For white goods makers, a ‘happy’ lot of dealers implies a ‘happy’ festive season.

Savreen Gadhoke & Surbhi Chawla explain why today, dealers are the new kings...

Consumer is king – that statement sounded clichéd for sometime; today it stands challenged! It’s the era of the dealer, and pampering them is what the companies are doing best, especially in the face of the festive season… In May 2009, consumer electronics firm, Asus rewarded its top performing 30 dealers across the country by taking them for a week-long trip to Bangkok. Their stay was arranged in a top-quality five-star locale and a visit was also arranged to Asus’ service-centre in Bangkok. This year too, Asus has decided to take its high performing dealers to an all-paid foreign trip, though the destination has not been finalised yet. There is Samsung too, which offers its mobile handset dealers a trip to South Africa, Dubai, Bangkok, et al, if they purchase 30 units of a particular handset of one model. The offer comes down to a refrigerator for purchasing 20 units. The company also offers a Honda Jazz to big dealers if they purchase products worth Rs.32 lakh.

A Bhubaneshwar-based dealer of electronic appliances dealer also shares his experience of travelling to Europe for having successfully sold 200 LCDs of a company. This is just a snapshot of how big consumer electronics and durables giants are wooing their dealers to improve upon their sales, particularly during festive seasons. The stakes are really high this time around, as the previous year wasn’t really something to cheer about. The past two quarters (Q4, 2008-09 & Q1, 2009-10) have been disheartening in terms of sales. And with Dussehra & Diwali falling in two different months this year, consumer durables & electronics companies are quite excited about both months being high-growth and activity-laden. Shantanu Dasgupta, VP, Corporate Affairs & Strategy – Asia South, Whirlpool, confirms, “We are hoping to register a 35-40% growth over last year and are aiming for sales revenues of around Rs.600 crore during this festive season alone...”

The high optimism reflected by these white goods entities has a strong footing. According to the most recent Nielsen Global Consumer Confidence Survey 2009, Indian consumers have a good perception about personal finances and job prospects, which reflects in their willingness to spend on discretionary items. The survey reveals that 39% of Indians think that it is a good time to make purchases. Encashing upon this opportunity, sellers are leaving no stone unturned to make sure their cash registers ring in this time; and to this end, a host of consumer schemes are being launched – like Sony’s ‘Zero Percent Finance Offer’, Haier’s ‘Bhagya Lakshmi Festival Promotion Offer,’ et al.

In order to achieve their revenue targets, it is imperative for companies to not only launch consumer discount schemes, but also trade schemes (dealer incentive programs). Also, with the 6th Pay Commission hiking salaries of those in the public sector by releasing Rs.16,000 crore, manufacturers and retailers are hoping to pocket at least 10-15% of that amount. But what is it that makes the dealers and modern retailers (like Reliance Digital, X-cite, Croma, et al) such an integral part of the entire value chain and how do companies keep them happy?

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Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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25 AND GETTING YOUNGER

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“Hero Honda posts its strongest-ever quarter in Q1’ 10” - Wednesday, July 29, 2009.

“Hero Honda reports leadership performance with 50% net profit in Q2’ 09” - Tuesday, October 21, 2008.

Ask the dapper Anil Dua, Sr. Vice President (Sales and Marketing), Hero Honda about Hero Honda’s slowdown-defying growth of late and pat comes the reply: “This growth has been possible primarily due to a smart strategy – which we internally call – the “multi-focal” approach. The strategy is built on four ‘building blocks’ – keep refreshing the product range constantly; build brands and invest continuously in them; keep expanding the distribution network; and support the new launches with innovative 360 degrees communication and ground activation. And we plan to stay true to this strategy.”

In fact, just in the last few years – even as the nation was supposedly reeling under the slowdown wave, the bike company has notched up some definitive wins in the otherwise hiccuping Indian bike market, primary among them, a significant increase in market share to take their tally up to 59% in the segment. Amidst the jamboree of celebrations of Hero Honda entering into its silver jubilee year, the bike major has not only strengthened its financial position, but also its existing product portfolio by launching new bikes and smart branding initiatives. Facts themselves speak volumes – a growth of 12% in FY’09 (as against industry growth of 5%); 32.43% increase in net income (recorded at Rs.12.8 billion) and a 19.23% rise in net sales. Nearest competitor, Bajaj recorded a de-growth of 21% in the last fiscal.

They rolled out their first memorable campaign in 1985 for the inimitable CD100. “Fill it, Shut it, Forget it,” they said, and the whole nation chanted with them. Hero Honda and the brand it epitomises has come a long way since then. If creating a brand buzz is all about occupying every available mind space of the consumer, Hero Honda has certainly cracked the code. Right from Dhak Dhak Go to the communication that harped over its mileage power (where the boy drives all the way to wish his girlfriend ‘goodnight’), consumer insights have been the key for Hero Honda this last year. “The idea was born from the consumer insight that relationships get stronger when people get closer,” says Elvis Sequeira, VP & ECD, JWT Delhi, the agency that made the campaign. Money was also plowed into the brand. Just the new corporate brand tagline ‘Dhak Dhak Go’, flaunting eight celebrities in a music video, cost Hero Honda Rs.2.5 crore. The idea was to announce to the world that Hero Honda is now 25 years younger so that it appealed more to its target audience – the aspirational Indian youth.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
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THE MOMENTS BEFORE ‘EUREKA’

Archimedes may have coined the term in his bath, but for us it really took a lot of midnight oil & number crunching to say ‘Eureka’. Read the minutes...

Financial year 2009 was a trying period for most, starting from buyers to sellers, financiers to investors to companies and even brands. But as David F. D’Alessandro, author of Brand Warfare says, “A great brand stays that way in part because it has no tolerance for anything – or anyone – who threatens the reputation of the enterprise.” So what if it’s slowdown or a global meltdown? Brands, like relationships, ought to grow in times of crisis, right? Well, maybe!

Despite market conditions, most valuable brands are still thriving in the hearts and of course, in the minds of the consumers. Their irreverent tag-lines are still making it to the most-happenin’ crowd lingo; their witty storyboards are still compelling millions to either laugh-out-loud or leave them with glistening eyes and a heavy heart; and virtually every home is overstuffed with brands popping out of the walls, the kitchen and the washroom. But then, do you think it’s true for every brand? Well, don’t scratch your heads. The fourth 4Ps Business & Marketing annual ranking of India’s 100 Most Valuable Brands is here again to tell you which brands struck the cosiest chords with consumers during the year.

It was certainly not a cake walk. We teamed up with Indian Council for Market Research (ICMR) to fetch the best from a holistic list of mind-boggling 40,190 brands. However, after a great amount brain storming, colossal data crunching, and intensive primary research work in 3 phases over the past 6 months, we finally caught on to the swinging mood of the Indian consumers. So, here is the lock, stock and barrel of the method behind the madness of arriving at the 4Ps Business & Marketing India’s 100 Most Valuable Brands…

PHASE I started with preparing a holistic list of local, national and international brands (40,190) present in India, which is then scaled down to a master list of 1499 brands based on the growth, reach, demand and availability (in at least 4 metros and Bengaluru) further divided into 32 broad categories with 99 sub categories. Next, ICMR prepared a structured questionnaire on parameters of Brand Awareness and Preference. Based on the questionnaire a primary research was conducted in Delhi, Mumbai, Kolkata, Bangaluru and Chennai with 3000 respondents. Based on the frequency of brands under the parameters, as found in the primary research, ICMR shortlisted top 200 brands across all categories.

PHASE II witnessed another survey carried with 6,300 respondents across 10 cities (Delhi, Jaipur, Chandigarh, Mumbai, Bangalore, Hyderabad, Ahmedabad, Kolkata, Pune and Chennai) in one-on-one interview format. In order to avoid any bias, the order of the brands was changed for each of the cities. Respondents were selected based on socioeconomic classification (education and occupation), gender and monthly income.

This survey intended to account for the Brand Equity of various brands by asking the respondents to rate them on the following parameters: 1. Brand Image & Perception (what brand stands for and promise); 2. Brand Performance (sales, profit, growth as perceived by consumers); 3. Brand Loyalty (inclination towards the brand); 4. Brand Awareness (or recall-a measure of the brand’s marketing communication); and 5. Brand Association (how far has the brand become synonymous with the product category). The respondents rated each of the brands on a scale of 1-5 (5 being the highest). The survey results are then compiled to draw the final list of 4Ps B&M India’s 100 Most Valuable Brands.

PHASE III saw ICMR conducting an opinion poll with 2500 respondents across 5 cities to vote for the brands under the various heads viz most promising brands, premium brands, best serviced brands et al. See pages 64 – 69 for details, but note that the ‘Top 5’ brands in these categories are not restricted to those placed among top 100.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
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Savreen Gadhoke puts the big question to the man himself... How?

Evergreen entrepreneur C. K. Ranganathan has gone down in golden letters in way too many management books because of the manner in which he beat heavyweight multinats to become India’s sachet king. Now he is looking to shed CavinKare’s regional positioning to reach out to a pan-Indian urban audience.

The year 1983 was a watershed of sorts for the underdog. On one hand there was Captain Kapil Dev who took the sensational catch to dismiss the dangerous Viv Richards, taking underdog India closer towards its historic World Cup win at Lord’s; and on the other, there was Nirma, a local FMCG player that had only just begun to make deft inroads into the detergent powder market, which till then was considered the sole bastion of the all-powerful multinational Hindustan Levers and their popular detergent Surf. The brainchild of Karsanbhai Patel, Nirma completely revolutionised the detergent powder segment with its ingenious pricing and swept the lower end of the market. The battle between Levers and Nirma continued for two decades, but around the turn of the millennium, eventually the deep-pocketed MNC won. As per the Centre for Industrial and Economic Research (CIER), by Y2K Levers had overtaken Nirma in brand awareness in rural households with 88% penetration as compared to Nirma’s 56% penetration. Nirma had clearly lost out to its muscled multinat rival.

Not every domestic FMCG player suffered the same fate as Nirma though. Around the same time as Nirma was taking the winds out of Surf’s sail, another domestic FMCG company was upping its ante. By 1985, through a reverse merger with Vidogum Limited, Dabur (once a small time pharma company) became a public limited company. Over the years, Dabur successfully entered the healthcare, personal care and foods businesses taking some of the sheen off its MNC counterparts. Unlike Nirma, the Burmans of Dabur turned over the company to professionals in 1998 and reached the magical turnover of Rs.1,000 crore by the turn of the century, leaving behind its small beginnings forever. In segments like shampoo and juices today, the Rs.112 billion Dabur Group continues to give sleepless nights to multinats like HUL and PepsiCo respectively.

This brings us to India’s third home-grown FMCG company, CavinKare. Interestingly, CavinKare too has an inextricable association with events that took place in 1983. At a time when HUL was busy fighting Nirma in the detergent market, little did the MNC know that in a lesser known town (Cuddalore) in Tamil Nadu, a young entrepreneur had taken it upon himself to transform the nation’s shampoo market. With Rs.15,000 in hand, C. K. Ranganathan, now famously called India’s sachet king, launched his Chik shampoo sachets in 1983. Ranganathan did not have deep pockets and so distributors were reluctant to stock Chik Shampoo. So he thought ingeniously, approached bicycle hirers and inspired them to become entrepreneurs. Initially, Ranganathan collected a demand draft of only Rs.2,000 from these bicycle guys in lieu of handing over bags full of Chik shampoo sachets to sell in rural Tamil Nadu. But in no time the demand draft’s grew to Rs.5,000 and then Rs.10,000. By 1992, Chik Shampoo had become the market leader in South India’s shampoo market. By the time FMCG multinats got wind of the sachet revolution in the hinterland’s, Ranganathan had already swept the market.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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With over 90,000 members MHRIL is set for big move, but the road ahead is bumpy, says Neha Saraiya.

Nevertheless, you enjoy your holidays, that’s all they want...

“Yes, the land is under litigation. But we are staying crucial financially. As we think we have a very strong case in Munnar property and above all we are proud of our resort as it is the first resort that we had set up,” gushes an effervescent Ramesh Ramanathan, MD, Mahindra Holidays and Resorts India Ltd (MHRIL). (For those who don’t know much about the whole episode, on July 3, 2007 an order was passed by the Sub-Collector, District of Devikulam canceling the assignment of the Munnar land to the company stating “it as an agricultural land.”)

But then the days have changed, today MHRIL has a rock solid number of members, 91,997 (as on May 31, 2009), and the list is growing at a CAGR of 32%. What’s more interesting is that the same Munnar resort now contributes around 2.17% to the overall revenues of the company (FY ‘09).

However, what has done a wonder for this holidaying arm of the Anand Mahindra Group is its unique business model. The company has an integrated model, which takes care of all its operations – marketing, acquisition of land, servicing of clients, providing value added services, and resort operation et al – under one entity. Thus this mixed business model not only enables the company to tone down the cost of operations considerably, but also provides an edge when it comes to adoption of a change. Probably that’s the reason for which the recent downturn that left all major hospitality players in despair, could not dent MHRIL much.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.
1 lakh copies sold in less than 10 days of Arindam Chaudhuri’s “Discover The Diamond In you”
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