Thursday, March 27, 2008

Yahoo! Googles its way up

Top management shuffle at Sunnyvale
Global internet economy looks well poised for yet another bull race, bigger and more spectacular. Post the dot com bust that left many battered and bruised, this one promises to be more of a conquest! A battle between the Goliaths of the virtual world – Google and Yahoo!. In Terry Semel’s much awaited stepping down from the boss’s chair at Yahoo!, is a harbinger of what holds for the massively growing internet audience and of course, impatient shareholders. Stocks at Yahoo! Soared 8% immediately after Semel stepped down. “Jerry (co-founder, Yahoo!) and Sue (Susan Decker, head of Yahoo’s Advertiser and Publisher Group) will make an unbeatable team,” mentions Semel in his resignation letter as he vacates the corner office at Yahoo’s headquarters in Sunnyvale. However, what bothers shareholders and analysts is the tenure of Yang’s stay at the boss’s office after Yahoo’s disastrous Q1 revenues of $1.67 billion compared to Google’s monstrous $3.66 billion. Now since the global search engine market is poised to touch $22 billion within the next five years, Yahoo! does seem in a catch-up mood with the launch of ‘Panama search advertising ranking’ that putsit at par with Google’s Adsense. Revealing his strategy cautiously, Jerry Yang’s Yahoo blog post states, “My immediate and overarching prioritie are to realise Yahoo’s strategic vision by accelerating execution and further strengthening our leadership team.” Tough words.

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Source:IIPMEditorial,2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Pepsi yawning...
Now Pepsi tries to keep you awake
One common thing plaguing American companies at 2 PM is the chronic ‘Yawning’ exercise exhibited by the employees! In order to prevent people from spreading this contagious disease further, cola giant Pepsi has launched its new product Diet Pepsi Max, an invigorating zero-calorie cola with ginseng and more caffeine. According to Cie Nicholson, Chief Marketing Officer, Pepsi-Cola North America, “Diet Pepsi MAX will bring invigoration to the masses.” Though the company is tight lipped about the total amount invested in the brand, industry experts estimate the amount to be nearly $55 million for one whole year. This is definitely a new initiative to capture market share as traditionally cola giants have only supported brands for the first few months. BBDO, New York has designed a new campaign ‘Wake up, people!’ for the same. The ad shows how helpful the drink is in situations like a job interview, a football game or even a wedding. Yawn! With this drink, Pepsi is also charting a new territory by targeting men. To get their target market gulp down the drink, Pepsi would be running majority of TV campaigns while NFL (National Football League) is on. There would also be digital campaigns run on various websites. Pepsimax.com and wake up people. com are two websites that have been launched by Pepsi for the purpose. People can upload their yawn moments in this website and also send a wake up call to their friends via comedian Ben Stein. The jury is still out on this new brand. Yet, Russell Weiner, VP, Colas, Pepsi-Cola North America sounds optimistic, “It’s evident that Americans are tired and could use an extra kick to help get them
through the day.”

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Source: IIPM Editorial,2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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Tuesday, March 25, 2008

Three To tango…

What do you find extremely odd in the following description? “A fuel-efficient auto-rickshaw with a working meter, having ample leg space and a smart & extremely humble orangutan (!!!) as the driver!” We know, that was easy! A fuel-efficient auto with ample space and a working meter, simply doesn’t exist! As the statement mentions, it would be much easier to find an honest orangutan driving an auto! But still, autos continue ruling the travel roost in metros and auto companies, despite fighting each other till death, keep churning out the same old versions of outdated autos (if you believe CNG introduction is a mark of innovation, oh please...!). So what’s with the marketing warfare in this segment and what’s really with the product quality? “Bajaj Auto does not make ‘jugad’ (make do) products; we want to make high end, high value products for the consumer,” aggressively defended Rajiv Bajaj, MD, Bajaj Auto, to 4Ps B&M. The authority of the man comes naturally from the fact that his company controls close to 41.2% of the total three-wheeler industry.

Even though the ingenuity of the Bajaj three-wheeler – more commonly referred to as the ‘rickshaw’ – is now under threat. The young blood at the Bajaj helm is hell bent in furthering the game. However, after years at the dominating centre of action, Rajiv is suddenly feeling the heat from the new crop of competition creeping in, namely from Piaggio, Force Motors, Atul Auto and Mahindra. Rajiv’s concern has its roots firmly attached to the number of units that the competition sells. For information, between April-May 2007-08 (SIAM), out of the total 54,557 three-wheelers sold across the two segments of passengers and goods, almost 22,864 units were sold by Bajaj’s biggest competitor, Piaggio alone. Even though Bajaj has an edge because of its deeper market understanding and sheer penetration of its products in all categories, competing companies are now concentrating more on innovation.

For instance, Mahindra, another major player in the industry, offers its key product, the Champion series, in a larger capacity format. The same strategy can be seen being used by other competitors as well. This, at a time, when the Bajaj business model continues to revolve around the small capacity passenger segment, which aims at paid personal transportation. Figuratively, Bajaj products have evolved sticking to these specific lines, with the 4-stroke RLE and CNG variants being perfect examples of one platform utilization here. Competition, on the other hand, has been collectively focussing on the larger capacity, ‘partial’ point-to-point transportation. Moreover, it is surprising to note that while only 20% of Bajaj’s sales are contributed by the goods category segment, the competition has based its bread and butter on this less favoured sector. The reasons are not far to find. In the less-thanone- tonne goods category, the three- wheeler has emerged as a favoured product because of its cheaper cost price (compared to a four-wheeled commercial vehicle) and ease of maneuverability in congested traffic conditions.

Selling 4,330 units, 96.2% of Mahindra sales strucare overwhelmingly ‘goods carrier’- oriented; Piaggio’s 10,022 unit non passenger platform sales further vindicates the point. While speaking to 4Ps B&M, Paul Zachariah, Senior GM (Marketing), Atul Auto, revealed, “We are not competing directly with anyone as we are already in the good-carrier segment in a substantial way. Our main strategy is to expand our operations beyond the nine states we are currently present in.” Now the problem with Bajaj Auto is that it is stuck in a cleft stick situation where manufacturers are akin to scavengers feeding on market leftovers. Rajiv Bajaj stubbornly, though confidently, retorted to 4Ps B&M, “We have lost some market share in the short-term here, but this has happened because of heavy investments for the long-term (as) we would like to focus on four-wheelers and upgradations.”

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Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Thursday, March 20, 2008

It’s a Kodak moment

At the age of 24, George Eastman made plans for a vacation to Santo Domingo. On a suggestion of a co-worker, Eastman bought a photographic outfit with all the paraphernalia of the wet plate days so that he could record the trip. However, Eastman cancelled the trip. The photographic outfit that he described as ‘a packhorse load’ fascinated him instead. Eastman took upon himself the task of making photography a less gruesome and inexpensive affair. Some years later, Kodak was born. The goal was simple, to make photography “as convenient as the pencil,” and that’s what this visionary entrepreneur did. He gave the world a device that had the power to make moments timeless, was easy to use and also easy on the pocket. “You press the button, we do the rest,” Eastman told the world. Just like Ekta Kapoor, Rakesh Roshan and Karan Johar, Eastman too was a believer in the power of the letter ‘K’, which made him incorporate the name ‘Kodak’ and it became one of the most valuable brands globally when it came to imaging and photography. The company set foot on Indian soil in 1931 and in tune with its global mission, has enabled easy imaging solutions to Indians ever since. Today, the company boasts of a portfolio of products, which range from Digital and Film Imaging to Entertainment and Health Imaging. While the slogan changed from what it was to ‘Easy Share’, their logo changed as many as six times. And to find out whether “Kodak moments” have really worked for the company in India, 4Ps B&M met up with Ravi Karamcheti, Managing Director, Kodak India. Since the year 2001, when Ravi joined Kodak, he has handled different profiles at the company. A visionary, and one with in-depth marketing and industry knowledge, Ravi has to his credit – with the help his vast experience gathered from his past stints at Asian Paints and Philips – various strategies to position Kodak as a strong brand for the price sensitive and technology driven Indian market. Says Ravi, “Kodak has always been known for innovation and our prime concern is to provide the best product in terms of technology. If you see our products, they look like mobile phones – very handy, stylish, compact and easy to carry; plus the price is very attractive considering that India is a price sensitive market.”

Taking into consideration this price consciousness, in the year 2001, the technology major launched KB10 cameras, which were most attractively priced at Rs.995 and were aggressively marketed. The result made history. The camera sold one million units in the country, a figure that no other camera had ever achieved. So is this ‘camera-loving’ way how Kodak is going to grow in India? Ravi differs, “Kodak’s goal is to offer complete end-to-end imaging solutions to the consumers. The aim is to provide a complete package or a solution to the customer with the best printing quality and offer 100% satisfaction to the customer, which means providing not just a camera but also a printer, paper, et al.” Apart from the price aspect, what has really provided the company an edge over its competition is its retail network, which spans the whole of India. Following the at-arm’s-reach strategy, the company has a chain of Kodak Express and Kodak PhotoShop outlets. Moreover, the Kodak film roles are sold through a robust distributor network that makes them available even at kirana stores. This retail network provides the company with an advantage over the rest of the herd in reaching out to its consumers.

An engineer with an MBA degree from Faculty of Management Studies (University of Delhi), Ravi has been instrumental in the marketing of consumer and professional business units. Under his leadership, Kodak India launched a range of digital cameras and undertook major non-media initiatives to promote the digital imaging business in the country. Talking about Kodak’s future marketing strategies, he says, “India is neither completely digital as the global market is, nor is the consumer’s perspective the same; so our idea is to provide a product that is easy to use and has better technology.” For Ravi – who believes in having a leadership style that gives complete freedom and follows a decentralization policy – the biggest challenge is to maintain a balance between the rapidly changing market and consumer desires, “We like to look at it as an opportunity to introduce many more into the world of photography. In fact, the industry trends are very promising and we are geared up to maintain our lead. Of course, every industry collectively faces a scenario where the consumer is changing rapidly; so to keep up with the changing dynamics, one needs to pre-empt faster.” Eastman was a great believer in advertising – since the very beginning, he advertised his company and its products. In the Indian market too, the company has given many memorable campaigns – one of them being, “It’s a Kodak moment,” a catch line which is today commonly used in general conversations.

And after so many years of India operations, the company has now roped in Katrina Kaif (mark the ‘K’ factor) as their ambassador. “Katrina embodies the imagery and style quotient, which we are communicating to the market through our product range in India. We are looking forward to seeing the same translate into higher brand visibility for us,” explains Ravi. Our interview had ended, and while making our way out of Ravi’s vibrant Kodak office in Santa Cruz, Mumbai, one almost expected a thousand cameras to click away our sumptuous ‘Kodak moment’ exit. But perhaps we were letting our imaginations run wild. But then, wasn’t it the same imagination that led George Eastman to place all his money on an idea that seemed more out of a science fiction movie than inside the world of practicalities? Wasn’t it the same imagination that helped him build a huge empire from scratch? We’ve got our answers... Have you?

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Monday, March 10, 2008

Playing for a cause!

The contribution of sports to society is much more than what meets the eye
Mankind’s sojourn with sports is perhaps as old as his rendezvous with the very concept of civilisation. Even in the pre-historic era, rival kingdoms oft en used sports as a medium to get a momentary respite from relentless conflicts. From the Greek civilisation onwards, sports started getting institutionalised as a key activity. It was the Greeks who introduced the concept of Olympics, the resonance of which can be felt till this millennium. With the onset of 20th century & the two World Wars bringing about paradigm shift in the way the world would henceforth function, sports have become a crucial reflection of the changing geopolitics & the dominance of few countries in the world. Emergence of USA & USSR as the only two superpowers, got frequently reflected by their medal tallies in the Olympics. While the Cold War continued & both sides remained hamstrung by the concept of Mutually Assured Destruction (MAD), it was the Olympics (both summers & winters) where USA & USSR started settling scores. More oft en than not, most of the medals went to either of the two parties or their satellite nations.

Gradually sports also became a leveling factor between the Whites & Blacks & other races like Asian & Hispanic. It is in sports where Africa as a continent has been able to garner much of the respect which it has been deprived of in other fields. While they continued their dominance in every kind of sports, especially in football & athletics, incidentally in most of the European nations & in USA, the ethnic Africans (brought centuries back for slavery) started dominating & representing the country in every possible game. USA is as much known today for Bill Gates & Steve Jobs as it is known for the icons like Aurther Ash, Michael Jordan, Carl Lewis & Tiger Woods.

The mother of all ironies is that most of players of the 1998 FIFA World Cup winning French team which showed its elegance even in the 2006 World Cup are not ethnically French but Africans. How many actually know that Zinedine Zidane is ethnically an Algerian? In the recent past, China has become the talking point of sports and that it’s hosting the 2008 Olympics, is a reflection of its increasing economic prowess. Last but not the least, is the fact that sports in essence are a reflection of the state of the health of the society. No prizes for guessing that India with its ranking of 126 in the UNDP HDI takes solace in an occasional silver or bronze medal, while those who are highest in the medals tally, top the UNDP list too.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Thursday, March 06, 2008

A couple of Google’s offerings...

The search engine company, Google has come out with a new service for small businesses. The Google Custom Search Business Edition is a $100 per year service, which allows visitors to search information on their sites. This is a 10 minute sign-up process completed in three steps. The only requirement is a particular embedded code. California based Google is also mulling expansions in its Print Ads programme. This new expansion will permit online advertisers to publish their ads in 225 newspapers in the US market.

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Coca Cola is falling down!
Cola major, Coca Cola Enterprises has been struck by the clumping demand for its soft drinks in North America. Analysts attribute this downfall in sales to a comparatively lower demand for carbonated drinks due to perceived health risks. Also giving trouble is the price increase of aluminium, a resource needed for cans and corn syrup that is used as a sweetener. For the quarter ended June, profit stood at $270 million or 56 cents per share (58 cents per share when restructuring charges and other items were excluded from the calculations). For the same quarter in the previous year, the profit was $339 million or 71 cents per share.

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