Banks charge for every service they provide under the ‘free-service’ banner leaving the onus on customers to keep themselves informed says Gyanendra K

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Read your bank statement carefully (incase you haven’t for the last couple of months–thanks to the chaos in the financial market), and you could find yourself worthy of few surprises. And all of a sudden you will realise that the big statements such as, “Highly competitive interest rates with flexible tenors and no hidden costs...” popping on the silver screen everyday have very easily deceived you.

For a decade now the banks have been free to levy their own charges and this has thrown up a host of hidden costs which many of us are not aware of till date. If you discuss with Mr. Raghavan, (a well-paid marketing manager who never laid an eye on his bank statements earlier) you would get to know your own folly in case you happen to be one who does not believe in regular updates. “Air-conditioned expanse, well lit ambience, blurring dubious and highly questionable work practices designed to hoodwink trusting customers and unsuspecting loan seekers,” that’s how he, in his sanity, describes banks today. Well, you may not necessarily agree with his views, but nevertheless his views are not entirely unfounded.

If you have not been aware of the various charges – which could range between Rs.25 to Rs.1,000 – levied by banks, then in all probability your dear banker (entrusted with your trust and banking on trust of millions of customers like you) must have burnt a hole in your pocket by now. Things can’t get worse especially in times of financial uncertainty, downsizing, cost-cutting and when you want to cut on those extravaganzas. Picture this: Axis Bank increased the charges for not maintaining minimum balances to Rs.500 from Rs.200 without informing its customers in a proper manner. Anil Paul, former professor of Economics, Darjeeling Government College (who maintains multiple accounts), alleges that the bank (Axis Bank) without any prior information increased the levy on non-maintenance of minimum balance. So, his valuable piece of advice to all multiple account holders is, maintain the minimum balance at any cost and earn 3.5% yearly interest on the same, rather than paying the penalty along with added transaction charges (as levied in some cases) for non-maintenance of minimum balance.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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And it’s not just Coke! Arch rival Pepsi, which has recently dropped Shahrukh Khan as its brand ambassador, has signed a deal with Chennai Super Kings (CSK) to launch co-branded cans to cash in on the IPL frenzy. GlaxoSmithKline India’s (GSK) Boost was just a brand partner of Rajasthan Royals’ (RR – the winner of IPL’s inaugural season) in the last season of IPL, but now it has entered a licensing deal with CSK to develop a special co-branded drink with the formula developed by John Gloster, the physiotherapist of RR. Again, if you glance back at Boost’s advertising over the last few months, it is easy to notice how Sachin Tendulkar and Virender Sehwag (who were endorsing the brand earlier) have been missing from action. Though, Sehwag is still associated with the brand, the company is now focusing more on RR to gain popularity among the Indian masses.

And why not? From a health drink brand’s perspective it makes more sense to associate the brand with the winner of IPL’s inaugural season, rather than just spending money on big ticket celebs, pitching for sales. Through such a licensing agreement Boost’s branding becomes associated with a pack of fit men on a winning streak. And being the winner of the last season, RR surely has a competitive edge over other teams when it comes to attracting more companies to associate with it. RR is cashing in on this opportunity in a smart way. In fact, the team plans to come up with a music video featuring Shilpa Shetty and the brands in RR’s pavilion will be embedded as a part of the video. The company’s officials, however, chose not to comment at this point.

This trend is equally popular with marketers, irrespective of the segment in which their brand is present. Sony Ericsson has tied up with DD as its official mobile partner. The handset manufacturer will be launching special co-branded handsets for this reason. Even garment major Peter England is not far behind as it will be launching a new collection of formal and semi-formal clothes under the CSKP range (CSK-Peter England range). Wrigley, the chewing gum brand, has tied up with CSK and DD to develop co-branded chewing gums. Well, apart from performance, it is important to note here that the players in the team also matter for the brands associating with them. A classic example is Indian captain M. S. Dhoni, who’s helping CSK in getting lots of associations.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Focus on your competition

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Relegated to an after-ran amidst the Hero Honda’s and Bajaj’s of the Indian market, Yamaha was hell-bent on completing its India comeback before its rivals had a chance to recover from the slowdown effect. In between cat calls of a global recession in July last year, the Japanese auto major launched its YZF-R15 in the Indian market; then when the US investment banking giant Lehman was breathing its last in September, Yamaha bravely launched its FZ-16 performance bike in India. And last week when the Indian Yamaha announced that it was in talks with vendors to provide spare parts for its cult bikes like RX100 and RD350, wowing old Yamaha loyalists in the process. The bid is to “win back the confidence of Yamaha customers,” says Yukimine Tsuji, Managing Director & CEO, Yamaha India.


Now consider if Yamaha had made its comeback with 100cc bikes (remember the RX100 that was once legendary in India?). Would the bike-maker have flourished? Possibly not, considering that the segment is now dominated by the world’s largest two-wheeler maker Hero Honda, which itself had been pretty aggressive all across 2008 in its marketing endeavours. Stunning market watchers, when the auto industry was just going on its slowdown hiatus, Hero Honda even came up with a 3-minute television spot, with the who’s who of celeb endorsers. Wisely therefore, Yamaha decided to focus on the weak link in the bike market – Bajaj – and decided to upset their premium segment apple cart instead. Guess marketers at Yamaha just thought differently and needless to say smartly...

The results are already showing. Between April–December 2008, Yamaha had won some of its own back in the premium bikes segment, registering a staggering 220% growth in the category, while rival Bechara Bajaj took a heavy beating. Not one to rest on past laurels on its blazing comeback trail, Yamaha is now busy expanding its dealer network, with plans to invest a cool Rs.240 crore in 2010-11 to develop India-specific models. And the focus on Indian market is clearly visible as Tsuiji states, “India is the first priority market for Yamaha Corporation...” Even Hero Honda’s marketing overtures in 2008 are paying off. To beat sluggish demand, it even launched three refurbished variants of Glamour, Glamour FI and CD Deluxe in December last year, notching up standalone net profit of Rs.300.42 crore versus Rs.275.01 crore on y-o-y basis. Hero Honda too is winning the heated war against the painful slowdown effect in the economy.

Bajaj too is reacting now, though a little too less and a little too late… Honcho Rajiv Bajaj is now promising to launch six two-wheeler models within the next nine months. In an interview with 4Ps B&M, S. Sridhar, CEO, two-wheelers, Bajaj Auto, blamed Bajaj’s aggressive strategy for the falling sales graph (huh!) and elaborated further on their plan. “Three of the six bikes will be in the value segment, one will be the Ninja 250cc and another will be a 750cc bike. This will ensure that by the time recession ends, we will be in a very strong position,” he promises.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School
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IIPM, GURGAON