Thursday, January 10, 2013

What got you there, won’t get you (back) here

If there has to be a case made out for mistakes in identifying India as a target market, AT&T wouldn’t even find competitors in its ring. AT&T and Tata had picked up stake in Birla Communications in the year 2001 and rechristened it as Idea Cellular Ltd. Considering that the wireless market in India at that time was just picking up, there would have been immense opportunity for AT&T. However, due to the tussle amongst the partners and given that Idea Cellular only had limited circles to operate in India, AT&T – after just three years, in 2004 – amazingly announced its decision to call it quits.

Analysts say Cingular had taken over AT&T Wireless in the US and the new management wanted to concentrate on the American market that was becoming increasingly challenging. But how could one justify even that with exiting the Indian market (AT&T informed stakeholders in Idea that it does not consider its investments in India as ‘strategic priority investment’). In 2004, Birla and Tatas both bought over the stake of AT&T.

Once AT&T realised the mistake it had made, it tried to re-enter the Indian market in 2006, by tying up with it Mahindra Group to launch National Long Distance (NLD) and International Long Distance (ILD) calls. As a matter of fact, AT&T was the first company in the country to offer NLD and ILD facilities. But Portica substituting for Cleopatra? Get aside Caesar, no way! Although it was a significant step of AT&T to stay in the Indian wireless market, it was not the same as being a cellular service provider. When in 2008, the fresh spectrums were being issued, there were speculations that AT&T would partner with DLF/ Mahindra Group.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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“India is critical to world’s progress”

In an exclusive interview to B&E’s pathikrit payne, Sir Richard Stagg, British High Commissioner to India speaks about India’s incredible future potential and the positive impact of its outsourcing business...

B&E: How do you look at the transformation of India from the time of Independence to now when it is an emerging powerhouse?

RS: We view it as an amazing achievement of India. The transformation especially in economy, society and the way in which the country worked in the last 60 years. India has an enormously important role to play in the world. India is a model of how democracy and development can go hand in hand as it has just been shown in the elections, which went off so well. So we view India as a country which has emerged on the world’s scene. It’s now the fourth biggest economy in the world by PPP. It’s critical to almost all critical issues that the world faces, be it trade rounds, development sphere, agreement on climate change, international sponsor to financial crisis. India has put itself in the centre of major issues, which reflects the success of its governance.

B&E: Is there paranoia in the UK about the economic resurgence of India and it becoming an outsourcing hub, as it leads to job losses in UK?

RS: In the case of India, there’s genuine welcome from almost every political group in UK. UK is very comfortable with the companies using outsourcing as one of the ways to make their business more successful. From our perspective, it makes no sense to constrain the competitiveness of our companies by limiting their ability to outsource. We will not succeed as an economy just by competing for relatively low skilled jobs, which can be done at a lower cost elsewhere. We have to accept that the only way we are going to succeed as a country and as an economy, is by moving up the value chain by doing higher value added tasks. So the government’s challenge is to ensure that as the low skilled jobs leave UK, we provide training and up-skilling to the people affected, so that they can do higher value work in the economy.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.

 
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Tuesday, January 8, 2013

The new #1 Samsung

LG ruled the Indian consumer durables market for long. But since 2011, it has been struggling to play catch up with the new #1 Samsung. The road to regaining glory isn’t an easy one for LG

With LG at a crossroads, Kwon has enough reasons to worry about. Though this time around, the company doesn’t stand a chance of being put on life support system, it’s the love for the gold that gives him the wrinkles. The company has already lost the crown when it comes to overall revenues and profits. Now, with Samsung’s new strategy to go bullish on the mobile handset market in India (especially the smartphone market where it has already captured a 41% market share; CY2011), and with LG’s loosening grip on the same cash-cow of a product segment, more questions are being asked about whether hopefuls in the LG India boardroom really trust a turnaround in near future. This is LG’s core problem. Between 2010 and 2011, its share in the Indian handset market fell from 5% to 2%, while that of Samsung rose by 2.1% to 17.1%. To imagine that Samsung India earns 55% of its revenues from this category (Rs.10,500 crore), LG’s stance of ignoring the mobile handset market is nothing but suicidal.

There is another problem-in-the-making. We say in-the-making, because the effect of it hasn’t quite started showing on the chaebol’s health. It all started in 2007 when Moon Bum Shin, the-then MD of LG India, announced the company’s vision – that of LG being regarded as a premium brand. Supposedly, the decision was in line with the company’s global mandate. Since then, LG has been at it to reposition itself as a premium brand, and not one meant for the masses. LG was out in the market to try something new, a detour from the main road that helped it become the #1 in the market. Four years have gone by since then, and even today, your neighbour would vote for LG being a great ‘mass’ product! The company however is not one to give up. Even Shin’s successor Soon Kwon, MD of LG India, is working on repainting LG’s image with rich colours. Onlookers are not quite convinced that this will help LG work its way up the ladder again, by playing up on the aspirational value. If a Motorola tying up with Dolce & Gabanna (using its best selling product the MotoRAZR) couldn’t help catapult Motorola’s perception to that of a maker of premium phones, LG cannot on its own switch its identity to a high-end CD manufacturer. The company should take some lessons from the books of automakers or even some handset makers in this regard. The Skoda and Volkswagen brands are mass brands while Bentley and Audi are premium offerings from the same company - the Volkswagen group. Lexus is a high-priced product, while Toyota sells cars for the masses – again both belong to the same company. It’s the same story with Vertu and Nokia. If LG has to create an impact in the premium pockets, it has to walk ahead with a non-confused positioning strategy. Creation of sub-brands with identities unique or faintly linked with the parent LG brand is an option. 


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.

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“Every fact about the consumer is consumer insight”

What are the key factors that you keep in mind while planning a successful campaign?

First and foremost, in any campaign, you need to understand what the marketing objectives of the client are and what the deliverables are from the expected campaign. Specific campaigns have specific deliverables. We need to be very clear while designing a campaign because it should be very clear what needs to be delivered for a specific campaign. What are the marketing objectives of the campaign? Based on that, we make a matrix of the campaign. Advertising is done to achieve marketing objectives. The first and foremost thing is a clear understanding between the media agency and the client. The client should have a clear idea on what they need out of a campaign. So, clarity of the campaign is aligned with marketing objectives and its very important.

The second most important thing is “an objective inquiry into the relevant consumer’s mind”. You need to understand whether your campaign is meant for an existing user of the brand or for a lapsed user or to expand the user base of the brand, et al. Depending on that, you will get an understanding about the consumer’s mindset. Every fact about the consumer is a consumer insight. Consumer insight is something, which has never been used before or something which was there in the consumer’s mind but was not unearthed so far. The things which are fresh and unused are what I believe to be consumer insights.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.


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Saturday, January 5, 2013

It’s the true world wide ‘web’

Global coordinated action is a huge necessity to tackle cyber crimes

A young man called Jimmy, an Internet hacker, walks discreetly to a Cyber Café in Nigeria to demonstrate his skills of perfidy, fooling perfectly innocent people into his well crafted web of fraudulence. He sends tens of thousands of e-mails congratulating them for winning $6.4 million worth of a sham British lottery. Anybody falling into this trap would be asked to pay ‘fees’ and ‘taxes’ amounting to $5000, which would be pocketed by Jimmy, leaving the respondents in the lurch.

Jimmy is only a tiny fish in the huge ocean of cyber crimes. In UK, internet crime gangs are recruiting students from British universities to join them. Often, these syndicates have developed a cult following among young hackers who are lured by the promise of celebrity status. This kind of recruitment resembles the KGB style of doing things in the heydays of the Cold War. The online fraudulence includes Internet auctions, sweepstakes, lotteries, identity theft and prizes that have despoiled money worth $152 million in the US alone last year. Older people are more susceptible to these crimes; they have being defrauded to the tune of $43 million in 2005. Around 41% of complaints of fraudulence filed by people from the age group of above 50 and received by Federal Trade Commission of US are online crimes. The figure was only 33% in 2002; indicating an alarming increase. As if things were not bad enough for the US, top secret data from Pentagon has been hacked regularly by Russian, Chinese & French hackers, which has kick-started a cyber war with them. Now these hackers are a cause of concern across borders.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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Friday, January 4, 2013

Slumdog millionaire: firangi style

One look at the First World reveals a much darker side to poverty

The earmarked poverty line in the US is $22,050 annually for a family of four. This figure is derived by a standard mechanism way back in 1960s, which quite naturally is outdated. A recent survey indicates that the figure will be twice as much today as compared to the one four decades ago. There are about 41 million families in the US, out of which 12.5% are below Poverty Line. The total count below the poverty line is a staggering 35.9 million people; a huge figure, yet better than the averages of 1980s and 1990s. Interestingly, there are over 73 million children in US; and 18% of them belong to the poor families. The poverty rate is 10.8% in the age group of 18 to 64 and 10.2% in the age group of above 64.

The worst off people in US are the unskilled illegal immigrants, a majority entering the country crossing the porous border with neighbouring Mexico. For a long time, the US government has made only a half hearted attempt to stop illegal immigration, as it is highly profitable for US employers to exploit them with less than minimum wages and facilities.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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Wednesday, January 2, 2013

Will Mukesh Have the Last laugh in 2010?

It’s slated to be the largest non-pharma deal this year (till date), if successful. But the Bharti-MTN deal is much more than that, for it can potentially be a major game changer in corporate India’s most high profile sibling rivalry – that of the Ambani brothers

We still remember the blistering summer of mid-June, 2005 in Mumbai, when this magazine was launched in a glittering function at the Taj. Virtually all the guests were gracious enough to have a few words of praise for Business & Economy. But once the polite conversation got over with, it was back to the BIGGEST story of those days-the public spat and the looming split between Mukesh and Anil Ambani. There were whispers about how a battle over family crown jewels between the two had been transformed into a deeply bitter and rancorous personal feud that had ostensibly dragged even close lieutenants and spouses into the quagmire. Mumbai denizens were wondering which brother had better access to the corridors of power in Delhi. There were apocryphal tales about how the head honcho of ICICI Bank K. V. Kamath was desperately working out a deal whereby at least a public façade of an amicable split would be maintained. South Mumbai residents talked in awe of how the matriarch Kokilaben was holding all night counselling sessions at Sea Wind, the multi-storied Ambani residence in Colaba. Even as we talked a little and gossiped a lot more, mobile phones started twittering with calls and text messages announcing a final and formal split between the two. We knew what the cover feature of the second issue of Business & Economy would be.

Beyond the headlines, the real story was the gut wrenching emotions and angst that haunted Mukesh Ambani when he had to part with his brainchild, his passion and his personal tribute to his father – the late Dhirubhai Ambani. That was Reliance Infocom. Though these things can never be accurately verified, people close to the split swear that Mukesh swore that he will reclaim his dream and passion sometime in the future. Meanwhile, within weeks of the split, every company and employee of the companies that came under the control of Mukesh abandoned their Reliance phone handsets and connections.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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