Painful but cathartic verdict

By terminating all 122 licences issued by former telecom Minister A. Raja, the Supreme Court has shown its utter disgust and contempt for policies that smack of bias and are rigged to serve partisan interests. Will the government now come up with a transparent policy for allocating licences?

Much muck and dust has been flying around ever since the 2G scandal prised open yet another egregious instance of the unholy nexus between our crooked politicans, complicit bureaucrats and compromised businessmen. The landmark Supreme Court judgement early this month, cancelling all 122 2G licences issued by former telecom minister A Raja, brings to an end the kerfuffle that had been reverberating in the nation’s corridors of power and business. The SC verdict marks the opening of a new chapter in an otherwise so far sordid saga that has dogged India’s telecom sector in recent years. Immediately, following the verdict, telecom minister Kapil Sibal announced at a hurriedly called press conference that his government welcomed the SC ruling, which would help “remove the uncertainties clouding the telecom sector.”

Meanwhile, in the aftermath of the apex court ruling, several telecom operations seem to be in a state of funk. Many of them snapped up licences thinking they were buying into India’s telecom success story. But the SC ruling, some people say, seems to have thrown out the baby with the bath water. Copping the blame on the telecom players for obtaining a licence given out by the government on the basis of a policy that the Supreme Court has now repudiated seems a tad rich. Unfortunately, in light of the cancellation of telecom licences, these operators now look like having become dupes of the con played out by Raja and his underlings. The court’s ruling also comes as a stinging excoriation of the UPA government which, despite being alerted by various quarters to the flimflam orchestrated and pulled off by Raja and his minions, chose to string along with the first-come-first-serve policy for granting 2G licences.

Some players are certain to bear the brunt of the SC judgement more than the others. Already, Bahrain Telecommunications Co (Batelco) has announced that it is pulling out of its joint venture with STel and exiting India. The C. Sivasankaran-owned STel was among the beneficiaries of Raja’s 2G spectrum allocation. United Arab Emirates operator Etisalat, Norway’s Telenor and Russian company Sistema are the other foreign firms affected most as they had bought shares in the Indian companies whose licences have been scrapped. The court has given these companies four months’ time to shut shop. With the cancellation of all its 22 licences, Uninor (Telenor’s JV with Unitech) is the worst affected by the judgement. Though the company has one of the lowest average revenue per user of Rs 98, Uninor has the highest number of subscribers (36 million) amongst the greenfield operators. It has a workforce of around 17,500 and is operational in 13 circles. Uninor has also made substantial investments of around Rs.140 billion in the market.

Not everybody stands to lose though. Older incumbents such as Airtel, Vodafone and Idea stand to gain a lot since they are the ones who have been in operation well before 2008 when Raja gave out the new 2G licences. Idea has not done too well in the new circles it had won and hence its loss of nine circles does not amount to much. These players will most likely bid for maximum circles when fresh auctions are held so as to expand their reach further. “The court has said the government must now get the market value of these licences,” said a visibly elated Subramanyam Swamy, who was one of the parties that challenged the 2G licence allocations in the court.

While the angst of players adversely affected by the judgement is understandable, the SC has, in one deft stroke, dispelled the fog and murkiness surrounding Raja’s 2G licence allocations. The court’s verdict has ensured that the law of the land prevails. It has sent out a strong message to both the industry and government that crony capitalism will not be tolerated and that corrupt business deals facilitated by a collusive government will be subjected to judicial scrutiny. Says Member of Parliament Rajeev Chandrashekhar, “This is the first time that there has been such a detailed judicial scrutiny of the licence issuing process. This judgment signals that the sector is finally open to only those investors and stakeholders who wish to invest, build and succeed by following the laid down rules and laws.” He adds that the judgement clarifies many policy confusions and also lays down the mammoth task of cleaning up and reorganising the sector over the next year or so. “This scrutiny and the judgement establishes the unambiguous basis for licence grants through auctions or market-based mechanism by the government today and in the future.”

In order to prepare the ground for a fresh round of 2G spectrum auction, the Telecom Regulatory Authority of India (TRAI) has come out with a pre-consultation paper. The regulator has also sought to allay fears of existing subscribers in circles where telecom licences of operators have been cancelled. According to TRAI, subscribers need not fear about their connections as they can port to other service providers in their respective circles. While the modalities for holding the auction are being worked out, the government expects the auction to fetch a revenue of about Rs 750 billion. However, following the cancellation of licences there is likely to be an overabundance of spectrum in the Indian market, which will ensure that prices remain low. Besides, incumbent operators have already paid through their noses for 3G and Broadband Wireless Access (BWA). These investments will take a long time to turn profitable. In such a scenario, it seems doubtful whether these service providers will warm up to participating in another round of auction. Moreover, the incumbents (whose licences have not been cancelled) have enough 3G spectrum which can be used to accommodate new subscribers. Says Rajan Mathews, Director General of the Cellular Operators Association of India (COAI), “I don’t think that kind of money is available with domestic players. That is why the government itself indicated that it will raise the FDI limit to 74%.” Just to ensure that his reasoning comes across more convincing, Mathews draws your attention to 12th Five Year Plan proposals for the telecom sector. “The preliminary numbers put out by the Planning Commission suggest Rs 6,500 billion as the outlay for rolling out various initiatives by government. They themselves admit that 80% of that would have to come from international sources.”

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Source : IIPM Editorial, 2012.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

“There is no reason to believe that advertising does not plan successors”

How do you view the current state of succession planning in the ad industry?
It depends upon individual agencies so I don’t know what their plans are. But one must prepare some time in advance so that you can groom that person. One should try not to interfere too much in the process because you don’t want to leave a clone of yourself. So the head should always be involved in helping the person but not interfere to the extent of becoming a hindrance.

The quality of people coming in to the advertising industry is not as good as it used to be before. Is that true?
That is not true. Because we’ve seen people around for a long time, there is always a feeling that the present is always more stable than the future. But that is not the case. There are brilliant people in this industry. We groom them in the role of a captain and that’s how captains emerge. Succession planning is not done by hiring new talent out of a management institute. It is done from amongst the people who have been around for quite some time. So I would say that the second level of leadership is very much ready across the industry.

If we look at the corporate world, the CEO has a set of people who are groomed as future prospects. Given the fact that advertising is fundamentally a different kind of industry, do you think the same process applies here as well?
Of course it does. There are always three or four people and one of them ends up taking over the reins. And that doesn’t mean others have to go. They are given appropriate roles and responsibilities. It’s like cricket. When Dhoni becomes captain, Tendulkar shouldn’t say, “I’ll not play anymore”.

But don’t you think the Indian advertising industry is not as good when it comes to planning for a successor?
I’m not certain. I don’t think so. If you look at the sort of people who are heading agencies today, they are very good at their job. And there is no reason to believe that advertising does not plan successors as professionally as marketers do. We do it equally well.

During the 1970s and 80s, people used to come into advertising from totally unrelated backgrounds. But today, they are well trained, more focused and armed with management degrees. Do you think that the flair for creativity in the new blood is not as good as it was a decade or two back?
I can say it from Ogilvy’s point of view that we do not go by degrees. We go by attitudes and passion. Do we go on a hiring spree from management institutes? I don’t think so. And do we completely write off the management types? Again, I don’t think so. As far as your question pertaining to the creative flair is concerned, Ogilvy has been at the forefront of creativity for almost a decade now. And all the work isn’t done by me. You have to give them credit. So I think there are good people. And see for yourself. Look at the work that came out five years back and look at it now. Isn’t it better?

What is the state of talent retention? How does Ogilvy retain talent?
I think talent retention is a problem in the industry. We need to re-look at our business models. We need to remunerate our people slightly better. I think the biggest thing that people respect is the opportunity to express themselves. We do our best to give them independence. Let them own the campaign, let them own brands. We try to create an atmosphere that’s lovable. At the same time, we are doing our best to look at benchmarks in the industry and stay ahead of them.

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Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

Why doesn’t succession planning work in Ad agencies?

Critics have often lamented the lack of well defined succession planning in advertising agencies, a problem attributed to both intent & the dynamics specific to this industry. But not giving this strategic imperative its due could eventually hurt them badly in the long run

For those of us who did witness Subhas Ghosal reign over the advertising industry, it would be an understatement to describe him as the man who reinvented the very idea of creativity in India. Starting his career at HTA (Hindustan Thomson Associates, now known as JWT India) in 1944 under advertising legend Edward J. Fielden, Ghosal went on head HTA and was also the mastermind behind Contract Advertising (JWT’s sister concern). His rise to the top was pretty smooth. Given the kind of work he delivered, it just had to be that way. But before he took over as CEO, the board of HTA faced a dilemma. During the late 1970s, Ghosal was offered the job thrice and thrice he refused. An ad veteran who is well informed of the state of affairs at the agency in those days reveals to 4Ps B&M that top executives who were close to Ghosal had made it clear to the board that it had to be either him or one of them. When nothing worked out, HTA got hold of a person who was not an ad guy. He concludes, “Soon, there was a lot of confusion and Ghosal had to be finally persuaded to go to Mumbai and take over. This is an iconic case of succession planning going wrong. The agency thought that Ghosal was the right man. Ghosal said no. And suddenly, they were in the dark.”

When Ghosal finally stepped down in 1984, he was succeeded by Mike Khanna, who had been with HTA for close to 18 years. Khanna presided for two decades before finally handing over the reigns to Colvyn Harris. However, what is interesting to note is the fact that months before this, Khanna was quoted as stating, “No decision has been taken yet (on succession planning). We have a big pool of talent to choose from. Succession planning at JWT is not very simple.” And he also denied speculations that Harris will take over as Chairman of JWT India. Given the scale and size of JWT, it does seem odd that the agency did not have a clear road map on the issue of succession. Although, on the face of it, a compromise on this important area might not appear to have any significant impact, the true story is starkly different if you dig below the surface. For example, during the Khanna-Harris transition, JWT India ended up losing Sunil Gupta, who was then the Senior VP & General Manager, HTA and was apparently in the race for the throne. (In fact, even when Khanna was promoted to CEO in 1984, Ahluwalia and Ram Ray – two of HTA’s key executives – had resigned).

If you thought that these are just isolated instances, look at ad land a little more closely and you’ll realise that the industry witnesses high profile exits and shifts quite regularly, and a dissatisfaction with the pecking order is often cited as the most ostensible reason. In 2001, Rajiv Agarwal resigned from Enterprise Nexus where he was serving as Managing Director. The development was totally unexpected, because Agarwal had been quite instrumental in ensuring the growth of the company. Similarly, in 2008, Agnello Dias and Santosh Padhi put in their papers at JWT and Leo Burnett respectively, and joined hands to start TapRoot. In 2010, Priti Nair quit BBH India and founded Curry Nation. In the case of Nair, BBH had to wait for quite some time before someone could fit into her shoes. Shedding light on the crunch for talent to fill in a position, Nair tells 4Ps B&M, “To narrow down on a successor takes time. It takes time to evaluate performance with a varied set of circumstances. Unfortunately in advertising, the turnover is very high and people don’t stick around long enough anymore as they used to.” Well, as is evident in organisations even outside the ad world, succession planning is not just important for the company but also for the people in race for the top job. As Arvind Wable, Executive Director and CEO of Draftfcb Ulka, puts it, “It is important because it helps the organisation grow beyond individuals. If an individual leaves, it shouldn’t impact the business of the agency. Further, succession planning also gives an assurance to people in the organisation that they have the opportunity to move up the ladder.” In fact, the people driven nature of the advertising business makes succession planning even more crucial for the industry. In their book titled ‘The advertising industry business’, authors Eugene J. Hameroff and Herbert S. Gardner write, “By its very nature, an agency is highly dependent on the talents of a small group of people. So a prolonged illness or death can play havoc with an agency that hasn’t foreseen these possibilities and made some advanced provisions to meet them.”


For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

ONLINE GAMES, A PATH TO YOUNG CONSUMERS

Like many marketers, food companies are now using multimedia games, online quizzes and cellphone apps to build deep ties with young consumers.

Deep into one of her favourite computer games, Lesly Lopez, 10, moves her mouse to click on a cartoon bee. She drags and drops it into an empty panel, creating her own comic strip. Lesly likes this online game so much she plays twice a week, often emailing her creations to friends. “I always send them to my cousin in Los Angeles,” she said. But this is not just a game – it is also advertising. Create a Comic, as it is called, was created by General Mills to help it sell Honey Nut Cheerios to children.

Like many marketers, General Mills and other food companies are rewriting the rules for reaching children in the Internet age. These companies, often selling sugar cereals and junk food, are using multimedia games, online quizzes and cellphone apps to build deep ties with young consumers. And children like Lesly are sharing their messages through email and social networks, effectively acting as marketers.

When these tactics revolve around food, and blur the line between advertising and entertainment, they are a source of intensifying concern for nutrition experts and children’s advocates – and are attracting scrutiny from regulators. The Federal Trade Commission has undertaken a study of food marketing to children, due to be out this summer, while the White House Task Force on Childhood Obesity has said one reason why so many children are overweight is the way junk food is marketed.

Critics say the ads, from major companies like Unilever and Post Foods, let marketers engage children in a way they cannot on television, where rules limit commercial time during children’s programming. With hundreds of thousands of visits monthly to many of these sites, the ads are becoming part of children’s daily digital journeys, often flying under the radar of parents and policymakers, the critics argue. “Food marketers have tried to reach children since the age of the carnival barker, but they’ve never had so much access to them and never been able to bypass parents so successfully,” said Susan Linn, a psychiatry instructor at Harvard Medical School and Director of the Campaign for a Commercial-Free Childhood, an advocacy coalition.

Linn and others point to many studies that show the link between junk-food marketing and poor diets, which are implicated in childhood obesity.

Food industry representatives call the criticism unfair and say they have become less aggressive in marketing to children in the Internet era, not more so.

Since 2006, 17 major corporations – including General Mills, McDonald’s, Pepsi, Coca-Cola and Burger King – have taken a voluntary pledge to reduce marketing of their least nutritious brands to children, an effort they updated last year to include marketing on mobile devices.

The companies have good financial reason to pitch to children. James McNeal, a former marketing professor at Texas A&M University, estimates conservatively that children influence more than $100 billion in food and beverage purchases each year, and well, more than half of all cold cereal purchases. Children “have power over spending in the household, they have power over the grandparents, they have power over the babysitters, and on and on and on,” said McNeal, who has researched family behaviour for decades and consulted for major companies on marketing to children. “All of that is finally being recognised and acknowledged.”

Some parents, like Lesly Lopez’s mother, Toribia Huerta, 26, say the online marketing is subverting their efforts to improve their children’s diets. Huerta said Lesly and her younger siblings pester her for sugary cereals they see in the games and for snacks like Baby Bottle Pops, a candy with a game site that the girl also visits often. “They ask me for it constantly. They’re hard to resist when they whine,” Huerta said, speaking in Spanish through a translator.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Proves Its Mettle Once Again.....
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

“Four pillars of success”

Through a gamut of marketing strategies, Kamal Nandi is looking to build a strong recall for brand Godrej in the appliances space

When Kamal Nandi took up responsibility as VP Sales & Marketing, Godrej Appliances in 1997, its business was witnessing severe competition from South Korean majors LG and Samsung. His prime challenge was to rejuvenate Godrej into a youthful & contemporary brand. He talks to deepti singh on the progress so far:

Godrej has a vision to regain leadership in the durable space in India. For the same, how do you lead and motivate your team?
The biggest challenge has been to first create a good team and then build ownership amongst them of a shared dream. Talking of leadership style, I think I have a mix of a pragmatic and a democratic style of leadership. I have always focussed on four pillars for success – optimism, transparency, empathy and empowerment. We have built a homogenous and winning team by inducting professionals from diverse industries like advertising, retail, market research and consumer durables.

How do you compete with brands like Samsung and LG who have overtaken many successful brands in India? Who do you consider your immediate competitor?
When you are pitted against the multinational giants, your best armoury is to understand and connect better with the Indian consumers. Godrej has been pioneering technologies and features, which are relevant to Indian consumers, their habits and lifestyle. Our immediate competitor is Whirlpool, which operates in similar business spheres.

After the success of the LCD TV-cum-game console, what new innovations and portfolio expansions are you now planning?
Godrej’s appliances division is always looking for more innovations in our products. Smart appliances are in demand and seeing substantial growth as customers are seeking more convenience and control over their products. The television market in India is currently around 13 million units per annum. Our aim is to capture 5% of this market in the first year of operations. We are also expanding the portfolio to cooking ranges & water purifiers. Apart from building on our existing appliances range, this will help create synergy with group firms such as Godrej Interio, which makes modular kitchens.

How does the immediate marketing scenario look? How are you planning your growth amidst this scenario?
The current scenario is a bit depressing, given the global economic uncertainty and the Indian inflationary trend. Consumers are retreating to the recessionary mindset. Given their shrinking discretionary spends; consumers are postponing/curtailing their purchases and trying to conserve in this environment. Our strategy has been to aid consumers with better finance options to help them meet their aspirations. For example, for the festive season, offers like “Upto 100% Cash Back” on the appliances purchased have been launched. Going forward, in a stable economy, we will focus on launching revolutionary and convergent products across categories and services relevant to Indian sensibilities to drive preference for brand Godrej.

How do you manage your work and personal life and how critical do you consider this issue?
I think, it is critical to have a proper work-life balance to be professionally effective and efficient. I have always tried to give equal importance of time to both work and personal life and have not allowed one to interfere with the other.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Proves Its Mettle Once Again.....
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

What makes a great marketing maverick?

In this cover story, the legendary Alyque Padamsee expounds on the things he is most passionate about – advertising and marketing. Critically, he puts forth the pillars that make a great marketing icon – those who find their rightful place in 4Ps B&M’s Annual Hall of Fame Issue.

My lifelong stint with theatre and the ad world has taught me that in theatre, you have the freedom to be your own boss and to do, what you want to do – whereas in the advertising world, you have to work in a highly disciplined manner. You have to first listen to your client who is investing a huge amount of money on advertising and then you have to persuade your client to like the idea and to make him believe that it will work for his brand. However, advertising teaches you the discipline of thinking. It taught me too. This is something I never had before.

For any great marketing head, it all starts with research, research and more research – in fact, it is the most important thing he has to undertake. A thorough knowledge of your target customer’s perspectives is most important. Only when you understand your customers, can you generate a convincing idea for the brand’s product. The next step is to find out how your target group will notice your brand and not get swooned over by your competitor’s brands. You need to choose the right channels for that.

Advertising is a very creative art. But it has an objective – to sell your products. Regardless of how many awards a creative may win, the quality of an ad is only revealed by the amount of sales it has been able to deliver. For if it does not sell, it is only a failure. When I was proposing the idea of a new product (Fair & Handsome) for men, everybody thought I was joking. But I was serious. Research told me that by design or inadvertently, 35% of the consumers of Fair & Lovely were men. And it is because it’s not only women who would like to appear beautiful, but men too had the desire to be better at appearances; just that the desires were hush-hush. So when we launched Fair & Handsome, it was an instant hit. It delivered an annual sales figure of Rs.100 crores. It is by far the most successful brand launch in the personal products range in the last 10 years. Great marketing heads ensure that when they communicate with their target customers, they see to it that the idea is absorbed by the customers and that it connects the brand to them.

When I launched the Hamara Bajaj campaign, the sales significantly shot up. The same was the case with Liril soap. Consumer behaviour is not always based on their rational choices. A lot of times, they go by their emotions. For instance, Liril was not a rational product, but more of an emotional product. People loved the idea of freshness. And freshness is a feeling that was projected by Liril’s ad, which said that the soap will give you this feeling. And so with Liril ad campaign, the lady who was taking a shower in the waterfall symbolised a customer having a good time. The idea connected with the masses as they too wanted freshness. Ultimately, the product was a success. Similarly, MRF was at number 9, and when the muscle man campaign came in, it went up to top the charts. In contrast, in Nimbooz, the addition of lime was a rational appeal to the consumer.

The ever changing and highly evolving markets of today have made it very difficult for today’s marketing heads to be efficient with their money spent. And the figures are huge. More than 50% of the hundreds of crores spent on advertising today, I dare say, is a waste because the money is being spent either on ideas that are not well researched, or on propositions that are plain wrong or are not well presented. Hence, at first, the marketers should necessarily spend money on research.

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Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Proves Its Mettle Once Again.....
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

“I rest my case with Mobile”

Reinier Evers Plumps for the mobile when it comes to zero-in on The most interesting medium that will drive the media trends henceforth

I think ‘fragmentization’ and ‘snacking’ are the two pivotal elements that really need to be considered when one talks about the trends that are shaping media consumption across the globe. In fact, I would say it’s not just about consumption, but there’s way too much to consume as well.

Though the whole world is constantly creating more and more media content for the consumer to consume everyday, it is the consumer with whom the ultimate power rests of what to consume and what not, and it all depends on his interests. Moreover, the consumer prefers everything to be shorter today so that he can actually consume more of it as that way he can cram in ten different experiences versus a long one. Not that he can’t choose a longer experience; but only that there’s too much to choose from and he doesn’t really want to miss any one of them.

Having said that, I think that media is finding you as a consumer; so today, you don’t really have to search for it any more. In fact, it’s interesting to see how somebody passes something interesting to someone and how that person alerts you on it. So there’s evidently a word-of-mouth behind the scene that goes in telling what to consume from various media. This means that the creator of a particular experience has to be really, really good at it if he or she wants to influence others. Apart from that, you have to also find the right people. In fact, if you look at the last 10 years, a few of the major brands, especially American, and those in the rest of the world, they don’t really advertise any more!

For instance, Apple hasn’t really done much of advertising for a while. Starbucks too never advertised as a matter of fact. And yet, they grew really well. That’s because if you do something well, people will find it. Those are the few things that we are observing now. I think the curation of media is going on well, but ‘consumers creating the media’ is a bit of an over-hyped statement. But then, what is media? I think five years ago, we all were saying that we are going to produce our own movies. That’s not really doable, you also have to have talent. If you look at media from the business point of view, then everything becomes information created by consumers. In fact, that is the way the 100 million people on Twitter are creating media. They are writing, sharing insights, interesting links for people to catch up on things; so it becomes quite a challenging but fun environment.

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Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Proves Its Mettle Once Again.....
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS

Deal Sites Galore, but how Many will Make The Cut?

Group Buying Websites have begun to Innovate and Differentiate their Services to Sustain themselves in The Long Run. But is there Enough Demand at The Outset?

When Andrew Mason, a 29-year-old music major from Northwestern University in Chicago, was looking for a suitable appellative for his company, he hit upon two words, group & coupon, to coin Groupon – the name of his deal-of-the-day website. The internet business start-up was set up in 2008 with the idea that it’s possible to harness the collective purchasing power of a group. This innovative approach to e-commerce has brought millions of dollars in new revenue to local businesses while saving more than $1.5 billion for consumers around the world. Some tech analysts call Groupon “the world’s fastest-growing company”; it has already amassed 70 million users in more than 500 markets globally, including India, where it debuted early this year.

For daily deals/group buying sites like Groupon, it’s a ripe time to enter India, where the online coupon market is estimated at $120 million and is growing 37% year on year. Also, with about 100 million internet users, of which 20-25% have broadband access, analysts believe e-commerce in India has reached an inflection point and is just about taking off. According to a recent report of Internet and Mobile Association of India (IAMAI), the Indian e-commerce market will gallop at an impressive growth rate of 47% to over Rs.46,520 crore in 2011. The report also highlights that areas like e-retailing are predicted to grow by 62% and touch Rs.2,700 crore this year. E-tailing, which includes purchases of durable products such as electronic items, home and kitchen appliances, as well as personal items like apparels and jewellery, constitutes 8% of the overall e-commerce market in the country. No wonder that more than 20 group buying sites or daily deals aggregators are already active in the country, including SnapDeal.com, Dealsandyou.com, mydala.com, Taggle.com, Buzzintown.com, Koovs.com, DailyDeal.in, Dealivore.com, Khojguru.com, Thekha.com, Scoopstr.com, 24hoursloot.com, Masthideals.com, SnatchDeals.com, Lootmore.com, 30Sunday.com and bindasbargain.com.

However, most of these sites have very little differentiation from one another. According to audience measurement website Vizisense.com, there was no huge difference in the number of unique users who visited mydala.com (1.07 lakh) and bindasbargain.com (1.9 lakh) in December, 2010. Also, there are chances that in the absence of any differentiator and the fact that the type of service offered by most of the daily deals sites is almost the same, websites are getting duplicate traffic. Promoters of group buying sites are realising that it’s not as easy a market as they expected it to be. Already, issues related to less sales margins, attrition of sales force and unhappy merchants are becoming difficult to avoid.

But a visible yet slow transformation is taking place among the Indian group buying websites, which are now jumping in the race to become a one-stop shop for all services and products. Deal sites are now looking to scale up by offering not just discounts for service categories like travel, beauty, health, and dining, but also through inclusion of products from popular categories like computer peripherals, electronics and apparels as well. Knowing that the proliferation of copycats might be the sector’s downfall, some sites are making efforts to get into new lines. For instance Koovs plans to offer health care packages in partnership with Apollo Hospitals and Nova Medical Centers.

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Source : IIPM Editorial, 2011.

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

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1,00,000 Engines by Ford India!

With a unique capability to produce both diesel and petrol engines on the same assembly line, Ford India’s new engine plant at Maraimalainagar Nagar, in 14 months flat, has rolled out its 100,000th engine unit from its production facility. Erected at an investment of $500 million and contained in an area of more than 40,000 square metres, the Chennai plant is designed to cater to the growing demands of the Indian market and its exports opportunities. The advanced manufacturing centre created with global best practices of engine manufacturing has an overall capacity of producing 250,000 engines per year. Currently, the plant produces five Duratec petrol engine variants and one Duratorq diesel engine variant, and has exported over one third of the engines produced to South Africa and Thailand. It also has an eco-friendly ‘cold test process’ in place, which apparently does not use fuel to check engine noise, vibration and harshness. So how does it check everything then? Go, visit the plant, and find out!

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Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
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IIPM: Indian Institute of Planning and Management
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Now, Life in Third Dimension!

With around a thousand motion pictures released per year in India, a figure that is the highest in the world – and should have been treated as an achievement of sorts – gets badly marred upon the quality of our production. To abridge the erroneous gap, Sir Howard Stringer, Chairman, CEO & President, Sony Corporation was present in Delhi to inaugurate the Sony Media Technology Center (SMTC) a collaboration of Sony Corporation and Whistling Woods International (WWI) to establish a centre of excellence. WWI, chaired by Subhash Ghai, is a leader in the media and entertainment education sector and at their Mumbai campus, SMTC shall find its establishment. Through SMTC, Sony will provide its expertise in High Definition and 3D film and broadcast technologies as well as focus on the proliferation and development of these technologies in India’s entertainment industry. For 2012, Sony is targeting a staggering $12 billion revenue from the 3D related businesses.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Best B School India
Management Guru Arindam Chaudhuri
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IIPM Proves Its Mettle Once Again.....
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IIPM: Indian Institute of Planning and Management
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