Indian Market Update 30.12.07

The weekend edition of ET had a few invitation articles and predictions made for the new year

Kishore Biyani's article on retailing No one can Stop an Idea

Arun Maira's predictions for the new year link

Hector Ruiz, Chairman and CEO AMD Inc, on Indian Market and Innovation

Other Usual Updates

Predictions on the Gadget boom coming in 2008 link

Harish Bijoor Catalyst reviews the year 2007 from a marketer's perspective link

The Strategist had an article on selling luxury homes.

Radio ad makers and the use of golden days to connect link

Suzuki - 'from denial to price reduction' reaction to Tata 1 Lakh car

Tata's seem to be the flavor of the month in terms of the media coverage and news. This is media attention is only going to increase in the coming days with the Jan 2008 launch of its 1- lakh car at the Auto Expo in Delhi. As it had happened with Indica, competitors and other auto manufactures were in a state of denial that an Indian company could come up with a world class car, now the same is happening with the 1 Lakh car, Suzuki initially denied that it was possible to manufacture a car at $2500, and then a few weeks back questioned the ability of Tata's to produce a car at the price with adequate safety and emission norms. Now the news is that Suzuki is planning to slash the prices of its iconic 800, some are even saying that it might try and match the prices . To quote the managing director Shinzo Nakanishi "We will have to do at least that,”.

From the consumers point of view it is a new year gift from Suzuki and Tata Motors, and the reinforcement of the belief that competition is good for consumers. With the coming of the world's cheapest car the dynamics of the auto industry might change forever. But then what would happen to consumers who have brought Maruti 800 for so many years, will they not feel cheated? Would it lead to a similar reaction as happened with iphone? Maybe one of first reactions would be that consumers would postpone their purchase decision till dust settles down in the low priced car wars............

Bottom of the Pyramid a Mirage?

Debates and arguments are beneficial , many a times the process brings out dimensions which have not been thought-off by the parties involved. Infact it is when some one questions you that you are able to articulate your thoughts better than when your idea is accepted passively by peers and others.

The debate between Prof C K Prahalad and Prof Aneel Karnani on the viability of the concept of Bottom of the pyramid marketing is one such debate. C K Prahalad is the one who propounded the theory that the Bottom of the pyramid consumers with incomes less than $2 per day can be a viable and a profitable segment to market and he places the onus of these activities on MNCs who have ignored this market till now. He says serving the bottom of the pyramid can become a win-win situation for both the consumers as well as the companies and also serve as a source of innovation. In his book 'Fortune at the Bottom of the Pyramid' he has written many cases on how the concept has been applied in many emerging economies. The book was published in 2004, but in the preface of the book CKP admits the fact that he has been working on the issue for many years and the struggle he had to go through before the idea was accepted. And as of today one finds that the idea has been taken forward by many companies and there are joint initiatives in terms of BOP labs being set-up in many developing countries.

Prof Aneel Karnani in his article Mirage at the bottom of the pyramid argues that the BOP argument is riddled with fallacies. According to him the BOP approach looks at the low income consumers as alternate markets and with the current low levels of income this seems to be a difficult proposition to accept. He goes on to look at each of the cases which have been given in the book and identifies the problems, including the estimated market size and number of BOP consumers. He emphasizes towards the end of the article that rather than looking at BOP consumers are buyers of products produced by multinationals they should been seen as producer . This is the only way in which the real income of these consumers would increase and real poverty alleviation would happen. CKP has responded to the article , link.

Indian Market Update - 22.12.07

Thought should start providing links in major news paper articles, which had marketing news so that one would be able to access it at one point. Staring from this week would try to post this info every Saturday.

Brand Equity had the main story on Marketers who dominate the market, a good read which provides us insights into how some companies are able to dominate their markets. Examples of J&J, Nestle, Eureak Forbes....

Strategist reproduced an article on Companies approach to innovation, which had some time back come in the McKinsey Quarterly and the other story was on how three comics are trying to redefine the markets.

Catalyst describes the challenge that Raymonds is facing trying to manage both park Avenue and Raymonds Brand.


More News links

This article is about the importance of Bollywood in Indian market place and the fact that it is the driving force behind internet portals , gaming devices and mobile phones

The story of how regional brands are cashing in on the modern trade.

SRK and the nokia ad.

Reliance eying the acquisitions route for making its presence felt in the Indian branded apparel sector.

Opinion of Shombit Sengupta on "Is Brand India tag a liability for Luxury goods?" and Arvind singal in his regular column adds his insights on Brand India.

Trends

Net Access through Cellphones is 14 Times more than Broadband.

10 Technology trends that defined 2007.

'Munnabhai' makes Mahatma netizens' top search.

SRK and New Nokia Ads

Celebrity endorsements as a means of promoting a brand has often been misused in the country with celebrities like Amitabh Bachan and cricketers endorsing scores of brands each, from petrol, Banks to chocolates.

But the new ads of Nokia featuring Shahrukh Khan (who is into as many if not more endorsements as Amitabh Bachan) has been generating a lot of media attention even before it's release. The coverage on Hindustan Times talks about the ads connecting the use of Nokia phones with the generic category of telephony itself. With Nokia having close to 70 percent market share in the handset market it does make sense. Overall though nokia has been a little late in jumping on to the band-wagon of using celebrities with the rivals Motorola having used Abhisek Bachan and Sony Ericsson Hrithik Roshan.

If one were to look at the earlier communication strategy used by Nokia through it's N Series ads and now the use of SRK, the question is Nokia taking the easy way-out of coming up with original ads, because the earlier ads of N-series were very well received and with the use of celebrity maybe the originality of Nokia ads might be lost as it would be one more Brand being promoted by SRK . Though in the short run it might have an influence with the recent hits like "Om Shanti Om". And as the Business Standard article asks, how will this help the market leader???

If one were to fall back on some theory , it says that for a celebrity endorsement to work it should have expertise, trustworthiness and likeability. Maybe SRK would do well in the last parameter and to certain extent in the Trustworthiness also , but then may one should wait till the ads are released...

Will update the ad in the blog when it is released......

Update 1 : SRKs comments on Celebrity Endorsements, link
Update 2 : More on Celebrity Management, link

Rise of India....

Here I have written many times on the potential that India holds ,

but one always feels good if some one outside also acknowledges the same and thus thought this video* should find a place in this blog....



* saw it on varun's page so due acknowledgment to him...

Tata's Small Car as a Taxi

I read this news item in the economic times Tata's small car may become taxi operators' choice and then there was a question raised in one of the discussions* which promoted me to raise this issue .The article says that many of the Taxi Operators across the country are postponing their plans to buy Indica and other small cars and are waiting for the Auto Expo in Jan when the Tata's would unveil the new car. The fact that the other products in the Tata Motors stable, Sumo and Indica have both the reputation of being cheap to run and affordable to own, the taxi operators expect the same from the new offering.

But as a marketer would it be a good idea if your car sells as a Taxi? World wide car manufactures have resisted being seen as a Taxi reasons being the impact on the Brand image and also because in the developed markets the Taxi business is very well organized with big players who have a lot of bargaining power and thus are able to get the best price possible. Though in the Indian market the Taxi operators are small and mostly unorganized market, but the first factor of the impact of the brand image is a factor which needs to be taken care of . Would a first time buyer (the expected target customer) be really keen on buying a car which is is running around the town as a Taxi? Or maybe it might not be as much as a criteria as we are talking about an entry car. In Srilanka I had read that Baja Autoriksha's are being used as a family transport vehicle........................

* By Vinayak during the Indica presentation.

Triumph of Brand Tata or Brand India

Most of us have been keenly following Tata's bid to acquire the two Ford Brands Land Rover and Jaguar. With the Indian media reporting that Ford has named Tata as the preffered bidder it seems that Tata would eventually buy the two brands. This is not something new for the group which has been on the acquisition spree for sometime now, its 11.3 billion deal acquiring Corous is being listed among the world's ten best deals of 2007 by Time.

And even in overall M&A scene we have seen many Indian groups acquiring many companies in 2007, and the Chinese companies have been on it much longer than the Indian companies, the Lenovo's acquisition of IBM's PC division being one which is more recent in the consumer's memory.

But the coming to what i have put in the title of the post on how the Triumph of brand Tata is more or less the recognition of Brand India. Tata is one of the oldest and well recognized brands in the country and in the pre-lib days through their diversifications were there in most of the sectors in the economy and as their website puts it name "TATA is synonymous with India's industrialization". As one foreign visitor has observed in the pre-lib days most of things in India were manufactured by the Tata's , how the hotel he stayed belonged to Tatas (Taj), even the the soap he used in the hotel belonged to the Tatas (Tomco), salt, steel, buses, and so on......

The willingness on the part of Ford to sell its brands to the group shows that they recognize it as a company which has the competence and standing in the automobile market to be able to handle the two brands.....

Update: Brand Tata is Hinged to Brand India

" We are like that only"

Book written by Rama Bijapurkar on understanding consumer India. With foreword written by C K Prahalad and afterword by Naryana Murthy, the book raises a lot of expectation of the reader. The book promises to help the reader understand the billion plus market, and also clear many myths about it. A good read but the authors ideas have been published in various newspaper articles and business publications. A die-hard believer in the future growth and potential of the Indian market.

Link to the author's website Link

Aminabad Market Vs Sahara Ganj....

This post is triggered by a comment made by my friend on our recent visit to Aminbad Market, he wondered "Can Big Bazaar replace this market ever?". Now for the benefit of people who are not from Lucknow , Aminbad market is that typical market which is present in most of the small and bigger cities in the country(though size might vary), whether it is the Shivaji Nagar Market in Bangalore, or the market surrounding the Kalupur market in Ahmedabad. These are the typical markets which are full of vendors who are there to sell anything from a comb to watches to crockery......

And these vendors are mostly the small vendors on the roadside, with all the material which they sell on the a rented gadi or thela and some make use of a small loudspeaker to attract customers. And these markets have a reputation to be the one where you could get the best price if one knew how to bargain.

My friend made the comment a couple of days back , and we just casually discussed it, but then when i again went back to the market i decided to take some time off and spent a couple of hours in the market pondering over the question. Though I am firmly in the favor of the entry of organized retail in the country, the first thought which came to me was the one which has many people worried (though i doubt the genuineness of most of them) was the employment such markets are able to generate. Second thought was what it would mean culturally to loose out such a vibrant and lively market with a life less organized retail store which in a way is unique and ingrained in the way we are and we shop....

But at the end of two hours followed by a visit to few of the organized retailers in the city I was convinced that it would be very difficult if not impossible for organized retail to dislodge the unorganized small retailer from the retail scene in the country , because more than the issues of economies of scale and efficiency, for us bazaar buying is a part of our culture and though we might like to go to the shopping malls once in a while we would continue to patronize markets like Aminabad for a long time to come, and by "we" I mean the majority of Indians...

Marketing Trends and Predictions for 2008??

2007 is nearing an end, so i thought we could make some predictions on marketing trends for 2008 and also list out things which we as marketers would look forward to ....

can start with some and other can contribute and we could compile it at the year end and post it....

Market Trends

1. Indian Retail would continue to grow, but with them becoming more sensitive to the political and social issues

2. Indian Telecom would grow at the same pace or even higher.....

3.

Things to look forward to

1. New Car launches by Maruti, hyundai and others would make the activity in the Indian automobile market even more interesting to watch and comment..

Expect more additions .....

Product Launches Accompanied by Websites

The recent launch of new products have been accompanied by the launch of a companion website (generally gaming and entertainment).

ITCs Bingo's website is a gaming page which includes games woven around the flavors which the company is promoting in its chips. The theme is that of a college campus.

I think one of the reasons why marketers are going for the launch of companion website is that the cost involved in setting up a new website is very low and for such a low cost it is not a major decision , whatever traffic you are able to generate would be a plus and if it really picks up you can capitalize on it later.

And the second and more important reason could be the changing media habits of the younger consumers, the ITC Bingo site is focused on informing consumers about the various flavors it has to consumers who might not be spending that kind of time on TV or even when they would be watching TV they might switch channels during the ad time and with the growing interest in gaming in the country it is bound to attract the attention of the right consumer .....

Some more examples include, ITC Sunfeast , Colgate Max Fresh , in which the site includes games, jokes, e-cards and free sample options. The game is again revolves around the brand proposition of the use of crystals.....

Another new launch accompanied by a website is Taj Mahal Dessert Tea. Here the site seems to have been put to a different use, There are no games, the site seems to be more of trying to educate consumers on the possible uses of the Dessert Tea which for most of the consumers would be new...

Corporate sites which have additional websites attached

Coke has Myenjoyzone.com
Pepsi has Pepsizone.com