Wall Focus-123

(News collection for Management studies)

Volume: 02      Issue: 123         25-November, 2010 – Thursday           Pages:11

Focus on Brand Lines - Trends
The Indian consumer, 10 years on - Given the rapid changes in the country's demographic profile, marketers and advertisers say they would be addressing a whole new Indian consumer in the next decade..

Even as the majority of India will be young, there will still be a significantly large retired population and a very large middle-aged population.

 
“Just couldn't resist buying it — It comes with 80% extra advertising than its competitors!”

Chitra Narayanan (Ref : The Hindu Business Line )

The end of the year is always an occasion for marketers to look back on a year well spent or as one of missed opportunities and indulge in some crystal ball gazing on the year ahead. But, the beginning of a new decade suffuses one with hope and cheer, more so, as the clairvoyants are out in full force. What will the Indian consumer look like in 2020?

Based on a few reports (The FMCG Roadmap to 2020 by Booz & Co), some trend spotting by CEOs at the recent CII-FMCG summit and forecasts by experts, BrandLine pieces together the profile of the Indian consumer a decade from now. The 2020 consumer in the country will be:

A younger Indian

The average age of the Indian in 2020 will be 29, while the average age in both China and the US will be 37 and in Europe 45. According to Madhukar Sabnavis, Country Head, Discovery and Planning, Ogilvy and Mather, a significant point marketers should note is that the 25-year-old Indian in 2020 will be a post-liberalisation child. This, as Giraj Sharma, a Delhi-based brand consultant explains, means the consumer will be a ‘spoilt for choice' one, exposed to plenty of brands and options. Also, as Kannan Sitaram, Operating Partner, India Equity Partners and former COO, Dabur India Ltd says, this generation would tend to be more consumptive, borrowing from future income for purchases including holidays.

Having said that, Sabnavis clarifies that the North of India will be predominantly young, but southern India will be comparatively older. Besides this, even as the majority of India will be young, there will still be a significantly large retired population and a very large middle-aged population.

A predominantly urban animal

Even as marketers chase the rural markets today, the growing trend of large-scale migration to the cities could mean changing ratios. The report by the National Council of Applied Economic Research titled ‘How India Earns, Spends and Saves,' says that 45 per cent of Indians would be living in towns and cities by 2050. Other estimates suggest that in 2020, the urban population in India would be nearly 35 per cent of the total. In today's context, urban residents are more educated, have higher incomes and spend more — but by 2020 the urban-rural divide will no longer be that strong.

Already, in many parts of Punjab, people residing in the pinds or villages buy the same labels as their urban cousins. “We are going to see a lot more homogenisation, just like in the US where the rural consumers' disposition and attitude is similar to that of their urban cousins,” explains Giraj Sharma. According to him, in the coming years, marketers will not be able to slice India as rural or urban — the segmentation would have to happen along value terms rather than on demographic or locational terms.

Agrees Sitaram, “There are strong signs even today of increasing homogeneity between urban and rural.

“In fact, there are bigger differences within a city than between a city and rural area — for instance, the South Delhi consumer when compared with the East Delhi consumer may display a different behaviour as compared to that between a East Delhi consumer and a UP town resident.”

A multi-tasker SEEKING experiences

According to Sabnavis, advertisers will have to look at faster ways of engaging the consumer in 2020 as Indians will be busier and consumer time will be compressed. Also, the emerging new consumer will be a seeker of experiences — so the engagement would have to be more visual, more interactive. Brands will need to focus on the experience.

Not-so-price conscious, indulgent

Already, several market surveys and studies have shown that the Indian consumer, even at the BoP (bottom of the pyramid), is not so much cost-conscious as he is value-conscious. Indian consumers are already showing tendencies of wanting to indulge in new experiences and new products. By 2020 when per capita incomes are expected to double and India will be the eighth largest economy, this will become even more pronounced. The Booz & Co report points to the ‘increasing premiumisation' of products which will see “consumers trading up the price ladder in search of additional functionality or brand promise.”

Chittaranjan Dar, Chief Executive of ITC Foods division, describes how cheaper glucose biscuits are losing share to more premium cookies. Even the rural market experience supports this trend. As Pradeep Kashyap, CEO, MART, points out, consumers are buying not so much on the affordability platform as on the accessibility platform. Giraj Sharma, brand consultant, links this phenomenon to a new marketing term ‘Masstige'— where mass is married with prestige — leading to the downward extension of the brand. A mass product has to carry some ‘premiumness' and vice versa — a premium product has to go mass.

More aware and educated

As education levels rise (India will have more than 100 million graduates and post-graduates), the Indian consumer will become more aware. The NCAER report points out how incomes tend to rise with education and the pattern of saving and spending changes. It also makes consumers more demanding.

A bit of a brand sceptic

Ambi Parameswaran, Executive Director and CEO, Draftfcb Ulka, says that India and Brazil have traditionally displayed brand loyalty but things may change. First, India is getting younger and the youth are typically not so sentimental about brands. Second, the rise of private labels will give brands a run for their money. Hence, marketers will need to work harder to gain brand salience.

More health conscious

This trend, which as India Equity Partners' Sitaram points out is already embedded, will continue, not just with food marketers but other products as well. However, Sitaram says, even as their disease profile is forcing Indians to become more health conscious, the Indian consumer wants a pain-free change. “The sweet spot for marketers is to give the healthy option without foregoing the indulgences,” says Sitaram, citing how consumers may switch to healthier oils but will not give up oil.

Convenience conscious

With time at a premium and Indians getting busier, marketers will have to provide more ‘on the go' products. By the next decade, the Indian consumer will be demanding convenience, not just of products but also of purchase. ITC's Dar describes how Kitchens of India, its ready-to-eat label, sells more online (on Amazon) than in retail stores.

More individualistic

The family structure will continue to evolve in the next decade — even as the joint family disintegrates and nuclear units take firm shape, there could also be a rise in the single person household. The migration of workers to cities, more divorces, could see more singles in the city and this spells another opportunity for marketers, according to Sabnavis.

“What will also happen is the rise of individualism,” says Giraj Sharma. So, rather than address the family as a unit, marketers need to talk to individuals — a trend that Dar agrees is already happening, pointing at how an increasing number of men are making FMCG purchases on their way from work.

While these are broad trends — with the Indian consumer expected to evolve into a younger, richer, more educated, busier, more confident entity — marketers warn that there will continue to be many more Indias at work.

SPECIAL FOCUS

Brand Line – Brands - Variety - CinemaThe magic of Harry Potter  - What makes Harry Potter one of the biggest brands of our age? HARISH BHAT

 Bangalore. The seventh movie in the Potterseries is whipping up a lot of excitement among movie goers. _ G. P. Sampath Kumar

Potter fans at the premiere show of Harry Potter and the Deathly Hallows Part 1, in

Last week, the latest Harry Potter movie (Harry Potter and the Deathly Hallows, Part 1) premiered worldwide, generating excitement and packed cinema halls. In my office, the Marketing Head of Fastrack declared her happy intention to watch the movie on the opening night. When I returned home, my teenage daughter and her friends had already made bookings for the weekend. Movie theatres expressed their happiness at being sold out. Clearly, brand Harry Potter had waved its magic wand yet again.

This was entirely expected, because Harry Potter has become one of the biggest fictional brands of our generation. Ever since the first Potter book was published in 1997, over 400 million copies have sold, making it one of the bestsellers of all time. The first Harry Potter movie ranks amongst the top 10 grossers of Hollywood, and the first six movies have earned an astounding $5.7 billion. Brand Harry Potter commands levels of recognition and buzz that most consumer brands would die to achieve. What explains this magic, and what learnings does it hold for us? Here are seven lessons from Brand Harry Potter.

BRAND HARRY POTTER IS BASED ON A POWERFUL HUMAN INSIGHT

Like all great brands, Harry Potter succeeds because it is based on a deep human insight. All of us have a bit of Potter within us - we aspire to be like this boy magician as he attempts to save the world by fighting the powerful evil wizard Voldemort. This requires repeated acts of courage, both big and small, and indeed these are the stories which appeal to us. In our own lives, as children and adults, we fight similar dark and powerful forces and fears, sometimes external and sometimes within ourselves. On several occasions, we feel as helpless as Harry does, but we always wish that we had his courage to confront these negative forces and fears head-on. We feel elevated when he wins his battles. Therefore, brand Harry Potter appeals to a deep and universal human insight.

No wonder we relate to these stories so spontaneously, and no wonder the brand has become so loved.

THE BRAND ENGAGES US SPLENDIDLY

Iconic brands engage their consumers superbly. The devices they use for such consumer engagement include entertainment, encouragement, provocation or flights into delightful worlds of fantasy. For instance, Nike encourages us to "just do it" and Dove provokes us to think about real beauty.

Brand Harry Potter excels in this sphere, because it engages us in multiple ways - at one level, it entertains us by opening doors to a fantastic world of magic. At another level, it involves us in the great fight between good and evil. At the deepest level, it provokes us to think about fundamental forces that rule our lives, such as love, friendship, courage and compassion. When a brand engages with its consumers at so many multiple levels, it is bound to win. The brand has remained consistent, yet evolved.

Brands which achieve sustained success remain true to their core proposition, yet constantly evolve to keep themselves interesting, fresh and relevant. Classic illustrations include IBM, Gillette and Tata: over the years, their core promise has remained remarkably consistent, yet their product offerings and communication have changed significantly.

Much in the same manner, brand Harry Potter began life as a light schoolboy story, then morphed into exciting battles between powerful opposing forces, and in the last few instalments it has turned to heavier adult themes like death. Yet in this voyage of evolution, it has remained absolutely consistent in its core storyline and characterisation.

Indeed, even the lead characters of the story - Harry Potter, Hermione Granger and Ron Weasley - have been played by the same actors - Daniel Radcliffe, Emma Watson and Rupert Grint, all of them looking a year older in each instalment of the tale, thereby lending even more credibility to the natural evolution of the brand.

THE BRAND IS SUFFUSED WITH EVOCATIVE SYMBOLS AND RITUALS

The Hoffstede model, evolved from the sociological sciences but also used in creating brands, talks of the importance of symbols and rituals in building cultures and brands. Harry Potter is incredibly rich in a consistent system of unique symbols and rituals which greatly appeal to us. I can only quote a few examples here: Magically entering platform 9_ in Kings Cross Station, the Sorting Hat Ritual at Hogwarts, the game of Quidditch, the Invisibility Cloak, the Mirror of Erised, photographs which come alive, Dobby and horcruxes - these are all symbols and rituals which play their respective roles in enhancing the allure of the brand.

THE BRAND HAS CREATED ITS OWN LEGENDS

Every great brand creates and nurtures its own legends, which add to its appeal. Coke's secret recipe or HP's birth in a garage are two examples. In a similar fashion, Harry Potter has nurtured legends built around its author: a penniless single woman J.K. Rowling, creating stories on a napkin, seated alone in an Edinburgh caf‚ with her child by her side. Along the way, it has also acquired other legends, including stories of thousands of people waiting entire nights in queues to pick up their copies of Harry Potter books.

Undoubtedly, these legends make the brand even more attractive to pursue.

THE BRAND HAS DEVELOPED A DAZZLING ARRAY OF TOUCHPOINTS

Successful brands also develop an array of consumer touch-points rapidly, because these help envelop the consumer's mind with images of the brand. Harry Potter is a brilliant example. It began life as a book, and soon moved into movies.

But beyond this, the brand quickly had a full range of merchandise on offer including wands, leaky cauldrons and invisibility cloaks.

Eight official Harry Potter video games have been developed and launched to coincide with the release of each movie. An entire Harry Potter theme park has been established in Orlando, Florida. In London, tours of Harry Potter sights are actively promoted by the Tourism Authority. No wonder brand Harry Potter has gained so much traction, so fast.

THE BRAND HAS LEVERAGED NEW-AGE MEDIA VERY SMARTLY

Harry Potter is perhaps the first fictional brand to use new-age media comprehensively. Muggle Cast and Potter Cast, both based on Harry Potter stories, have repeatedly reached top spots in iTunes podcast rankings. The brand has developed an active Internet presence, and now has an amazing 9.3 million fans on Facebook, which is far more than any other brand can boast of.

Web sites such as Mugglenet and Leaky Cauldron have been promoted to showcase and talk about all things related to Potter. Harry Potter fans have also been encouraged to go online in many other ways.

For instance, the online play titled A very Potter Musical has been a great hit on You- Tube, where it has been viewed by no less than 3 million viewers.

This re-emphasises what marketers are fast discovering - to appeal to new-age consumers, your brand must have impactful new-age media presence.

Even as you contemplate these seven lessons, don't forget to enjoy the seventh Harry Potter movie.

(The writer is Chief Operating Officer - Watches, Titan Industries Ltd.)

Forbes releases list of 7 most powerful rural Indians  (B.Raghavendra, 09D61E0003)

Mansukhbhai Jagani, Mansukhbhai Patel, Mansukhbhai Prajapati and Madanlal Kumawat, are among Forbes' list of seven most powerful rural Indian entrepreneurs, whose "inventions are changing lives" of the people across the country.

IIM-Ahmedabad professor and founder of India's Honeybee Network Anil Gupta has selected the seven most powerful rural Indian entrepreneurs for a compilation in Forbes magazine.

"India's villages have become a hot bed of innovation, as its rural poor develop inventions out of necessity. Several of the people on this list have no more than an elementary school education," Gupta says.

Jagani developed a motorcycle-based tractor for India's poor farmers, which is both cost effective - costing roughly USD 318, and fuel efficient (it can plow an acre of land in 30 minutes with two liters of fuel).

A farmer, Patel invented a cotton stripping machine that has significantly cut the cost of cotton farming and revolutionised India's cotton industry.

Prajapati, a potter, invented a clay non-stick pan that costs Rs 100 and a clay refrigerator that runs without electricity for those who cannot afford a fridge or their electricity and maintenance costs, Gupta said.

Next on the list is Future Group Chairman Kishore Biyani . Called the "Sam Walton of India ," Biyani's company operates about three million square feet of retail space in 25 Indian cities.

Coming in next is social entrepreneur Anshu Gupta who founded GOONJ, a system that transfers used clothing and household goods from India's rich to its poorest communities.

Gupta collects 30 tonnes of cloth every month and distributes it across 20 states. "He has an amazing reach, a simple network and excellent supply chain management," Gupta said, adding Troikka Pharmaceuticals MD Ketan Patel is "India's pain-killer."

Patel's business focuses on developing painless solutions for medical procedures. He developed the world's first painless iclofenac injection, which helps alleviate acute pain and inflammation.

Also on Gupta's list is Dadaji Ramaji Khobragade, who invented the HMT rice, a highly successful rice variety which yielded 80 per cent more rice than the conventional variety. HMT is now grown all over India, on some 100,000 acres in five states.

Madanlal Kumawat, a grassroots innovator with no more than a fourth-grade education, developed a fuel-efficient, multi-crop thresher that yields cleaner grains, which can be bagged directly and eliminates the cost of cleaning.

Gupta said his last pick Chintakindi Mallesham, inventor of the Laxmi Asu Machine, "ignited a revolution in India's weaving community."

Mallesham's machine can make six saris worth of material in one day, and "no human effort is required beyond placing thread on the machine and removing the material after the process is complete."

DAY FOCUS:  (Focused by B.Raghavendra, 09D61E0003)

Telecommunications -Info-Tech - New Products & ServicesMobile Number Portability now just an SMS away - LAUNCH TODAY

Subscribers,who are not happy with their existing operator, can move to another.

After a delay of more than two years, Mobile Number Portability (which allows subscribers to retain their existing mobile telephone numbers when they switch from one operator to another) will debut today starting from Rohtak in Haryana.

Consumers who are not happy with their existing operator can move to another, irrespective of mobile technology or from one technology to another of the same operator within a circle. The system is likely to be launched in other parts of the country by the end of December provided the operators are ready with their network.

Process

For porting, a subscriber has to send an SMS (PORTMobile Number) from the number he wishes to be ported, to number 1900. The subscriber will receive a Unique Porting Code (UPC) by SMS from his current service provider.

The subscriber will need to apply in the prescribed application form to the chosen new service provider quoting the UPC which will act as a reference while filling up the application form with the new service provider. The new service provider will then take action to get the required processes completed to enable the subscriber get connected to his network. Porting has to be completed within seven working days. TRAI has fixed a ceiling of Rs 19 on porting charges which the new service provider may collect from the subscriber. Post-paid subscribers, before making the porting request, have to make sure that their last bill has been paid failing which the request for change to new service provider shall be rejected.

In the case of pre-paid subscriber, any balance amount left will not be carried forward when the number is transferred to the new service provider. Once a subscriber ports his number to the new operator, then, he will have to wait for at least 90 days before he can change his operator again.

According to TRAI estimates, about 10 per cent of the mobile subscriber base is expected to avail itself of the service in the first year, which will fall down to just 5 per cent by the third year. But the system will force operators to improve their quality of service and create differentiation in services not only to retain their existing subscriber base but also to attract customers from other players. New operators are looking at MNP as an opportunity to wean away high-end customers cornered by incumbent players, especially in the post-paid segment. On the other hand, incumbent players are planning to leverage their pan-India network and reach to attract subscribers.

3G services

Industry watchers say that there could be a significant movement from CDMA network to GSM. MNP will also play a significant role in the 3G space as not all the operators have spectrum. So, a subscriber of a mobile operator which does not have 3G services may look to move to an operator who has.

Railways - Shipping/PortsContainer train operators put on hold Rs 3,400-cr investment plans

The recent Railway Ministry move of increasing freight charges for container train operators has resulted in the existing and potential investors reviewing their investment plans of about Rs 4,400 crore. This emerged at an interaction between industry and the Railway Minister, Ms Mamata Banerjee.

Existing container train operators said that they have “put on hold” about Rs 3,400 crore of investments after the Railway Ministry introduced such frequent policy changes.

Fluctuation in policies

Additionally, Maruti Suzuki said that the company wants a long-term commitment from the Railways on freight charges before it commits an investment of Rs 1,000 crore.

“You cannot change the policies so frequently…in a public-private partnership model where we are dependent on the Railways (superstructure),” said the Kribhco Managing Director, Mr B.D. Sinha.

“When we took the container train operations licence, we had committed investments of Rs 6,000 crore. Now, after about Rs 2,600-crore investments have gone in, they (the remaining investments) have been put on hold,” said Mr Sankalp Shukla, speaking on behalf of the Association of Container Train Operators (ACTO).

“We have plans ready for an investment of Rs 1,000 crore. But, there is no long-term commitment from the Railways on freight rate increases…the fluctuation formula (for freight charges) is not fixed,” remarked an official from Maruti Suzuki.

“We invested Rs 2 crore for special (design container) wagons to move steel coils by rail from Mundra and Kandla…You have now increased the freight charges by 270 per cent,” the official from Maruti Suzuki said when the Railway Board Chairman, Mr Vivek Sahai, asked for specifics on freight rate increases.

This increase was on account of haulage charge hikes for container train operators.

Life Insurance -Industry & Economy - Real Estate & Construction
Money & Banking - Economic OffencesAll norms adhered to in clearing loans: LIC Housing - Company to ensure that stakeholders' interest is protected.

LIC Housing's loans to builders constitute 11.34 per cent of the total loan portfolio

As on October 31, 2010 gross NPAs from this portfolio is at 0.08 per cent

LIC Housing Finance Company, whose Chief Executive was arrested by CBI on Wednesday on bribery charges for sanctioning loans, said that it had adhered to all rules while approving loans.

“All procedures and due diligences consistent with Board approved guidelines have been adhered to in approving the loans, as has been followed in the past, by the Competent Authority,” the company said in a statement.

Accusation

According to CBI, Mr R.R. Nair, the LIC Housing chief, allegedly received a bribe of Rs 45 lakh from Money Matters, a Mumbai-based finance company, who acted as the facilitator for loans to developers.

Mr Nair is accused of providing undue favours to companies such as DB Realty, Mantri Realty, Entertainment World Lucknow, Indore City Treasures and Pashmina Developers.

LIC Housing Finance said loans to builders constitute 11.34 per cent of the total loan portfolio for LIC HF as on October 31, 2010 with gross NPAs from this portfolio at 0.08 per cent.

“All the loans are secured by the underlying assets to the full satisfaction of the approving authority. All the loans have been approved in compliance with relevant regulatory norms. As on date all the loans in question are performing assets”, the company said. All necessary steps would be taken to ensure that interests of various stakeholders would be fully protected, the release added. The scrip of LIC Housing Finance fell more than 18 per cent or Rs 240 to close at Rs 1,068.5 on BSE on Wednesday 24, November-2010.

Another accused Mr Naresh Chopra, Secretary (Investment), LIC has been allegedly providing insider information on dealings of investment matters of Life Insurance Corporation of India related to Adani, J P Hydro, JSW Power and Pantaloons. He is alleged to have received a bribe from Mr Rajesh Sharma, CEO of Money Matters to provide this insider information.

A director in Central Bank of India, Mr Maninder Singh Johar has been accused of receiving a bribe of Rs 30 lakh to provide undue favour to Lavasa's, a project he was handling at that time.

However, while speaking to news channels, Mr S. Sridhar, Chairman and Managing director of Central Bank of India, said that Mr Johar is not a bank employee. “It may have nothing to do with the Central Bank of India. He is a chartered accountant member of the board and a part-time director. The CBI hasn't come to us and asked us for details,” he said. One official each from Bank of India and Punjab National Bank were also arrested. The bank management and LIC officials were not available for comment.

According to banking sources, this is a purely a bribery case and not a housing loan scam. It is unlikely to have any systemic implications, they said. A bank official said loan facilitation charge is a normal practice in sanctioning large loans among banks and financial institutions.

MANAGEMENT TIPS: -  MEETING DEADLINES

No one will be happy if your team has to rush around at the last minute to complete a project. Follow these tips to make deadlines less stressful for everyone.

Only promise what you can realistically deliver. Don't create deadlines that you know you can't meet. By only promising what you know you can do, you'll be able to finish on time.Set clear goals. Once you know what you need to accomplish, it helps to know how and when you want to do it. Put your goals down on paper and make sure everyone on your team gets a copy.Organize a team. Many of your employees will have unique strengths and training that can make them great assets to certain projects. Pick a team that has the right skills to carry out the job.Delegate tasks. Spread work among your employees in a way that doesn't leave anyone overburdened while also allowing the project work smoothly.Create milestones. Creating milestones for you and your team will help you keep track of your progress and also give you a sense of accomplishment as you reach each milestone.Keep communication open. Keeping everyone in touch with the status of the project is key to making sure it's completed on time.Do it right the first time. Planning ahead will help prevent you from delivering a substandard product. Having to redo something for a client costs money, and, more than likely, future business opportunities.Stay organized. Staying organized will help keep you from wasting time chasing down important documents and information.Make sure expectations are clear. Be sure that each member of your team knows what their specific responsibilities are. This will save time and prevent tasks from being overlooked.Create a plan. Compile your goals and milestones into a comprehensive plan for attacking any project you are given. This way, you can make sure you're staying on schedule and that all of your employees will be clear about how and when things should be done.

FOCUS - CASE STUDY

Consumer Behaviour and Marketing Research

Case Study: Product Testing on the Internet

Procter & Gamble (P&G) is offering a number of different products and / or product versions over the Internet that you can't buy a your local retail store. But a consumer can go to the Procter &: Gamble Web site (wwp.gcom) and under 'Services and offers' a consumer can click on Try and. Buy'. Then, for a number of products, P&G will offer you a free sample, a cents-off coupon, or the ability to purchase the actual product online. If the purchasers of a new item offered on the Web site give it great reviews, then P&G will consider making the product available in retail Stores.

Although P&G only began testing products online in 1998, the company already is doing 40 persent or its 6,000 product tests and related research projects online. One successful new product that was launched as a result at online testing is Crest Whitestrips, a home tooth-bleaching kit. Despite its $44 retail price, P&G was able to sell 144,000 whitening kits 'online over an eight-month period, thereby providing evidence that the public would not balk at the product's rather steep price When the product was finally introduced nationally into retail stores, consumers spent almost $50 million on kits in the first three months.

Question:

What personality traits do you believe many of the consumers who buy and try products found on the Protect &: Gamble Web site might share in common ?

Focus – Day Tip Continuous learning is an long term investment for life.