Thursday, January 10, 2013

A lesson taught ...and learnt?

from the ceo to the office boy, from the business tycoon to the paan waala, from urban to rural; mobile handsets have travelled a great distance in india, and so has nokia. but thanks to the latest twists in the tale, nokia may need to adapt quite a bit very soon

The ‘Black & White’ era went into decline mode in India way back in 1982, when the first colour TV sets were introduced on the occasion of the Asiad Games (movies were already in colour, though; interestingly, India’s first indigenously produced colour film was Kishan Kanya; way back in 1937). But the ‘grey’ era continues to be strong till date. Not on your screens, my friend, but in markets. Ask the MNCs and they will recount, in horror, countless stories on how the grey market has, time and again, wreaked havoc with their plans.

And that was just the beginning of Nokia’s quagmires when it entered the Indian market in 1995. It was a market where mobile phones and services were a luxury item. With the prices that these models commanded, you could get a decent second hand Fiat car in those days!

There were a few key planks on which Nokia played its cards, and played them well. Firstly, they developed phones specifically for the Indian market, with durability to withstand Indian conditions and features like torch, vernacular SMS, news feeds, et al. Also, with other players like LG, Sony and Samsung being perceived as diversified consumer electronic companies, Nokia scored heavily on the fact that it had a core focus on mobile phones & developed strong brand equity.


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 09, 2013

Jet’tisoning a brand!

Despite holding pole position in the Indian aviation industry, Jet Airways was known for its apathy towards branding and marketing. 4Ps B&M does a snapshot seat-of-the-pants recap of Jet’s brand journey and the new branding move by Goyal to combine low cost carrier operations under JetKonnect

Exactly five years ago, in April 2007, Jet Airways decided to buy Air Sahara (for the second time, after the previous deal fell through). That was a time when it was flying high and seemed to be within touching distance of becoming the indisputable lord of Indian skies. Its revenues had increased by a whopping 21.5%, closing at Rs 7,401.31 crore for FY 2006-07 as compared to Rs 6,087.57 crore a year ago. Buoyed by its performance, the airline was quick to declare a dividend of Rs 6 on equity shares of Rs 10 each for the financial year 2006-07. Nobody could have faulted the airline and clearly all straws in the wind suggested that the airline was destined to peak new highs in the Indian aviation industry. Things were working to the airline’s plans and the famed merger with Air Sahara was supposed to fuel its future growth.

But the merger, instead of being a seamless exercise in integration and a trigger for growth, brought along a bagful of problems. Instead of deepening the airline’s bench strength for skilled manpower and adding to its reservoir of talent, the airline found itself saddled with redundant resources that could not be put to productive use. As a result of the merger Jet Airways suddenly found itself in a situation where there were crew members far in excess of its own requirements and with more number of expensive pilots than were needed to fly its machines. Also, around this time, economic winds had started turning baleful and the fangs of global recession had started biting. The aviation industry across the world, including in India, found itself stuck in the storm clouds of an intensifying recession. Airlines’ profits took a sharp beating and revenues for the industry plummeted precipitously. Like others, Jet Airways too found itself in the crosshairs of a blowing ill-wind. Its problems were compounded because the adverse business environment foreclosed any options that it may have had for deploying its surplus human resources. As a result, the airline’s management found itself faced with a knotty issue. After keeping this baggage grounded for nearly a year, the airline finally moved to cut the Gordian knot. In October 2008, the airline handed out pink slips to around a 1,000 of its employees.

Unfortunately, for Jet Airways the move backfired. The en masse sacking of employees kicked up a media hysteria and forced the airline to beat a hasty retreat. Two days later the airline reinstated all sacked employees but the episode left a lingering doubt about the health of the airline besides also denting its reputation in the public eye. Also, the market fallout was swift and brutal. Its stock price took a hammering, sliding from Rs.955 on December 17, 2007 to Rs. 115 on March 12, 2009. In a matter of months, the airline which had its nose in the cloud found itself buffeted by turbulent air pockets and desperately seeking a safe landing.


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 08, 2013

India has been late to the party

The paper industry in India has been late to the party when it comes to creating strong brands, but they can’t afford to stay laggards in this domain anymore

In an effort to create a strong presence in consumer segment, ITC launched its ‘Papercraft’ brand in the premium stationery segment and ‘Classmate’ brand in the mass stationery segment. The most important part was the way their ads communicated the quality of the products. This was one of the very first keen attempts by a large player in India to create a positioning of superior quality and also an environment friendly image. To add to it, their CSR campaign, which said that Re.1 from the sale of every Classmate notebook is contributed towards education of underprivileged children, also proved a great fit for their branding attempts. Today, ITC’s paperboards, paper and packaging business fetches them Rs.819.24 crore in revenue (year ending March 31, 2011) & a 31% growth yoy. The company’s proposed marketing budget for the segment for 2012 is projected to be Rs.350 million with a yoy leap of around 15%.

For 2012, the Rs.3000 crore Ballarpur Industries Ltd. (BILT) has upped its advertising budget from Rs.100 million in 2009 to around Rs.180 million in 2012. As much as 65% of this goes towards print advertisements while banners, hoardings, billboards, et al make the rest. BILT has also been a regular sponsor of BILT Skins Golf Tournament since 2002. The company presently owns a premium range of paper-based stationery products under the name ‘BILT Matrix’. It also has various brands of printing paper like BILT Magna Print and BILT Wisdom Print. JK Paper also owns various well known brands like JK Excel Bond, JK Ultima and JK Evervite to name a few.

However, the industry needs to really step on the gas on branding now, with the threat of cheap imports from China and Indonesia looming large. So far, growth in the domestic paper industry has been at around 9% over the past decade compared to a mere 4.2% average yearly growth for Chinese paper products in the same period. But this may not last long. “These imports are at least 25-30% cheaper and unless Indian companies come out with an image of superior quality, they will lose the war”, says M. L. Pachisia, member, Indian Paper Manufacturers Association. Over time, Chinese players like Nine Dragons, Shandong Chenming and Lee & Man have acquired global prominence. The interesting thing to note, however, is the fact that besides price, Chinese manufacturers have also been lauded globally for their unwavering adherence to environmental standards. A. K. Ghosh, VP-Marketing Sales, JK Paper, admits in an interaction with 4Ps B&M, “Brand identity to paper globally has started much earlier than in India. This is because many top paper companies are multinationals and sell their paper in many countries. Indian manufacturers fare well in terms of branding efforts but we are constrained by the amount we can spend on marketing and branding.”


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 04, 2013

‘Brown’, but not out!

Labour Party is in trouble and so is Brown, but his resignation will not make matters any better

Julius Caesar would surely lend a sympathetic ear to British Prime Minister Gordon Brown; as he would relate to him quite well. It’s not only the Opposition and rebels who are baying for Brown’s blood. Even party insiders view the PM as the key obstacle to the party’s hopes of avoiding defeat in the next elections. Rebel Labour MPs are distributing a letter calling on Brown to step down. He has survived a political gale by hastily reshuffling his cabinet, but political analysts say that the storm is far from over. The Labour party performed miserably in the recent local elections for the first time in 30 years. In power since 1997, it lost over 300 councillors and chances are high that the party may be wiped off in some southern counties. Some Labour councillors say that the MPs expense scandal, a wave of senior minister resignations and the government’s failure to handle Britain’s worst recession since World War II led to the catastrophic election results. But the embattled premier has put a brave front, saying on his new cabinet, “I have chosen a determined and strong Cabinet that will fight hard for the British people in these difficult times.”


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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Thursday, January 03, 2013

CHECHNYA: INSURGENT GROUPS

Russia has to ensure that sleeping dogs continue to lie in Chechnya

During the military operation, Caucasian militants (the separatist group) carried out large-scale attacks throughout Russia. The most prominent were the 1999 apartment-bombing campaign, the 2002 Moscow theatre siege and the 2004 Beslan school massacre. The Chechen war also attracted jihadists from Middle East and Central Asia to the Chechnya cause. More recently, under President Kadyrov, the Chechen insurgency has been toned down, as extremist groups have been suppressed. But their traces can be still found in the neighbouring republics.

As of 2009, Russia has partially succeeded in mitigating the separatist movement. The Government officially declared the end of hostilities towards Russia in April this year, but there are still groups of insurgents taking the battle forward. Russia has to ensure that the issues that led to the radicalisation of the people of Chechnya are buried so that the era of lasting peace prevails.
 

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