"Traditional media still rules”

Unlike in the west, in India, print, TV & radio still remain the most critical areas for media buyers to focus on. Digital media is still in its infancy.

With income and consumption on a rise in the Indian market, the role of a media buying agency has also been evolving. Would you agree?

Surely. Media has evolved from the traditional forms of Print, Outdoor, Television & Radio to include Digital, Mobile and the Internet. This is because the consumer today enjoys content and entertainment across a multitude of channels and devices. Thus, it has become important for media buying agencies to acknowledge this change in mindset of the consumer & further equip themselves to correctly target and effectively reach out to newer platforms.

It has been noticed that in the developed West, consumers have moved to electronic and modern media. While in a developing nation like India, we are still very much into print and radio. What kind of a message does this have for media buying agencies?

Rightly put. In the West, Print has shown a considerable decline in circulation as a majority of the readership has shifted to digital mediums where the monetisation of such content has posed a challenge. Western media buying agencies have therefore transferred their skill sets to encompass digital as one of their strong growth drivers and have begun to rely lesser on traditional media forms of Print & Radio.

However, with a developing nation like India, Print still commands a lion’s share of the readers and advertisers in the country. Such a disparity exists primarily because print and other traditional media are still on the rise. This growth is because of demographic factors of growing literacy, language diversity & vast outreach. Thus in a country like India, media buyers have to concentrate on Print, Radio and TV, besides other emerging mediums.

So you mean that Digital Media still has a long way to go before it can become a strong force in the Indian market?

Yes. Digital media promises much in India, though, it is still at a very nascent stage, when compared to other established traditional media forms. However, every brand advertiser recognises the promise and potential of digital and is slowly testing the digital waters by allocating a small but significant part of their entire budget to digital. In response, media buying agencies have started to further focus on recruiting talent with both quantitative and creative skills – to actually service the digital domain properly.

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.

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We’ve got two flats!

This year’s festive season is crucial for the fuel price & interest rate battered Indian automotive industry. But will the festivities lift the mood?

After Maruti Suzuki pushed the iconic Ambassador and Padmini out of the picture in the mid-80s, the Indian consumer graduated from a two-wheeler to a four-wheeler with just one practically available choice – the 796cc hatchback Maruti 800. However, due to the huge demand and limited production, consumers had to wait for months before they could get themselves behind the wheel. And unlike today’s scenario, if the consumer got the delivery of the vehicle during the auspicious festive season then, it was more out of sheer luck rather than a well organised and efficient marketing set up. The scenario remained the same for almost a decade before the floodgates of economic liberalisation were opened in the early 1990s. Within a few years of the new economic reforms coming into action, Indians were considering various options like Hyundai Santro, Daewoo Matiz, Ford Escort, Opel Astra et al while purchasing a new set of wheels. From just an 800, the Indian consumer was getting spoilt for choice as new names were added to the list during the mid-90s. Names like Hyundai, Ford, General Motors, Toyota et al, were vying for the expanding volumes of the Indian passenger car market.

In fact, during the past two decades of economic liberalisation in India, the automobile industry has come a long way. From a market worth 35,000-40,000 cars every year during the early 80s, the Indian passenger car market is today the 11th largest passenger car market in world selling close to two million passenger cars every year. Going by the estimates of J. D. Power & Associates, India is expected to become one of the three largest automotive markets in the world by 2020. And even as you read this, marketers are gearing up for the busiest phase in the year – the much-awaited festive season.

To lure more consumers in the festive season, carmakers not only launch new products during this season but also offer freebies and hefty discounts. As buyers get the best deals during this period, the festive season becomes a win-win for both marketers and car buyers. However, considering rising fuel prices and interest costs that are a double whammy on car-buying sentiment, how will this festive season fare for marketers in the automobile industry?

RBI has raised interest rates 11 times since March 2010 and petrol prices have gone up by Rs.11 since the beginning of this year, so the overall negative sentiment of consumers is making things worse for marketers. Launches of new products like Maruti Suzuki Swift, Toyota Etios & Liva Diesel, Renault Koleos, Skoda Laura RS, Volkswagen Vento & Polo Breeze have been able to boost demand to an extent but failed to really lift the sentiment of the consumer. “The festive season this year is totally different from what we have seen last year. As the overall mood of the market is negative, this discount season will most probably extend longer than the normal cycle as the inventory level is currently high,” admits Shashank Srivastava, Chief General Manager – Marketing, Maruti Suzuki. As per market reports, discount levels are currently up by 20-25% as compared to last year as the industry is sacrificing margins and eying growth in the festive season. For the April to August period this year, domestic sales of passenger vehicles has registered a figure of 977201 units, a growth of just 1.94% yoy. This is certainly inadequate as compared to growth in production of 8.5% yoy in the same period to reach 1249464 units. Exports, meanwhile, show a different trend, growing by 22.44% yoy to reach 220256 units in the same period (as per SIAM data).

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.

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Even Art and Economics need to Mix & Match!

The Arts Market in India has Grown Manifold over The Past few years. But Unless more Professionalism is brought in, The Benefits will only Reach a Chosen few

“I am deeply ashamed and sorry for my actions,” said Lawrence B. Salander in March 2010 to a judge after confessing that he duped tennis star John McEnroe and many others of $120 million through “bogus art investments.” In October 2010, another American James Mobley was sentenced to five years in federal prison for selling art work purportedly made by Picasso, Dali, and Chagall. On March 24, 2011, the Mexican government confirmed that a Mayan art piece sold for $4 million was nothing but a fake. These in general summarise the pathetic state of the art industry globally, what to talk about India.

It is said that original art, artefacts and paintings that have recognised names behind them are generally independent of currency and economic cycles. Moreover, from the consumer’s point of view, antiques & arts could become an alternative investment proposition as well in terms of status symbol. But the art industry will never be able to reach respectable level in sales unless this industry brings in place extremely stringent processes and rules to ensure that the incidence of fraudulent transactions is done away with. To the benefit of the Indian art market, thankfully, some corporate houses are developing a hitherto hidden penchant for artefacts & paintings. And this penchant actually goes beyond being mere connoisseurs to taking an active business interest. Instances of the same include Godrej Group, RPG Enterprises and Emami Industries. Their interest is not without reason. With a robust economy, a new moneyed class and the energetic participation of young expats, Indians are boosting sales of contemporary Indian art to new highs. Buyers, mostly, comprise the blue eyed boys of India Inc., who buy the work for personal consumption and have no intention for further business with those works. For instance, the collections of Jerry Rao, Chairman of MphasiS BFL Ltd., are visible in the company’s offices worldwide.

The excitement for most of such collectors is palpable in the decor at their homes & offices; and as such, they really don’t focus on proper pricing or on proper insurance. No wonder, apart from public insurance companies, there’s just one insurance company (Tata-AIG), which works on insuring art work. As a result, an adequate pricing mechanism for these masterpieces is yet to be done in India. “I am the best person to decide prices of my paintings, but mostly, my decision is below the market price,” feels Husain.

In addition, trading of art objects in India has been limited to just two metros (New Delhi & Mumbai) and mainly through auction houses. “Most of the time, these auction houses do not have the right basis of valuation and it lacks professionalism,” feels Surajit Hari – a leading photographer, who has done his exhibitions in cities like London and Cairo. Not only that, as per Delhi-based Indian Art Gallery, there are cases where art objects sold in auction houses are sourced from stolen properties.

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.

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The man MLM is counting upon in India

By improving customer awareness, Amway’s India Head expects the MLM concept to pick up soon in India creating enormous opportunities for the company. By Angshuman Paul

William S. Pinckney
MD & CEO, Amway India Enterprises Pvt.Ltd

This company would forever be remembered as a pioneer with respect to two things; firstly for introducing the concept of multi-level marketing in India and secondly for the money back guarantee, the usage of which was relatively unheard of in marketing circles previously. No prize for guessing, we are talking about the $8.4 billion Amway. Present in 88 countries across the globe, the company’s direct selling approach for its products is a legendary case study in the ares of marketing knowledge. And the strategies adopted by William S. Pinckney, MD & CEO, Amway India Enterprises Pvt. Ltd. to overcome all the roadblocks in order to popularise the concept in India is certainly nothing less than a lesson of how to sell to masses. But then, it’s actually his multicultural personality (born in the USA, married to an Australian, his daughter is settled in China, and he is working and living in India) and an experience of almost three decades that has made William understand the versatile Indian buying behaviour and play his cards so successfully.

In 1998, William navigated his way into India to set up Amway’s operations here. One thing that motivated him about India was its people; and on a lighter note, he says, the thing that de-motivated him (to be exact, “scared him”) was Indian food. He recalls, “Me and my wife were actually worried that our waistlines will become thinner due to lack of our own food as we found Indian food very spicy and scary at that point of time.” But that was during his initial years. Over the past ten years, William has developed a hitherto hidden penchant for Indian palate and culture. This was apparent from the idol of Lord Ganesha kept on his table. Later, we also came to know that every year he even gets a pooja done on the occasion of Ganesh Chaturthi. The people and their culture have truly attracted William and he claims to be very much familiar with the consumer-psyche of this country. However, he admits that he is still struggling to find an answer to his biggest challenge in India – lack of awareness and interest in consumers about Amway’s products.

Nevertheless, bucked up with his knowledge of Indian consumer behaviour, equipped with his deft strategies and with an investment of Rs.151 crore, William has achieved a turnover of over Rs.1,407 crore for the year ended 2009. Moreover, with a team of 450 people and seven contract manufacturers, Amway India is now manufacturing all the products within the country. But William has bigger plans for this country as he says, “We have our own manufacturing plants in the US, China and now in India also. We plan to source our products from these countries to the rest of the world, and thus would be investing more in India.”

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
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A BILLION USER DREAM

HE BOASTS INDIGENOUS TECHNOLOGY, AND BELIEVES ON THE SAME TO BRING IN A REVOLUTION OF ITS KIND. ALOK SINGH, CEO, NOVATIUM SOLUTIONS PVT LTD, EXPLAINS HOW HE MIGHT MAKE IT POSSIBLE...

Founded in 2004 with a vision to provide “Computing to the next billion users,” Novatium Solutions Pvt Ltd has so far worked towards creating a solution that makes computing simple and affordable by using indigenous technology. And in the process, developed the first generation of truly thin, embedded devices capable of operating on any server platform, be it Windows or Linux, without any change in device (It has been considered as one of the top 4 technology breakthroughs in India by the External Affairs Ministry, Government of India). This clearly explains why the company has as many as 11 global patents to its credit. In an interaction with 4Ps B&M, Alok Singh speaks about the company’s products and strategies, which can play a big role in building a bright future for Novatium.

How do you intend to provide computing “to the next billion”?
The intent behind this vision is to create a solution that will make computing accessible and affordable for the next billion users. In India (and many other developing nations), the current computing solutions are considered to be complex, expensive, and technology focused rather than consumer focused. As a result the common man is kept away from it. So unlike the growth in the mobile and cable sectors, growth of computing and computers has been very slow. Novatium’s innovations have been in the area of providing holistic computing experience that is affordable and easy to use.

Recently, you entered into a strategic tie-up with Bharti Airtel…
We entered into a strategic partnership with Airtel to help expand the broadband market in India. We had launched services for Airtel Broadband customers in Chennai followed by other southern states. Our partnership reinforces the strategic intent to enhance the computing experience for Airtel Broadband subscribers. Novatium’s managed computing service would add to Airtel’s existing portfolio of services that harness the power of cloud computing. The initiative will not only help individuals, but also the business users in saving on recurring costs.

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.

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PUTTING THE OOMPH IN OLD-AGE HOMES

Varun Gupta, Director, Ashiana Group very candidly claims that their main TG is the affordable segment of the society and talks about the acceptance of assisted living in retirement resorts.

What’s to do with the concept of ‘Assisted Living’ at Ashiana Utsav Retirement Homes? What’s new?
For India, the concept of assisted living is very new, but it’s very popular in the west. People in India associate the word ‘retirement’ with the end of the world. The concept of assisted living is to enable them to live again. Retirement resorts generally have three aspects to it – active living, assisted living and nursing care. Retirement communities are mostly catered to active living where in addition to home and space, very basic services like ambulance on call, gas leakages, et al are provided. At Ashiana Utsav, we assist seniors in their day-to-day living. The current old generations want to live in a dignified manner and our product allows them to feel independent as we provide the requisite infrastructure in terms of security, companionship, and health. Ashiana Utsav has an advanced security system, a hobby club with an activity centre, ambulance-on-call service with regular health check-ups, et al. For senior citizens, the need to be active is very important and an activity manager at the location manages various activities, ranging from yoga, gardening, tree plantation, movies, month-end parties, et al.

Does pricing matter in this space? How competitively are you priced vis-a-vis your competitors?
Pricing plays a very important role in real estate as India is a price-sensitive market. Our projects are generally designed for the middle class with prices ranging from Rs.15-40 lakhs. Surely our ticket prices are competitive and suit the affordability index of the consumer. As per market dynamics, we look at per square foot price and the ticket size before deciding the prices of our products. We are targeting middle income groups which differ city-wise and location-wise depending upon their affordability. As opposed to other players in the market, we price our products from the end user perspective and not from the perspective of speculators or investors. For us, affordability is the biggest criteria for pricing and we want to remain in the range of Rs.15-40 lakhs.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
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