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Wednesday, January 21, 2009

BINGEING IN BAD TIMES


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The downfall of global financial stalwarts like Lehman and Morgan Stanley have also unleashed a somewhat similar story for India’s darling ICICI (with malicious rumors playing their own part in the saga). Correspondingly, consumer confidence has also taken a dip (albeit slight!). Given the unfolding situation, analysts expect a tightening in the corporate spend for at least two quarters. An ICICI official, on conditions of anonymity, told this magazine that “In order to maintain the bottom line, it is prudent for the corporate (ICICI) to cut their expenses. Hence, cost cuts are happening through various alternatives and ad expense is a part of those alternatives.”

As a matter of fact, while it is prudent to curtail costs, corporate should look at the returns of ad spends in terms of top line and compare it to the costs of business losses if the marketing spends were not done to arrive at an alignment. Well there are few who do not buy this logic, for them it is not merely revenue but legacy which matters. A Coke spokesperson told 4Ps B&M, “In Coca-Cola we don’t exactly design every ad keeping in mind how much revenue it will generate as our policy is to sustain the legacy of the brand by promoting it through ads. So the exact ad expenditure is not necessarily directly linked to revenue.”

His words ring true, specially given the fact that even global experts have now started recommending more advertising during recession time, so that the brand makes the most of it when the economy recovers. For now, the only guys who seem to be in the safe zone are the (evergreen?) FMCG and (sunrise!) telecom sectors. As opposed to last year, FMCG major HUL increased its ad spend by 11.78% and correspondingly its sales improved by 13.24%. Similarly Dabur India improved its sales by 29.64% after increasing ad spends by 25.55%. Telecom major Bharti leads the list of the telecom players which increased its ad expenses by 40% and witnessed a 44% growth in its sales figure.

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.
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
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...


Saturday, January 10, 2009

White goods: A chimera?


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With perishables, FMCG and apparel markets already under their thumb, desi retailers have now begun to eye private labels even in high involvement categories like white goods. Analysts feel that creating a private label that would give sleepless nights to the market leaders in the category is difficult. The complication grows bigger because consumer durable majors (or at least some of them) are even setting up own retail outlets to sell their wares (Videocon has a target of $3billion turnover by 2013 from its retail venture). But does that mean that RPG Cellucom, which has created its own handset brand and Reliance Digital, which is planning similar, can never stand at the heel of LG, Samsung, Whirlpool and several of their ilk? Of course, creating a brand from scratch is relatively difficult for new-entrant retailers than is for let’s say Videocon, but “if priced low, boasting equivalent features and supported by excellent promotion, retailers can even grab market share from these players,” feels Paul Martin, Global Sales Manager, Planet Retail, UK.

In fact, analysts are raving about the Reliance way of creating private labels. Over the past two months, Raghu Pillai, President, Retail Operations & Strategy of Reliance Retail, has had his hands full putting in place some more hyper-marts, launching at least one private label across segments. “That’s going to match with the local taste or preferences, whichever community we are entering,” adds Pillai. Rising on the wave, yesteryears TV brand Salora is geared for a comeback. Having their own manufacturing hub enabled them to make LCD TVs and when they launched their retail arm - Terminal - in 2008, they promoted these as in-house brands. The chain is set to expand to 350 stores and is setting up sturdy distribution channels. But are people buying Salora LCDs, specially when Sony is also present in Terminal? “Yes! Our brand is priced lower than Sony and we offer same features and after sales service,” avers Sanjive Sethi, CEO, Salora Retail.

“The more developed and consolidated a market, the higher the penetration of private labels. Switzerland is the market, where private label dominates,” announces Martin and he believes that the more organised retail spreads in India, chances of in-store brands emerging as big brands get higher. Definitely a sunny indicator for Biyani, Ambani & Company. Reliance laptops and Future DVD players are still to see the light of the day, but the corporate retailer has begun to flex his muscles. The NCAER Report may have given organised retail a clean chit so far as millions of mom & pop stores are concerned, but HUL, P&G, Samsung, Raymonds, Levis, LG... you better watch your backs! The journey has only just begun.

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 INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
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...


Wednesday, January 07, 2009

Arrogance has killed many American brands… They once basked in their own pride, but today lie in coffins gifted by new-age brands.


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Walk up to a teenage coffee lover and ask him if the word ‘Brim’ strikes a familiar note. Don’t be surprised though if he gives you a wrinkled ‘what a weirdo!’ look. How on earth would he know what ‘Brim’ is?! Its ads had stopped flooding media machines decades back and the brand itself has been jettisoned from retailing ships for much over a long decade! Dead… and its memories just a ghost from the past! Move onto something cold – call it ‘Tab’. Remember the name? Don’t worry if you can’t, for it’s another one from the morgue. Tab was the predecessor of Coca-Cola’s current Diet Coke, but with time and lack of innovation in taste, it began to fizzle out. At present, the Tab formula lies inert in Coca-Cola’s labs, waiting for an American re-branding miracle...

These were just two ‘glorified’ brands which once basked in the American sun of glory, and were all set to capture global centre-stage. They lost their hue partly for lack of innovation and primarily because they were just too arrogant and obstinate to change, as Jeff Kagan, Telecom industry expert asserts, “American brands need to keep competitive threats in mind. Once successful American brands can stumble. They need to reinvent themselves...” What follows is an account of a few such ‘once great arrogant’ American brands that suffered from the very two reasons mentioned above, and are dying today.

Levi’s, which once ‘proudly’ swore to clothe the world with denim is a mirror image of what it was 24 years back when Robert Haas bought an almost dead brand and closed dozens of production units and subsidiaries, and brought the organisational ‘core’ focus back. Having taken the company semi-private a year later, he infused new life into the brand. Levi’s was a known brand again and its stock price was kicking, having risen from a mere $2.53 to a swashbuckling $265 in just a year! But with time, and for lack of consumer focus and customisation (its ‘One size fits all’ strategy), revenues and profits for the brand is drying quarter after quarter as a spokesperson confesses, “The mistake we made was to make one brand for everyone – it ended up being nothing to anyone.” In the past eleven years, the company has given the royal kick to 17,350 employees (including its CEO in 2007) and has put the locks on 33 factories across North America and Europe. What growth! So what led to this dangerous situation? While companies which focused on maximising wealth – like Honda, GE, Toyota, Unilever et al – rushed to low-cost Asia, Levi’s put it’s foot down to manufacturing products in America. It was too proud to allow its products to be manufactured in Third World geographies!!!

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 INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...


Friday, January 02, 2009

Prem Kamath, Vice President, Marketing & Communication


IIPM : EXECUTIVE EDUCATION

Prem Kamath, Vice President, Marketing & Communication, Star India agrees wholeheartedly and says that Star India has three different agencies for its various brands viz. O&M for Star Plus and Star Gold; JWT for Star One and Star Movies and even an on-site agency Bettercom to handle their BTL communication activities. “We (Star India) draw up our own communication strategy, do research and draw conclusions. Then agencies are called in and told – this is my communication plan – now give me a script to match this. And if you don’t give me a good script, I’ll simply ask another person to write me a script,” he explains, adding that having multiple agencies exacerbates the need to concentrate a majority of the communication strategy planning at the corporate HQs itself.

But if agencies are simply shops for churning out advertisements (for awards or otherwise!) - as they are now, sooner or later they are gonna be hit because declining advertising effectiveness, media clutter and changing consumer habits (thanks to disruptive technologies such as the Internet and TiVo), will make mass-media advertising redundant. This is already happening and is reflected in the fact that clients and their marketers have started taking more ownership of brand communication strategies.

In fact, over the last few years, most of the real, cutting-edge stuff – Surf, Idea, Airtel, Vodafone, Lead India, ICICI Prudential, Cadbury, Perfetti, Coke, Pepsi, et al – have come from a solid collaboration with the client, concurs BBDO’s Exec. Chairman, Josy Paul, “Ask Balki, Aggi, Prasoon or Piyush and they’ll all agree that marketing teams of these brands have contributed up-front, shown imagination and intelligence to make a difference.” Reliance Communication, one of the fastest-growing telcos in India and therefore understandably one of the largest advertisers is riding a similar horse. With three agencies on its panel – Mudra, Leo Burnett and Cartwheel, Sanjay Behl – Reliance Communications’ branding chief stresses that “more creative ideas emanating from multiple perspectives of different creative teams gives (them) a huge flexibility to choose the best rather than settle for the ordinary.” He admits that multiple agencies “raise the bar on creative quality.” In fact, sources in RCOM admit that nearly 80% of the advertising brief is now strategised by the in-house marketing team, while agencies work on just the balance 20%, read: executing the client brief. Admits Mahesh Chauhan, the strapping President of Rediffusion, “The agency game has not really evolved in India. We’ve become mere vendors of creative wares.”

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 INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
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...