A multi-billion dollar question – does the Indian consumer really care about the ‘brand value’ of the four wheeler the family so desires?

Brand valuation experts Millward Brown was quick to make its claim in a report titled, “Brand-driven shareholder value creation’ which proved empirically how “Brands with greater market presence and a superior ability to convert customers from brand awareness to strong relationships significantly outperform the market, producing annual average total shareholder returns of 10% to 20% in the period 1998 to 2006. In comparison, the market on average yielded a mere 4% return to shareholders annually.” A paper by McKinsey & Company titled, ‘The New Rules of Branding’ also proves how “companies with strong brands have shareholder returns of 1.9 points more than their industries’ average.” This was doubled up by another McKinsey product titled, ‘The Power of Brand Delivery’, that interestingly put forward its proposal of an emotional connect. “Strong brands create value for shareholders by building emotional bonds with customers,” is what it claims. But who better to talk about emotional bonding and emotional attachment than the Indian consumers. It is therefore surprising then that the global automakers’ claims of great intangible brand value score low on Indian frontiers when it comes to performance in the market. Value-for-money is what the Indian middle-class consumer generally looks out for in everyday consumption, from the time she makes her choice of detergent to choosing the ‘right’ kind of four-wheeler. The Maruti 800s, the Altos, the Zens, the i10s, the Swifts, the Santros, the Indicas – these are of the ilk that made great headway into the Indian market, having sold millions of units till date. But ask an ordinary consumer what characteristic he associates with these abovementioned brands between being ‘performance-based’ and ‘goodwill-based’, and the answer would be nothing but the obvious – these are value-for-money performers and not brands which command billion dollar goodwill in the market (compare them to the BMWs, the Audis, the Mercs and the Land Rovers and you’d understand our point here)!

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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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Global players are not a threat to us, due to our USP of giving Indianised food”

Nishant Arora, Head Food Division, Kohinoor Foods Ltd

Do you think the coming of foreign competitors is a threat for you?
I don’t think so because our USP is ‘Indianized’ menu and we provide convenience food which requires Indian expertise and can be provided only by Indian players.

Do we miss out big on positioning?
I can’t comment on other players, but in Kohinoor Foods, our focus or positioning has been very clear. We offer hygienic and convenient Indian food, which no other players offer. Positioning is very important in any industry and this industry is no exception.

You are promoting the Kohinoor Foods brand in USA. Any bottlenecks?
When it comes to attracting Indians in the US, we didn’t have to face any bottlenecks; but when it comes to attracting non-Indian consumers, you need to focus on many things – like the hygiene condition during the preparation of food and details in packaging.

The future of the convenience food industry would be...
There would be more and more brands emerging in the Indian convenience food market and a majority of these would be from the retail companies.

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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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IIPM enters into media education
IIPM makes record 10,000 placements in five years

TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
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Why Ford loves the ‘licensing‘ game in India

Ford Motor Company is one name that counts amongst the top believers in the power of brand licensing. Mark Bentley on the how, why and what of Ford’s licensing program

Licensing has played an important role in Ford Motor Company’s marketing mix for nearly 20 years now. Established in 1991, the Ford Global Brand Licensing program has grown from two dozen companies to over 350 licensees worldwide in 2009. Annual retail sales of Ford licensed products were recently projected at over $1.5 billion. Our key partners include Mattel, Fisher-Price, Aramis, Electronic Arts, Microsoft, Sony and Franklin Mint. The “3 Ps” form the foundation stone of Ford’s licensing program. In order of importance, the team focuses on the following basic rules: 1) Protect the brand; 2) Promote the brand; and 3) Produce revenues.

It is no small task to protect an iconic, 106-year-old company’s trademarks. Ford and its agency partner, The Beanstalk Group, work hard to ensure that the company’s intellectual assets are being used properly. Key trademarks such as the Ford Blue Oval, Ford Mustang, Model-T, Ford Thunderbird, Ford Racing and “Built Ford Tough” trucks are constantly monitored in the marketplace. If necessary, Ford takes additional steps through its brand protection and legal teams to settle trademark infringement matters.

Ford leverages licensing as a platform to create additional brand exposure. Licensees indirectly promote Ford brands by creating millions of additional brand impressions and consumer touch points. For example, over 150 licensed toy and videogame companies annually produce Ford products allowing consumers of all ages to experience the brand in ways that reach far beyond traditional advertising.

Consumers also indirectly advertise corporate trademarks by wearing Ford brands on their apparel. Ultimately, positive brand exposure may lead to the purchase of actual Ford cars and trucks.

Finally, licensing unlocks brand equity by allowing the company to receive a steady stream of royalty revenue. Ford creates brand value and consumer goodwill by annually spending billions in marketing and advertising. Inspirational designs and high quality products also contribute greatly to the company’s success. The licensing team is responsible for leveraging these marketing and design efforts by extending the brand into many categories including die-cast vehicles, videogames, apparel, technical publications, gifts and vehicle accessories.

Ford Global Brand Licensing plans to replicate its licensing successes far beyond its core North American market. In 2009, foundations were laid in India, China and Latin America. Although licensing is still in its infancy in many emerging markets, Ford is poised to capitalise on future global growth in the sector.

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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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TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here

Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com

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Smartphones at smart prices...

Exclusive In chat with Society Magazine - Prof. Arindam Chaudhuri

Sony ericsson has recently launched three new slick phones namely Satio, Aino and Yari that the company is touting as “smarter phones.” It’s noteworthy that Sony Ericsson, which was at the fourth spot in the Indian handset market in 2008, had come under extreme pressure all through 2009 as it lost a considerable market share in the mid- and high-end category to Korean rivals like Samsung and LG. The growing popularity of their affordable touch screen phones were the major cause of worry for Sony Ericsson. However, now with the launch of these phones, the company plans to come back in action. Anil Sethi, President, Sony Ericsson says, “In today’s market place, the definition of a smartphone is getting increasingly fuzzy as people want their phones to enable them to do it all at the same time. And with the help of these three phones, we expect that the consumer would be able to do all and help us in writing a new chapter for Sony Ericsson in India and strengthen its position as an aspirational and an irresistible brand.” Indeed Satio, Aino and Yari come loaded with all possible features. However, the key to succeed in the Indian market lies not just in loading in features but also in getting the pricing right. Unfortunately, it seems that Sony Ericsson has not learnt the art of pricing its products as was evident in the case of its earlier flop show Xperia X1. On the other hand, Samsung (Star, Corby) and LG (Cookie, Arena) have launched pocket-friendly smart phones, which reflects in the huge sales of their offerings. If Sony Ericsson does not want to repeat history, it will have to re-look at its pricing strategy and price its smartphones smartly.

Surbhi Chawla

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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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TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here

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You wanna test my confidence?!

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Indo-US Civilian Nuclear Agreement
The Nuke Deal, on one hand, overturned decades of India’s nuclear apartheid, significantly enhancing India’s global brand image, and on the other, made heroes of PM Manmohan Singh & UPA Chairperson Sonia Gandhi within India, adding oodles to their political charisma and clout. Uncle Sam’s one-time exception for India to keep its nuclear weapons (without signing the Non-Proliferation Treaty), overnight gave credence to India’s positioning from a slumbering elephant to the hungry tiger. In one fell swoop, years of mutual suspicion & distrust between the world’s largest and oldest democracies were swept away. On the flip side, the deal encouraged India’s blinkered Left Front to withdraw support from the incumbent UPA government, but the UPA’s unquestionable win in the subsequent Election went a long way in underlining the positive brand aura of the Civilian Nuclear Agreement. As for our economist turned politician PM, he’s still getting used to the Yankee ‘you’re with us or against us’ ideology!

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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 movers...

IIPM: An intriguing story of growth and envy

• Reliance Big Pictures, the motion pictures arm of Reliance Big Entertainment has roped in Sanjeev Lamba as its CEO. Prior to this, Lamba was the COO of Zee Motion Pictures. An industry veteran, Lamba brings with him 25 years experience in advertising, consumer products licensing, movies, video games, et al. Lamba has been previously associated with companies like Ogilvy & Mather, Walt Disney and Weinstein.

•Anil Srivatsa, ex-COO of India Today Group-owned radio, Meow FM, is all set to join Kings XI Punjab, the IPL team jointly owned by Preity Zinta and Ness Wadia as its CEO. After having started as a RJ, Srivatsa tried his hands at different verticals of television including production and management, besides DTH and IPTV. At Kings XI Punjab, Srivatsa will take control of the management of the company and revenues.

•Ending her stint with Dentsu Communications, Vijaya Sriram has joined Bates 141 as VP, Chennai branch. Sriram has an experience of 18 years and has worked with agencies like RK Swamy BBDO and JWT and handled accounts of P&G, Aircel, MRF, et al.

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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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Redemption for the titans!

Exclusive In chat with Society Magazine - Prof. Arindam Chaudhuri

Its campaign – Diwali hogi cup wali, rightfully mixes the two biggest celebrated events in the country – Diwali and cricket. The campaign includes television commercials (of varying durations), as well as strategic tie-ups with news channels, radio stations and coffee houses to reach viewers. In fact, after India crashed out early from the T20 tournament, the channel had to ensure that the value of the channel was not eroded. “The efforts went in consoling the viewer that a lot more cricket is coming up and hence we felt a serious need for aggressive marketing,” avers Dayani. When it comes to aggressive marketing, 2009 is being considered a watershed year for ESS; but as Dayani claims, ESS had not been dormant even last year.

“We made huge investments last year also. As far as investments during 2009 is concerned, the efforts are on to make the Champions League a unique property in itself,” claims Dayani. In September last year, ESS had paid $975 million for commercial rights of the T20 Champions League for 10 years – the most expensive deal in the history of the channel. But can it become as big as the IPL, especially considering that the club format has never been tried before in cricket atleast? There is a debate brewing there, but many experts opine that it will take a season or two to reach the IPL platform. “After watching tournaments like IPL and T20 World Cup, people can easily relate to the format. However, it may take some time to get familiar with the international club team format that is not known to the sport. But we are confident that it has the potential to become a unique cricket property for us,” forecasts an optimistic Dayani. While that was the sentiment about the modern shorter version of the game, surprisingly, ESS continues its bullish approach to the 50-over format as well. And this is despite the fact that the recently ended Champions Trophy (which was a 50-over format) wasn’t able to garner as high TRPs as the recently concluded T20 tournament did. Experts also believe that increasing competition from channels like SET Max (which owns rights for IPL) and Neo Sports have been a party spoiler for ESS. Then there is an added threat from BCCI, which plans to launch its captive sports channel. But Dayani chooses to differ as he notes, “Competition is always good for the industry, as it makes you proactive.” And the worries seem to fade further with ESS’ plan to launch a round-the clock sports news channel. So for now, with little differentiation in content, the only salvation for the sports channel gods is marketing, in other words, advertise shamelessly! Remember, it’s always the last over in a competitive market!

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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!
For Exclusive Footage by Sunday Indian Click Here

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Burning the tracks, in time!

IIPM 3-year full-time Integrated (MBA BBA) Programme

Then the growth story was jolted to a halt; the smooth run fast becoming a tale of the past. Reason? Although the brand won great recognition amongst youngsters, the price was found to be a significant dampener as research proved how the target group, which consisted of college students could not yet afford this brand. Added to this was its eccentric act to extend its reach from the early jobbers to executive segment. Result – a decline in annual sales by Rs.23 crore for the year ended 2003. The group needed cushion there, to ease the heartache and bounce back. A consumer research followed, which advocated how mobiles/deodorants and sunglasses were the most popular accessories in the purchase list of youngsters. The next cash cow for Fastrack was born in the form of sunglasses. The product fit the bill perfectly as there was no Indian brand presence in this category and Ray-Ban served a relatively premium segment. So as a brand extension strategy, Fastrack ventured into the sunglasses category and again with its time-honoured strategy of economical pricing, it stole the show from unbranded players in this category.

In 2005, the brand went for another repositioning exercise with a new logo. Supported by a new campaign – ‘How many do you have?’, the brand sales increased by Rs.35 crore during 2007. That was another fresh start. Through massive product proliferation & innovative pricing strategy, Fastrack succeeded in maintaining an average y-o-y growth of 30% and has thus become the fastest growing brand under the Titan umbrella in the past four years. With an annual turnover of Rs.300 crore for FY2008-09 and an annual sales of 1.5 million watches, Fastrack is mulling over plans to clock a turnover of Rs.500 crore by FY2011-12; the brand focus shifting from being just a ‘watch’ brand to an ‘accessory’ brand.

So, what is Fastrack exactly doing to facilitate this shift in brand focus? Starting from brand new launches (like bags, wallets and belts) to venturing into new areas (like sports shoes), Fastrack has big plans. “Our mission is to completely envelope the new Indian youth,” announces a beaming Simeran Bhasin, Marketing Head, Fastrack & New Brands.

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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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“We will change your outlook” - The Sunday Indian on B-SCHOOL RANKING SCAMSTERS EXPOSED! A must read...
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“We are doing a lot of BTL activities around the workshop areas.”

IIPM 3-year full-time Integrated (MBA BBA) Programme

It’s the approach that matters. More so, it’s all about customer interactions when it comes to becoming an auto-service bigwig. A 4Ps B&M exclusive...

4Ps B&M: Two months since you launched Carnation. What’s the distance covered?
JK: By the end of June 2009, we had started operations in nine locations. The 10th came in July. Overall, our rollout has been quite decent, though some people call it aggressive. We are planning to open another 20 workshops by the end of the current fiscal...

4Ps B&M: How has been the initial response in the country?
JK: Till date, we have serviced around 8000 vehicles but our motto is to sustain the initial response.

4Ps B&M: 8,000 alright; but then isn’t your model ‘similar’ to that of the authorised and local workshops?
JK: It’s our approach that is different. The equipment that we use is world-class, which makes us different from the neighborhood workshops. And our approach is to minimise the cost of ownership of a vehicle, i.e. we focus on repairing an accidental part rather than changing it with a new one, unlike the case with the authorised workshops. Our target is very different and we want to be as transparent as water in customer service.

4Ps B&M: What efforts are you making to ensure footfalls? Any great attractive deals for the consumers?
JK: We are doing a lot of BTL activities around the area where the workshop is located as it suits the current needs of the business and is economical too. Till the time the volume doesn’t build up and consumers aren’t aware of an Carnation experience, it’s of no use to offer them any form of deal or contract with the company.

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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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“We will change your outlook” - The Sunday Indian on B-SCHOOL RANKING SCAMSTERS EXPOSED! A must read...
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BIG... BIGGER... ADAG! - Surbhi Chawla reviews the whys and wherefores...

IIPM 3-year full-time Integrated (MBA BBA) Programme

If RCOM added to ADAG’s overall brand value in a ‘big’ way, BIG TV – the company’s DTH venture – also added its brilliant mite, what with its much hyped launch. Add to that tactics like the launch of the new Reliance Energy bill in Mumbai – which has a very customer friendly and an easy to navigate design – and you have a brilliant positive word of mouth doing the rounds. Having said that, it is a clear fact that the recent gas controversy has taken its toll not only on the current ranking but also on group efforts moving them away from the primary business objectives. What is more critical is the scenario if the dispute and controversy continues further, the same might affect future rankings.

But what is more important is that ADAG does not build its brand only through its customers but also through numerous stakeholders on a daily basis. Shah tells us, “Reliance ADAG stocks are investor favourites. The task at hand has been to invest in micro-marketing initiatives rather than hi-decibel campaigns.” To meet this objective, Reliance Capital brand, for example, initiated an innovative drive to connect with its premium customer base through an association with theatre (in one specific case, Reliance Capital sponsored a musical show titled City of Dreams, which went on to be a complete sell out). ADAG, in the meanwhile, has kept reaping the benefits of being a valued brand for investors. The Reliance Infrastructure Fund, despite the market conditions, saw contrarian participation of over Rs.2,000 crores from retail investors, a figure which went completely beyond the forecasts.

The year 2008-09 also saw ADAG migrate ADLABS to BIG cinemas and heralded the launch of new BIG multiplexes across the globe, including in Malaysia and US. The BIG brand was also in the news for inking a multi billion dollar deal with Steven Spielberg to produce Hollywood movies.

“The BIG TV Brand will become even bigger with well planned & executed BTL & ATL [below the line, above the line] campaigns nationally,” adds Shah. Brand ‘BIG’ is also expected to strengthen ADAG’s play across platforms in the media and entertainment sectors, utilising the group’s education arms, NIS Sparta and NIS Academy. So where to from here on? How does ADAG make the last mile jump from the number three position to number one? With a lot of patience, and a little lesser of, well, controversies...

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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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Follow Arindam Chaudhuri on Twitter
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Indraprastha Gas Ltd.

Entry Price: Rs.144
Target Price: Rs.161
EPS: 15.4 (FY10E)
P/E: 9.4 on FY10E EPS
Time Duration: At least one year
Rationale: Promising business model, robust growth in CNG vehicles and PNG customers in NCT of Delhi, timely expansion plans and low industry competition provides a long term & stable visibility to company’s future performance and growth trajectory. However, due to the supply side pricing constraints, margins are expected to remain under pressure.

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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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Follow Arindam Chaudhuri on Twitter
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Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
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The off screen TRP war

The small screen is sizzling with TRP wars with the launch of myriad of new shows like Sach Ka Saamna on Star Plus, Is Jungle se Mujhe Bachao on Sony, Color’s India’s Got Talent and Rakhi ka Swaymvar on NDTV Imagine. While GECs are seriously fighting the war of one-upmanship to garner maximum TRPs; the off screen rating war among the rating agencies Television Audience Measurement (TAM) and Audience Measurement Analytics Ltd. (aMap) is raising the temperature of the TV town. aMap has partnered with Eurodata TV Worldwide (an international rating agency, which compiles viewership data of 2000 channels in 80 territories across five continents) to provide international TV ratings in India besides doling out Indian TV ratings across the world. This tie-up will strengthen aMap, which has not been able to gain much stranglehold despite being in the business since 2004, in this off screen TRP war. aMaps’ large sample size and quick data delivery (overnight) for events and shows gave it the initial kick. On the other hand, being in the industry for over a decade, TAM enjoys an edge as it is more like a TV rating currency. As the Indian economy is getting increasingly interwoven with the rest of the world, in the context of television, this means that there is greater international advertiser interest in the Indian market. International interest in the Indian culture is also increasing. Take for instance, Brazil’s latest hit show Caminho Das Indias (India’s Way) is about an Indian upper-caste girl falling in love with a Dalit boy. Driven by such trends, international broadcasting companies, content providers, et al, are all looking to do business in India. International broadcasters are looking to have a comprehensive data that gives them a hint of what works in the Indian market and this is where aMap will get a strong edge over TAM. “This move will give advertisers and broadcasters in India their first ever preview of the TV program performance around the world, an opportunity to study successful formats the world over and therefore to identify successful opportunities in India...” says Amit Varma, CEO, aMap. It’s time TAM bucks up, for it won’t be too long before aMap races ahead of it.

Pallavi Srivastava

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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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Not cheap! It’s economical…

Bajaj Auto’s over reliance on brand ‘Pulsar’ and increasing focus on the 125cc-plus motorcycle market garnered it a heavy loss in not only its market share in the two-wheeler segment, but also in its bottomlines. However, Bajaj Auto is revisiting its strategies and is now all set to make a comeback into the 100cc segment with its Discover DTS-Si, which will hit the showrooms from July 27 onwards. Interestingly, Bajaj Auto’s plan to reign in more market share in the 100cc segment is a bit different from the strategy formulated by the company in the first place. But will the discovery of Bajaj Discover be able to create the desired position in the executive segment for Bajaj Auto?

There is no denying that Bajaj Auto’s strategy riding on the superior technology and advanced designing fronts has been very successful to tap the consumer in the premium segment. The company is banking on the same pillars to replicate its success in the executive segment. If the words of Rajiv Bajaj, Managing Director, Bajaj Auto are to be believed, “In terms of sales and profits, this fiscal will be the best ever for Bajaj Auto.” Introduced as a 125cc model and presently selling in a 135cc version, Discover has been operating in the Indian market for over five years now and is well poised to take on Hero Honda’s executive model – Splendor and Passion by which the company plans to take the sales figure to around the 2,00,000-units mark. And if Bajaj is able to create a new category in the executive segment, the company may garner a healthy share of the entry level segment.

Pawan Chabra

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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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In India, the idea of corporate governance is well received; however, its implementation is left stranded.

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Regulators certainly need to develop draconian teeth just like the US had put in after the Enron case, feels Manish K. Pandey…

It was just three months ago, when it had won the coveted Golden Peacock Global Award for Excellence in Corporate Governance for 2008. Come 2009 and B. Ramalinga Raju, the former and now disgraced chairman of India’s fourth largest IT firm, Satyam “relieves the burden on his conscience” by bringing to light, one of the biggest-ever frauds in Indian corporate history. Shocking, mind-numbing, atrocious, disgraceful, cheats, and so on… adjectives pour in from all directions as the mystery starts unfolding.

Events still continue to unfurl but as they now pave a way deep inside Satyam’s financials it’s clear that Raju couldn’t have done it alone. As per critics the pliant partners at Price Waterhouse, the so-called ignorant directors, nearly quiescent government body (Ministry of Corporate Affairs) and, above all a horde of politicians who supported Raju (presumably for favours) were his shrewd partners in the crime.

In whatever direction the investigation may point out, but the Satyam fiasco has certainly revealed the dark underbelly of Indian capitalism. It has not only questioned the integrity of promoters but also the levels of corporate governance in India. The objective of the corporate governance is to build an environment of trust and confidence among shareholders by augmenting company’s performance and accountability. So how can a management with only 10% stake decide on a Rs.80 billion investment and 90% of the shareholders have no say at all in the deal? Isn’t it just a mockery of corporate governance rules?

Certainly this is not for the first time that such a thing has happened. Instances ranging from the South Sea Company in 1720 (popularly known as South Sea Bubble where the company got exclusive rights to trade in the South Seas through unethical means) to Daily Mirror’s Robert Maxwell in 1980’s (manipulation of the pension schemes run by Maxwell’s businesses), to Enron in 2001 (that created a web of SPVs to hide debt on its books and inflated revenues), to Lehman Brothers in 2008, and many others alike prove the point at the international front.


Even in India it’s not for the first time. However, the only difference is that the scandals are not of this magnitude. Like Satyam, Sterlite too was alleged to adopt fraudulent practices to bag a tender floated by GAIL last year. Even Bearings (promoter of BFL), abstained from voting when their business was getting acquired by MphasiS. How can we forget Global Trust Bank, where the auditors were again Price Waterhouse?... India Inc. too is full of such examples.

No doubt change has come to corporate India - from family-owned businesses that were involved in issues such as nepotism, mismanagement, lack of transparency, et al to a scenario where companies are professionally managed – but the pace of it has been really slow. Even today still more than half of the companies on the benchmark indices Sensex and Nifty are family-controlled which hampers the evolution of corporate governance in India. In an exclusive interaction, Naresh Gupta, MD, Adobe India tells 4Ps B&M, “Indian corporate culture is still in a nascent stage as opposed to their American and European counterparts. Moreover, a deep integration with global environment has quickly come to them. But, Satyam fiasco will make sure that corporate governance matures in India.”

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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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‘Singh’ definitely is a ‘Kingg’

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As Akshay Kumar romanced Katrina Kaif in Egypt, it became one of the biggest thunderstorms to have hit the tinsel town in 2008. The buzz created by Singh Is Kingg was such that it became a runaway hit even before it was released and earned great bucks in paid previews: Rs.50 lakh in India and £50,000 in UK. The rustic innocence of Akshay Kumar as a village-boy made him the undisputed King of Bollywood. In fact, what made this flick iconic was the fact that just before its release, Manmohan Singh won India’s first confidence vote of the decade in the Lok Sabha on July 22, 2008 enabling him to pursue the Nuclear Deal with US. The release of the film also coincided with the Indian cricket team’s Australian tour, where Bhajji, after the much hyped quarrel with Andrew Symonds became another King for Indians. Good or bad – publicity is, after all, publicity!

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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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No more selfish motives in broadcast media

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The Telecom regulatory Authority of India (TRAI) which also regulates the broadcast media has advised the political parties, religious bodies, urban and local bodies and state governments to stay away from public broadcasting. The regulatory authority has recommended that political & religious body and the state governments should not be allowed to run and own broadcast outfits like cable, DTH, TV channels et al. Those who are already involved in such business should plan to phase out in another three to four years. The recommendations, if made binding by the government, will surely benefit the broadcast industry as the involvement of such parties in the business has put a question mark on the integrity of the medium. There have been debates on the issue raising concerns that such involvements may lead to the misuse of the medium to fulfil the political and other considerations of the party in concern.

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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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Coming of (ramp)age!

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With its ‘Indianness’ philosophy, the Bhilwara Group has woven a most admirable web

As you step inside the Corporate Office of the Rs.28.58 billion Bhilwara Group in Noida (also called Bhilwara Towers), the first thing you notice is the grandiose crescent shaped logo which says, ‘Proud to be Indian, Privileged to be Global’. You ponder over the words as you walk across the lobby to meet the man at the helm of this textile, graphite, steel and power behemoth. His vast cabin reeks of patriotic jingoism, manifest in the portraits and photos of freedom fighters adorning the walls. In the next few minutes you come to learn from the man himself – Riju Jhunjhunwala, Joint Managing Director, Rajasthan Spinning and Weaving Mills Limited (RSWM), Bhilwara Group – that you are in a temple where everyone worships everything Indian. More importantly, everyone bears an indomitable passion of bulldozing India on to the forefront of the global textile map.

Incidentally, the textile business of the LNJ Bhilwara Group comprises six companies that contribute the maximum to the top line of the entire group. Of these, the listed flagship textile arm of the Bhilwara Group – RSWM (annual revenues worth Rs.10.75 billion) - has the Mayur brand in its portfolio (with over 7% market share in the suitings segment), which has done extremely well in the value-for-money segment over the last one year. From roping in Bollywood biggie Salman Khan as its brand ambassador on Valentine’s Day earlier this year to launching its ready-to-wear collection, Mayur has certainly been creating waves. Says Jhunjhunwala, “We’ve revamped our brand positioning to become a leader in the ready-to-wear formal dressing. In the front-end, we have roped in Salman and in the back-end, we’ve re-structured our management.”

While RSWM is flying high on the Mayur brand, the other textile arms of the Bhilwara group cannot be ignored either, primarily Maral Overseas Ltd., a major producer and exporter of Polyester/ Viscose Blended yarn in India; BSL Suitings, which peddles premium worsted tags; and BMD Ltd., an automotive furnishing unit that boasts clients like Honda, Maruti, GM, Ford, et al, in its kitty.

However, it’s RSWM that has clearly taken a lead for the LNJ Bhilwara Group, with a renewed and enhanced focus on the bottom of the pyramid segment over the last year. RSWM is betting high on the ready-to-stitch segment, which they forayed into in February this year. The bid is to tap the high-potential consumer base in semi-urban and rural India (largely cornered by the unorganised players). In April, the company set up a low cost denim manufacturing unit in Rajasthan to cater to the price-conscious consumer segment. Following suit, Reliance Mart, Mukesh Ambani’s hyper retail format also announced a similar venture in October. But, while Reliance has the winning proposition of having its own retail outlets to market these wares, Mayur, for now, has no such pan-Indian retail presence.




On the other hand, the presence of the brand in the global market has given it a shot in the arm in recent times. As much as 50% equity purchase in the Spanish company SISA S.A. will not only allow RSWM to leverage SISA’s brand image in the global higher value-added yarn market, but will also help it leverage the expertise of SISA in fashion trends and dyeing. “SISA brings with it a speciality and value-added yarn business in global market... It adds an established and well reputed marketing network to our operations, which’ll enable us to obtain better realisations for our high-end yarns,” says Jhunjhunwala.

With RSWM leading the way, Bhilwara’s textile business may not be setting the ramps at the Meccas of fashion on fire; but the group’s careful strategy of reaching out to the price-conscious Indian masses is likely to pay off sooner than later. Especially with the rising disposable incomes in tier II and tier III cities and towns, Jhunjhunwala may do well to actually start planning for those exclusive brand outlets now, a la Reliance Mart!


Edit bureau: Bikram K Jena, with inputs from Angshuman Paul

Source : IIPM Editorial, 2008

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

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Paving way for a ‘pure’ future

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The company has come a long way, achieving turnover of Rs.30 crore in the first three months of this fiscal year. Kent RO expects to touch the Rs.100 crore mark by the year end & Rs.200 crore by the next year. However, Kent RO still faces tough competition in the market, as its RO technologies expensive compared to the Ultra Violet technology that Aquaguard and other water purifiers use. Adds Gupta, “On one side we have competition from a generic name – Aquaguard, while on the other side we have packaged mineral water.” So what entices a customer to go and buy a more expensive product that is even a late entrant in the market? The answer is simple, Kent-RO provides two advantages – firstly, a better quality product that can purify even dissolved impurities in water that no other purifier can and secondly the consumer gets the convenience of on the spot availability. Explains Gupta, “The reason why people prefer this is that the packaged water will still have chances of contamination during the process of transportation or pilferage as you call it. On the other hand, you can be sure of the quality that is made with your water at your home.”


Feeling the threat of its superior technology also convinced Aquaguard to come out with a water purifier with RO technology. But clearly in this segment Kent RO has leap-frogged ahead of competition. Leaving no stone unturned, the company has been marketing the brand and technology in a big way. Roping in the three Deol girls gave the brand instant eyeballs. Asserts Gupta, “I had to do two things; one to educate my customer and other to build trust. Now our brand is associated and known through Hema Malini.” Besides direct marketing channels & dealers’ network, Kent- RO products are also visible in branded retail stores such as Big Bazaar, Reliance et al. Moreover, it has tied-up with Indian Oil for better visibility. And with people getting educated and wanting the ‘BEST’, Kent RO will soon reap the rewards of its investments.

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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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