IIPM - MEDIA

Tuesday, February 28, 2012

Still taking India home

In 1983, its competitors were the outdated Ambassadors and Padminis. Now it competes with the likes of EON, U-VA, Figo and Micra. Tomorrow, it may well compete with the Mercs and the Beamers (who knows?). 4Ps B&M documents the brand journey of Maruti Suzuki in India

Since 1991, India has moved on from being a market that most MNCs considered untouchable to one that has become inevitable for most of them. Although a number of the first movers have felt the heat, a precious few have also been amply rewarded.

Maruti Suzuki is one instance you just can’t miss, and as predicted, it is also the #1 MNC in India in revenues, boasting annual sales of around Rs.362.99 billion with profits of over Rs.46.84 billion (FY2010-11). While names like Nokia and Vodafone are relatively close followers with annual sales of Rs.230 billion and Rs.220 billion respectively, the fact of the matter is that Maruti has been able to dominate the hearts and minds of Indian consumers over the past 28 years despite the competition growing by leaps and bounds. However, the journey has not been easy by any means. 4Ps B&M brings to you how the brand has evolved in the country and what makes Maruti Suzuki big enough to be an unbeatable force in the Indian market.

Small is beautiful
Soon after the Maruti 800 paved its way onto the Indian turf, the price-conscious Indian consumer was instantly enamoured by its value proposition. When pitched against the bulky Ambassadors and the Padminis, it was light in weight. As compared to its gas-guzzling counterparts, it was fuel-efficient. In the era of obsolete technology, it was a performance-driven marvel. And for Indians deprived of excitement and innovation, it was a dream come true from the technology leaders, i.e. the Japanese themselves.

Little wonder then that it turned out to be an outstanding start for this Sanjay Gandhi brainchild, but there was much more to come. Just a few years after Harpal Singh, an ex-Air India employee got the keys of the first Maruti 800 from the-then Prime Minister Indira Gandhi in 1983, Maruti Suzuki realised how marketing could be a critical driver of its success in the automobile industry. “The pre-Maruti era definitely belonged to Ambassadors and Padminis but the technology & price point of Maruti 800 revolutionised the way the business of automotives was done in India,” admits a former employee of Hindustan Motors.

The first campaign from its stable was done by Hindustan Thompson (now JWT) in 1989 for the Omni, which aimed at positioning the car as a passenger vehicle. The company found that the looks and size of the product were giving it a rather commercial appeal. While the campaign, which was shot in the factory premises in Gurgaon, featuring the renowned model Malvika Tiwari, it focused only on the print media. Even then, many in the industry opposed the idea of a marketing campaign; citing it as an unnecessary effort, since there was no practical competitor for the company in the industry. However, Maruti was fully convinced about the potential of the product and didn’t want to take any chance with the same. “It did help in changing the positioning (though partially). Our research shows that 44% of Omni users still use the product for dual purposes (both commercial and personal) while the rest of them are using it for personal purpose,” comments Shashank Srivastava, Chief General Manager – Marketing, Maruti Suzuki 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.

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IIPM: Indian Institute of Planning and Management
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Planman Technologies

Tuesday, January 24, 2012

They need a dhoni masterstroke!

Extreme advances in media management are urgently required

It is ironic that the Congress is facing a perception management crisis when it was this very aspect that was its biggest strength in the past two terms. See, there are a few facts about day to day life that one must come to terms with in modern day India.
A few decades back, the prerogative and ability to communicate with the masses rested with the party in power. There was no other way one could get one’s message across without being in favour with the centre. But the explosion of news media and its inexplicable mass popularity in India today has changed that. Today, one can reach most of the country’s population without taking the nod from the government at the centre. So, in essence, a group of people subscribing to a particular school of thought can have a strong dialogue going with most of the country’s population by completely bypassing the central government of the day.
The Congress Party must realise this. For all of Rahul’s tireless touring into the heartland, all those people who come to listen to him eventually go home and watch TV and listen to news anchors more often and for longer than he can ever manage.
So firstly, extreme advances in media management are urgently necessary. Because as far as its public image goes, I feel (and this may largely be the choice of its spokespersons), the increasing barrage from over-articulate, jargon-spewing spokespersons is beginning to give the party an argumentative tinge. So ‘glib’ is not very far off. Mrs. Gandhi should speak to the people once in a while. She is in danger of being seen as insensitive rather than stoic & calm, which I suppose is the current intention. Secondly, in the spotlight that most world governments operate in today, one needs a combination of real reform and perceptual reforms. Real reforms may not have a clearly visible, tangible effect on the country. But perceptual reforms do. The Congress should look at large, symbolic reforms at a ratio of 1:4 to real reforms. It’s like any organisation, a spot bonus for employees or a river rafting, team bonding trip can sometimes work better than progressive HR policy changes that may perhaps have more long term results. And lastly, the party should set a steroid shot, immediate short term objective perhaps even at the cost of some more genuine long term ones. And that is the quickest, fastest path to a fall in inflation and prices. This single act will address almost all of what I have said here.
To borrow a cricket analogy, what the Congress needs right now is not a century off 100 balls or even a fifty off 40 balls but a quick 25-30 additional runs in about 17 balls. After that, every one else can go back to a run-a-ball without sticking their neck out too much. The issue is, they have Rahul Dravid and V. V. S. Laxman at the crease and one of them needs to get run out so a pinch hitter can come in. That’s what MSD would do.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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

Tuesday, December 27, 2011

The road ahead for media planners

With the emergence of nomadic audience and the rise of personal portable medium, media agencies now require a new type of measurement system

Future is always complex. Predicting future is fraught with danger. Chances of getting future wrong are bright. However, future is always built on contexts that are current. Future is always shaped by the challenges faced in present.

There is a lot happening in our world at this time. Technology is progressing at a pace that is hard to keep track of. For example, in the last three years, the mobile penetration has doubled, homes with digital TV subscription have gone up exponentially; the FM stations have moved from metros to tier 1 & tier 2 towns. And the changes are not just tech driven. Even the demographic changes are re-crafting the entire society. The rapid urbanisation is throwing up challenges not faced before. There are no indicators suggesting that the speed of change will slow down or the transformation is eased off.

Here are three challenges that we are likely to face in coming years. First is the challenge of nomadic audiences. Second, the challenge of contexts. Last is the challenge of measurement.

Challenge of Nomadic Audiences

Media planning and buying is dependent on a set of audience being available to receive the message. The process of enumeration assumes that the audience is stationary, and once counted is always available. In today’s technology empowered scenario, the audience is not stationary. Rapid adoption of Net-enabled personal devices like Tablets is making media portable. This has serious implications. It means that mass media will get empowered by personal media. It means that the notion of fixed audience will have to be shelved. It means that media buyers will have to find a way of synthesising the broadcast media with new-age portable media. Nomadic audiences and personal portable media are forces that will permanently change the media landscape.

Challenge of contexts

Let’s take this rise of portable personal media and the possible stagnation of traditional mass media forward. Till now the media planning was built on increasing salience, so that it impacted interest in brand, in turn leading to a positive action on retail point. This is straight forward and linear in approach. This has delivered great results for brands. Today, the entire context of brand consumption is changing. Salience matters and salience impacts the interest in a brand, but from here on two new forces come into play. The personal portable media is the transformational force. It makes search and share more important than mere action of the traditional AIDA (Attention, Interest, Desire, Action) theory. Today everything is searchable, and people share everything. We know that this peer-to-peer network has an amazing power to influence brand choices. This change in context is already a reality and will only grow in future.

Tuesday, December 13, 2011

Will the property market perk up?

Buyer sentiment has not exactly been rousing for the real estate sector, which is counting on the festival season to bring the effervescence back again

The festive season in India, which begins around September and culminates with Holi in March, is considered as one of the auspicious periods for property purchase with builders looking to score decent sales. As many people start their process of home buying around this time, enquiries and bookings start touching a new peak, increasing by about 40-50% during this period. Real estate observers say it’s the time when the industry comes up with new offers and newer marketing & sales strategies to cater to the upsurge during this phase.

If the festive season is able to spur demand, it will spell good news for the real estate sector in India, which has been witnessing a dip in general demand and uncertainty over timely completion of projects in recent months. According to data compiled by research firm Venture Intelligence, private equity investment in India’s real estate sector declined by around 20.2% to $831 million (about Rs.3,740 crore) in the first five months of this fiscal due to sluggish demand. In comparison, PE players had pumped $1,041 million (around Rs.4,685 crore) into realty in the same period last fiscal.

According to industry experts, home registrations are down 30-35% in major markets like Mumbai compared with the previous year, which show that investors and homebuyers have been putting off their investing decisions. Rising interest rates on home loans and unbridled inflation across all sectors of the economy have forced prospective home buyers to hunker down and wait out the current economic uncertainty. Since March 2010, the Reserve Bank of India has raised interest rates 12 times by a total of 350 basis points, the fastest round of increases in RBI’s 76-year history. As a result, mortgage rates have gone up from around 8.5%-9.5% two years ago, to 11.5%-12.5% now and home loans that once took 15 years to pay back are now taking over 20 years to service. Even otherwise, the general economic health, which had been looking ruddy until a few months ago, has taken a turn for the worse. India’s gross domestic product declined to 7.7% in the April-June period, the slowest in six quarters while industrial output slumped to 3.3% in July, the slowest in 21 months.

With such economic clouds hovering above the real estate industry, it is uncertain whether sales during the festival season will pick up. Although historically property purchases especially on the residential front see a surge during the festive period, the wide disconnect between the expectations of buyers and sellers this time around may act as party pooper. Industry experts opine that in the current scenario characterised by high prices of homes and higher cost of home loans, buying a home has become a matter of choice and most home seekers are opting to wait and watch in the hope that prices might correct to more acceptable levels. According to Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India,“This has resulted in a rather prolonged period of vacillation among home buyers in India. The fall in sales has impacted the capital availability of developers, and we are going to witness widespread delays in the construction of the residential projects across segments.”

Tuesday, November 15, 2011

How Strategic is your Sales Organisation?

In an Era of Strategic Customer Management, you need to Quickly Reshape the “front-end” of your Company to meet its Full Value-Delivering Potential

The salesforce has long been the unfashionable and unloved part of marketing. However, our research at Warwick Business School suggests the revolution taking place in the demands customers place on sellers, provides an outstanding opportunity for the sales function to add value to companies and customers in new ways. In fact, that potential is for the growth of the strategic sales organisation with a strategic customer management role.

Why Sales Has Become Strategic today?
Sales management strategy is increasingly linked directly to a company’s competitiveness, as well as its ability to implement corporate “turnaround” in turbulent markets. The changing role of the sales organisation increasingly makes sales teams strategic resources concerned with relationship management with strategic customers at home and abroad, which certainly demands active senior management attention.

Transformation in sales organisations is underlined by escalating levels of company expenditure on sales and account management, reflecting the growth of collaborative, relationship-based customer management. Many organisations have seen a significant shift in resources away from marketing towards sales, because sales strategies are increasingly critical to achieving many of the top priorities of marketing and business strategy.

Strategizing the Sales Organisation Managerial priorities change as the demands of the outside world evolve. Relevant topical questions are concerned with how the conventional sales organisation can change to fulfil a strategic role focused on customer management. Our research suggests that the strategic re-positioning of the sales organisation demands several imperatives to be addressed by the management. These are:

Involvement – means positioning the sales organisation back in the center of business and marketing strategy. Close involvement of sales executives in generating business strategy is mandated, rather than simply taking a role in implementation. A company’s customer portfolio is an investment matrix, where different levels and types of investment are indicated by customer characteristics – potential growth, but also risk. The dependence of a seller on a small number of customers, adding customer business risk to our own, radically different profitability in different parts of the customer portfolio, the need to match resources advantageously to opportunity, the development of sales capabilities as a critical resource that drives competitive advantage – these are all issues that belong to the boardroom rather than the sales office.

Intelligence – means building customer knowledge as a strategic resource critical both to strategy formulation and to building added-value strategies with major customers. Market sensing capabilities are a distinguishing characteristic of many successful companies and the sales organisation is a major source of these capabilities. The strategic role is both interpreting changes in the market environment for the company, but also demonstrating deep knowledge of customers’ end-use markets as a route to added-value and competitive advantage. In fact, major customers now regard traditional sellers as commodities, and the supplier leading the way to improved efficiency and enhanced competitive advantage in end-use markets is a partner.