King Fisher Red is Dead

When I read the news that Kingfisher has decided to close down its low cost operations Kingfisher Red, one part of me was happy , having traveled in many sectors on Red, but then I also felt sad as it was the erstwhile Air Deccan which was getting a final burial.

In the list of brands which we have lost in the recent past I have always felt that Air Deccan was on top of the list. To me it showcased the power of pricing and the influence it can have on expanding the overall market in a category. Air Deccan also was a sort of showcase example of power of opening up of the economy and the reflection of the increasing disposable income.

Captain Gopinath , expressed his disappointment at the closing down, but then his suggestion that all domestic should have been Red and international could have been First also goes against Kingfisher's positioning as the 'King of Good Times' . Closing down would also be a factor of the current finacial situation the airline is in. From a branding angle I would have felt that they should have used to Air Deccan name for the low-cost airline and retained the kingfisher as a full service airline. The synergies of combing the two airlines , in terms of ground operations and other logistics could still have made sense.

But then there is another theory where people suggest that acquisition was driven by the urge to start international flights which was restricted to airlines with a minimum years in operations and acquiring Air Deccan gave that status to Kingfisher.

Understanding the customer !!!!!!

Good Timely Ad

FMCG Majors and Indians

I was reading a newspaper article in TOI on how Asian Executives are increasingly in demand in corporate world worldwide . The article was written against the backdrop of the news that Harish Manwani is set to become first COO of Unilever, which is seen as an acknowledgement of the growing importance of Indian/Emerging markets. The recognition for the Indian talent has always there, historically many multinationals have looked at their Indian operations as a hunting ground for fresh talent.....

Harish Manwani is actually an addition to the list, other are PepsiCo chairman and CEO Indra Nooyi and Rakesh Kapoor the global CEO of Reckitt Benckiser. I have looked at only FMCG sector there are more people in other sectors also, and this probably is just the start...

Dhoni & McDowells

disappointed by Dhoni on this....

Perhaps I was expecting too much from him, with the status he has achieved he could have always said 'No' to this surrogate ad and it wouldn’t have made a difference to the crores he would anyway make. But ....

Value of Brand Dhoni !!!!!!!!!

I thoroughly enjoyed the world cup success and was quite impressed with the overall team performance and especially Dhoni's role in the success. I think many of us have always have been waiting for that one individual who would come true on the big match day and win matches for us ( like the Aussies have always had and even with Pakistan at time).

My first tweet after the world cup victory was how many ads will I see dhoni in :)

My fear is proving to be right , the endorsements rates have sky rocketed and quoting from live mint article "

Dhoni charges Rs. 6-7 crore per endorsement per year and already endorses around 19 brands, including Sony, Pepsi, Reebok and Big Bazaar, leaving only a handful of categories such as financial services and four-wheelers he is yet to enter. That may happen now.

One report in economic times says the endorsements rates might even cross 10 crores...

I have never been convinced about the over use of celebrity endorsements and I think we will hit the peak in the next coming months in terms of Dhoni & team endorsing products across the range.. and the focus will be back on cricket , which had actually changed with the some success in other sports

Whole Grain - The New USP for Food products??

A few years back a pack of bread use to be a pack of bread, today if you were ask for pack of bread you would be in turn asked if you want brown , whole grain, multi-grain and so on....

In fact at times I think we are also going in the American way of increasing choice for the consumer to the point of confusion, for people who want to know more about increasing choice and confusion could read Paradox of choice by Barry Schwartz....

But coming back to the Whole Grain/Multi Grain phenomenon in food products. Today health seems to be a plank on which every food manufacturer wants to climb on, be it the old Maggi or the new Horlicks foodles to even Kellogg's corn flakes. The idea is probably to work on the anxiousness of the mother who sees the child glued in front of the TV or computers rather than going out and playing, and the increasing consumption of pizzas, burgers, chips...

It doesn't help that obesity is “the emerging Indian epidemic”, and the problem is going to only increase in coming days, with the marketers held answerable at some point or the other. Globally health consciousness has increased but we as a society still see a fat baby and compliment him as being from a well-to-do family. In fact in many parts of country food needs to cooked in Ghee or at least as much oil as possible, acting as an indicator of the status of the household...

We would be needing a change in the way we perceive obesity and change our food habits drastically if we need to move on to become a more healthier nation and the whole-grain and multi-grain products seem more as a gimmick or at best a drop in the ocean...

A Fistful of Rice By Vikram Akula

In 'A Fistful of Rice' Vikram Akula traces out his journey of starting SKS and shares his philosophy, take on tackling the poverty and rural issues in the country. The strength of the book is it very well-written and easy to read (infact at times a little too easy) and gives us an understanding of the for-profit micro finance model as against the NGO model which Grameen Bank promotes.

The book starts with his experiences on his visits to India in his childhood and moves on to the days where he started working in rural India and to the part where his search for a scalable model helps him conceptualize the SKS model. The idea he promotes through the book is that it is not a bad thing to make profits from micro finance or the poor. His idea is that one will not able to attract more money (other than grants and government funds) unless and until you are able to provide decent returns. This is what Late Prof C K Prahalad propounded in his book bottom of the pyramid where he said that there is money to be made by serving the world's poor.

Towards the end of the book, Akula shares the new areas in which SKS is expanding , from using their reach in rural India to sell product to their members, the non-profit work which they are doing in areas of education & health....

The book was written before the Microfinance crisis hit, so there is no mention about that, and the negative coverage which the industry has got, but then these issues are out the scope of this post, but there are a lots of positives which one can take away after reading the book especially for people interesting in making their presence felt in rural India.

Retail Consolidation : Observations from the Indian Market

In one of my earlier study on understanding retailing in villages, I had observed how retailers in the smaller villages had more generic offerings (even homogeneous) but as the population of the villages increased more specialized retailer would come up. I could not empirically test it but then there is some support in the theory and logically also it makes sense because a specialized retailer would survive only a certain minimum scale.

Now on my recent trips to the markets in some of the Meteors gave me a different flavor of how things are evolving, at one end we have the emergence of these more specialized retailer, like Mobile stores (driven by the mobile revolution), baby care stores like Baby center catering exclusively to needs to babies and pregnant mothers ... and at the other end of the evolution the smaller specialized stores like the chemists and consumer durable shops are becoming more more generic in their offerings. I still remember a couple of years back when I was looking for a camera roll (yes people still buy it!!) I could get it in a near by chemist store who was literally stocking everything which a typical grocer would do, and chances of you getting a specialized medicine was also low.

Some of these changes can be attributed to the emergence of organized retail and consumer willingness to travel some distance to buy products at these larger format stores. The smaller shops are reacting by adding more categories to gain economies, but a lot these need to studied in order to document this evolution and how it will impact the retail structure in the country….

Packaging Quality & Size

The rising inflation is making FMCG marketers rework their packaging strategy. The sachet revolution has become a folklore in the marketing world, on how it pushed consumption into newer and newer markets. But the current need to revisit their packaging decision is not driven by the need to increase penetration, but from the need to control price increase. Though some of the companies are still working on reducing the weight & keeping the price constant, I am not sure about its efficacy, when the reduction is 5-10 gms , as in the case of biscuits & confectionery maybe the consumer will not notice but when the weight goes down from 500gms to 325gms it sure to be noticed ...

The second aspect is related to coming up with cheaper packing options, so that it helps them save money. This again seems to be a very risky strategy where in many categories the packing also protects the basic product itself , especially in the context of the mom-n-pop stores in Indian retail. They say that when Marico first introduced plastic containers for parachute they had to do a lot of convincing before the retailer agreed , because till that point plastic quality used to be so bad that rats could actually eat into the containers!!!

And overall the packing quality has never been comparable to the developed world , either in terms of quality or in terms of details on the packs. Are we moving in the right direction?