Most Premium Brands

• BMW-7 Series • Omega • Mercedes Benz- AMG • Tag Heuer • Mont Blanc

There is always an aura of mystery surrounding premium brands. With the global economic climate seeing one of its worse times, luxury consumers have gravitated toward quality, by purchasing fewer but better things that deliver on a promise that endures over a lifetime. Be it BMW-7 Series or a Tag Heuer, consumers are going out to buy products that represent genuine value. There has been a decisive shift from conspicuous to discerning consumption as customer fatigue has set in with mass marketed premium products.

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Source : IIPM Editorial, 2010.

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

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The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!

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We value a lot of intricacy!

“People decorate home with all kinds of products like marble, precious metals, crystal, et al. In fact, homes are now becoming more luxurious and the concept of luxury home is getting more and more popular by each day. Further, it’s no more a concept limited to super riches in India as middle and upper middle class are also adopting it quickly. People are now spending more in making their home look beautiful. But, the main idea is that we do a lot of research before, like in the case of Lakshmi we did research for three years on ornaments, colour of sari, et al. For Radha Krishna our Italian guys lived in Vrindavan for almost a year to get the perfect thing. We value a lot of intricacy and when we finally announce the piece it is consulted with the people for whom it matters or from the people who has the knowledge about it. Moreover, before we launch an Indian piece we take care that nobody’s emotions are hurt and create a piece that is loved and liked by all. Moreover, whenever Lladro family (the brand Lladro is a family name and there are four members who are running it) is in India we organise our signature event. In fact, whichever product you buy that day, it can be personalised for you and the family member signs it for you as well. No doubt, luxury market for home is expanding in India as today luxury is not just restricted to rich individuals, but it’s also for the middle class. There is certainly a huge potential in that class.”

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Source : IIPM Editorial, 2010.

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

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CZARS FROM THE WEST...

Foreign banks making their presence felt in India is no news. They started doing that more than a century ago. Policy hurdles, however, have kept their ambitions at bay. But of late, they are managing to give nightmares to their desi counterparts...

They came, and they conquered. This has been the case of all invaders, be it Alexander the Great, Zahir-ud-din Muhammad Babar or for that matter the British East Indian Company, who had come from the west to this land of golden opportunities. But certainly, that’s not the case with the banking giants from the west, who thought that they can have a fair share of the abundant opportunities present in Indian banking arena. So far the journey has been a bumpy ride for them, considering the government protection to the domestic banks for long and denial of a level playing field. However, since liberalisation in the early 1990s, a few of them have managed to put up a show worth taking a note.

Bearing in mind their restricted operational freedom, here in our survey we have evaluated them separately from the domestic banks. Furthermore, as availability of data of the India operations of the foreign banks are a constraint, we have considered their financial performance for the financial year 2007-08. This also provides for an allowance to these banks’ India operations, which might have suffered from a spill over effect of the banks’ miseries during FY 2008-09 due to the financial meltdown in the west.

Talking about the foreign banks, which have succeeded in making a mark in India, there are two names which just can’t be ignored, Citibank and Standard Chartered Bank. While Citibank is way ahead of Standard Chartered Bank in terms of financial performance, the latter certainly has an edge over the global prodigy when it comes to the Indian consumers’ perception; may be it has something to do with a century and half presence of the bank in the country or the country’s nexus with the incorporation of the bank (Chartered Bank of India, Australia and China opened its branches in Bombay and Calcutta in1958 and later merged with Standard Bank of British South Africa to create Standard Chartered Bank). But going by the scale and operations, Citibank has certainly created a magic by surpassing not only Standard Chartered Bank, but also few other banks, which has been in India for around a century or more like HSBC Bank and ABN AMRO Bank. As per the survey, HSBC Bank India stands second among the foreign banks in India in terms of profitability, growth, strength and size and quality of earnings.

In the league of new entrants, it seems as if the one that is fast catching up with the veterans is Barclays Bank. One may consider that its growth looks big on account of its low base, but then one must not ignore the fact that earning the first million is the toughest task. Moreover, in terms of consumer perception this bank is comfortably ahead of its competitors like Deutsche Bank, Bank of America and BNP Paribas. But then, it’s just the beginning, not only for Barclays Bank, but also for all the foreign banks present in India. With the regulators gradually relaxing their restrictions, these foreign banks must get prepared to prove their worth rather than just blaming lack of a level playing field for everything.

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Source : IIPM Editorial, 2010.

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

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1 lakh copies sold in less than 10 days of Arindam Chaudhuri’s “Discover The Diamond In you”
IIPM fights meltdown, places 2300 students By Education Mail Bureau
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BSNL resurrects…

Mahindra holidays’ initial public offer (IPO) seems to have revived the moods of many. So much so that Bharat Sanchar Nigam Ltd. (BSNL) is once again planning to bring its $10 billion IPO to floor. BSNL had announced last year to come out with its IPO. However, BSNL’s ambitious plans were sidelined due to opposition from Left and worker and employee unions. The stock market meltdown also crashed BSNL’s hopes to go public. Following the victory of the UPA regime with an overwhelming majority has once again revived BSNL’s reveries as the state run telecom operator now hopes to get a nod from the newly formed government. And it is also hoping to negotiate with the employee unions to a good effect. As per Kuldeep Goyal, Chairman, BSNL, the company will start with the (employee) unions once it gets the green signal from the government. Sources close to developments suggest that the government is planning to sell 10% stake in BSNL to raise around $10 billion with a paid-up capital of Rs.50 billion. BSNL, which garnered revenues to the tune of Rs.450 billion in FY 2008-09, is preparing itself to step on the gas and go on a mega expansion spree. Goyal has confirmed that BSNL is not only looking for telecom licenses in African countries, but eyeing probable acquisition opportunities. Though BSNL already has cash balance of Rs.300 billion in its books for the expansion projects, materialisation of the IPO will definitely be very timely and help in raising funds for expansion. Also, with declining average revenue per user (ARPUs), BSNL is also contemplating to join hands with a strategic foreign partner. Not only will it improve the company’s valuations (pegged at $100 billion), but will also enahnce BSNL’s brand equity. BSNL today is a laggard in the burgeoning Indian telecom sphere and is in talks with foregin players like AT&T, who are waiting to enter the Indian market. BSNL, like any other PSU, has a conventional management with a traditional working style. Joining hands with a strategic foreign partner will change that perception and turn around its fortunes.

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Source : IIPM Editorial, 2009

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

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PRATHAP SUTHAN, NCD, CHIEL COMM.

IIPM Best B-school

1. Surf’s ‘Lolitaji’ ad campaign
2. Liril’s ad commercial showing a girl bathing under the waterfall
3. Cadbury’s ad where the girl excitedly danced on the cricket ground when her boyfriend hit a six on the last ball
4. Bajaj’s ‘Humara Bajaj’ campaign
5. Incredible India’s ad campaign

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

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The current slowdown is taking a toll on organised retail, as players fight back to survive. Haunted by rising debt and interest cost,

Vishal Retail too is ready with its quiver to drive away the slowdown monster. But will arrows hit the bull’s-eye? Wonders Savreen Gadhoke…

“The growth in India’s organised retailing will be hit due to weak consumer sentiments and the slowdown in fresh investment…,” avers Kumar Rajagopalan, CEO, Retailers Association of India (RAI). RAI, who had once forecasted a 30% annual growth rate of this burgeoning sector, has slashed its outlook to a 12-15% growth. Raison d’être: After the nerve-wrecking Subhiksha default case, the consumer as well as the market sentiments attached with this once most sought after sector is rather incredulous. Experts even claim that the retail sector is mostly riding on the back of huge debts. All major retail chains including Pantaloons, Shoppers Stop, et al, are not only facing the heat of slowdown and low consumer spendings, but are also under the scanner for their high debt obligations. In fact, under the eagle eye this time is yet another giant retailer – Vishal Retail Limited (parent company of Vishal Mega Mart).

With Rs.10 billion turnover in 2008, and growing at 100% (y-o-y), it was little expected that Vishal Retail could also fall into the deadly debt trap. But it did! The company’s un-audited financial results for the quarter ended December 2008 reveal that the retailer’s expenditure on interest has increased by a whopping 137.26% as compared to the same quarter last year. What’s more? The profit for the December quarter too plunged by a pathetic 86% and stood at a miniscule Rs.21.5 million (as against Rs.155.6 million last year). So, with liquidity crisis, reduced cash flow, mounting debt obligations and a huge fall in profits, the daunting question arises – is Vishal Retail heading toward becoming another Subhiksha?

“Vishal Retail’s total debt obligation is about Rs.7.5 billion, of which Rs.1.4 billion is high-cost short-term debt,” avers Raghav Sehgal, Retail Analyst, Angel Broking. Considering this, the road ahead certainly offers a bumpy ride to Vishal Retail. Even the rate of interest, which the company is liable to pay on this debt, is between 14-16%. So, with an interest coverage ratio of about 1.5 and estimated debt-to-equity of about 2.66, the company certainly faces an uphill task in its effort to sustain growth and profitability.

However, in order to improve profitability and bring the conditions back to normal, the honchos at Vishal Retail have already started wasting a lot of chalk on the drawing board and are making efforts to re-organise and revive their retail venture. But will the efforts really pay-off amid slowdown is the question that’s doing rounds in many minds!

In fact, the company has already started consolidating its back-end and front-end operations. The first step in this direction has been the centralisation of its warehouses. From 22-23 warehouses across the country, the number has been drastically reduced to 4-5 warehouses and that too concentrated in north India. Avers Ambeek Khemka, Group President, Vishal Retail, “Huge warehouses in south & west India have been shut down and a centralised hub has been opened in Gurgaon.” Although Khemka agrees that this will lead to job losses, the move will certainly help in improving operational efficiency by reverse logistics. Moreover, transportation vehicles can not only be used to deliver stock & inventory to stores in far-flung areas, but on their way back to the centralised hub, can be used to collect deliveries from vendors’ en-route, thereby saving on transportation fee payable to vendors.

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Source : IIPM Editorial, 2009

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

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CAN nanomania revive Tata Motors?

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So the core team at Tata Motors is working over time to deliver on the Ratan Tata promise. Never mind that the company can produce only about 3,000-4,000 units of Nano per month for now (from the Patnagar and Pune plants, say sources), as the Gujarat plant is not yet ready. Given the few thousand units of Nano, which will be ostensibly ready by the launch date, sources opine that it will be a mere farcical launch, with the waiting period for deliveries stretching to even 6-9 months! The company, on its part, has issued a virtual whip on its vendors, dealers and other partners to not say a word about the launch strategy. Mahesh Chauhan, CEO, Rediffusion DY&R, which won the creative duties for Nano, is upbeat on the ‘rewards’ for the agency, but mum’s the word on strategy. “It’s work in progress,” is all he says.

In the meantime, the buzz about the Nano is reaching a crescendo amidst the junta, ahead of its official launch. PR and publicity stunts are at their peak, if you take into account the ‘pilgrimage’ that Nano is being taken for across India – Golden Temple, Amritsar; Ajmer Sharif, Rajasthan – to invoke divine blessings and also contributing to the hype among curious onlookers. But will this NanoMania be able to stem the mounting losses at Tata Motors?

Before answering that however, it may be advisable to look into the company’s plummeting profitability. From earning a Rs.500 crore profit in the same quarter last year, in the third quarter of FY09, Tata Motors recorded a loss of Rs.263 crore – a steep dip of 152%, its first in seven years! Worse, the fall would have been steeper, if not for the fact that the group sold off its investment in Tata TeleServices at a profit of Rs.478 million in the same quarter and attracted another Rs.1,740 million via a new FD scheme for the public.

For those wondering why we are singling out Tata Motors when the entire automotive sector is gasping under the slowdown winds, the answer is elementary. While every automaker has taken a hit in numbers, Tata Motors has by far seen the worst casualty (see chart). This is because a major chunk of Tata Motors’ domestic sales come from the commercial vehicle segment, which has been badly hit due to the economic slump. A tightening of credit supply from commercial banks for auto loans is the other spoilsport, which is also playing havoc with passenger vehicle sales. The fact that Tata Motors does not have latest variants of its cars in the market (perhaps because the Nano obsession has taken all their mindspace) is another dampner. So after months of decline, when Tata Motors passenger car sales rose (albeit incrementally) in February, it was on the back of their only launch in recent months – the Indica Vista!

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Source : IIPM Editorial, 2009

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

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IIPM set to beat economic slowdown
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The most-hyped President of the United States

The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School

Changing for deep-pocked corporates however is one thing and quite another for the average retail customer. Can it be done merely by brandishing a new logo and hiring expensive ad agencies and image consultants? The most-hyped President of the United States, Barack Obama is already finding out that selling ‘hope’ and ‘change’ on his campaign trail was one thing, but actually selling a 1,100 page stimulus package is quite another uphill task. Points out Anand Halve of Chlorophyll: “Logo change is just a part of the story and not the most important part either. For a PSB with 8,000-10,000 branches for example – it’s not so easy to communicate and monitor the huge change.”

State-run banks are quick to counter such assumptions. M.V. Nair, CMD of of Union Bank of India (which went for a logo change and re-branding exercise – Good People to Bank With – a few months ago) argues that the ‘change’ being communicated is actually the culmination of a back-breaking, 18-month process change that the bank underwent. “The real expenditure was in the area of process change in terms of investment of technology and training of our 27000 workforce,” he says. The supposedly fuddy-duddy bank smartly teamed up with Infosys Technologies to roll out its Core Banking Solution across its 1000 branches within a record time of 4 months; Boston Consulting Group developed their game plan for transforming employee mindset, while Mudra Communications was handed the task to study, assess and change the market perception of the bank! Nair finds it difficult to hide his delight. “The customer response has been overwhelming,” he says. While it is tough to say whether retail consumers are going to Union Bank out of sheer desperation (thanks to the global financial strain) or due to their makeover gambit, fact is it’s tough to ignore the state-run bank’s brand messages that fill up television sets across the nation’s living rooms every evening. Coupled with their Internet banking services, ATM proliferation, personalised cheque books and focus on customer service, the icing on the cake is all but complete.

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Source : IIPM Editorial, 2009

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

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A myth called ‘long-term’ and a view called non-Warren’ted!

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Going against Buffett’s mantras, A. Jainani claims that active trading, instead of taking long-term positions, is the right strategy in a volatile capital market...

Equities always outperform all other asset classes over the long term. Market experts do not tire in telling that to an investor day in and day out. They go on endlessly describing the virtues of long-term investing. Our analysis of the returns over the last twenty years of the two most important equity indices of the world – the Sensex and the Dow Jones Industrial Average – shockingly reveal that there is nothing which can universally be called as long-term and the returns during different long-term intervals within long term are anything but predictable.

Different set of investors have differing notions about the concept. For a savvy trader, one month is a very long term; for institutional investors and taxmen for the purpose of computation of capital gains tax, even one day more than one year is long term; and for insurance companies, five years is fairly long enough to be called as long term. But no one tells you how long should the long term be and that is applicable to all investors across stages in life and whether the time horizon of investment has anything to do with one’s risk appetite. Worse, they do not even say that you have to carry that much risk on your head, and also on your finances, for an inordinately long period since equities are commonly perceived to be riskiest assets of them all.

Our analysis of the Sensex returns during various time intervals of five, ten and entire period of last twenty years show that there are pretty long periods within which the equities actually do nothing. In fact, the interest accumulated on term deposits, 23.8% is higher than cumulative returns from the Sensex, which were negative 35% over three years from 2000 to 2002. The critics may also consider the 20-year trend witnessed in returns by the DJIA, which is considered to be the most developed market in the world. During the last decade (1999 to 2008), the returns from DJIA were -4.4% whereas the 10-year American treasuries gave cumulative returns of 46.8%.

The horrific results of the long-term investing can not be forgotten by the one who invested at the peak of the dot-com bubble in January 2000. More often, even though the Sensex is able to go back to previous levels witnessed in the bull market, many stocks, even blue chips, find it hard to climb back to those levels even after a very long term. It took full four years for the Sensex to retrace the fall and come back to the level seen in early 2000. Whereas, blue-chips such as Dr Reddy’s Lab, Hindalco, Wipro, Ranbaxy, Ashok Leyland, Indian Hotels, MTNL and many other stocks have given poor to negligible returns if one held them for these nine years. Currently, after nine long years, the Sensex is trading at 8,900 yielding an appreciation of just 65% over January 2000 levels.

The advocates of long-term investing say you can win without taking risk of repeated entry and exit. Their advice is simply to buy and forget it. Few, however, take the opposite route, and take the risk of riding the waves by timely entry and exit – in other words, actively trade. Though, it is possible to cut one’s personal risks to a minimum by being passive long-term investor, and in the process abandon all hope of becoming anything but a face in the crowd. To make any kind of gain from the stocks one must place some of the material and emotional capital at risk and resist the passive philosophy of long-term investing.

Going through the above arguments, one can conclude that the sensible way to manage one’s hard-earned savings and investments is not to shun the risk of trading but to expose oneself to it deliberately. Join the game, with care and thought. To trade in such a way that large gains are more likely than large losses.

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Source : IIPM Editorial, 2009

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

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1500-plus IIPM students placed across the country with 44 bagging international offers
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From sports mavericks to luxury on wheels

IIPM set to beat economic slowdown

“The demand for Porsche vehicles, even in cities where we do not have showrooms currently, is growing and we intend to capitalise on the brand pull.”


4Ps B&M: With the Panamera, Porsche enters the main stream luxury car market in India. How will Porsche position itself in a market with well established players like BMW, Mercedes, Audi, et al?

RW: Through its design language alone, the Panamera will establish a new segment versus the competition. The four-door Panamera combines a wide range of features seemingly contradictory at first sight, and offering a unique synthesis quite unparalleled in the premium segment. Panamera comes with all the sporting and dynamic characteristics of a genuine Porsche combined with a high standard of motoring comfort. The symbiosis of sports car DNA derived from the looks of a coupé, the unique interpretation of the classical sedan body and the benefits of a variable space concept give the new Porsche Panamera its truly unmistakable appearance.

Like all Porsche models, the Panamera is oriented in every respect to the needs and wishes of the driver. But now, thanks to the new concept of space and the sporting architecture of the interior, the car’s occupants are also able to experience this special “pilot feeling” on all four seats. All four occupants enjoy supreme ergonomic comfort on both the front seats and the two firmly contoured single seats at the rear. We are confident of good response from Porsche fans in India.

4Ps B&M: How has Porsche managed to do well in the SUV market in India, when the company was known more for its sports cars globally?
RW: The Cayenne is suited to Indian driving conditions and from the day it entered our showrooms, the Cayenne has been a great success, thrilling Porsche aficionados in the country. Never before has there been a car so capable of performing as both a race-bred sports car and a truly specialised 4x4, like the new Cayenne. All of Porsche’s engineering talent has been employed in the development of this car to ensure it successfully captures the essence of two contradictory personalities shared in a single package.

Despite the size, the Cayenne is as spirited as the sports cars from Porsche. The Cayenne Turbo, for example, generates 700 Nm of torque and 500 bhp which is higher than even the 911 Turbo.

4Ps B&M: How has been the India experience so far?
RW: The India experience has definitely been good. We have received excellent customer response to both the sports cars and the Cayenne model range. The Cayenne is Porsche’s best selling model in India with a major share of the overall luxury petrol-engined SUV market and we are encouraged as the sports cars continue to grow in sales and popularity. We sold 101 cars in 2007. Figures for 2008 came close to the 200 mark, making for good year-on-year growth in sales.

4Ps B&M: How have you positioned Porsche in India?
RW: Porsche, globally, has a strong following as a brand and we are fortunate with a strong presence of Porsche enthusiasts in India too. Most of our communications, including advertisements, are subtle and at all times catch the eye of the successful and the discerning. Direct communication with customers and prospects has always been the preferred mode of contact. A highlight of 2008 was the Porsche World Roadshow held at Aamby Valley in November where prospective customers got to experience Porsche in the best possible way – by driving the cars. We had 18 cars from the Boxster, Cayman, 911 and Cayenne ranges with four German Porsche certified instructors who took our guests through courses specially designed to highlight just how enjoyable driving a Porsche can be. Our experience says once our prospects drive a Porsche, the outstanding performance and product substance along with a unique design convinces them easily. We recently sent to selected prospects, a product introduction brochure on the soon-to-be-launched Panamera – the first four door luxury sedan from Porsche - and the response has been encouraging.

4Ps B&M: Does Porsche intend to expand its number of dealerships in India?
RW: The demand for Porsche vehicles, even in cities where we do not have showrooms currently, is growing and we intend to capitalise on the brand pull. We are hopeful of having Porsche Centres in nine more cities by 2010, with carefully selected local partners and customer service facilities that meet all the Porsche criteria and with fully trained staff.

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Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
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Entertainment

1500-plus IIPM students placed across the country with 44 bagging international offers

What rocked?

Besides cricket, they also do the bhangra, rock n’ roll and salsa. The year not just saw Bhajji slap Sreesanth on field, but the duo showed up as rivals in a TV reality show. Bhajji won the ‘Ek Khiladi...’ contest (thanks to his partner Mona Singh), but he still ‘really’ can’t dance saala!

What didn’t?

He may be King of tinsel town, but SRK did not pass muster in the much-hyped game show ‘Kya Aap Paanchvi Paas...’ Star honchos tried every tool in the trade, created a mad buzz, but audiences gave a thumbs down.


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Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM set to beat economic slowdown
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Six Sixes of India Inc.

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Strange visitors from the same nation!

Amidst the scare, amidst the fear, there have been a few superheroes with their superacts that made 2008 worth remembering for India Inc. steven philip warner gives an account of what and who went right...

What a year bygone, was 2008! During the year bygone, we stood ‘not-so-mute’ spectators to the Sensex resonating at 21,000-plus (in January) and then crashing to levels seen three long years back at sub-8000 points, eroding close to a pythonic Rs.70 trillion in the process (as on December 16, 2008). During the year bygone, we saw, and for the first time ever, an Indian donning the title hat of ‘the world’s richest man’, and shortly thereafter, we mourned the loss of a mighty Rs.7 trillion by just the four richest of Indian tycoons (and that includes the aforementioned ‘world’s richest man’)! Such has been the year, when, almost out of compulsion, we had inculcated the habit of waiting for a bomb to be dropped on our heads, after every glorious fest. In this chessboard of a year, there have been goods, and India luckily, has stood witness to some superhero acts too (we call them the ‘Six Sixes of India Inc.’). Yes, they emerged at regular intervals, from the same tribe of corporate India, making memories not ‘all that pungent’ for India Inc. to remember the year 2008 as the year that ‘was’!

And for once, these ‘six’ superheroes (allow us to call them Supermen), proved thumpingly that this tribe had found no sadistic reason to degenerate from within… Pray, allow us to prove their superacts. Hyman Rickover once famously quoted, ‘Great minds discuss ideas, average minds discuss events and small minds discuss people;’ immodestly accepting our average-minded smallness today, allow us to discuss these supermen and the events that makes us repeat the first statement, in a more realistic fashion: ‘What a ‘great’ year bygone, was 2008!’

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Source : IIPM Editorial, 2008

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

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Monojit Lahiri attempts a checkout on a time-tested ‘war’ that frequently invades the ‘creative’ space of most ad agencies!

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As every moron knows, an ad comprises of words and pictures. The word component is the domain of the Copywriter and the visuals, the Art person. Interestingly, although their combined creativity, skills and craft went into the making/creation of the ad, they functioned separately. This meant that the Copywriter wrote his stuff and handed it over to the Art person – usually with some guidelines – who then proceeded to visualise it in an appropriately meaningful manner. The duo also (frequently) came from different ‘social’ stratospheres. The Copywriter, usually, came from a Convent/Public School background, was fluent in English and totally comfortable with both the command and nuances of the language. He was also heavily into what this world offered – theatre, poetry, literature, cinema, cocktail parties… this invariably made him the ‘spokesperson’ of the creative team and the front guy during briefing, interaction and presentations. The Art guy, a hugely gifted person, normally was an Art School/College product, not terribly comfortable either with the English language or its fancy manifestations. He/she was happy to do the work assigned to the best of his/her ability and go home, quite content to live in the shadows…

In the year 2008, does the Art-Copy divide still exist – in any form? Does the subliminal khunnas in the Art guys still remain with the Copy brats for constantly stealing their thunder, unfairly? Do the Copy-hotties still luxuriate in the old smugness… or in this new world-order, is all that a thing of the past with convergence finally replacing conflict?

Ogilvy’s talented Delhi-based Creative Director, Titus Upputuru takes first strike. “Weird as it may sound today, this kind of crazy division of labour did exist, once! Three things slammed it out. One, the concept of ideation [replacing the earlier juvenile words and pictures ying-yang] that demanded collaboration, shared thinking and brainstorming. Two, the tacit recognition by the Art guys that there is a world of difference between Art [aesthetics and design by-the-book] and Art Direction [creating powerful seductive communication that will sell in the market place] putting an end to the dreaded, old-fashioned Art College syndrome! Lastly, the entry and popularity of Design Yatra – an art-specific fest held every year, where hot-shot globally acclaimed Art and Design Gurus come down to India [Goa?] every year to conduct workshops with our art guys.”

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Source : IIPM Editorial, 2008

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

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It’s not global turmoil or exposure to the US, it’s rumour that’s killing ICICI Bank, says Ankur Chandra

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“Dear Customer, Your deposits with ICICI Bank are safe. Your bank is well capitalised with good liquidity. Please do not listen to baseless rumours.” India’s largest bank in terms of market capitalisation must have understood how deadly rumours can be on this particular day when they were forced to send an SMS to all its customers to save itself from a crash in terms of the market price of its shares and in terms of liquidity. The crisis started on September 29, 2008 when rumours spread of ICICI Bank going bankrupt due to its losses on account of exposures to Lehman Brothers and the US sub prime crisis. Customers rushed to withdraw their deposits from the bank’s ATMs. Share prices dipped 14% in a day to a 52 week low of Rs.483. Not only that, these rumours also ensured that the bank lost its position to HDFC Bank for a couple of days in the Nifty.

Following the near mad rush the central bank, RBI, had to intervene and assure the depositors about the health of the bank. But rumours continued to batter ICICI’s share prices. And therefore ICICI had to lodge a complaint in the Economic Offences Wing of the Mumbai Police against major brokers. The complaint even includes the name of Motilal-Oswal Securities.

The ongoing crisis raises several questions and issues about the fragility of the financial system as a whole. It is worth analysing because its implications are not limited to ICICI bank alone. Post US subprime crisis, confidence in the banking industry as a whole has been lowered. But the whole Indian banking system is largely unexposed to the ongoing derivatives crisis in US. The stringent regulations in Indian banking sector which have made the cost of banking among the highest in India have worked in its favour.

ICICI Bank too seems to be in a very sound financial position. Its capital adequacy ratio (CAR) [a measure of how much risk the banks can absorb] is still hovering at 13.97%. This is much higher than the 9% CAR that banks are required to maintain under Basel-II norms. The CAR is also higher than the present CARs of other major Indian banks, including the SBI. Its exposure to the US crisis is limited to that of its London subsidiary, ICICI Bank UK Plc alone. ICICI bank UK holds 57 million euro of senior bonds of the now bankrupt investment bank, Lehman Brothers. But despite this 98% of its non-India investment is rated investment grade.

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Source : IIPM Editorial, 2008

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

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The man who calls the shots... Of course, figuratively

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He doesn’t believe in blinking and shooting at the same time; near-misses were never in his lexicon! With no love lost or time wasted, CEO Sudip, live...

4Ps B&M: In a short span of time, Reliance Money has emerged as a force to reckon with; could you elaborate upon the strategies that have been the driving forces towards the company’s success?
SB: Reliance Money has ensured that its services are cost effective, secure and convenient. Multiple innovations have resulted in our services being available to the customers at the best possible cost and in the most efficient manner. Our unique fixed fee model in lieu of the traditional brokerage, coupled with outstanding security token and convenience (amongst others, trading through ATM like kiosk), real-time online chat for retail customers, advance charting facilities, etc. have made our products great successes.

4Ps B&M: What has been your strategy for international markets?
SB: Our strategy in the International market is to work with local established players for catering to the needs of NRIs, PIOs and Institutional Investors willing to invest in India. This is an extremely low cost model and focused on serving international markets for Indian investments. The strategy in India is to have a complete basket of financial products and services. Whereas in international markets, the strategy is restricted to only facilitating investments into India.

4Ps B&M: Reliance Money has already established its presence in the entire Gulf. Why are you betting so heavily on these markets? What are your other focus markets?
SB: Middle-East is a market with significant potential. There is also a huge NRI & PIO population in the Middle-East who are very keen on investing in India. Apart from this, local institutions in the middle-east are also keen to invest in India due to geopolitical reasons. Apart from that, we are also looking at the African and South-East Asian markets. Offices have been established in Lagos (Nigeria) and Hong Kong. We have also established our presence in Ireland (Dublin).

4Ps B&M: How much investment are you making in these markets? What new products and services are you planning to introduce?
SB: As explained earlier, the investments in the international markets are not significant at this stage. However, a separate strategy is being followed for Saudi Arabia. In Saudi, we have floated a local company and this company (Riyada Reliance Money) is obtaining the requisite approvals from the local regulators for taking license to operate in the Saudi Stock market.

4Ps B&M: In the current volatility of stock markets, how do you make sure that risk averse investors are maintained? What according to you are the emerging trends in the sector?
SB: Yes, the investors are risk averse and rightly so. We are devising appropriate strategies and products to meet the requirements of these investors. Investors are also deploying funds in FMPs of mutual funds, liquid funds and other secured avenues.

4Ps B&M: Reliance Money has an offshore investment platform... Why?
SB: Reliance Money, amongst others, facilitates investments by domestic Indian retail investors in the international markets under the RBI approved window of up to $200,000 per year. We have international partners like OptionsXpress (3rd largest retail broker in US), Goldride Securities (Hong Kong), Mubhasher (Gulf), CMC Plc (UK), etc. who facilitate the transaction in the international markets.

4Ps B&M: What are the challenges you face while expanding in the international markets?
SB: The regulations are different in each country and the approval processes are cumbersome. Our working with local partners facilitates the navigation.

4Ps B&M: Your vision for Reliance Money for next five years?
SB:Reliance Money would become the largest broking and distribution company in Asia and amongst the top such companies in the world, within the period of next 5 years.

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Source : IIPM Editorial, 2008

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

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Rewrite rules but retain values!

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Retailing is all about understanding the consumer. The more you are able to connect yourself with the consumer the chances of success are higher...

They have not only built a successful business from scratch but have also redefined the way the common Indian consumer shops. They wanted to deliver everywhere, every time to every Indian consumer in the most profitable manner and they have done it successfully so far. In fact, with some of their leading retail formats which include Big Bazaar, Pantaloons, Food Bazaar, Central, Planet Sports, eZone, Collection i, Brand Factory and Home Town, the duo seems to be present almost everywhere. Certainly their strategy has paid off in the past and they plan to continue with the same in future too. Future Group’s Kishore Biyani (Founder & CEO, Future Group) and Rakesh Biyani (CEO, Future Retail) share their future strategies with 4Ps B&M Angshuman Paul...

In this fiercely growing retail rodeo, where do you think Future Group stands?
Kishore Biyani (KB): Retailing is all about understanding the consumer. The more you are able to connect yourself with the consumer the chances of your success are higher and that’s what we have been doing in Future Group.

Do you think national players understand Indian consumers in a better way as compared to foreign players?
KB: To some extent yes and I feel there’s no need of foreign direct investment (FDI) in retail. I always encourage domestic competition like from Reliance and Subhiksha, et al.

What are the key challenges for Indian retail industry?
Rakesh Biyani (RB): Infrastructure and real estate, particularly in big cities, are some of the key challenges. The real estate cost in India is not in sync with the productivity. Even the energy cost in India is higher than any other country in the world. Apart for these there’s lack of skilled manpower. Certainly these are some of the challenges that all retail players in India have to face.

Your growth model has always revolved around private labels. Why so and any intention to change such strategy in the near future?
KB: We believe in giving consumers what they want at an affordable price without compromising with the quality. That’s the reason we create brands. So if the demand and the need of the consumers are taken care of, then the brand can become the favourite brand to the consumers. We are also eyeing for 50% stand-alone stores for all our brands in near future.

RB: In the near future our focus would also be on private labels. In fact we are planning to launch about 35 to 40 stores every year and by June 2009, approximately 140 stores will come up. We are also looking forward to experiment with new formats in terms of sizes. However, our formats would be on the basis of need and demand for the consumers, which our team is finding out through intensive research.

As a pioneer and veteran in this industry what changes do you see in today’s retail industry?
KB: I think one should look at expansion in terms of the number of stores to reach more and more people and not in terms of the formats. We in Future Group are looking at opening more and more stores in the near future under any format, depending upon the need of the market. Retailers, of late, have been too much into rolling out new formats but what’s the point in opening such formats if there’s no demand in the market. That’s the reason we believe in doing research before opening a store and if our team finds out there’s a good demand in rural India, then we would definitely go there as well.

Can you elaborate on how you conduct this type of research?
KB: We conduct extended market research and the core focus of our research is to understand the Indian consumers and markets. For the past one year we have done research with McKinsey Group. However, we are now focusing on conducting research on a more innovative way.

Tell us about your future investment plans?
RB: We don’t believe in announcing investment figures, wherever and whenever required we have invested. Our IPOs have been very successful. We know we will have to invest more on the potential areas of retail. We have big plans with hyper-marts and we would be investing there. We even have big plans for fashion retailing, as fashion retailing is comparatively easier than food and grocery retailing.

Why do you say so?
RB: Because in fashion retailing you don’t require a cold store, which you definitely need in food and grocery retailing. Moreover, in fashion retailing you can always be in direct touch with the brand manufacturer, which is not always possible in case of food retailing. Anyway that doesn’t mean fashion retailing doesn’t have any challenges, it has its own bottlenecks particularly in apparel and fashion retailing you definitely have to be more creative.

Over the last decade, how do you think Indian retail industry has changed and what are the more changes we can one expect?
KB: Definitely, the Indian retail industry has been growing much faster in the last three years as compared to the earlier seven years. Retail is becoming more organised with its arm spread across all the corners of the country. In fact there has been a phenomenal change in consumer awareness, today’s consumer are much more educated about brands. Regarding the future, by next year all most all the malls in the country would be operational.

RB: On that even I agree too, you can’t take consumers for granted. There’s certain rise in consumerism in India, it’s good and this will give birth to more and more organised retail. I think we would be able to address all the challenges that we have today for the retail growth by the coming years.

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Source : IIPM Editorial, 2008

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

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AN AMERICAN DREAM... AN INDIAN REALITY!

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Can American Express take advantage of the ‘Great India Opportunity’? And how is it different from the slew of plastics available? The Country Head speaks...

4Ps B&M: What do you feel about market potential for plastic money business in India?

RH: In India, the credit card market is witnessing amazing and rapid growth at a healthy rate of 30-35% per annum. The total card market today in terms of billings is growing at over 30-35% per annum and is estimated to touch over the $20 billion mark this year. Having said that, the Indian card market is still relatively untapped and offers a huge potential. The current India context presents unprecedented opportunities to American Express to further its strategy to own and serve the premium segment. American Express’ strategy to own the premium segment fits in extremely well in the present Indian environment...

4Ps B&M: Do you cater differently to Indian consumers as compared to your competitors?

RH: The edges that American Express enjoys over the other cards are several. American Express is a company, which provides seamless service to customers travelling in India and overseas and offers a host of global benefits such as special offers and savings opportunities. For instance, we have the unique American Express Selects platform. This platform allows us to create significant value for our merchants and our card members. Through this ongoing, consistent and value-added approach, we deliver competitive advantage to our customers. In addition, being a leading travel agency we provide Membership Travel Services through our travel network. The strategy enables us to provide card members with a range of services such as tele-ticketing, special discounts on international fares, free airport transfers, et al, again something which no other card company can offer. We offer the best Protection Package that includes limited loss liability for a Card member.

4Ps B&M: What are your strategies to increase your consumer base in the Indian sub-continent?

RH: Our strategy will revolve around gaining leadership position and owning greater base amongst the rapidly growing affluent customers in India. The key elements of our strategy include our laser-like focus in providing premium value to all our customer segments and we continue to innovate to meet our card members’ changing financial and lifestyle needs. Over the last two years, we have expanded our product set to including innovative Platinum Club and Kingfisher cards.

4Ps B&M: How do you plan to retain consumers, given new buying patterns and shifting loyalties?

RH: In India, the opportunity is pretty large and we are focused on gaining industry leadership, and are making significant investments to this end. A leader in product innovation to raise the bar in the industry, American Express plans to continue to invest in advertising and marketing its products across the country. We will also continue to work with key partners to develop innovative product offerings to match customers’ needs and wants in the premium space.

4Ps B&M: Your take on the growing competition in the India?

RH: American Express is a key player in the cards business in India and offers unparalleled and comprehensive portfolio. There is space for everyone, but we like to differentiate ourselves. Unlike other cards, the Amex Card member is liable only up to a maximum of Rs.1,000 before report of loss of card and zero after report of loss. This feature is well recognised and appreciated by card members.

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Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
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If iPhone has enigma and reach, Nokia N96 is dialling the marketing number.

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If iPhone has enigma and reach, Nokia N96 is dialling the marketing number. But then, Nokia cannot afford to lose out to Apple’s iPhone. By pawan chabra

Imagine the delight that would have lit up author J.K. Rowling’s face when she heard that people have been actually queuing up since midnight to get their hands on Harry Potter and the Deathly Hallows, the last book in the series. Well, Apple’s Steve Jobs must have been anticipating something similar, with all the hype surrounding the iPhone’s launch in India. But instead of delight, his facial muscles ended up being concentrated in a frown. Why? Well, big brother Nokia had managed to steal the thunder. Fearing that the iPhone may snatch its lead in the Indian market, Nokia, in a surprise move, announced the India-launch of its N96 – a feature-rich smart phone from its N series stable, scheduled for launch much later in the country.

The industry is already hailing the N96 as the ‘iPhone killer’ and clearly these marketers have a war on hand. Already, most consumers who had been impatiently waiting to buy the iPhone as soon as it hit the stores have shelved their plans to wait for the N96 (to be launched on 16th September), compare the two handsets, and only then make a studied decision. Highlighting the imminent power of this newest model, Devinder Kishore, Director-Marketing, Nokia India says, “If the N series belonged to someone else other than Nokia, that player could alone become the second largest handset manufacturer in the country.”

To be fair, Apple iPhone’s global success story is almost legendary and the legacy has travelled to India, giving Apple’s smart phone the aspirational edge in Indian consumer-scope. In fact, to deal with criticism over its premium pricing, both Airtel & Vodafone (exclusive partners for iPhone in India) belatedly launched EMI schemes to lure in more buyers. Sanjay Gupta, CMO (Mobile services), Bharti Airtel, believes that the tie-up with Visa for finance options will “provide a new opportunity for consumers who aspire to own the 3G iPhone” and widen the market for the product in India. Incidentally, AT&T is able to sell the iPhone for $199 onwards globally, as the subsidy can easily be recovered because of higher ARPUs in developed nations. But Airtel and Vodafone do not have that luxury as lower ARPUs in India will not allow them to recover subsidy costs anytime soon.

Nokia too will pull all stops to stop iPhone’s success in India (like the surprise launch of N96) – largely because it cannot afford to let Apple win the Smart Phone battle in India. Nokia commands over 70% share of Indian handset market, with about 6-7% total share of smart phones. With the maturing of the handset mart, more users are expected to shift to smart phones, and Nokia does not want to stumble on this growth trajectory. Other smart phone players are also gearing up to cash in. Ajay Sharma, Country Manager, HTC India says that he’s ready for the battle ahead. “If we just limit it to smart phones, we can give Nokia a run for their money any day.” On the iPhone, Sharma says that till the time 3G is not available in the country, “people buying 3G phones are wasting their money unnecessarily,” but is confident of HTC’s ability to flood the market with 3G phones when the technology will get the green signal.

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Source : IIPM Editorial, 2008

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

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