Friday, July 20, 2012

Ten years? You are Fired!

In Terms of both Content & Intent, Yunus’ ouster Elicits Controversy

The latest joke in Bangladesh after the dismissal of Dr.Muhammad Yunus, founder, Grameen Bank, from the post of MD, reads thus – In hell, every other nationality is kept in guarded cells but the one housing Bangladeshis remains unguarded. Because if anyone tries to leave, jealousy ensures that the others pull them back!

After a documentary (aired on Norwegian TV) that tried to prove how Dr.Yunus is embezzling funds (later proved wrong), Yunus seems to have become a prime scapegoat of the media and the ruling Sheikh Hasina Wajed-led Awami League. He has been accused of “making a sweeping statement against politicos”, promoting adulterated yoghurt. Above all, Sheik Hasina has called him as the one who is “sucking blood from the poor in the name of poverty alleviation.”


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Wednesday, July 18, 2012

Can he upset The Japanese?

Volkswagen has Renewed the term of its CEO, and all Eyes are on The Company as it Seeks to do to Toyota what Toyota did to GM by 2018. Can Winterkorn Indeed win his Most Coveted Prize?

2010 was surely one of the most relieving years for many companies who were browbeaten by recessionary winds over the past few years; and the largest German auto major Volkswagen is no exception. In fact, the company made all sorts of noises as the calendar year touched the end. For the less informed, even after the company had sold more than seven million vehicles for the first time in its history in a calendar year, the spotlight was on the term renewal of its CEO Martin Winterkorn. The board wholeheartedly voted in favour of extending Winterkorn’s term for another five years for its own set of reasons. Needless to mention, completing the merger with sports carmaker Porsche will be the second most important agenda of his renewed term. Second, because the first one is to displace Toyota as the world’s #1 auto major by 2018 in profitability and unit sales. Notably, the CEO now has the benefit of job security through 2016 for a term that would have expired by the end of 2011. As he is the architect of Volkswagen’s so-called Strategy 2018, the board feels that it makes a lot of logical sense if he captains the ship to that harbour. But is he indeed good enough to run the course?

Before taking control of the reins at Volkswagen AG in 2007, Winterkorn was the Chairman of the Board of Management of Audi and Porsche Automobile Holding SE. The last few years have been nothing but dynamic for this German engineer. Still, even critics accept that the appointment of the new global design chief (Walter de’Silva) is one of the most important decisions he has taken so far. For the uninitiated, de’Silva had previously overseen design at Audi, where he conceptualised the current R8 sports car and A6 sedan. And considering that Toyota has been dealing with an ageing product line-up, Volkswagen’s bet on design may prove to be a gold mine in the years to come. Even the CEO of Toyota Motor Corporation, Akio Toyoda, recently admitted at the North American International Auto Show in Detroit that the company will now be looking at making its cars look better.

Moving towards its goal to become the world’s largest auto major, Volkswagen will be doubling its capacity in China to three million units a year with two new plants. Moreover, the company will also be opening another plant in Tennessee to increase both sales and margins in North America. Even if Volkswagen is able to overtake Toyota in unit sales, profitability still remains one of the biggest challenges. While Volkswagen has been operating with an average net profit margin of 2.42% over the past five years, against the industry average of 3.46%, Toyota, on the other hand, has a net profit margin of 3.61% that beats the industry average. “Volkswagen is now trying to reduce costs and increase profit by removing many of its premium traits and also by building a US plant. They are doing this to increase volume but it could backfire because many US buyers won’t want to buy a Volkswagen if it doesn’t feel like a more up-scale option compared to Honda or Toyota,” said Karl Brauer, senior analyst, Edmunds. He also adds that it was in fact the drop in perceived quality for the Japanese automakers that has opened up opportunities for Volkswagen. A compromise on that front would not be a very good idea.


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Wednesday, May 16, 2012

Brands as Real Estate Boosters

The shift towards branding in the real estate industry is helping developers log an increase in sales on the back of a relationship built on trust, transparency and timely delivery of projects.

Recently, Ackruti City Ltd., a real estate company with a 30-year track record of delivering real estate projects in Mumbai, changed its name to Hubtown Ltd. The name change was done as part of the company’s rebranding exercise and to better reflect its growing capabilities and delivery standards. In fact, recent years have seen a lot of builders and developers becoming very serious about creating a positive image about their company through brand building. A lot of this change has to do with the changing profile of property-buying consumers today who have evolved into more discernible buyers, especially in matters of big ticket purchases like automobiles and homes.

With consumers becoming smart and looking for differentiated products, it has become all the more important for real estate players to go in for effective branding and marketing. Engaging in marketing and brand building helps real estate firms to attract new business, retain old business and build up a good reputation. As such real estate players are resorting to various branding activities by way of advertising, PR, participation in property exhibitions in India and abroad and making their presence felt on social media network sites.

As building a brand is all about gaining the trust of prospective customers and the industry alike, the route to branding for a real estate developer has to start and end with ‘customer satisfaction’. “Conducting your business in a transparent manner, adhering to timely delivery, ensuring a smooth transition to a registered housing society, all this helps in earning the faith of the customer, which creates awareness in a positive manner about your brand, resulting in sales increase,” says Diipesh Bhagtani, Director, Jaycee Homes. As real estate is a capital asset and a lifetime investment for most home buyers, building a brand in the real estate space is different as compared to other businesses and depends upon a number of factors. The city where the project is located, the locality in the city, amenities provided by the project, timely delivery by developer and possession to the customer are some key factors that a developer needs to look into in order to build trust for his brand and his company. “A developer who manages to provide these to a customer is able to build trust among home buyers in that particular city that he has operations in, thereby enhancing his image not only among customers but among his peers as well,” says Bhagtani.

Agrees Navin Raheja, Chairman and Managing Director, Raheja Developers Ltd. “Yes, branding and promotion are extremely important. However, the biggest branding is your work.” If a developer delivers a project on time and as per the committed quality, his work alone serves as his biggest branding and helps attract a large referral business.

So does a good brand image influence the buyer to choose the right property over other competitors or is it just the project that matters? A good brand image can pull the buyer in, but unless the product is intrinsically good, a sale will not be consummated. Like in all other industries, the product (or project) is the focal point, and if it appeals to the consumer, sales will happen. But, yes, the branding can ensure that the consumer at least considers/evaluates the project. “While earlier most real estate developers were only content with advertising their projects, a new breed of developers, especially those that have a pan-India presence, have realised the importance of branding and are concentrating on brand building exercises,” says Kaustuv Roy, Executive Director, Cushman & Wakefield.

Branding has also emerged as an important selling tool in these days of depressed market conditions. Developers are adapting to the changing environment by re-strategizing innovative business & marketing plans, thereby increasing profit margins. Today, developers are tying up with internationally renowned architects for their projects, thus bringing to the table international technology along with quality construction, resulting in faster deliverable time. This results in more sales within a shorter period, increasing cash flows and reduced borrowing costs for developers. “We do find real estate developers having multiple strategies which can be a mix of tying up with globally acclaimed architects, celebrities, sponsorship of sports and similar such exercises,” says Roy. Not only that, industry experts firmly believe that there’s a strong correlation between branding and stock-market listing. While earlier very few developers were listed, today we have a handful of them trading on the bourses. “Indirectly, branding may be leading to greater transparency in the real estate industry since we expect at some point of time in the future all the large developers to be listed,” adds Roy.

According to Niranjan Hiranandani, Managing Director, Hiranandani Constructions, “Branded real estate products should be able to live up to the expectations of end-buyers in terms of offering a world class qualitative product.” Industry experts point out that though the expectations from branded real estate firms are higher, most of them are able to command a premium owing to their superior quality of products. Customers don’t mind paying a premium for a good brand. “We, at Jaycee Homes, charge 10% higher than other developers for the premium quality we deliver,” says Bhagtani.

Developers are also branding themselves according to their core specializations. For instance, a developer promotes itself as a company which creates a lot of green spaces; some other developer promotes his company for building low-cost housing. This way, a lot of developers have taken to branding on the virtue of what the company specializes in.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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Wednesday, April 18, 2012

DECODING THE WORLD’S HOTTEST CONSUMER MARKET

The last year was a tough one for consumer marketers in India. The party spoilers were spiralling inflation, rising input costs and reluctant buyers plagued with twin uncertainties from having less money in their pockets and weak market sentiments. This year, though, promises to be different with various global consumer surveys indicating that the Indian consumer remains one of the most confident across the world as far as his/her future personal finances are concerned. Many of these surveys also point out that the Indian consumer intends to increase spending activities across consumer categories this year. But what is the average Indian consumer thinking? Will he buy more? why will he buy and from whom will he buy? 4Ps B&M and ICMR team up to crack the life and buying style of the urban Indian consumer in 2012 and beyond.

Henry Ford had once remarked, “If I asked my customers what they want, they simply would have said ‘a faster horse’”. He meant to say that consumers simply do not know what they want.

But that was almost a century ago. Consumers, markets and marketers have acquired a different life since then. Geographic boundaries have blurred and information is now available on a click. Like the global consumer, the Indian consumer has not only become king over the two decades since liberalisation, but has gotten very vocal about it too. Ask him to describe his needs today and he will wax eloquent for hours about what he likes, what he doesn’t like, what makes him happy and what doesn’t, what he is wishing for and even what he feels he should have wished for. So now when consumers talk, marketers listen. And listen very carefully at that.

It is this listening to the voices of consumers that has given marketers bestseller ideas for the Indian market – be it fairness creams for men, dust-free keypads for mobile phones, vegetarian pizzas, agricultural tips on SMS or the ‘cash on delivery’ model devised by e-commerce websites to address the traditional Indian paranoia over virtual buying.

Today, more marketers – both Indian and global – want a generous pie of India’s domestic consumption base of $827.9 billion, which translated into 49% of the nation’s total GDP of $1.7 trillion at the end of 2011 (even ahead in percentage terms of China’s 32% consumption share out of a total GDP of $6,476.2 billion). India is a top priority market in the future plans of almost every global company. But getting to know the heterogeneous and diverse Indian consumer is no mean feat, especially in a dynamic socio-economic environment, where what was a novelty until yesterday is quickly consigned to the dustbins of history the next day.

The annual 4Ps B&M and ICMR Consumer Compendium is our effort towards understanding the Indian consumer’s mindset, figuring out his buying motives and also getting a handle on what he is contemplating next and why. Our cover lead over the next few pages attempts to collate and communicate the big takeaways on consumer attitudes and behaviour from our survey spanning key product categories including consumer durables, electronics, automobiles, banking & finance, and online buying. Our series this year attempts to unravel the intricate mysteries of the urban, educated consumer’s mind and mindsets.

For now, as marketers get ready to launch their marketing blitzkriegs into 2012, we urge them to keep the results of the 4Ps B&M and ICMR Annual Consumer Compendium handy. Who knows, which consumer insight may help conjure up that path-breaking strategy that will help you get closer to your individual marketing goals.

They love comparing apples to apples

Here’s a nugget for marketers of consumer electronics like laptops, tablets and camcorders – the front-end experience at the store plays a vital role in your brand’s popularity. Nearly three-fourth of our survey’s respondents said that the front-end experience at showrooms was very important as they prefer that the staff answers their queries regarding tech-purchases properly.

A majority (almost 59%) also said that they prefer buying electronic items from multi-brand outlets and other channels rather than eponymous brand stores, as it gives them the option to compare available brands and prices under the same roof. Subrata Dutta, MD, Samsonite India, is not a technology buff and is therefore more comfortable buying from a multi-brand outlet. “I prefer buying from the multi-brand outlets as I can compare and get to touch and feel the other options available at the same price points. In many situations, the salesmen at the counter and the info they give play a role in what I eventually buy,” he told 4Ps B&M. Guess it’s time to dish out more resources towards educating the ubiquitous store salesmen then.

Here’s another interesting takeaway for electronics marketers. Consumers really do not care whether you have a swashbuckling Sachin Tendulkar or a pouting Kareena Kapoor endorsing your technology-savvy products. A majority of respondents surveyed (52%) said that they buy electronics items because they have a need and they choose particular brands because of ‘features’ that the product boasts of.

As opposed to the multi-million dollar marketing budgets of consumer electronics companies, only about 11% of respondents said that advertisements played any influence over their purchase decisions. Instead, about 27% respondents said that they relied on the Internet when it comes to gaining credible information about electronics that they intend to purchase. For another 15% respondents, friends were a vital source of information on electronic purchases.

The writing on the wall is clear. Instead of pushing a bulk of your marketing spends on buying TV spots and getting celebs on board, there is a need to expand the digital presence of your brand to keep alive the ever-wandering consumer interest in your brand.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012
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