Are Indian products racists?????

Well there has always been a group discussion on a topic like racism and its relevance in India..
Knowingly or unknowingly we are all into that distant trap.... In India racism, poverty(Bottom of the Pyramid in mgmt. terms), women empowerment and all these are concatenated terms. Two of the best management guru's, Indian Institutes have ever produced where i mean to say Prahalad and Aneel Karnani (both of them are Professors in Michigan University) had an interminable discussion over this..Prahalad in one of his book named Fortune at the BOP mentioned widely the example of fair n lovely cream where it was able to reach the mass market and create enough loyalty towards the brand..He says that F&L empowered them by bringing more confidence into them by making them look better as he quotes, some women working with a mason once said that F&L made her skin less darker as compared to her parents crediting F&L.. Counter acting this Aneel Karnani said that F&L is actually exploiting them and making people more vulnerable to the racism bug.. Fair n Lovely ad's claims that far skinned women become more successful with better job and better husband, to which people responded very seriously which was deceptive according to Aneel..He says that these create a sense of difference between fair looking and dark skinned women in the society leading to racism which is very dangerous..
Even if you look at statistics, India is the only country where this concept of fairness cream has evolved and has turned as a favourable destination for marketeers to market..HUL after cladding mammoth success in India ,thought that the African market would also respond in the same way..But alas!!!! They dont have special feeling or to put more clearly a sense of superiority in white...They are not racists,atleast from this point of view...Ramkumar

Understanding asset bubble burst!!!!

This story would give a great insight to what it is!!!!

Once there was a little island country. The land of this country was the
tiny island itself. The total money in circulation was 2 dollar as there
were only two pieces of 1 dollar coins circulating around.

1) There were 3 citizens living on this island country. A owned the land. B
and C each owned 1 dollar.

2) B decided to purchase the land from A for 1 dollar. So, A and C now each
own 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.

3) C thought that since there is only one piece of land in the country and
land is non produceable asset, its value must definitely go up. So, he
borrowed 1 dollar from A and together with his own 1 dollar, he bought the
land from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.

B sold his land and got 2 dollar, so his net asset is 2 dollar.

C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,
his net asset is 1 dollar.

The net asset of the country = 4 dollar.

4) A saw that the land he once owned has risen in value. He regretted
selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar
from B and and acquired the land back from C for 3 dollar. The payment is by
2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to
C.
As a result, A now owned a piece of land that is worth 3 dollar. But since
he owed B 2 dollar, his net asset is 1 dollar.

B loaned 2 dollar to A. So his net asset is 2 dollar.

C now has the 2 coins. His net asset is also 2 dollar.

The net asset of the country = 5 dollar. A bubble is building up.

(5) B saw that the value of land kept rising. He also wanted to own the
land. So he bought the land from A for 4 dollar. The payment is by borrowing
2 dollar from C and cancellation of his 2 dollar loan to A.

As a result, A has got his debt cleared and he got the 2 coins. His net
asset is 2 dollar.

B owned a piece of land that is worth 4 dollar but since he has a debt of 2
dollar with C, his net Asset is 2 dollar.

C loaned 2 dollar to B, so his net asset is 2 dollar.

The net asset of the country = 6 dollar. Even though, the country has only
one piece of land and 2 Dollar in circulation.


(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,
what if the land price stop going up, how could B repay my loan. There is
only 2 dollar in circulation, I think after all the land that B owns is
worth at most 1 dollar only."

A also thought the same.

(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar
coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned
which he thought worth 4 dollar is now 1 dollar. His net asset become -1
dollar.

C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset
is still 2 dollar, his Heart is palpitating.

The net asset of the country = 3 dollar again.

Who has stolen the 3 dollar from the country ?
Of course, before the bubble burst B thought his land worth 4 dollar.
Actually, right before the collapse, the net asset of the country was 6
dollar in paper. his net asset is still 2 dollar, his heart is palpitating.

The net asset of the country = 3 dollar again.

(9) B had no choice but to declare bankruptcy. C as to relinquish his 2
dollar bad debt to B but in return he acquired the land which is worth 1
dollar now.

A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net asset
is 0 dollar. ( B lost everything ) C got no choice but end up with a land
worth only 1 dollar (C lost one dollar) The net asset of the country = 3
dollar.

What is Ambush marketing????

Ambush marketing is a marketing technique which involves riding on the coattails of a major event without paying sponsorship fees, essentially using the event as a free promotion. One classic example of ambush marketing occurred at the 1996 Olympic Games in Atlanta, when the Nike company covered the city in ads, benefiting from the focus on the city for the Olympics without having to pay the often hefty sponsorship fees. Ambush marketing is a source of frustration for promoters of sports events, as well as companies which do pay sponsorship fees.This type of marketing most commonly occurs in association with major sports events, although potentially other events could be used as a venue for ambush marketing as well. At a typical sports event, several companies pay very large fees for exclusive marketing rights, and these fees can sometimes number in the billions for events like the Olympics. In return for the fees, the company gets exclusive advertising space, and it is supposed to get protection from competitors. Rival soda companies, for example, cannot both pay sponsorship fees for the same event.

A variety of techniques are used in ambush marketing. The most basic is simply buying up billboard space around an event, assuring that people who attend the event will see the marketing. This practice is entirely legal, although event organizers and sponsors may find it annoying. Ambush marketers may also be more subtle, doing things like passing out t-shirts, hats, and other promotional gear to people attending the event so that their branding is seen in the stadium.

How strong could a color be to a brand....

Colors like blue(Indian team,Pepsi), red symbolizes a lot about the brand. To an extent that people in rural associate products with colors without even knowing their names. For example : From class room discussions i learnt that Lifebuoy in villages is better acknowledged as "laal sabun"(Red soap). For many red means kingfisher, eveready batteries(give me red), Coke,Red cross, Ferrari and many more.

Well out of these, the story of Coke is worth knowing.

We all know how Santa Claus looks like.... A man with Red and White(I guess every one knows him by the same color pattern.). To divulge the fact Santa Claus before 1950's was known in Green and White until 1950's when Coke launched a campaign to celebrate christmas which portrayed Santa Claus in red(because coke is widely recognized as red cola drink.) The campaign became so popular all across the world that chilren born after 1950's thought Santa Claus wear red and white dress.

We can very well understand what can a color bring to a brand..In this case the change has been acculturative ...Ramkumar

Golf is for niche market what IPL is for Indian masses..

It is always nice for a brand to get associated with sports if it is in a spree of brand awareness.

If you are following Indian Premiere league then im sure you must have noticed a lot of sponsorships from companies like Vodafone, Hero Honda, Karbonn, Micromax, Maxx mobiles and Setmax TV channel to name a few which are taking the major apportion of the time space(in this case, time space is the time in between completion of overs etc. when TVC's are broadcasted).

If you look at these companies you might find a very peculiar similarity that all these companies are serving the masses. All these companies wanted to be noticed during the time of highest TRP ratings which is cricket in India for all senses.

Why aren't companies like Sony Bravia, Mercedes Benz, BMW, Louis Vuitton, GAP, Volkswagen, Xylys etc are not trying to get associated with the largest Indian confluence?? Well for them the market is entirely different. As we know that brands can be classified into 3 categories broadly.. Cult brands, Aspirational brands and brands for Mass Market. All the above mentioned brands(Sony...) are all aspirational brands. Aspirational brands doesnt spend marketing budget for awareness rather they spend money for next level of buyers i.e for "action" if you remember AIDA rule. Well to get associated with their prospective buyers ,companies like Barclays bank, BMW, Swaroski, Cisco etc are betting high on the rich mans game(GOLF). That is because a survey reveals that an average golfer comes within a salary bracket of around 35L pa.. Which is the right target which they say the conversion rate is as high as 15% and companies like Toyota revealed that their conversion rate was as low as 0.001% in the past where they had bad experiences with cricketing game.. ......RamKumar

A Lost bike..Story of marketing myopia

A brand that was once the heartthrob of Indian urban Youth is now resting in peace...
A case of marketing myopia...

I am not sure why I chose this brand , may be because of nostalgia.

This bike was manufactured by Ideal Jawa Ltd with technical collaboration with Jawa of Czechoslovakia. Ideal Jawa started its operations in 1960 .Yezdi ( that time Jawa ) was in Indian roads from 1961. During 1960's Indian roads were ruled by scooters. Bikes were not at all popular due to mechanical issues and low mileage.

During that period , there were only three serious players in the Indian motorcycles market. Bullet, Rajdoot and Ideal Jawa. Rajdoot was popular in rural areas because of sturdy suspension. Bullet and Jawa were popular in the urban market.

Yezdi was targeting the youth with the positioning of " Forever Bike Forever Value" . Since it was a seller's market, what ever that was produced were lapped up by Indian consumers.

1980's saw a sea change in the Indian two wheeler market. Japanese technology entered the Indian market through joint ventures. The market saw lot of new 100 cc bikes which were more fuel efficient and easy to ride.

Ideal Jawa was having a blind eye. It refused to accept the realities. When the consumer attitudes changed, Jawa refused to change . Customers wanted Bikes that offered mileage, style and comfort. Japanese bikes provided all that. This period also showed the shift of Indian consumers from scooters to motorcycles.

Yezdi had serious mechanical issues, especially the starting trouble. One had to pump about 20 times to get that machine started. It had no chance before the peppy new generation Japanese bikes.

Yezdi realised this late and came out with some design changes and new launches like Roadking which had a new styling. But it was too late.

Failing market and labour problems took its toll on Ideal Jawa . Yezdi was laid to rest in 1995. Had Yezdi changed its products in tune with the customer needs, we would have seen a lot of this bike on Indian roads. but alas ....

Once an Icon, Yezdi has now faded in to the annals of history.

Rural people using "World Wide Web"

I have seen Broadband majors like Tata, Bsnl etc coming up with new plans to enter rural market and infact BSNL has named it as "BSNL broadband RURAL"(can definitely be a topic for discussion for bad brand naming. Included in another blog.). & telecom companies are also entering the market through GPRS pathway..Well in my opinion the process/cycle would be something different.. If you understand the product hierarchy the core constitues communication and then comes entertainment.. Communication through cell phones and entertainment thru TV's definitely..Internet comes after that.. For that they need a computer which is a hefty investment for them. Computer(fixed investment)& internet(operational investment). If we look at the internet penetration in India it is close to 0.5%(govt. website) which is the mean of urban as well as rural..I mean the figure for rural is still meager. Now for this market there are large and big shots entering the field and already entered in some cases..

Even if they use internet we dont expect children (prospective user) and women to chat or write blogs rather their use would be restricted to use of mails, likes of educative websites etc. If this is true then some DTH companies have encashed it in the right way leveraging their technology to serve the customers need.. Major DTH companies like Airtel, Tata Sky etc. got into tie-ups with some Web portal companies like Shaadi.com , English learning sites etc.

So I think the transition would be through DTH route..

K'taka mulls global financial district

Karnataka government’s plan to set up a global financial district in Devanahalli has met with enthusiasm from the banking and finance community in the preliminary meeting. The district is being envisioned as a hub for financial institutions to cater to industrial banking and finance.

The government had identified 200 acres of land near Bangalore International Airport at Devanahalli for the proposed district.

At a preliminary discussion organised by the government last week, senior officials from 45 banks, insurance companies and mutual funds attended and expressed their willingness to set up their offices there, Nirani told reporters.

He said the global financial district would enable industries to access finance for their projects in the state at one place as all the banks and financial institutions would be available.

With big ticket investments from companies like Arcelor Mittal, Hero Honda and Wipro expected to come into the state in the next couple of years, the Karnataka Industrial Area Development Board (KIADB) is looking to acquire around 50,000 acres to be allotted for industrial purpose. Of this, around 12,000 acres has already been acquired, he said.

“Depending on the area, we are acquiring land at prices ranging from Rs 5 lakh to Rs 1.5 crore per acre,” said Nirani. He added around 5,000 acres of the 50,000 acres the state is looking to acquire could fall under the fertile land category which could be de-notified.

“If more than 20 per cent of a piece of land is found to be fertile, we will go ahead and acquire the land (for industrial purpose) only if we get approval of over 80 per cent of farmers,” said Nirani.

Islamic Banks!!! A welcome story..

Islamic banks are about to get a permit to enter the Indian Subcontinent..Sashi Tharoor and other ministers are mulling on the idea whether to give a go to these banks.These banks serve not only to muslims but serve equally to all the religions which is a misnomer in every Indian mind..These banks have a wide presence in countries like Malaysia. These would act as a boon for many people as they have a policy to charge no interest to the loans being disbursed. Which mean interest free loans..Well a question may arise as to how these banks would generate profits! Well these banks work on a concept of investing money in real estates which no other Indian banks are allowed. So lets see how it goes!!!

Why did kingfisher logged on to the campaign: "Dont drink and drive."

~Ram kumar~
Well i guess most of us must have come across the big outdoor hoardings by kingfisher(UB group) which holds a big statement like "DRINK RESPONSIBLY" and the footer says"Don't drink and drive."
Well i guess there is a lot of study behind it as to why they came up with such corporate social responsibility stunt and especially from a stable run by a person like Vijay Mallya..
If you look at study which is conducted for a sample of 100 regular alcohol drinkers of different age groups under 16-24, 25-44, 45-64, 65+ . The number of people who consume more that 4 units perday are:
16-24 ----- 23
25-44 ----- 31
45-64 ----- 21
65+ ----- 07 (Source: British heart foundation website.)

Which clearly brings to a conclusion that age group of 25-44 consumes alcohol to the max.

Now if you look at the correlation between age and deaths due to accidents,from the study we understand that age is a major factor.. Details as taken from(http://medind.nic.in/jal/t04/i1/jalt04i1p20.pdf) reveals that,

Age grp Males
(years) Cases
0-10 27
11-20 76
21-30 110
31-40 91
41-50 46
51-60 28
61-70 20
71-80 3 0
81-90 1 0
91-100 0
(17% of the deaths are because of drunk drivers.)
Now by simple calculation if u distribute these figures in the previously taken age groups we get:
0-21 --- 93 (27+76)
21-40 --- 201(110+91) "Figure got doubled"
41-61 --- 74 (46+28)
61+ --- 60(20+30+10)

Can be clearly deciphered that Death rate is maximum for the age group 21-40(44 in the previous table,,forgive me for the residual error..no exact data found) who tends to be the largest customer group (31% of the sample consumes more than 4 pegs/units per day. )Now if you look at the total size of regular drinkers and multiply it ,you would find the number to reach astronomical heights.

Lastly if you peep into your own lives you understand that the average alcohol expenditure with age on the x-axis tends to increase and abruptly after your first salary and may decline after 40's because health problem grips in..Again gets to the conclusion that the maximum expenditure is for the age group of 21-40(Rational value)....So for the maximum revenue to be generated by UB Group they should save these people from dying..So the campaign"Drink responsibly " and "Don't drink and drive"..
Please comment on this..This is my first marketing deduction....Ram kumar

IPL governing council scraps tenders for new franchises

The bidding for the Indian Premier League's two new franchises turned out to be a damp squib as board members on the IPL Governing Council objected to the stiff norms in the tender documents.

Sources said that the board had issues relating to the tenders in the council meeting, on Sunday morning which led to the scrapping of the existing tender. They added that the board was unaware of all this till some corporate houses and individuals expressed their disappointment with the “tough clauses”. For instance, bidders needed to have a networth of $1 billion and submit a bank guarantee of $100 million.

It is believed that the Sahara Group, an interested bidder, had written to the board on these stringent clauses.

The company had indicated that this was unfair especially when they had a long association with the Board of Control for Cricket in India (BCCI) and were also official sponsors for the Indian cricket team. The Sahara group also added that when the first tendering process was initialised two years ago, the existing franchisees did not have to go through such tough norms. Two BCCI officials confirmed this development.

BCCI officials said that only three bids had been received from the Videocon and Adani groups as well as Jaiprakash Associates. “The bids are being returned without being opened. New tenders will be issued on March 9 and the fresh bids have to be submitted on March 21at 10 a.m. in Chennai which will be opened at 11 a.m.,” Mr Modi said at a press meet here on Sunday.

The new tenders will do away with the $1 billion networth clause and reduce the advance bank guarantee of $100 million. “The governing council has decided to bring this down to $10 million performance guarantee,” he said. In the first tender in 2008, it was $5 million.

Mr Modi also said the winnings bids will be expected to pay $10 million guarantee before the tender documents are opened, and then pay 10 per cent of their bid within 48 hours in the event of a successful bid.

Mr Venugopal Dhoot, Managing Director, Videocon said that though he was disappointed, he had no “grievances” as his consortium had fulfilled all conditions in the tendering process.

“I will be there on March 21 for submitting a new bid,” he said. Mr Dhoot will pitch in for Pune along with his brand ambassadors, Saif Ali Khan and Kareena Kapoor. The cities in the race are Indore, Pune, Ahmedabad, Dharamsala, Nagpur, Kanpur, Cuttack, Vizag, Rajkot, Kochi, Vadodara and Gwalior.

Time to position salt differently!!!(DFS)

Almost all the companies offering table salt are positioning on some/all the benefits like free flow, iodized(good health), taste etc.. Now the companies have to reposition their offer because of an added benefit... R&D department of India have developed a new salt variant which is rich not only in iodine but also in iron. All the TVC's are focusing on the benefits of Iodine and now they have to add iron content makes the body more immune and improves the oxygen carrying property of blood making the individual more healthy..They have come up with this new product called as DFS(Double fortified salt) and this doesnt alter the real taste of the salt . Officials declared that they have not decided the price of this new commodity..FMCG majors like ITC,TATA Chemicals are all set to launch this new variety by mid of 2010....RamKumar

Creating communities is the game for the day!!!

Buoyed by their successful Tweets and YouTube promos, brands such as Canon, LG, Samsung and Adidas are now busy creating online consumer
communities. Marketers feel that besides increasing brand salience, online communities can emerge as a platform for cross-selling products, thanks to the ever-increasing relevance of the internet as a medium to reach out to consumers. Canon and Samsung Mobile, which were among the earliest to roll out online consumer communities in India, claim huge dividends. Canon has logged in 80,000 members in its Canon Edge community. “Since a lot of consumers participating in our community are interested in serious photography, this translated into nearly 100% growth in the digital SLR camera business,” says Alok Bharadwaj, senior VP at Canon India. “Next month, we will launch an online photo gallery that will provide further thrust.” While money spent on online promotion is still less than 5% of the overall marketing budget for most brands in India, brands like LG and Canon are increasing their online investments 50-100% every year. This is because the return on marketing investment on the internet is high as its cost is minimal and the reach measurable. But the companies are not betting big on online sales. Canon manages to sell some ten cameras every month online, but average monthly revenue of Rs 1 lakh is nothing great. Source--Economic times

Aamir bags highest endorsement fee!!!

Aamir Khan, fresh from the success of 3 Idiots, has signed a deal with a UAE-based telecommunications service provider reportedly for a staggering Rs 35 crore -- the highest a Bollywood celebrity has ever received for endorsement, leaving far behind the previous highs of Rs 12 crore to Rs 15 crore. Reports say it is a two-year contract during which period Khan will make himself available for an allotted number of media shoots, press advertisements and personal appearances.Aamir's own earlier contracts for a biscuit, a cola, a car, an FMCG, a watch maker and a satellite TV service provider are all reportedly in the range of Rs 12 crore; so, by even his own standards, his fees have almost tripled. Trade insiders attributed Aamir's rising stock in ad circles to his recent box-office successes. Aamir himself neither denied nor confirmed his latest endorsement fee. "I enjoy doing my ads. And I'm choosy about the brands and the creative team that works on them. I work as hard on my ads as I do on my films," he said.
Endorsement fees charged by other actors are (highest):
Aamir Khan Rs 35 crore
Shah Rukh Khan Rs 15 crore
Akshay Kumar Rs 15 crore
Hrithik Roshan Rs 15 crore
Salman Khan Rs 12 crore

HUL has gone too aggressive

Leaving behind ethics and friendly rivalry, HUL took a major step by pointing on TIDE's poor performance. I think they should think of how Horlicks was effected in terms of market share post launch of a similar spoof ad against complan..the results were a decrease of 5% market share of horlicks in that month and it was like waking up a sleeping tiger(Complan)..
If you look at the ad, Rin instead of telling/ showcasing its superior properties was committed to showcasing tide's deficiencies.. 75% of the time they told about tide.. Audience thought more about tide than thinking about rin.. If you remeber the equation for inpact of advertising, it is proportional to mind space of the consumer and proportional to the time the consumer was made to hear about the brand...so tide is in advantageous position.
Moreover this ad would never entice non users of rin/ users of tide to switch over to rin because the ad was too unrealistic... I mean, the users of tide never had such horrible brownish fade of a white shirt, so ad was on a lighter note to them...
Similarly Rin users had never experienced such sparkling white from a cheap product like Rin-----RamKumar. Need comments on this..

Japanese had learnt from us!!!

Right from our MBA first year we have been taught about Japanese performances and their supply chain efficiencies..I have come across keywords like Kaizen, Shitsuke(Dont remember other 3s), six sigma and so on.Among all these I personally think we(Indians) are also good at some kind of supply chain process, the only reason we are not credited upon is because we hate using jargons... Yes I am talking about the buzz word in SCM classes called JIT(Just in time)... Recently i happened to attend a marriage ceremony of my cousin and an inaugural function of a shopping mall on consecutive days...To my surprise i have noted some similar SCM practices in both the cases..
1. I went to the mandap 3 hrs. before the muhurat(the scheduled time) and i saw everything disorganized and i wondered whether they would be able to locate mangalsutra(the sacred thread) when demanded by the purohit. But everything went normal and in fact precisely perfect..
2. Similar thoughts waves were generated across my mind the day before inaugural function of the shopping mall..Uncleanliness, chaos, & panic filled the pages of the night..The same..Perfect by the time scheduled..
Well dont u think JIT should be a label from indian tradition??? I think we overcede Toyota in several fronts.. They developed but we inherited!!!!!!-----RamKumar

Save tigers----Save the poor

I have seen South Indian actor Surya, Baitchung Bhutia, Dhoni etc. coming up on TV sets & speaking about Save Tigers initiative...I was moved & logged on to their site to check what was it all about..To my surprise i understood that this years advertising budget is a big knock off!!! I followed their site which says about the existence of tigers in several parts of India which you could easily find out easily from other government sites & had statements trying to inculcate proactiveness to support their societal marketing drive...I dont understand how can we save tigers if we dont come across it...Did that mean we are all poachers????
Their site had a column where we can donate some amount to WWF(World wildlife federation)..Even that was skeptical....Should we contribute money to save tigers or sould we contribute money to help the poor & underpreviliged people for their daily bread????? Ramkumar

Brand Endorsement!!! "TIGER" The buzz word..

Well i heard a lot of discussion and i have gone through several articles which made me feel that i have to throw some light upon it..... The first name that strikes our mind is "Tiger Woods"...
Well statistics say that when his polygamy act came onto the surface they said the rub off effect would cause the company's accumulated losses to touch around $2billion.. Rather i would say that it would not have any effect n even if it had,it would only be for some transient period... .Well because all the products that he used to endorse were of high quality with well established market share(Accenture,Pepsi,Gillette among the major ones).. For example accenture is a consulting company with some Big names as their cleints.. I dont think they would stop consulting if their business is growing and Tiger Woods is under charge....How does it matter....There might be a slight slump in the share prices but im sure it would bounce back as the time pass by and media gets some fresh news to engage upon...It is just a game with sentiments(Share market).... I think i dont take a shave with gillete because of Tiger woods or their world record feat by engaging some thousands of people to shave their beard at a single gathering...i do it for comfort & price & gillete serves it!!!!! RamKumar