IIPM - MEDIA

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.

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Source : IIPM Editorial, 2011.

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

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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.

Tuesday, October 11, 2011

What ICC can learn from FIFA

Cricket is far less popular around The World – both as a Sport and Commercially, and the entire framework of ICC is plagued with many-a-fault. Can it pick up a lesson or two from fifa’s book?

Trek along the plowed fields near the Volcanoes National Park in Rwanda or rest under the tree shades of the Omo Valley of Southern Ethiopia, and you might just come across a small young group of an ancient African tribe, playing with a ball made of rags. Of course, the chances are one in many thousands, or even a million. But a sight such as this is possible. And why not? Rwanda – a nation talked about for being the land of genocide murders – was the proud host of the 2011 African under-17 Soccer championship. And Ethiopia – a country still under construction – on the other hand, has been a part of this lesser known soccer tournament ever since its inception in 1995. For once, put this chalk-talk aside and think of what made soccer a global game. Did FIFA pull off something spectacular? Or is it all a matter of natural progression – the “it just happened” school-of-thought? Actually, it is both. From the lesser-known nations, to the much developed city of London, which witnesses many incidents of violence whenever England performs poorly in the game (as was reported in June 2010, when moments after England’s exit from the FIFA 2010 World Cup edition, there were several incidents of violence reported in various parts of the city), around the world, the game of soccer is synonymous with the passion. It is different with cricket.

Due to limited efforts from the ICC, the game is still a buzzword across limited geographies. Even on the commercial front, cricket has a long way to go. Here are some numbers – the total viewership of the last edition of the FIFA World Cup stood at a staggering 27 billion, while that for the current ICC World Cup is forecasted to touch just 2 billion. While FIFA bagged $3.2 billion from the sale of broadcast rights to just the 2010 edition, ICC has earned just $1.2 billion in an eight-year deal – this includes three World Cups until 2015, five World T20s and three Champions Trophy tournaments. Worse, while FIFA pocketed $1.2 billion from sponsors by sale of marketing rights during 2010, ICC is taking home only 37.5% of that amount until 2015 (during the World Cups of 2011 & 2015). So where actually is ICC going wrong?

Some suggest that a calendar cluttered with tournaments and political involvement are two factors ailing ICC – something which FIFA is free of. “The overdose of cricket has definitely taken away much of the charm. Even this tournament (ICC World Cup 2011) is far too stretched,” says Dheeraj Mathur, Exec. Director, KPMG. Many argue that there are many soccer events organised around the year as well – but which of them, except the FIFA World Cup championship, gives any team a shot at becoming the world #1? None.

FIFA’s stand against political interference in football associations have also given the game a clean image – thereby making fans believe more in the game. This is unlike what is seen in cricket – what else do you expect when the very ICC Chief (Sharad Pawar, Chairman & President of ICC) is himself a known face in the Indian political space?

The current format of the ICC World Cup is also plagued by the inclusion of many undeserving & weak sides in the main schedule. This creates a hollow image of the tournament as far as competitiveness is concerned. The qualifier round (where teams fight it out to find a place in the main schedule) of the 2010 FIFA World Cup saw more than 200 teams in the arena. In stark contrast, the qualifiers of the 2011 edition of the ICC World Cup featured only 12 teams. The next edition (2015) will see a repeat.