Adam Smith, father of modern economics said...

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Adam Smith, father of modern economics said, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices (The Wealth of Nations, 1776).

So on October 13, 2008, when Kingfisher’s head honcho Vijay Mallya turned toward Jet Airways’ headquarters in Mumbai’s Andheri suburb to keep his appointment with Chairman Naresh Goyal, the air was agog with speculation. What was cooking between the foes turned friends? The drama reached a crescendo when later in the evening, Goyal returned the favour. Along with his senior team, he drove down to the Kingfisher headquarters at Vile Parle, a western suburb in Mumbai and sat closeted for close to six hours with Mallya and his team. When the duo finally emerged, they made public their plan, a deal to control competition in Indian skies and possibly even air fares, and that too in full view of the government, Monopolies and Restrictive Trade Practices Commission (MRTPC) and the public!

There are many who are thinking it, few who are mumbling it and just about one or two who are calling the Jet-Kingfisher alliance a cartel. Yes! We did say cartel. Mallya and Goyal prefer to call it an alliance, but call a cartel by another name and it still remains just that – a cartel! Oxford Dictionary defines a cartel as: “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition,” a phenomenon that runs against the very grain of free markets. Dangerously similar, this ‘alliance’ offers the two airlines a combined share of more than 60% of the domestic aviation market, leading to a near-monopoly situation. The plans, among other things, include code-sharing, cross selling of flight inventory and overall route rationalisation between the two airlines. And route rationalisation effectively means jointly cutting down supply, and a class X economics student will tell you that with supply down, prices are bound to automatically rise. If this is not cartelisation, wonder what is! To be fair to both of them, Indian aviation is undergoing its worst crisis ever. Rising fuel prices, increasing overhead costs, falling air passenger traffic and their combined losses totalling Rs.20 crore per day, literally forced the two competitors into each others arms. Goyal even says that the alliance was “needed by both of us to avoid bankruptcy.”

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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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What are your plans for the movie business?

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We are very keen on movie content production. In fact, we have already started our production company in Hollywood. We have signed a Hollywood producer to work with us and we are looking at producing around 5-10 movies in Hollywood in the next couple of years. One film is already on the floor with a $100 million budget and it is on the life of Lord Buddha.

What’s your strategy for the TV business?
Right now we are working with some of the existing channels. We have some tie-ups and there are many more in the horizon with whom we are in talks with. There is a general entertainment channel, which has not being doing well of late, I would not name it. But it is struggling and requires a revamping. We are looking to acquire it very soon. And we are not interested in the channel just for the stake, rather we are looking for an active participation to revamp the channel and bring the Spice brand.

You have also picked up 32% stake in Multi Screen Media. How are you looking at spicing it up?
The negotiations with the management are going on. We are trying to focus on the age group of 13-35. These young women and men are the future and they are looking for programmes, which move forward. I believe that we will bring this angle of youth, specially to their flagship channel SET.

What kind of leadership model do you follow?
I strongly believe in promoting young talent. You can train them, delegate and get best results out of them.

What is the best advice that you have received so far?
Re-invent yourself everyday, always look for new opportunities. Everyday you can do something new and something better. A lot of companies have got a strong foothold in their business through this and Google is one of them. So, keep reinventing yourself.

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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.
IIPM Programme :- SUPERIOR COURSE CONTENTS
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Subhiksha plans to increase its number of stores

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Even the consumer has turned his eyes towards hypermarkets and supermarkets (see pie-chart). But will organised Indian retailers stand to gain from this consumer interest, simply by expanding their hypermart footprint? Not really. Even though disposable incomes of the Indian consumer class has increased, it is still less, compared to international standards. McKinsey in its report titled “The Great Indian Bazaar - Organised Retail Comes of Age in India” says that a typical Indian spends between $7-10 in one hypermarket shopping trip as compared to $45 in the US and $10-18 in China.

However, another school of thought believes that the growing middle class will further demand and improve expenditure patterns of Indian consumers. “By 2016 more than half of the Indian households will be from middle class and this will create more demand for organised retail in India as compared to other countries, says Roopa Purushothaman, Chief Economist, Future Capital Holdings.

Another big difference area is in that Indian retail is dominated by real estate players. Land rentals have doubled in the last two years and have created a situation where acquiring real estate at affordable rentals has become a difficult task, especially in metros and Tier-1 cities. One reason why rentals have sky-rocketed is the ambitious expansion plans of individual retailers (Subhiksha plans to increase its number of stores to 2,200 by the end of 2008 from current 1,580; Spencers targets opening 300 convenience stores and 75 large format stores by March 2009...) and their herd-mentality to open stores in the same locality to compete with each other. Moreover, despite all talks to the contrary, almost all players are concentrating their retail engines on metros and Tier-1 cities, further escalating rentals. Naqvi of Technopak states, “The ratio of rental cost per manpower cost is high in India in comparison to the ratio in international markets, which is proving to be a hurdle in the expansion plans of most of the players.” Perhaps this is the reason why retailers are now targeting Tier-2 and Tier-3 cities.

Even on the plank of credit purchases, India lags behind developed nations. For generations, Indians have been purchasing goods on credit from their local kirana stores, primarily because of the trust and loyalty of both the kirana store owner and the customer. However, such credit purchases have not really kick started in the organised format because of lack of trust and confidence between the retailer and consumer. Yes, a few retailers have tied up with credit card companies to encourage credit purchasing, but Indians are quite unlikely to use ‘plastic’ to buy their routine daal and atta! In stark contrast, global markets thrive on credit purchases.

Shakespeare once said “Comparisons are odious.” Unfortunately for her, India has always faced the veracity of critics when it comes to comparisons. Be it the Delhi Metro being compared to London’s Tube; Western Express Highway pitted against America’s freeways or Indian superhero ‘Kkrish’ pitted against Superman. Despite bottlenecks, the retail graph is only moving upward. If Americans started from A and moved to Z, Indian retail has started from Z and is now moving to A. Some say that as long as all alphabets are there, who cares whether A came first or Z? But if retailers take too much time in this backward integration journey, the prophesied time-table for success may not be really met!

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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.
IIPM Programme :- SUPERIOR COURSE CONTENTS
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When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
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CELEB USE OR GROSS ABUSE?!

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Idea Cellular is not an exception. In these times of a slowdown, marketers would do well to keep their marketing pennies close to their chest and not simply waste on having a celeb in their ad. Instances of celebrity abusement abound. The Dulux ad featuring Kareena & Karan Johar, Versa campaign sporting Amitabh & Abhishek Bachchan, the Tata Indicom commercial boasting Kajol & Ajay Devgan, Hrithik Roshan’s campaign for Macro Man and Acer, Hema Malini in an ad for a water purifier, the list is endless!

Even globally, the situation is not too different. Celebrities like Shaquille O’ Neal for Reebok and Britney Spears for Toyota’s brand, Soluna Vios had to go through similar abusement woes.

Given that such abusements are an embarrassment for both celebrities and brands, who is to be blamed for the quagmire? Well, in typical fashion, advertisers dump the blame on talent management companies, who in turn, swing the blame right back into the brand manager’s court. Playing tennis apart, fact is that unlike what every person in the endorsement supply chain claims, there is in fact, no science to the endorsement game. As Manish Porwal, CEO, Percept Talent Management justifies, “Just riding on the star appeal makes no sense. Moreover, offshore recommendations by talent management companies also leads to this abusement.”

This is not to say that celebrities should be cast out of the endorsement game altogether. If used correctly, they can boost the brand a million times. Beauty major Emami, which has pioneered the art of roping in celebrities since 1976 (Chayvanprash, Navratan Oil, Boroplus) in fact is quite gung-ho on its benefits. “We want to rope in more celebs, but rising costs are a constraint. Whenever this affordability is overcome, our strategy will centre around endorsements,” gushes Aditya Agarwal, Director, Emami Group.

As ad veteran Luke Sullivan says: “If you were to put five million bucks in a commercial, I wouldn’t worry much and put my five year old and tell him to shoot a commercial. But if you don’t have this (the money) then think of something else (innovate?).” A quick takeaway Mr. Marketer: It’s easy to spend big money and get James Bond star Pierce Brosnan to endorse your new, gadget-heavy, yet sleek bike. But it’s smarter to simply let your creative team take a 3 day-4 night holiday at some exotic locale, rack their brain cells and come up with a power-packed ‘big idea’, which will sell, with or without the celebrity!

For more articles, Click on IIPM Article.

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.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
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!
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Something’s cooking at Reebok. From being a sportswear brand, it is now expanding the net with its ‘Fish Fry’ range and ‘Reebok Classic’ stores.

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Something’s cooking at Reebok. From being a sportswear brand, it is now expanding the net with its ‘Fish Fry’ range and ‘Reebok Classic’ stores. 4Ps B&M’s angsuman paul caught up with man at the helm of Reebok India

Just one day before global sportswear major Reebok was about to unveil its till-then hush hush new global branding initiative – ‘Your Move’ – 4Ps B&M broke the story and indicated how the revamped tagline (Reebok’s earlier tagline was ‘I am what I am’) would fit in with Reebok’s new focus on capturing market share even in the non-sports category in India. But that was the beginning of 2008 and now it’s nearing the end of the year. Over the last six months, Reebok has taken at least six such branding initiatives to grab every possible corner of India’s Rs.11 billion sports footwear & apparel market. And why not, when India is the only market where this British brand enjoys leadership, leaving brands like Nike, Adidas and Puma behind.

To complete its transition from a sportswear brand to an overall lifestyle brand, Reebok has rolled out ‘Reebok Classic’ stores - which on entering give none of the regular sporty look & feel (a la Reebok); instead the stores wear a more elite, fashionable look – a taste of things to come! Reebok aims to open 70 more such stores by the end of 2008. The vision is that by 2009, the company would mint over 10% of its total turnover from these stores.

In contrast, globally Reebok had moved beyond being a mere sportswear brand way back in 1986, when it acquired the Rs.500 million haute couture brand Rockport. But as part of a global strategic decision, the two hardly ever highlighted their association. It was only in 2006, after its $3.8 billion takeover by Adidas, that Reebok started deeply penetrating and promoting itself as a bon ton lifestyle brand globally.

For more articles, Click on IIPM Article.

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.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
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...

iPhooon; too cool, too soon!

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iPhone entered the Indian market with its 3G iPhone... But what use is 3G in India? Is the party over already? Or is there more in store...?

The revolutionary iPhone finally landed on the Indian runway... However, what it received here, was just (literally) an empty bus of disheartened and disgusted enthusiasts... Yes, the technological ‘Swiss knife’ was launched across 6 cities in India, but the August 22, 2008 party was spoilt by its ‘hefty price’; and the ‘best buy’ terms, just seemed too ‘hollow’!

Anybody interested in the iPhone would be aware that globally, the 8GB & 16GB versions are available for just $199 & $299 respectively. The typical ‘I wanna buy the iPhone’ Indian therefore anticipated a price range of Rs.10,000 to Rs.15,000! But lo and behold! Apple decided to tweak pricing rules for India and launched the product for a hefty Rs.31,000 & Rs.36,100 for the 8GB & 16 GB models respectively (to be distributed through Airtel and Vodafone)! In a price-sensitive market, this pricing strategy was illogical, right?

For a change, look at it in the light of Apple adopting a skimming strategy, where it enters the market with a high price-tag and then lowers it in intervals, garnering higher revenues with each price fall. Also, the iPhone’s image is nothing but ‘coveted’ in the domestic circuits, hence a high-price point during entry would ensure that it maintains the ‘niche’ image. However, much as its high price is justified, the Rs.30,000+ range still means stretching it a bit too far.

So how will this Indian party be different? Globally, the gadget tasted great success as a staggering 1 million units of the 3G version were sold just 3 days post-launch in 21 countries. However, the figures stood at just a poor few thousands in India during the same time-period. “Buying at Rs.31,000 doesn’t seem to be an intelligent idea, especially when even the 3G technology is unavailable in the country. I will wait for the price to come down,’ asserts Rajan Malik, who was one of those disappointed. Sources confirm that the highest number of handsets sold by Airtel was in Delhi, whereas Mumbai proved luckier for Vodafone on the first day of its launch. Airtel sold around 200 handsets in Delhi and Vodafone around 250 in Mumbai on the first day itself. But these numbers aren’t by any means symbolic of a box-office hit! However, Apple has shown that it is willing to allow a lowering of price to boost demand, a glimpse of which was first seen with Vodafone slashing the price by Rs.1,500 already. A telecom analyst also opined on conditions of anonymity that, “Huge price-cuts can be expected in the coming 3 months as I don’t see iPhone capturing a really huge market share in India at the current pricing levels.”

Moreover, with the iPhone 2G already available in the Indian grey market for around Rs.20,000, the 3G enabled new iPhone’s 3G feature is rendered worthless in India. Vodafone and Airtel are also trying to save the day for Apple as they’re offering a free downloading pack along with the iPhone for the initial time-period. But don’t be surprised if the download happens at a dead pace as the user will be on a 2G network! Further on, absence of user-friendly blue-tooth, absence of zoom & flash feature et al, makes iPhone far less than the gadget that India most desires at a Rs.30,000+ range. And talking about the party, Steve Jobs (Apple’s CEO) was nowhere to be seen in India! Maybe he’s just avoiding those angry stares (he knew about it, didn’t he?). And as for Sanjay Gupta, CMO, Bharti Airtel Ltd. (who owns a Blackberry), he’s willing to wait for his first iPhone. “I will switch over to iPhone once all my customers are serviced...” Hopefully, Sanjay will get his iPhone soon.

For more articles, Click on IIPM Article.

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.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
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...

Is the ‘teleputer’ finally here?

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And how does one handle the unbelievable number of spam messages that have become a trademark feature of almost any email account? Filters! The option of applying filters – which would enable the subscribers of this service to select the senders or domains from which they want (or don’t want) the emails – is also present. And with just a swish of your cell phone, in other words an SMS, you can even deactivate or later activate the service without any issue or delay.

So that was the fancy part! And now to the brickbats. Although this service really catches the fancy of people in the first go, there is a lot of scepticism that arises out of the fact that an SMS is normally restricted to only 160 characters and the mails that people get would be usually longer than that. To that effect, Netcore Solutions had made the provision that a user can send/receive up to 480 characters in the first message itself; and multiples thereon.

In other words, if your email is really long and, say, runs into 4,800 characters, it would be broken up into 10 parts, and the subscriber would be able to see the email one part at a time, of course with a facility to directly jump to the second part the moment the first part ends (and so on so forth). Though promising, critics do state that this is only a poor alternative to seeing the email in one go, a feature that is available in any standard net email service. And the situation gets worse when one has to ‘view’ heavy attachments. How does one do that if one only gets to ‘read’ emails? But then, as supporters say, this was never meant to be the perfect alternative to the Blackberry, but only a practical low-cost solution for the non net users. Rajesh Jain, MD of Netcore Solutions, adds, “This service can also be a further driver to GPRS because, if one wishes to read the complete email in one go, one can also log onto the GPRS mode [if available on the phone]; and in case the email has attachments, then the GPRS can even be used to view those attachments!”

For more articles, Click on IIPM Article.

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.
IIPM Programme :- SUPERIOR COURSE CONTENTS
Now IIPM's World-Class Education... for everybody!!
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
IIPM Ranked No. 1 B-School In Global Exposre - Zee...
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Smart girls get ahead in life!

It’s all about women being on top! Research compiled by the Department of Sociology at Queens College (New York) indicate that fulltime female workers in their 20s earn more than same-age males in the cities of Chicago, Boston, Minneapolis, Dallas and New York. While in New York City, these women professionals earn 17% more than men, in Dallas (Texas) they earn 20% more. But strangely, women are no longer on top by the time they cross 30. And it’s only been over the last seven years that women have started to surpass men’s salaries in urban centers. One reason for women getting ahead of men at these centers, the study summarises, could be that they get married much later in lifein cities than in smaller towns. According to the National Committee on Pay Equity, women (in the US) who are doing best are from the states of Maryland, District of Columbia and Massachusetts, while they fall behind in money matters in Arkansas, Louisiana, and West Virginia.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Osama’s son’s reign of love

While Osama bin Laden continues his reign of terror, his son is spreading love. Or so it seems. According to British tabloid, The Sun, Osama’s fourth eldest son, the 27-year-old Omar has married 51-year-old Jane Felix-Browne, a five-time British divorcee and parish councillor from Cheshire, who’s also a grandmother! Omar’s Saudi wife, the 20-something Rasha bin Laden, is furious, and has vowed not to return to Omar unless he leaves Jane. “Rasha feels left out. Jane’s always in the limelight – the papers in Saudi Arabia are full of stories about her marriage to Omar. Rasha’s made it clear she won’t return unless things change,” the paper quoted a source as saying. The Omar-Jane romance is the stuff of movies. He first saw her in Egypt last September riding a horse near the Great Pyramid – and fell for her hook, line and sinker! Apparently the two married in Cairo (at a friend’s place) in an Islamic ceremony. Currently, The Sun says, Jane is trying to organise a visa so that she can visit her latest husband in Saudi Arabia. “I was told by my family that they do not approve of the marriage and there will be consequences. But I love my second wife and am not going to divorce her. I am going to struggle along with her and this will all settle down,” Omar had said earlier, The Sun added.

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Asia’s lop-sided growth story

A recent Asian Development Bank (ADB) study, Key Indicators 2007, points to the obvious – but extremely alarming – trend: the fact that in developing countries (in Asia) the rich are growing richer faster than the poor, and that disparities between the ‘haves’ and the ‘have-nots’ continue to widen. “Inequalities in life start early, and they begin with extreme circumstances that deny millions the opportunity to have adequate nutrition, health and basic education… The key challenge to public policy here lies on not just increasing the quantum of public expenditures, but also ensuring that these are well targeted, effective and funded through mechanisms that do not detract from economic growth,” the report said. And although poverty rates have been on the downswing over the past decade or so (ever since the region started witnessing a boom), the poor have been left way behind in the race as relative and absolute inequalities have increased. So what are relative inequalities and absolute inequalities? Well, relative inequalities are the proportionate differences in incomes , while absolute inequalities are the actual dollar differences in incomes.

“…the expenditures of the rich or top 20% have increased much more than those of the poor or the bottom 20%… This has happened even in countries such as Indonesia and Malaysia where relative inequality declined,” the report observed. Among other things, the report also said that there is lop-sided growth in the urban and rural areas.

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative