factor is the name of the advertising game today. We are in a highly competitive market, not a virgin one”.

The 'switch factor' is absolutely lacking in today's ads. When agencies have prepared the pitch for a television commercial, they must sit with their client and find out do our ads have the essential element to make people switch from some other brand to his. If it does not, then we must waste no time in tearing the commercial up and preparing a new one.

In advertising, we are like an athlete, always running against our competitors.

Most of the ad agencies I visited do not believe in the theory of Switch effect to drive sales. One V.P of a leading Multinational agency argued-“to drive sales, the product should have the switch effect and the purpose of advertising is only to let the product talk to consumer”. He might be right to an extent but at the end of day if the sales figure is not shooting up for a year or two the agency will be sacked.

Lowe Lintas was the agency which created the Liril Girl campaign and the campaign ran for a full 25 yrs but in spite of being extremely creative, the agency lost the contract as Hindustan Lever, dissatisfied with the soap's sales figures moved the product out of the agency.

A lot of Ad agencies brand themselves as creative hot shop but in my definition, advertising is only about creativity for selling purposes. We are not competing with M F Husain or other top painters or poets. The job is to sell the clients' products. However creative we may be, if we fail to sell our clients' products, then it is not a good ad. Some agencies have blended creativity and saleability nicely.

To me, a great ad is an ad that generates great sales. A lot of advertising today is certainly noticeable as ad agencies try to break through the 'clutter' but unfortunately often at the end of the commercial, you don't know what on earth they are selling, though you remember the ad which was great fun. The ad has no Switch Effect at all. Sometimes, even if you remember the brand, you don't find any reason, apart from humor, to choose that brand. It's good to have funny ads but we must remember that we are no R K Laxman. We create comic, serious or dramatic ads only to sell some products.

One of the best examples for understanding Switch Effect is ‘Fair and Handsome Cream’. The ad certainly has created a need for men to switch the earlier cosmetics they were using to the new brand which was specially formulated for their skin. Today it is one of the fastest growing FMCG products in recent history -- it has achieved sales of Rs 50 crore (Rs 500 million) in 9 to 10 months, but its an old story ...I need a fresh example.....

Rituraj Srivastva

Politics Vs Indian growth!!!!!!!!!!!

Indian politics is known for it backlash, its true when ever &wherever there is peace and prosperity rings. Indian political parties come into picture and try to disturb the harmony. Recently three different issues are raised by political parties in all booming sectors: power sector, retail sector, Share market & telecom sector.

Telecommunication sector: On 23, August 2007, Department of Telecom issue a new guideline for children below 16 years will not allowed for using mobile phone because health hazards. According to DoT, electromagnetic radiations emits from cellphone effect the growing tissues of children which may cause health hazards.

But on the other side if we 400 studies on biological and health effects of mobile communication radio frequencies are going on but still researchers are not come on the conclusion that these radiations are really highly hazardous for us. If we see the statistics of mobile usage in India- around 39% of children between 5-16 yrs used personal mobile phones. It’s a big market for telecom operators.

According to Dot, Telecom companies are instructed to rollout their base stations and antennas, including asking operators to install radio base stations away from schools and hospitals.

Telecom operators are shocked by DoT new safeguards and are opposing its (DoT’s) move.

Retail sector: 1 or 2 days back UP government shutdown the two retail giants shops in Lucknow & Varanasi on local administration's recommendations. In the mean time, there was fight between local traders & MFS (Modern format stores). It’s a warning bell for other big players who are expecting to enter in this booming sector. Few months back Reliance fresh faced same problem in Bihar also..

As per my thought there are two possibilities:
1. U.P & Bhiar will be left for any development by private player due to such politics & misconduct from local businessmen.

2.These issues will effect new retail entrants physique.

Power Sector: 123 agreement:

Today, Left parties are snatching every piece of flesh from UPA government. In fixed period of time Mr. Karat ready for announcing the annoyance against every initiative of UPA government i.e. privatization of airports, Merger of AI & IA (air India , Indian airlines) and now most awaited agreement of nuclear deal .

Unfortunately if the deal will not done it will affect India’s stand in world level esp. at strategic deals with other countries i.e. Australia for uranium etc. Its not a internal regular political tug-of- war between between parties.

Share Market: Recent political instability leads share market variation & affect FIIs decisions on investment .

Death Match

Round 1:

The big daddy of search Google arrives and knocks out every search engine existing on the planet including Microsoft's MSN search and Yahoo!

Points: MS - 2 Google – 10

Round 2:

Google launches Gmail, a free email service with huge storage space. MS jabs back boosting free memory in Hotmail but the damage is inevitable.

Points: MS - 4 Google – 6

Round 3: Google jumps the advertisement bandwagon, which becomes its cash cow by bundling ads with search results.

Points: MS - 1 Google – 7

Round 4:

MS takes Google to court claiming that it is confusing users by showing search results with ads. MS makes Yahoo its ally with an ad delivery contract to counter Google's Ad sense.

Points: MS - 7 Google – 2

Round 5:

Google hires Kai-Fu Lee, VP Microsoft.

The battle for Kai-Fu Lee, underlines a growing animosity between the two companies, with Microsoft CEO Steve Ballmer allegedly pitching such a fit after losing one executive in 2004 that he threatened to "kill Google" over the continued poaching of Redmond's top brass, even flinging furniture and dropping more F-bombs than I've heard tell in awhile.<http://www.aurorawdc.com>

MS strikes back and sues Google and wins the case.

Points: MS - 9 Google – 1

Round 6:

Google hits with ultimate thunderbolt, partners with Sun Microsystems in producing Open Office. This move ends MS's tyranny in office application software. MS runs scared of the Open Document format started by Adobe.

Points: MS - 0 Google – 7

Round 7:

As the noose tightens around MS it strikes with its old war trick - copying the technology (a rabbit punch), with which it had defeated many competitors like revolutionary Apple. Microsoft enters enemy's backyard search! Google gives a counter punch building a "patent fence" around search and takes on Yahoo first, then leveraging cutting edge user interface design technologies present in Google Maps (which could challenge PowerPoint) and Gmail (the RTF technology already offering about 70 percent of the functionality behind Word). Deployed on the "Googleplex" platform Google has created as its supercomputer-like infrastructure, calling into question Microsoft's very necessity isn't far around the corner.

Points: MS - 6 Google – 7

Round 8:

Google moved further into Microsoft territory with the Deskbar, a search box that sits on the Windows OS.

Points: MS - 4 Google - 6

Future

Round 9:

Search is still an infant. Google is still a web page. Don't get deceived by that, it will be shear ignorance. MS knows that and its going crazy fighting Google. Why? What's the obsession for?

Because it knows search is a key component in the future of computing. Microsoft's next-generation OS, Longhorn (first OS to be coded in .Net framework and c#), is conceived as a unified interface for a PC, its local network, and the Web. For it to work, Longhorn needs a sleek search utility. If Microsoft can't buy Google, it'll resort to its time-tested strategy: copy the best technology and integrate it on the desktop. What could MS do with longhorn? It could engrain SEARCH within the OS! Bypassing the competitor altogether and the almighty OS reigns…

Result: MS knocks out Google!

Round 10:

Google has becomes more than a business driven by search. Although it’s search box is a phone book and a dictionary. It can check stock prices, provide news, track FedEx packages, perform metric conversions, locate airplanes, offer street maps, and supply weather conditions. It'll search retail outlets by zip code and, with Froogle, scour the Web for products. In short, Google execs are innovating like they're running from someone. "People at Google don't talk about it, but it's pretty evident," says Danny Sullivan, editor of Search Engine Watch. "Microsoft's making a move into search that's equal to its move into Web browsers. That's got to make you nervous." It becomes the Walmart of the hi tech industry churning out newer and innovative product. Transforming R&D into an assembly line.

Result: Google knocks out MS!

For all their differences, the two companies have a lot in common. Microsoft looks at Google and sees its own past, full of promise. Google looks at Microsoft and sees the future - a company that dominates the tech landscape.

Hello- Trin-Trin

Hello!!!!

Indian telecom industry is one of the fastest growing industries in India. India has nearly 200 million telephone lines making it the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.

There are some facts of Indian telecom industry are given below:

Call rates from Rs. 16 to Re.1 : In FY 1999, STD call rates were Rs. 16 & incoming call rates were approx. Rs. 8, in year 2001, when BSNL launch its mobile services the incoming calls were free even though outgoing calls were Rs 3.60.
Today, all service providers went for “ CALL ONE INDIA” means outgoing calls at Re.1 .

In year 2004, First CDMA phone enters in Indian telecom market, then TATA also enter into telecom sector directly with Indicom . Now, Reliance communication is second in market share of around 19% after Bharti Airtel Ltd of 23%.

GSM Service Providers	CDMA Service Providers
Airtel (1,23%), BSNL (3,17.78%),Hutch-vodafone (4,16%), Idea (6,8.31%)	Reliance (2,19%),TTSL (tata,5,10%)

Source: TRAI 2007 report

Indian Mobile market from old MOTOROLA C-350 to latest moto razr & N-series (Nokia)
Price also slashed drastically from Rs. 15000 to Rs. 1500.

Dual Sim mobile phone: Any combination-CDMA(TATA)+CDMA(Reliance)

CDMA (TATA/Reliance)+GSM(Airtel/idea/Vodafone)

GSM (Airtel/idea/Vodafone)+ GSM (Airtel/idea/Vodafone)

One mobile number for any service provider- This development is under process & hopefully in few months it will be in market. All CDMA operators (TATA/Reliance) are interested in launching the scheme today but GSM operators are worrying about their market share so they are taking time to opt the technique esp. (Airtel, Vodafone).

VAS( value added services): from boring trin-trin to “kaho naa pyar hai” tune.
Railway reservation, cricket info etc.
3G spectrum

M.P.Singh
ICFAI Business School
Hyderabad

Creating Gods

The theory below tries to explain the following:

1. How do we create a Brand?

2. Is the brand around us?

3. Can we see a brand?

If the literature below can’t explain any of these even vaguely may Brands..oops God send the writer to hell…read Retail.

Brand Manifestation:

They are among us, they are mighty, and they rule our world. Ladies and Gentleman lets vow for them for they are no ordinary human they are Gods ….they are BRANDS. A Mercedes elevates you and a Rado makes time so much more important for us (didn't our parents told us its Precious). Even if some of us shun writing, Mont Blanc is a sure pleasure to have, use and..... Show off.

Lets think it over. What make makes people pay a whooping $137,000.00-$137,000.00 for a Mercedes Benz CL- Class. Is it only the luxury or is it the feeling of success and luxury associated with it. The more intangible you will make your brand the more differentiated it will be from commodity and the more premium you would be able to charge. If Marketer can associate the felling of success and luxury with Maruti 800, consumer will pay a premium for that……may be I am stretching it a bit too far.

The more tangible your brand is the lesser will be its equity. Remember Brands are God. We can’t see them, we can’t touch them. We can only feel, imagine and at the best experience them. The catch words in the sentence is feel, imagine and experience. The brand has to catch the imagination of Consumers and make them fantasize.

Let me explain the whole concept with the metaphoric example of Culture:

1. Is Culture around us?

2. Can we see it?

3. Can you touch it?

The answer to first is yes and the answer to other two are Invariable NO. Because Culture is so intangible that we can never see it, all we see is manifestation of Culture in the cloth people wear, the food people eat, the way they dress etc. Even in organization the organizational culture has its manifestation in its employees’ attitude and behaviour (But wouldn’t that be a separate debate). The point which I want to drive is the Stronger the manifestation stronger will be the culture. Likewise for Brands – The Product, Logo, Colour. Ads are all manifestation of Brand. The Stronger the Brand Manifestation the stronger the brand will be. My point is brand is not only about product, in fact its not about the product…it’s about the aura surrounding the product. And the Photons of this aura include organizational behaviour, suppliers, management (culture by the way drips down from the top management). Believe me to achieve God needs great devotion but to create one needs lot of courage, conviction and devotion indeed.

This article with all my heart is in honour of my friend Manvendra Pratap Singh, who encouraged me to join this band wagon (herd of Band Wagon Effect in Consumer Psychology).

Rituraj Srivastva

CORPORATE BLOGGING - A TRUTH

In last article we have seen what is corporate blogging & how its spreading among companies.

According to Technorati report, in one year corporate blogging increased by 330% which itself shows a huge upthrust is there in it.

Today, in every company almost 20% of its marketing budget spend on new ways of promotion like blogs etc. With the increasing demand of blogs as Public Relation, there are number of ways adopted by companies to promote its unique image, products, queries & suggestions etc.

According to Marketing Profs analyst David Felfoldi, there are seven types of blogs prevails in corporate blogging, each one has its own importance.

1. Corporate Newsroom
2. Product blog
3. Developer/channel partner Blog
4. Event/promotional blog
5. CEO/ thought- leader blog (Jason Calacanis of Sequoia Capital)
6. Company evangelist (Matt Cutts, a well-known blogger who works at Google)
7. Internal blogs

Answer of last post are:

Code of conduct: Actually its not well defined some of blog experts said that it should be formal but what I thought that if you are initiating something for PR & sifting traffic from your web portal to your blog then code of conduct should be informal and interactive because if the user who posted comments will not be satisfied, he will not come back & share anything with you.

Handling of blogs: As above mentioned there are six major type of corporate blogs and each blog is handle by one senior manager of the deptt.

• Product blog- it will be handled by product development deptt.

• Company evangelist: these blogs are handled by senior level mangers who have lot of experience in particular field because the visitors on this blogs are also well known experts in particular field, so expect quality answer of their queries.

• CEO blog: these blogs are directly taken care by CEOs himself.There is a list of few international & national CEOs.

International CEOs

Indian CEOs

Rajesh Jain, CEO of Netcore

Dr. Vivekanand P Kochikar Associate Vice President and Principal Consultant - KM, Infosys Technologies Ltd.

George Eby Mathew Principal & Head of IT management Research, at Infosys

Dina Mehta, Explore Research & Consultancy

Most amazing fact I have seen few days back was that government departments of various countries also have their blogs.

Indonesia: Juwono Sudarsono, Minister of Defense

Iran: Mahmoud Ahmadinejad, President

United Kingdom: David Miliband, Secretary of State for Environment, Food and Rural Affairs

Andrew Wadge, Chief Scientist, Food Standards Agency

United States: Department of Defense

On a same day, I was shocked by seeing India blog & India blogs which contains the database of best Indian blogs with various categories i.e. CEO’s blog, marketing blogs, personal blogs etc. First one has database of few thousand of Indian blogs which shows that there is huge growth & interest is rising among Indians also.

But on the other side if we see Indian comscore report which shows that Internet penetration in India is meagre 3% , around 2.2 crore people out of 1,129,866,154 population (till July 2007).

Benefits of corporate blogging:

• Quickly giving consumers company updates,
• Allowing for open feedback with consumers, and
• Inclusion in search engine indexes, and thus possible increased traffic.
• Online newsletter with community feedback e.g. ICFAI stockyard (it has no blog but have its forum), Google press centre.
• Information sharing

Have you ever thought about the evils of blogging? hopefully sometimes or might be no. Its very true that every coin has two faces: one is there in my first post, in this post and other face will be in next one. Till then just think about it & evils will be there in my new article......

“Blogging an incurable disease”

M.P.Singh

ICFAI BUSINESS SCHOOL

HYDERABAD

Online Branding

As David Aacker says, the companies must achieve the goal by making the customer smell with the eye, taste with the eye, and feel with the eye. In this Web based era we have limited choices to try the product physically or interact with the services face to face. Everything is about the brand because there are some companies as Ebay that are pure virtual player, so the only interaction with them is on the net.

Differences between Real and Virtual branding

Real Branding(Traditional Branding) Virtual Branding(Online branding)

1. Mass marketing Individualized Marketing
2.Branding Communication
3.Push Media Pull Media
4. Segmentation Community
5.One to many One to One, Many to Many

These are the five main differences, as we can see the Internet provides the opportunity to personalize the information, in the base of the marketing we can see that each customer is different, and the internet gives the opportunity to provide different services for the different consumers according to the use.
The Internet is a pull media, so even the publicity in the net is going to be very important the contents and the design of the home page are going to be as important as the publicity. Maybe the publicity is going to provide us the first visit to our web page but it cannot make the consumer feel that they are purchasing a quality product, maybe they will not comeback.
In online branding the customer value the brand in three different ways like customer satisfaction, security, dependability. For Ebay may be the most difficult benefit to fulfill here is the security. The security is one of the biggest problems for not purchasing in auction pages. The customer must feel himself secure of purchasing in the net and also it must make the customer feel comfortable while purchasing.
The other difference is that the traditional branding uses to focus more into create expectations, by advertising or sponsoring. But on line branding are taking much more care in the experience, the reason is because Internet is a pull media, and also it’s too easy for the customer to pass from the expectation to the experience.
So what should a good brand do in the Internet? In order to achieve this goal, the brand should concentrate it’s branding on experience. A brand that attempts to be a leader in the Internet should try to fix the 4Cs model. (choice, change, complexity and community). The principal differences in the Internet are the complexity and the community. If our web is too complex it will give a bad brand image. It is vital for a good web page to try to create a community, this will give to the brand the feedback to reformulate the brand, and from my point of view it’s the best way to create a brand loyalty.

Santideep Sahoo
ICFAI Business School
Hyderabad

Corporate Blogging: New PR tool?

Today personal writing has become professional. Initially when blogging introduced it was for passionate writers but now this blogging takes new turn and has become a Public Relation (PR) tool.

According to Susane M healthfield (HR expert@ about.com) said: “What sets blogs apart from other online writing … is their dynamic nature (as opposed to static Web pages) and their voice (style).” The voice of the writer (or writers) of the blog, in a successful blog, is unique to that blog.

In her article, she mentioned no. of reasons for starting corporate blogs. Today companies are so much customer centric that they are trying to involve lot of customer interactions in every stage of product development to meet customer demands. So, companies conduct a no. of pilot tests, focus groups, brain storming session etc to know about customers demand, perception, requirements etc.

Now blogging help companies in similar & in more refined way. When any new product launch or customer faced any problem related to company product he/she can directly communicate to the company professional through the corporate blogs & another most important feature of corporate blogging is company time to time updates about its usage, features & new changes in variety of products.

There are no. of companies in European union which are using “corporate blogging” as PR tools because it’s a informal communication between customers & companies just like communities & forums. There is partial of companies which are using corporate blogging as PR tool in EU.

According to wiki corporate blog research only 8% (40) of the fortune 500 companies were in corporate blogging till (may/2006). In one year, corporate blogs increased to 132 (till june/2007). Check out the list

In india when pulsar was launched there was dedicated community of “BAJAJ PULSAR” owners and daily they discussed about the features, market response, individuals’ reaction for new pulsar. The interesting thing about community was it was started by company senior managers' team to know about the views & reaction of “BAJAJ PULSAR” owners & prospective customers. Same experiment is done by HONDA motors when it launched “ UNICORN” in India, in the initial phase of launch Indian customers were worrying about the mono-suspension in the bike, so company used community as PR tool to promote its utility & benefits from UNICORN users(innovators).

Now in India, there are some companies which are using blog as PR tool for its PR & promotions: Some of them are given below:

1. Tata Interactive Systems
2. ebay India
3. Tekriti Software
4. Score India

Now in India majority of population thought that it’s a boring, non effective & cumbersome medium to promote yourself(company).But Sun micro-system promoting blogging among all its employee than any other company in the world, according to the company 3000/32000 employees have their own blog and company CEO also have corporate blog there are no. of visitors, third party developers visit company blog.

ISSUES:

Code of conduct, what should be the mode of communication (formal or informal)?

Who will look after these corporate blog i.e. entry level managers, middle level managers or Senior mangers?

In next article i will answer you the questions but till the time think about it?

LOTS TO LEARN FROM KIRANAS…

According to a new study published in Economic times, Indian consumers are still visiting local kirana stores (mom n' pop stores in India) while they love the shopping experience of malls. Besides, the bulk shopping that they do at these modern retails stores, there are the daily top-ups to do at the local groceries (Kirana Stores) and the perishables that have to be bought daily. For Kiranas the proximity is the major advantage.
Considering the largest retailer, Pantaloons (through Food Bazaar), does not think it a bright idea to compete with them, discount retailer Subhisksha still fine-tuning its format. “There is a huge opportunity in home deliveries and the trick is to beat the kirana stores at their own game,” says R. Subramaniam, Managing Director, Subhikhsha Retail.

Today home delivery services comprises a mere 5% of the leading food retailer turnover but the players like Wadhwan foods, pyramid retail’s True Mart, Subhikasha are expecting to generate more than 20% of their total revenue from the home delivery services.

Having set up multi-channel distribution systems after buying Sangam Direct, the home delivery channel of HUL, Wadhwan Foods would be exploiting the synergies between its store and non-store formats. For instance, it would now have the call centers operating on behalf of Sangam Direct or to direct calls to its nearest Spinach outlets to service customers. Sangam Direct was operating under central warehousing concept which is time consuming as well as it incurs more cost.

Here Kiranas leads the organized retailer due to there reach in the market. In order to increase the reach in the market the organized sector should include a Hub and Spoke model in their supply chain. Instead of going for the centralized warehouse, small-sized convenience stores are likely to be the ones to crack the home delivery format.

The organized retail stores have to match with the consumer expectations. Kiranas are already offering this programme which includes stock rotation and loyalty programs, along with credit and discount policies. The organized retail stores still have to learn a lot from the kiranas.


By
Santideep Sahoo
ICFAI Business School
Hyderabad

Leveraged Buy-Out:

What do you think when you hear the name Tata-Tetley. Well most of us associate it only to the morning tea that is tastier than most of the other brands available. Only a few in our country know that Tata buying Tetley was India’s first Leveraged Buy-Out or LBO as it is popularly called.

But what exactly is LBO ?

Well it’s like a small fish eating a big one. Not possible! Well in the field of merger and acquisition it is very much possible. LBO is company acquiring another one, which is of size greater than three or four times the size of the acquirer.

For example in March 2000, Tata-Tetley 300 mn pound deal, Tata tea had net worth of less than one third of the net worth of Tetley, whom it acquired.

In LBO an special purpose vehicle (SPV) is formed to carry out the deal in which, the acquirer puts small amount of equity (the capital brought in by itself) into the SPV and rest amount is raised from debt which is 3-5 times the equity. The lenders are given the assets of the company being acquired as the collateral. Thus, there is no net affect on the balance sheet of the acquiring company as the loan is taken by the SPV. Oh ! this sounds great.

After the Tata-Corus LBO, Tata steel is now the fifth largest producer of Steal. Calcine-CII carbon deal made Calcine largest producer of the calcined carbon in the world. So for the organic growth this LBO seems to be mostly used tool. However, this is not something that makes the investors very happy.

Then where is the catch?

Firstly, for the debt the interest rate is very high for LBO, sometimes as high as 8-9.5 %. This puts huge burden on the acquiring company in terms of paying interest, although, the acquiring company is not primarily responsible as the loan is taken by the SPV, but its know to everyone that if there is any default the company may have to pay by liquidating (selling) its own assets. This reduces the value of the firms in the minds of investors, which reflects in the lowering of share price of the company.

Secondly, the rating of the company goes down. After the Tata-Corus deal, the rating of Tata came down from AAA to AA. This makes the company unfavorable for investor to invest in it when the company itself needs some fund later.

Thirdly, the heavy interest payment is thought to be paid by the future cash earnings of the acquired company. For this there is a need of market. Now to find such market the company relies on international market. For example in case of Tata steal India will have to rely on market like China for generating revenue which can be used to pay those heavy interest. Now if the relation with china becomes bad, the company will turn red.

Then again the question comes in mind that if there is such a risk involve than why at all the company go abroad for the leverage buy-out when there is a option of merger?

The reasons are:

i) RBI has regulation that a domestic company can’t raise debt more than three times of the net worth of it. In case of LBO, the SPV is created outside India and it takes loan as much is needed as fall outside the purview of RBI.

ii) Merger can be an option but, cross country merger always has to deal with a lot of regulations and barriers. So the simple way out is acquire that company by floating a SPV in the country where the company being acquired is belongs.

navalkpratihast@gmail.com

S-Commerce- new milestone in Indian retail

An innovative concept introduced in India to give new dimensions to the service industry & money value to the customers. It’s a new category & new brand genre of business model to provide every possible service to the consumer at one place on a single platform called “SUVIDHAA”.

This initiative is developed by Shapoorji Pallonji Group and called as Suvidhaa Infoserve Private Limited.

According to company, IT revolution helped them to develop this concept and but due unavailability of internet across the country, company will introduce “BRICK and MORTAR MODEL”. The SUVIDHAA service will be launch in September, 2007 (in the month of my birth; just Joking) in 25 cities (tier-1 and tier-2). According to company projections, in next two years this will be available in 75 cities of our country & generate 300000 lacs direct jobs.

An advanced version or prototype of bank’s “single window system”, Andhra government’s unified bill payment model- “e seva” and “mobile shop” joint venture of ESSAR and Virgin mobile . Under one roof, consumers will get the service related to travel (roadways, airways etc), telecommunication, education, telemedicine, entertainment, utilities, finance, sales, job opportunity, e-governance, life style, bill payment etc which are prime and basic requirement of ours.

SUVIDHAA will have three tier distribution network:

• SUVIDHAA flagship stores (company owned)
• SUVIDHAA points (neighbor convenience store)
• Shop-in-Corporate model.

Shop-in-Corporate model is really an interesting model in which company will generates & maintains key Corporate Accounts for companies and their employees.

The issue is does this concept is viable in Indian context where less than 10% people access internet & with huge set of demands and vast geography.

LETS WAIT AND WATCH……………..

New way to go!

Wish U all Very happy Independence day

“Nothing fails like success” ---- Richard Pascale

In changing dynamics of business there is win-lose competition to survive & exist in market. Today, most of the industries are using various cost reduction techniques to reduce its cost & provide more values to their customer, but if we see these business from top view (machine drawing way) they all are roaming around the bush.

Niche or innovation is way to maintain one’s supremacy and leadership in market. Due to this a new concept of Strategy evolved called Blue Ocean & red ocean strategy to define the market condition & develop new tactics or formulas to succeed in such intense competitive market.

Red Ocean: a brutal battle field where you have to fight for survival otherwise you will die. Every company tries to outperform to grab more market share and due to this space gets crowded and prospects for profit & growth are reduced. In the mean time product turns into commodity and intense competition turns the water bloody

Blue Ocean: deep fresh water without any boundaries & restrictions. In business management terms, a new virgin market where there is no restriction, no boundary limit & no competition.

According to Blue ocean strategy, either you create new market, new industry (which happens with great innovation & inventions) or create blue ocean in existing red ocean by crossing the boundaries of industry.

The figure given below is similar to the PLC (product life cycle) but it’s an organization development life cycle where u can put any organization & compare its development with change in time.

Fig: Organization development life cycle(ODLC)

Let’s put Google in above graph, it started in September, 1998, as search engine & tied up with great biggies & with the success of search engine & advertising, in 2006, Google search captured the market share of 50.8%, yahoo (23.6%) & live search (8.4%) & others (17.4 %).

Every year it introduced new product and gave full time to its users to get accustomed to it. After hit of Google search it launched Gmail, orkut. From the last six years Google has been making its brand image for its users & it was such success that we were searching a person who have Gmail account because it was a prestige for any net savvy person to have an account on Gmail.

From the story of Google I would like to add that continuous development & innovation required to follow the above ODLC (org. development life cycle).

Another example is of Steve job’s , Apple. In initial years of its computer launch it was huge success but later on its process was perfectly copied by Microsoft and presented in much better & customer friendly way to the customer and grab major share of APPLE computer’s market. But that was not the end, Apple applied game theory & blue ocean strategy and target new market segment – entertainment and reenters with APPLE i-pod was a huge success

Other Successful blue ocean strategy examples are :

• Starbucks (coffee as low-cost & luxury for end consumers)
• Dell’s built-to—order computer
• Disney’s full length animated movies
• Sony walkman
• Orkut.com

In Indian context:

• Himalyas LIV52 (medicine)
• Paras pharmaceutical
• Mumbai Dabbawala ………………………

“ Success of Blue ocean strategy depend upon managers & CEOs”

IS IT TRUE………Just think about it

To download the article click here

EXPERIENCE MARKETING

The topic is elusive but its significance cannot be undermined. Nowadays companies are trying to implement third generation strategies through second generation organizations with first generation management. But have we forgotten about the key element of it all- called the customers?

Now the customer over the period of time has evolved to be more demand frenzy, irrational, conscious and educated. Companies can’t fool them by saying “customer is king” or “customer is our partner”. Companies have dubbed words like customer care, customer satisfaction etc to please them (Though I find marketing in tune with sexual terminologies like market penetration, brand intimacy etc, though it’s a topic for some other day). Still at the end of the day we have to ask two questions to us.

• Is the customer happy with us?

• How can we match customer’s perception of satisfaction with our existing process?

I will try to exemplify with an example. A customer enters a retail shop, fully drenched with some bags in her hand. Now the immediate service would be to take her bags from her hand and make her comfortable in a seat. But at that point of time, the A.C. is not working or some foul smell is around the shop. So what is the end of the story - dissatisfied customer. Isn’t it? (I hope we can have as many examples as possible on this regard).

So the crux of the topic is “companies should try to extract the intangible aspect called EXPERIENCE part into customer buying”. Since more & more companies are attaching service aspect to their tangible product, hence the companies should try and make a good experience for the customers while buying.

Check this link for more from the author -

http://managementchords.blogspot.com

It's Ringing in Rural India!

On march 16th finally Vodafone and Essar shook hands. £29,350 billion Vodafone, the largest company in terms of revenue in the mobile space, is planning to move in a big way in rural areas of emerging markets such as India. In the new entity Vodafone will have 52% stake, while Essar continues to hold 33%. There were some issues like Vodafone signing a memorandum of understanding (MoU) with rival Bharti-Airtel on sharing infrastructure that was not favored by the Essars which was finally sorted out. Vodafone's India-born CEO Arun Sarin was quoted saying:"Our target is to achieve 20-25 percent market share in the coming years from the current 16-18 percent."

Emphasising Vodafone's focus in rolling networks in rural India, Sarin said: "We are likely to invest several billion dollars in networks in India. There's an unmet need in rural India (for mobile telephony)."

So do you think Vodafone will be successful in its rural foray? To read the whole story click here

Food &Groceries (F&G) Retailing:

Fast, Growing, Revitalizing India’s tail (dead/lost) business sector: Agriculture

“I no longer buy fruits & vegetables from street, when it is available at cheaper price with excellent ambience- with ACs, attractively shelved wares & half dozen uniformed assistants to attend on customers, specially now when temperature is scorching,”. Customer (50, Delhi)

According to the Indian retail report 2007, F&G business offers a beguiling prospect & estimates that retail pie was worth Rs 12 lac crores in 2006 with F&G accounting for 63% share.

According to CRISIL report, F&G share in retail was 74% in 2006. However, F&G accounts for a meager 18% of total ORS (organized retail sector).

India is second largest producer of fruits & vegetables (15% & 14% respectively) after china -34%.

The growth trend of following horticultural crops in India shows that F&G retail is not a fad. It’s a positive symbol for Indian farmers & agriculture industry which was dragging with only 2-4% growth in last years.

New INDIAN entrants in F&G retail are:

Agriculture ministry has taken cursory interest in this sector & set up the national horticulture mission to give a needed thrust to “Farm-to-fork-model”.

Lots of initiative has to be taken to promote public-private partnerships as they ensure efficient resource utilization and better management practices. There are many examples of successful public-private partnerships.

Safal market in Karnataka is an instance of the modernization of wholesale markets. ITC's e-Chaupal, Haryali Kisan Bazaar, Mahindra Subh Labh, Cargil Farmgate Business and Tata Kisan Sansar, Godrej Agrovet has tactfully used its marketing experience in rural areas by opening advice centers called “Aadhar” are all initiatives of marketing distribution in the PPP format.

Factors responsible for F&G boom:

• Growing consumer base: Current consumer base is 217m people, 27% of population, equivalent to US population, by 2013 another 200mn will add in this productive population bracket.
• High Disposable Income & Urbanization.
• Middle class dwelling revamped & hectic environment etc
• New technological Innovations i.e. credit cards, Debit cards, online payments etc
• One stop shopping

Challenges:

• High cost logistics
• Infrastructure & power supply
• Wastage of fresh produce: nearly 30% of produce is lost due to poor logistics during transportation; which affects the prices of F&G & bear by the customers
• Protest of local vendors & retailers.

Download full report from here