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Showing posts from June, 2008

The poor man's bribe to life

The India Corruption Study 2007, brought out by NGOsTransparency International India (TII) and Centre for Media Studies (CMS), found that about one-third of Below Poverty Line (BPL) households in the country bribed officials to avail a total of 11 services -- from police to PDS.
According to the survey, which covered 22,728 households in all states and Union Territories, Rs 8,830 million, in all, was estimated to be paid as bribe by BPL households last year.

The report grouped states into four levels on extent of corruption -- alarming, very high, high and moderate. While five states come into the "alarming" category, the corruption level is "moderate" in states like HimachalPradesh, AndhraPradesh, Maharashtra, Punjab, Uttarakhand, Haryana and West Bengal, the survey found. Karnataka, Rajasthan and Tamil Nadu fall into the "very high" group, according to the report that took into account corruption experienced by poor families while availing basic services …

School expenses & family planning in India

A survey conducted in India reveals that even well to do young parents have decided not to have more than one child as they think that they are better positioned to afford education expenses of only a single child in school, as these expenses have grown disproportionately as against their annual income in the last 7-8 years.

These findings are arrived at a random survey done under aegis of the Social Development Foundation of ASSOCHAM titled, “Rising School Expenses vis-a –vis Dilemma Of Young Parents”. The report also highlights that school expenses excluding tuition fees have risen from Rs. 25,000 in 2000 to Rs.65,000 per annum in 2008 and that too on a single child. While the annual income on an average of well off parents have risen not by more than 28% to 30% during the period. Nearly one in ten respondents indicated that the cost associated with schooling has actually affected even their choice of school. 65% of parents spend more than half their take-home pay on their children&#…

Safety in the aisles

'Flying? Pick an aisle seat!'Here's why.
Pic: http://www.flyingwithoutfear.com

'Liberal Prohibition'

'The liberals who want to ban gun ownership are the same liberals who’d like to drive family-sized automobiles off the nation’s streets and highways, prohibit the use of fossil fuels because they allegedly harm the environment and contribute to non-existent global warming -- a fantasy they are inflicting on the American people -- and demonizing carbon dioxide, a natural gas without which life on earth cannot survive.'

- Michael Reagen, 'Liberty Wins a Big One'.

'Once its mine, it stays mine!'

'From basketball tickets to waterfowl-hunting rights to classic albums, once someone owns something, he places a higher value on it than he did when he acquired it—an observation first called “the endowment effect” about 28 years ago by Richard Thaler, who these days works at the University of Chicago.

The endowment effect was controversial for years. The idea that a squishy, irrational bit of human behaviour could affect the cold, clean and rational world of markets was a challenge to neoclassical economists. Their assumption had always been that individuals act to maximise their welfare (the defining characteristic of economic man, or Homo economicus). The value someone puts on something should not, therefore, depend on whether he actually owns it. But the endowment effect has been seen in hundreds of experiments, the most famous of which found that students were surprisingly reluctant to trade a coffee mug they had been given for a bar of chocolate, even though they did not pref…

Saluting Sam Bahadur

Customer loyalty through associations

Prof. Venkatachalam explained my 'delighted reaction' towards the salon coiffeur using the theory of 'conditioning'. He says that I have been conditioned to express my love for my little one. The coiffeur in turn elicited my loyalty by associating with my little boy, towards whom I've already been conditioned (to express my love). Such an act on the part of the coiffeur can be referred to as 'secondary reinforcement'.

Marketers too can employ secondary reinforcements by associating with entities towards whom the customer has already been conditioned in a certain way. The trick here is to notice the primary association between the customer and that entity. Once that bond is 'uncovered', the marketer can move to building a relationship with that entity.

Idiot Box influence waning?

'Today, all a presidential candidate really needs to do is film a few commercials, screen them for the reporters and networks who will disseminate them, and then file them away on a shelf. TV ads in general elections don't sway the masses anymore. All they do is waste a lot of money. And Obama, who has already started advertising on TV, will certainly be able to waste the largest amount in recent history. As they say, easy come, easy go.'

- Steven Stark, 'Why TV Ads Are a Waste of Money'.

Black n' Yellow taxis, R.I.P.

The prosperity that liberalisation brought in its wake dramatically altered the Indian business, and even its social landscape. A lot what we see as 'altered' around us is primarily due to change in products and services that we now demand and use. The 'old stuff' is no longer acceptable. What was once considered perfectly normal and meekly adhered to, like say queuing up to buy milk from a booth, or accept a token and wait for you to be called, to encash a cheque, is today taboo. In fact looking back, those times almost seem barbaric. Barbaricsimply because the Indian consumer was denied the use of products and services; even those that would just let him live his life with dignity. Ask me how it feels being pushed around as a child, standing in endless queues trying buy goods for daily use.
The black n yellow taxis form a part of that world and today they are on their way out. Is this part of passing of an era? Sure is. Am I shedding tears? Isn't the answer obviou…

Discounts ahoy!

Rising interest rates and sharp dips in consumer demand is not the best of news for car manufacturers in India. More so for the volume players in the Indian market.

ET reports that volume players like Tata Motors, Hyundai, Maruti and others are finding the going tough and most of the growth is coming from the huge discounts and subventions offered by manufacturers, dealers and financiers. Dealers are also stuck with rising inventory and are under pressure to push sales with high discounts. Industry growth is expected to fall to 8-9% in 2008 from 13-14% last year

Compare to secure consumer conviction, but beware!

GM's latest advertising strategy is take its rivals head on by 'daring' customers to try a side-by-side test drive of the Pontaic G8 to the BMW 5 series.

The move has its up and downsides. The tactic of comparative advertising is what may clinch consumer conviction as he traverses down the various 'readiness' stages. The conviction garnered through such comparisons may then lead to a purchase. But there's a downside too. As Dr. Madhukar Angur explains, what may seem as a bold move also has the potential to backfire. The move may end up selling more of your competitor's brand of cars, should customers find it a better brand, post comparison (read, test drive). Then what may have seemed initially as a bold strategy would now turn into a disaster for your brand. That too, of your own making.

Brands therefore must be doubly sure they score over competing brands before embarking on a 'comparison campaign'. Else, a non-comparative communique would have been…

Shut up n' Listen!

'To every thing there is a season, and a time to every purpose under the heaven,
A time to be born, and a time to die...
A time to rend, and a time to sew;
A time to keep silence, and a time to speak...'

- Ecclesiastes 3

Jharna tells me that at times I must listen, inside and outside the classroom. And stop the urge to speak. I agree. Many a times its just about listening. Doesn't matter whether I think what's being said is important or not, its just about lending a ear. Also helps stem the tide of flawed judgements. Remember, this is quite a 'moment of truth'.

Customers too should never have their conversations interrupted even if you think they 'waste' your time with their ramblings (Of course, there are exceptions!). Its about lending a ear. Its about the lent ear making a sale. The more customers talk, the more you know them. The more the opportunity for you to pitch the brand as the perfect solution.

My lesson? Its the same in classrooms too, packed to…

Where do Indians invest?

OF THE 1.1 BILLION INDIANS;
FEW ARE ATTEMPTING RETIREMENT PLANNING 4.5 mn participate in equity markets 33%of earners own life insurance policies 20 mn will buy life insurance in 2008 11 mn plan to buy residential property soon 5.7 mn is the retail mutual fund base 18 mn individuals have some form of investments
WITH SOME OPTING FOR NON-MAINSTREAM INVESTMENT OPTIONS
6% of 321 mn working-age Indians buy gold purely as an investment option 82% of all consumer loans are from money lenders and friends $6.4 bn of retail savings in gold in 2006-07
BUT A SIZEABLE CHUNK IS WAITING TO BE TAPPED
Rs 57,000 cr is the latent demand for voluntary retirement savings 79 mn are willing to join NPS on a voluntary minimum SIP basis 144 mn have incomes, but no bank accounts $35 bn is the annual savings potential of low-income investors Rs 2,268 cr is the informal savings kitty Rs 2.3 bn is held as savings in self help groups 18% of those aware of mutual funds are already investing in them 25% is the increase…

Hey, can you stay put, not travel?

Expedia, the world's leading online travel company, today released the findings of a global survey seeking to crown the world's best tourists and measure travelers based on their best and worst travel traits and habits. The Japanese won top prize and are considered by hoteliers across the globe as overall the best tourists. German and British tourists tied for second place, followed by the Canadians and Swiss. American tourists came in at number 11 overall. The French, Indians and Chinese were considered the worst tourists among the 31 nationalities.

The World's Best Tourists: 1. Japanese 2. British/Germans 3. Canadians 4. Swiss 5. Dutch 6. Australians/Swedes 7. Belgians 8. Norwegians 9. Austrians/Danes/ Finnish 10. New Zealanders

Agent commissions get the boot

Cutting costs has become an imperative for all businesses in an era of inflation. Trying to tide over increased operating costs by raising prices has become a no-no. Ask the domestic airline players and they will tell you that they till last year had a passenger capacity utilisation of 73 per cent, which fell to the current levels of 63 per cent after the hike in fuel prices. It is now likely that most airlines are likely to reduce capacity on their loss-making routes to step up yields. The latest move to cut costs have been directed at doing away with agent commissions. After national carrier Air India, other full-service carriers—Jet Airways and Kingfisher Airlines—are moving towards a zero-commission structure for travel agents. These carriers are expecting to save around Rs 1,000 crore as commission payments to travel agents on air ticket sales. Air India and Jet Airways are expected to net Rs 450 crore each and Kingfisher will save up to Rs 100 crore.

What's with the seal anyway?

Obama's turned into the master strategist. Or should I say he always was? He carefully crafted his strategy in winning the nomination despite not getting either the popular vote or the 'big' states. Now that he is in the nomination saddle he's turned on the strategy machine, big time. Note how smart he has been since then. To placate the Jewish community he went on to declare his rooting for Jerusalem as the undivided capital of the state of Israel. Add to this the controversy of headscarved kids being asked to move out of a photo session with him and you know he wants to get his 'christian' credentials right.

Well, now comes the Obama seal. One that's aimed at telling the air heads that he's about 'change' and that together 'THEY CAN'! Obama needs the seals and the rhetoric. That's what gets his image spot on with the young masses, drunk on a heady brew of thoughtless rhetoric. Tell you what, that's all they care about. The image…

Never mind, scream 'NO price hike'!

When Santro Xing and i10 proclaim 'NO Petrol hike for 6 months'; 'Hyundai takes the burden off your pocket by paying the increase in the petrol price on your behalf' as the Copy and sub head of their latest Ad., they GRAB most eyeballs.

Simply because all people can read and hear around them is about price hikes. Here's someone who's NOT raising prices. Hyundai's reason is that they care. Its apparent that its otherwise. Most consumers have put brakes on most non-essential purchases for the moment. Here's Hyundai giving them a reason not to, at least when it comes to the Santro and the i10. Never mind that other car manufacturers haven't increased prices too. Hyundai's ad campaign is smart within the present circumstances. They are the only ones 'tom-toming' what everyone else is doing.

The hypocrisy in the novelist's utopia

Listening to AmitavGhosh on NDTV last night, I was struck by what is common to most novelists, maybe even around the world. Their distaste for American foreign policy. The 'imperialist' picture that they paint makes me wonder if their likes can ever come to terms with what is today a stark reality. A reality that is, again, in stark contrast to the Utopianmumbo jumbo that they conjure up in their heads. Note that I admire Amitav's works. But most of the artists I've heard seem to take fiendish pleasure in bad mouthing Dubya. Amitav may not be as rabid as someone like Arundhati, but he too joins up the anti-Dubya chorus.

Am I surprised? No.

Consider the recently conducted Pew survey. We are now told that most of the world hates American policy and therefore the marred image. Now is that really true? Note what FouadAjamisays in his article titled, 'Anti-Americanism Is Mostly Hype', 'I grew up in the Arab world in the late 1950s and early 1960s, and anti-America…

Collusion over Indian skies?

HT Mint reports that starting next week, low-fare carriers SpiceJet, IndiGo and GoAir, that fly one in four air passengers in India, have fixed one-way airfares at around Rs5,400 between New Delhi and Mumbai, for the first time seemingly agreeing to common ticket prices on the busiest route in the country after three years of cut-throat price competition with each other.

But, India’s anti-trust regulator, responding to queries about the increase, immediately said the common fares—nearly double what was being charged recently—could be a serious violation of the country’s competition rules.

The idiot's guide to 'Gender Bias'

'Ah yes, now it's perfectly clear. We're supposed to deduce from this implied gender bias that men would stay home more often with their newborns if only society got it that men have babies, too.

Except they don't. Women do. It should go without saying that a mother, having just given birth -- which is somewhat more taxing than counting contractions with a stopwatch -- might be more likely to stay home with the little critter for a few weeks, though preferably much longer.

The same scientist blames social pressures for the perception among many men and women that the sexes simply have different housekeeping and parenting standards, as couples often concede after living together for about 10 minutes.

To what end these labored studies?'


- Kathleen Parker;'Domestic Dust-Ups'.

Mugabe the obscene

'Yes, a dictator who uses starvation to scatter and kill his own people making an appearance at an international conference devoted to raising food and feeding the hungry is an obscenity -- though I add, without cynicism, that the situation isn't all that unusual. Petty tyrants, terrorist enablers and tribal killers cluster about the wine and cheese smorgasbords of international community fetes and summits.

At these forums, they blame the United States for, well, virtually anything and everything. Anti-Americanism -- or in Mugabe's case, a worn-out '60s-style "anti-imperialist" pitch aimed at Great Britain -- provide media camouflage for their hideous genocides and cruel depredations.'

- Austin Bay; 'Mugabe the Obscene'.

Zappos Magic

'The privately held Las Vegas company (whose name comes from the Spanish word for shoe) gets raves from shoe lovers for its fast, free shipping--90% of orders arrive the next business day--and a 365-day return policy that allows footwear fans to order a bunch of shoes, try them on and return those that don't suit or fit. Three-quarters of sales are from repeat customers.

Zappos keeps its inventory handy in two warehouses, totaling 1 million square feet, in Shepherdsville, Kentucky, just a 15-minute drive from UPS' world shipping hub. Trucks ferry all types of kicks, from Crocs to Christian Lacroix stilettos, to and from the UPS hub all day and night. Shipping, which cost $100 million last year, eats into margins--the nine-year-old company didn't turn a profit until 2007--but Hsieh insists it's worth every penny. "It creates a 'wow' experience and generates positive word of mouth," he says.'
Read how Zappos does it all, here.

Coldplay whine

'The strange thing is, I can't seem to find anyone who bought X & Y, or who intends to buy Viva La Vida. For that matter, I have never encountered one person who has a kind word to say about Coldplay. None of my personal or professional acquaintances, nobody in the street or the local café, not a single soul will admit to liking Coldplay or purchasing their music. Indeed, most seem to agree that they epitomise everything that's wrong with modern rock music. So who's buying all their albums? Who are those masses politely arrayed in their thousands at stadiums when Coldplay play? Is it some secret society, an Opus Dei of dreary anthemic music? And where do they congregate, other than at stadiums and arenas? Do they have parties? And if so, how many slash their wrists at these parties? What's the attrition rate?'

- Andy Gill: 'Why I hate Coldplay'

Indians don't plan for retirement

A Metlife survey, titled, 'Study of International Employee Benefits Trends and the sixth annual US Study of Employee Benefits Trends' reveals that despite worrying about a comfortable old age life, almost 80 per cent of the working Indians do not opt for any kind of retirement saving plans other than what is mandated by law.

The surveys further point out that while 80 per cent employees in India and 81 per cent in Mexico have no retirement plans other than the mandatory ones, the number was low in developed countries like Australia (58 per cent), the US (46 per cent) and the UK (31 per cent).

RBI recovery rules every loan taker must know

Why do FIs charge a higher rate on a Nano loan?

I sometimes can't get it. We now have a report that says that financiers of TataNano plan to squeeze out more from buyers of the TataNano because the customer risk profile of loan applicants is likely to straddle between those who finance two-wheelers (typically higher risk) and those who buy new cars.
In simple terms it means they expect a substantial number of TataNano loan takers to default. So how do they plan to address this? Raise the interest rates on a Nano loan. As a result, it is likely that TataNano loan applicants may have to pay annual interest rates of between 17% and 18%, at least 250 basis points more. Typically, for new cars, banks currently charge around 14.5%.Indian financial institutions have in the past flirted with unscrupulous practices that include using thugs as recovery agents. In raising the rates of interest of the Nano loan, they have found an easy way to curb the number of 'faulty' loan takers. The more difficult method to do the same would hav…

Learn Economics!

'Mr. McCain's angry statement shows a lack of understanding of the insights of Joseph Schumpeter, the 20th century economist who explained that capitalism is inherently unstable because a "perennial gale of creative destruction" is brought on by entrepreneurs who create new goods, markets and processes. The entrepreneur is "the pivot on which everything turns," Schumpeter argued, and "proceeds by competitively destroying old businesses."

Most dramatic change comes from new businesses, not old ones. Buggy whip makers did not create the auto industry. Railroads didn't create the airplane. Even when established industries help create new ones, old-line firms are often not as nimble as new ones. IBM helped give rise to personal computers, but didn't see the importance of software and ceded that part of the business to young upstarts who founded Microsoft.'

- Karl Rove, 'Obama and McCain Spout Economic Nonsense'.

Can the 'image' fetch the candidacy?

Yes it can. Just as the image can engineer the first purchase.

But then on, 'reality' dawns. Consumers try and ensure that reality matches with the perceived image by making evaluations as rational as possible. More so, when the purchase risk is high. On the other hand, consumers tend to ease up on the evaluations when the purchase risk is low. It wouldn't matter much, in such a purchase case, if the gulf between the image and the real is deep. After all, not much is invested into the purchase.

But what about the risk when it comes to electing someone who will govern the likes of you? Should the image be scrutinised to the extent where a fair understanding of reality emerges? Surely, YES! But does it always happen? No. Isn't Barack Obama the Democratic nominee?

Note what Thomas Sowell has stated, 'The media have been crucial to Barack Obama's whole candidacy. His only achievements of national significance in his entire career have been media achievements and rheto…

Where's the rebellion in 'healthy snacks'?

Maybe it makes sense for Frito Lays India to make its Cheetos snack brand to be available in two new flavours with added vegetables, reduced fat and seasonings to appeal to health-conscious youth.
Having left my youth far behind, I wouldn't know what the youth of today want. If they want 'healthier snacks', I guess its a pity. Isn't 'youth' the time when one's at his/her rebellious best, caring two hoots about what one ate or wore? Calorie count? Who cares? Shouldn't that be the attitude? Maybe not, especially when the urban youth of today define excitement in terms of the latest game on their Xboxes. With obesity looming all over, its wise on Frito Lay's part to have healthy snacks on store shelves. After all chomping on these snacks and staring into a screen is surely every one's favourite pastime.Image: http://www.fritolay.com

Will the Honda hybrid work in India?

'In a market roiled by higher fuel prices, Honda’s Civic hybrid has every right to hit the spot with fuel-scrimping consumers, largely because hybrids typically consume up to a quarter less fuel than non-hybrid models. But India slaps such imports with a 104% customs duty, which all but guarantees that Honda will miss that spot by a mile.'

Anjana Menon on why India's first hybrid may not take off. Read it here.
Pic: http://www.carpages.co.uk

The snob-quotient in 'green'

'At the heart of eco-iconic is a status shift (isn’t there always?): Many consumers are eager to flaunt their green behaviour and possessions because there are now millions of other consumers who are actually impressed by green lifestyles.'

Well, don't think so. At least not in India. The 'green mumbo jumbo' pales, when the consumer is asked to pay an extra buck. Then its a no-no, at least for the middle classes that are trying to get the extra bang out of their buck.

Therefore, will the 'green' status not work at all, in India? Maybe, it will, but for it to, it has to demonstrate a strong 'snob-quotient'. Has it, in India? Maybe not yet, but I guess its getting there.

Rational to emotional brand propositions; smart?

"As we evolved, we figured there were many other facets of the product which customers were feeling positive about like mileage, ride quality and trouble free ownership. That’s when we thought of moving on to emotion driven advertising."

How smart is that?

The brand in question is Mahindra Logan, earlier positioned as a 'wide-bodied' car. It now wants to move onto an emotional plank. With Kunal Kapoor as their “brand protagonist” the idea is to rub in the “dare to do my own thing” attitude. The break, according to M&M is part of positioning evolution. The brand is moving to the emotional association of “owning an attitude”.

Lets analyse this move carefully. According to the company, Logan customers had found many more positive facets about the product in addition to its wide body. Well, that's just fine, except that all of the mentioned facets are pretty 'rational value' facets. None of 'em have any emotional, psychological twang to it. For example w…

Green Hypocrite

The 'inconvenient truth' is, Al Gore's energy consumption is up 10%. “A man’s commitment to his beliefs is best measured by what he does behind the closed doors of his own home,” said Drew Johnson, President of the Tennessee Center for Policy Research. “Al Gore is a hypocrite and a fraud when it comes to his commitment to the environment, judging by his home energy consumption.”Read about it here.

Market Segmentation failure & what can be done

'The dirty secret of market research is that most segmentations are never fully implemented to deliver business results. This is not because they are lacking in brilliance. Many of them are very sophisticated and analytically rigorous. The failure, actually, is in not taking this insight and driving it through the organization, including product development, strategy, marketing, and sales, to get return on the segmentation investment. There is no upfront cross-functional buy-in. The firm pursues all segments rather than the most attractive. There is no organizational alignment to dominate the chosen segments.'To know how to tide over segmentation failures, read Brad Bortner's complete article here.

Dangerous Judicial activism

'Judicial micromanagement will now intrude into the conduct of war. Federal courts will jury-rig a process whose every rule second-guesses our soldiers and intelligence agents in the field. A judge's view on how much "proof" is needed to find that a "suspect" is a terrorist will become the standard applied on the battlefield. Soldiers will have to gather "evidence," which will have to be safeguarded until a court hearing, take statements from "witnesses," and probably provide some kind of Miranda-style warning upon capture. No doubt lawyers will swarm to provide representation for new prisoners.'

- John Yoo; 'The Supreme Court Goes to War'.

Its who comes along, stupid!

Yesterday was Jaden's first haircut at a neighbourhood salon, which ain't a fancy place, mind you. Jaden's still 5 months away from his second birthday. Until now I have cut his hair myself. You can imagine the mess :)

We had a very interesting experience at the salon. The coiffeur asked me to hold Jaden in my lap after which he started to cut the hair on one side of his head. Jaden remained surprisingly calm through this. But when I switched sides, he was startled and so started on a wailing spree. All throughout we did our best to calm him. What touched me most was the coiffeur's reaction. He was extremely sweet throughout trying to cheer Jaden up and moving around so as to best do his job. He even stopped and waited for some time.

I ended up paying him twice what was normal payment for the haircut. All because of the way he treated us. Walking home I realised something. I have never been concerned about the way I had my hair cut. Seriously I don't care. But when i…

Why imported brands score

Its been a long held notion, at least in India, that an imported brand is always better than the very same brand when its available locally. Take chocolates for example. Imported chocolates have always tasted better than the ones available locally, even when the brand's the same. In addition the imported 'range' almost always scores with the consumer.

Little wonder then, that sales of imported chocolate brands, such as Mars and Snickers, have outpaced those of Cadbury's and Nestle's locally made chocolate in modern Indian retail outlets. Whereas the imported chocolates sales are growing at 100 per cent, made-in-India brands are growing at around 25 to 30 per cent. In retail stores in India, the sales of imported chocolates is reported to be double the sales of domestic brands.

The weaker the brand, the easier its extension?

Levi Strauss' foray into the personal care segment under the aegis of its Dockers brand may not encounter the problems that line extensions bring, as the brand Dockers is not necessarily synonymous with any category of clothing in India. This is unlike the strong position that it occupies in the 'business casual' space in the West.

BS reports that LS plans to launch deodorants for men and women under its ‘Dockers' brand, priced at Rs 2,000 for 100 ml bottles. Going forward, it plans to launch more personal care products to complement the casual-wear range. Levis Strauss, on its part, also plans to drive product innovations into the apparel market in India. As a start to the same, it plans to launch t-shirts that can be worn in 34 different ways, double-detachable cargos, and water-soluble tees.

Water-soluble tees? Who on earth wants a tee that dissolves? Beats me.

The importance of Core Product experiences

Our shopping yesterday at Spar (Oasis Center, Bangalore) was near perfect except for the problem we faced while lugging our grocery bags to the car. I had parked the vehicle at level Zero whereas Spar's at Level 4. Again, that in itself would not have been a problem except that the elevators would only go down till Level 1 where the exit would be at the Lifestyle store. And Lifestyle would not allow the movement of grocery bags on its floor.

So for me the only way out was to go down and get the car on to Level 4, which I did. Next time, I will drive the car up to Level 4. But what's interesting to note is that I wasn't hassled by my having to the get the car up. That's because the shopping experience at Spar was flawless.

Customers would be willing to overlook minor irritants should the core product or service deliver on a great experience. 'Recoveries' in such cases are quite possible, unlike scenarios where the product or service in itself is 'just satisfac…

What Leadership is

'Let me say this to you about all this popularity stuff. First of all, popularity is fleeting. And I want it to be said about George W. Bush that when he finished his presidency, he looked in the mirror at a man who did not compromise his core principals for the sake of politics, or the Gallup poll, or the latest, you know, whatever. And you can't lead in this world if you're chasing something as temporary as a popularity poll.'
- President George W. BushWatch the complete interview here.

Father's day?

The best thing in being a father?
To me, I am not important anymore! :)
Image : http://www.desktoppublishing.com

The problem with Indian cinema

'The curtain has fallen on the many splendours of the 61st Festival de Cannes, hot focus of the mind, heart and wallet of world cinema for twelve days. Of nearly 1,700 films that arrived from some 60 countries for the festival's main categories, just 60 were chosen—nothing from India, for the fifth year running. Some Indian filmmakers smirked. Did Cannes matter when so many of them were laughing all the way to the Mercedes dealers? And that, in a single smirk, is the problem.'

- Gerson da Cunha; 'The Cannes Smirk'.

Indian Eve 's tipsy

Why more Indian women are taking to drink -
Economic independence, changed social environment have helped break down middle-class taboos against women drinking.Work pressures, professional responsibilities, peer pressure, make many women drink several times a week.A plethora of bars in metro cities with weekly ‘Ladies’ Nights’, easy availability of a wide range of drinks also fuel the drink habit.Women drinkers account for a quarter of the Indian alcohol industry’s annual 15 per cent growth The majority of women drinkers drink more than the ‘safe alcohol limit’ every week.Alcohol has a more toxic effect on women than on men. Women are also more prone to alcohol addiction.Source : 'Swiggin' Janes' ; Outlook Magazine

The fall of 'Wine snobbery' in India

The best thing that's happened to wines in India is that it 'has recently stepped out of the snob circle to the affluent middle classes'. Now that's according to AbhijitKabir of Indus Wines.
And I quite agree. The likes of Indus wines have now made the product accessible to the upper middle class. As Kabir says, earlier it used to be snobs sipping the drink of gods. Part reason behind this change of 'scene' is the emergence of Indian wines and its availability in retail stores. It sure has been difficult for the likes of Indus wines to get the beverage to retailed across stores in India, but the availability of this beverage has improved across store shelves. The penetration level that wine has in the Indian market, I guess is minuscule, compared to other alcoholic beverages, but it does have a bright future. Even among the Indian middle class. Among the likes of me. I don't drink the normal alcoholic stuff. But I definitely don't mind and may even enjoy…

The 'deceit' in hiking food prices

Murad Ali Baig, auto expert demonstrates why the rise in fuel prices should not be used by Transporters, Industrialists, bus and taxi companies to demand huge fare increases. If at all they do, that's them exploiting the situation for personal gains.

Consider Murad's calculations. He states, 'Elementary arithmetic will however show that the cost of transport in the cost of most goods averages just 5% and the cost of fuel is usually about 35% of this cost. India’s four million trucks and one million buses have to additionally pay large finance costs, depreciation, staff salaries, tyres, repairs, taxes, bribes, etc. So if the cost of diesel is just 35% of 5%. it is barely 1.4% of the cost of most of the goods that one buys.

Therefore, the recent 8.5% increase in the price of diesel should only have an impact of about 8.5% on this 1.4% or a miniscule 0.12%. It will vary a little and be even less on high value goods that are transported over long distances and a bit more on mil…

Why price hikes will not help Fast food chains

The common reaction to the fuel hikes in India by manufacturers and retailers have been in the form of raising prices. As to whether these increased prices would help them tide over their increased cost of operation will depend on whether the Indian consumer cuts back on consumption or not.

Take the case of Fast food chains in India. Most Fast food retailers are now mulling increasing prices to offset their the higher costs that they now incur. While Pizza Hut has proposed a price increase of 5% later this month, KFC is also considering an increase.The bad news for them is that the increased realisation that they expect through higher prices will now be offset by drop in consumer consumption levels. The Indian family that would until now have had at least one fast food meal a week, would probably drop it to one every two weeks.

It does not make good financial sense to hike fast food prices. Instead Fast food chains should now try and curtail costs and turn their focus on optimising cost…

'Fascism has come to Canada'

'Human rights, of course, must include the right to religious freedom, understood as the expression of a dimension that is at once individual and communitarian – a vision that brings out the unity of the person while clearly distinguishing between the dimension of the citizen and that of the believer. The activity of the United Nations in recent years has ensured that public debate gives space to viewpoints inspired by a religious vision in all its dimensions, including ritual, worship, education, dissemination of information and the freedom to profess and choose religion. It is inconceivable, then, that believers should have to suppress a part of themselves—their faith—in order to be active citizens. It should never be necessary to deny God in order to enjoy one’s rights. The rights associated with religion are all the more in need of protection if they are considered to clash with a prevailing secular ideology or with majority religious positions of an exclusive nature. The full…

Celebrating Human Freedom

'Yes, this is a statement of my Catholic faith. But it is also a candid reflection on all of the history I have read: that political power passes away, that truths about God and man resurface, that human freedom is never fully extinguished. Much of the history we know may itself be false, owing to the disappearance of evidence over time; and justice in this world may not be availing. Yet in broad outline, a time always comes when we may review the past, freed from the shackles of the past. The chains of history always rust away.'

- David Warren; 'Deafening Silence'.

RBI hikes repo rates

NDTV reports that in a bid to tame rising prices which have pushed the annual inflation rate beyond 8 per cent, the Reserve Bank of India on Wednesday raised the repo rate by 25 basis points to 8 per cent from existing 7.75 per cent.

However, the apex bank has kept the reverse repo rate unchanged.

India's top Service Brands

Read more here.

SEC Classifications in India

Read how SEC classifications are calibrated in terms of Relative Purchasing Power here.

Ad Agencies behind India's top 10 brands

Comrade Obama

The present communist party led government in Kerala has never concealed its distaste of 'big businesses'. After all, for them, big businesses are the ones that prey on a hapless citizenry making windfall profits off their labour, which the businesses then proceed to pocket. So their sole objective seems to be to get the worker to always be at odds with the business owner. I am willing to go with their 'vision' except that its only brought with it economic misery, not to the party faithfuls, but to the average citizenry.
Why do I now feel that Obama sounds almost like a party member in Kerala? When he calls for new taxes on oil companies and wealthy individuals, along with $1,000 tax cuts for most working families, his socialist vision sounds deafeningly similar to what I am used to hearing in my home state of Kerala.That's such a pity. Especially since this rhetoric echoes in a country that has demonstrated to the world, the strength of capitalistic thought. Imagin…

The 'private label' challenge

Its been barely a week since Big Bazaar decided to drop Cadbury Plc.’s products from its stores’ shelves. Now it seems Pantaloon Retail (India) Ltd wants to launch its own line of chocolate products. The company that runs Big Bazaar stores plans to “test-market” its own chocolate products during Raksha Bandhan, a popular Hindu festival that falls in mid-August. The chocolates will be sold under the ‘Tasty Treat’ brand name.

Pantaloon plans to source the product from an unnamed chocolate manufacturer. The launch would supposedly be restricted to some stores as part of the test marketing before the products hit hundreds of company-owned stores nationwide.
Would the Big Bazaar brand of chocolate make a dent in Cadbury or Nestle's dominance of the chocolate market in India? I doubt it, since 'brands' play an important part in chocolate purchases. Both Cadbury and Nestle have extremely strong brands in the Indian market that evoke positive quality perceptions in minds of consume…

Purple Mangoes vs. colouring between the lines

'How can I try to explain, when I do he turns away again.Its always been the same, same old story.From the moment I could talk I was ordered to listen.Now theres a way and I know that I have to go away.I know I have to go.'- Cat Stevens, 'Father & Son'.I quite empathise with Mitra as she turned the 'mad momma' when her daughter came home with worksheets that had terse instructions to colour a banana yellow and only within the lines. It is but necessary that children colour mangoes with whatever colour they want to, and colour beyond the lines. But when Mitra exhorts us to act by saying 'there is much broken in Indian education, but government, schools and advertising regulators should unite to keep new players more honest and relevant', she seems to be singing the wrong tune. Keep 'new players' honest and relevant? What's that supposed to mean? Were the 'oldies' always ethical and concerned mostly about societal good, with no m…

How will Early Adopters react to Apple's 3G iPhone?

The lingering question? Will early adopters, geeks who bought the first Apple device – a phone, web browser, and music and video player, rolled into one - when it went on sale months ago feel short-changed, because Apple has now released a speedier, more sophisticated version of its much-touted iPhone? In addition, the new 8GB iPhone will cost $199 (£100) in the US – a third of what the equivalent device cost when it was launched in June last year – though this may be made up for by more expensive contracts with operators. A 16GB version will sell for $299.
My guess is, No. That is if the hordes that bought the earlier device can all be classified as 'early adopters'. Yet, by nature of the timing of their purchase, they sure can be termed 'early adopters'. yes the real test is whether all of them share typical early adopter 'characteristics'. Innovators and Early adopters typically are technically sophisticated individuals who may even be willing to tolerate eng…

India's most trusted brands

The 'Most trusted Brands' survey by ET has a new No. 1. Oral care brand Colgate’s run as India’s Most Trusted Brand has come to an end. The brand has finally lost its No 1 position in Brand Equity’s annual Most Trusted Brands survey — not to any FMCG brand, but to India’s leading mobile handset marketer Nokia. Following a stellar four-year run, the Finnish telecom brand has climbed 70 ranks to become India’s No 1 trusted brand, according to this year’s survey.NokiaColgateTata SaltPepsodentPond'sLuxBritanniaDettolLifebuoyVicks

Rafa reigns with a 'difference'

Sure Rafa's demolition act that he dished out to top seed Federer was remarkable. But what makes this young man even more remarkable is the 'class act' that he brings on to the court along with a dose of humility that makes him a 'rare' phenomenon in any sporting arena. Comparisons to tennis legend Borg were brushed aside by Rafa saying, he didn't deserve such comparisons. Now that's humility for you, from a true champion.Pic : http://www.abc.net.au

Rubber meets the road and gallops

Bloomberg reports that India may become the world’s second largest consumer of natural rubber in seven years, overtaking the US and Japan, as demand rises from producers of automobile tyres and gloves.

Demand in the world’s second fastest growing major economy may reach 1.44 million tonnes by 2020, up from 899,000 tonnes forecast for the current year. Soaring demand for rubber in China and India may help sustain the rise in natural rubber prices. Rubber prices are hovering above Rs120 a kg in Kerala as record crude oil prices made synthetic rubber more expensive and China boosted purchases. Kerala accounts for more than 90% of the natural rubber produced in India, the world’s fourth biggest producer.
Pic : http://www.livemint.com

Vote to prevent a 'point of no return'

'Not since 1972 have we been presented with two such painfully inadequate candidates. When election day came that year, I could not bring myself to vote for either George McGovern or Richard Nixon. I stayed home...

At a time like this, we do not have the luxury of waiting for our ideal candidate or of indulging our emotions by voting for some third party candidate to show our displeasure-- at the cost of putting someone in the White House who is not up to the job.

Senator John McCain has been criticized in this column many times. But, when all is said and done, Senator McCain has not spent decades aiding and abetting people who hate America. On the contrary, he has paid a huge price for resisting our enemies, even when they held him prisoner and tortured him. The choice between him and Barack Obama should be a no-brainer.'

- Thomas Sowell, 'Obama and McCain and Iran'.

Devana Yelli? ; Bengaluru International Airport

Had to pickup family from the Bangalore International Airport. My first trip to the new airport. Started from home (read, BTM Ist Satge) at 3.15 am; reached by 4 (note, minimal traffic and I took the MG road- Mekhri Circle route); a distance of exactly 42 kms..

The road infrastructure is not complete. Be careful you don't miss the exit from the Hyderabad road which takes you towards the airport. Parking gives you two choices, the premium one at Rs. 200 for an hour and the budget one at Rs. 40 for two hours.
The airport infrastructure is impressive, but nothing out of the world; functional, I would say. Signs all over were very helpful. No hassles on the way back. The earlier signs guiding motorists to the HAL airport are still around; they have not been taken down as yet. In the dark, sighting them can confuse a motorist, at least on the way back home.
All in all, as my travel was way early in the morning, the hassles were minimal. But I hope the road infrastructure gets better, whi…

'Fishy' cure?

The legendary 'fish prasadam', so called to work around problems the term 'medicine' brings, will be dispensed to hordes that are bound to descend on Hyderabad, come Saturday. The 'prasadam' will be dispensed as an asthma “cure” packaged inside a live murrel fish.
HT Mint reports that since 2000, a small but seething opposition has decried the remedy as sheer quackery and protested the government’s tacit, at times overt, support of the magnetic annual event. Now, a public interest litigation filed in a Hyderabad city civil court challenges five government departments and the Gouds, the family dispensing the cure; the case comes up for hearing on 19 June. Pic : http://www.khojhyderabad.com

The McCain Branding dilemma

Its always the same dilemma in branding. Should the brand appeal to a prospect's intelligence or connect at an emotional level?

Well if the target is the college going or the recently outta college dimwit, big on Global warming, vegetarianism and that sorta thing, the latter is recommended. Right now that's the McCain dilemma. Should he the lose the tie, zip the toothy grin and turn the wisecrack? Maybe.

Read John Feehery's 'Branding advice' for McCain here.

Pic : http://www.politico.com

Who's gaming?

According to an exclusive study by ZenithOptimedia, though online gaming is predicted to be $7-billion business by the end of 2008, it still remains a higher SEC phenomenon in the country. Of the total population of gamers, 41% belong to SEC A2, 20% to SEC B1 while just 9% belong to SEC C. If you think it is just the college going youth that is hooked to games, think again. The major chunk of gamers belong to 22-25 age group followed by those in the age bracket of 26-30 years. Apparently, women have no interest in the virtual gaming world. The study notes that 99% of the gamers are male while only 1% are female gamers. Perhaps, it is because of this demographics that what sells best in the real world takes the lead virtually too. Cricket is the most popular on-line game followed by chess, road fighter, boxing, FIFA, counter strike, pacman and football. Though Indians are being wooed by exciting gaming options across platforms like mobile, online, consoles, it is the PC that is the mos…

Price sensitivity in Indian markets

Cutting prices is an imperative, should you want the mass consumer in India to respond. Global Pharma companies are going after volumes in India and that's a good way to go.

ET reports that global pharmaceutical companies are launching their medicines in India at up to one-fifth their global prices. Global majors such as DaiichiSankyo, Merck, Pfizer and GSK are now adopting India-specific pricing to tap a wider domestic market. Japanese firm DaiichiSankyo will soon launch its hypertension drug, OlmesartanMedoxomil, in India at about one-fifth its European price. It is in advanced talks with a few domestic pharmaceutical companies to manufacture OlmesartanMedoxomil in India so that it can keep the drug at such a low price.

Maturing of Online businesses in India

Today, an estimated 32 million Indians use the Internet to look for jobs, buy airline tickets, book holidays, find spouses, trade in shares, and buy and sell everything from mobile phones to industrial scrap. This, in turn, translates into $17 billion worth of online transactions per year.

This still lags behind the US ($1.85 trillion) and China ($200 billion), but as India’s base of Internet users is expected to grow to 50-55 million by 2011, the transaction numbers will also swell.

Source : Outlook Business; 'Website Story'.

The 'credence' in Central Bank of India statements

Though Sahara India Financial Corporation Ltd plans to initiate legal proceedings against the RBI order banning it from accepting fresh deposits, I doubt if its going to assuage frayed depositor sentiments.

Sahara on its part has asked its 42.5 million depositors not to panic and added that its other businesses, life insurance, mutual funds, real estate, media & entertainment, consumer products and tourism, will not be affected by the move.

Would these assurances and the threat of legal proceedings against the RBI reassure depositors? My guess is, its going to be difficult, especially due to the credence that RBI statements carry, which depositors would weigh against Sahara's.

Bottled Water wars in India

Pursuing a strategy that straddles cost leader approach with a differentiated one is difficult. Both in terms of the back end (read, operations) activity and the front end one (read, branding).

For the moment, Tata Tea, through its bottled water unit Mount Everest Mineral Water (MEMW) plans to take on global rivals such as Coca-Cola and PepsiCo with such a strategy and it seems to be doing everything right.
It has positioned its Himalayan brand as the premium brand, controlling about half of the natural mineral water segment, which forms part of the Rs 1,500-crore packaged drinking water market in India. It now plans on a bottled water brand for masses, at rates lower than those offered by competitors Bisleri, PepsiCo and Coca-Cola. We can safely assume that this would be branded with name that is relevant to the target mass consumer segment. The name 'Himalayan' brings along visions of purity that sit well with a premium brand, though I wonder if an anglicized name would have b…

The 'trappings' of Power

'I’ve thought about that night many times. I still feel frustrated that the young man wasn’t taking control of his life. But I also remember the brief sense of how one’s will can be broken by feeling powerless. The issue of power is a complex subject with multiple dimensions, but the situation with the young man is a classic example of two types of power — one, the power for one’s own actions, or “power within”; and two, the power over the actions of others, or “power over”: the power of governments over citizens; Brahmins over Dalits; teachers over students; husbands over wives. The power of a domineering boss over a hapless panipuri vendor.

Changing this power relationship is incredibly difficult. Getting people to see and exercise the power within — getting empowered — is like opening a Pandora’s box, a process ridden with conflict and pain. It needs courage on the part of the oppressed, and also facilitators, to help in the transition. The sad fact is that there are millions o…

Why fuel prices shouldn't affect food prices

The recent fuel price hike should have an impact on food prices, considering the increase in transportation costs. But in India the impact would not be substantial as the short road distances travelled by India’s food would now be a blessing. Since carbs, fats, sugar, milk and greens clock barely a few hundred food miles, diesel price hike may leave MRPs untouched for now. ET states that Household food budgets will begin to feel the real pinch only around Diwali after farmers use more expensive diesel to water fields in the coming kharif and raise farm-gate prices. Meanwhile, if the consumer is asked to pay significantly more for basic food items, it may be more due to profiteering and the market’s inflation expectations rather than any major rise in actual cost.

Americanized Chinese

'A Chinese-American from New York City, Lee had her interest in Chinese food piqued during a year spent studying in Beijing, where she was continuously reminded that the real cuisine was nothing like the deep-fried, sauce-coated dishes U.S. diners thought of as Chinese. Chinese food in China, she knew, was much healthier, with less sodium and grease (and more varied animal parts) than Americans imagine. "Mainstream Americans don't like to be reminded that the food on their plate once lived, breathed, swam, or walked," writes Lee. Neither do they pause to think of just how Americanized, in the U.S., Chinese food — or more accurately Chinese-style food — has become. Lee points out that there are 40,000 Chinese restaurants in America — more than the number of McDonalds, Burger Kings and KFCs combined. "Our benchmark for Americanness is apple pie," she points out. "But ask yourself: How often do you eat apple pie? How often do you eat Chinese food?"

-…