Exclusively designed ballrooms, well-lit bedrooms, imported chandeliers, supremely planned restaurants...

IIPM set to beat economic slowdown

Exclusively designed ballrooms, well-lit bedrooms, imported chandeliers, supremely planned restaurants... the five-star lot in India is still finding buyers. And though times are not easy, why is it that all, except the bar-tender, smile? Does he hide a secret? Neha Saraiya narrates a tale of success (and the secretive oncoming storm)...

Yes, you read the heading right – really ‘cold’ times, and that’s exactly what is ripping the comfort jackets off the global tourism and hospitality industry... Cut to India, for the common street walker, events that unfolded of late (the terrorist attacks in five-star mansions... and blah... blah...) too make him wonder whether we really are that economy that is growing much better as compared to global counterparts. Imagine – a 6-7% projected growth rate for the next year, and at a time when even George Bush (or was it Obama?) admits to incessant headaches and blurred vision (thanks to the recessionary migrane)! And of all the macroeconomic excuses that we can boast about, here is a look at how (and why) those well-dressed ladies are still smiling their way into the ballroom of the 5-star hamlet, just a few miles away from where you presently stand!

Yes, at a time when all we can talk about the global hospitality industry is ‘gloom’, India continues to ‘shine’. In a close-finish race, the Indian hospitality industry nearly outdid even the diversified GDP growth, and closed the calendar year 2008, having grown y-o-y by 6%, with 5.37 million foreign tourist arrivals (and forex earnings of Rs.50,700 crore) being recorded! But at a time when every inch of the economy can feel the heat of the slowdown, the hotel industry is also rowing on lukewarm waters, both on the consumer and supplier end. Undoubtedly the ongoing economic crisis has dampened discretionary spending on both the corporate & personal levels, thus eroding pricing power of hotels and reduce demands for rooms, restaurants and banquets halls. Secondly, the prevalent dearth of easy debt is making new development and upgradation plans difficult to materialise for hoteliers (their working capital woes to meet just operating expenses, being a long tale for another day). Keshav Baljee, VP-Corporate Affairs, Royal Orchid Hotels Ltd, sums up demand and cost worries of the industry as, “The major cost has been that of lost business during the peak season. However, there are some ‘one-time’ costs associated with purchase of additional security equipment and some recurring costs with respect to that of additional staffing and screening. And the insurance costs are likely to rise as well!”

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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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We can buy pizzas too!

1500-plus IIPM students placed across the country with 44 bagging international offers

McDonald’s had become India’s darling because of its value for money pricing; Domino’s encashed on this and launched its budget pizzas at Rs.35 only. The bid was to attract economy consumers and also kids, making pizzas within reach of their pockets. For the first time, Domino’s shed its ‘Hungry kya?’ tagline and launched an ad that played on compassion rather than humour. The tagline – ‘Khushiyon ki Home Delivery’; the aim – to expand their customer base in one go. Now that’s what we call a smart marketing move.

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Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM set to beat economic slowdown
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It’s high time to revisit retail, says 4Ps B&M’s Savreen Gadhoke…

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In fact, retailers have now realised that having too many stores was perhaps not the right strategy to increase sales, as now handling rising operating expenses is beginning to get difficult for retailers. Moreover, rising manpower costs and sky-rocketing rentals too are adding to their dilemma. So, most of the retailers are now either merging their different retail formats or are relocating and resizing. They are even shutting down stores. This is certainly a natural move on retailers part, however, what is intriguing is that how did such a situation rise, especially when the Indian retail boasts of some of the biggest names of India Inc.?

Answers Vasal, “The reason for some retailers closing down stores is the general slowdown & fault in the strategies of the retail players. Some players entered the market during boom and hence the calculations weren’t done adequately.” Recently Videocon-owned consumer electronics store Next revisited its strategies and announced the closure of 20 outlets in prime cities. However, K. S. Raman, Director, Next Retail has a different reason for the same. “We now want to consolidate our presence in the interiors of the country and North East,” he argues. Similarly, Spencer’s Retail, too has shut down 56 stores (out of a total of 400 stores) purely on account of non-performance. Exclaims Goenka of Spencer’s Retail, “It is not an alarming news but a sensible decision.” Reasons cited by Goenka for non-performance of his stores were that in certain places, rents were too high and did not commensurate with the revenues, while in certain other places revenues just didn’t pick up. “You have to see what product(s) you are selling and then choose on a location. In few cases, this was done in a reverse manner,” he adds.

Apart from closing down stores, retailers are also considering to merge different retail formats they opened during the process. Reliance Retail is expected to merge its hypermarkets, supermarkets and convenience store formats. Certainly a merged management will help Reliance save on man-power, operational and recurring expenses. Kishore Biyani-owned Pantaloon Retail has also shelved its plans to hive off Big Bazaar as a separate entity and therefore cut on the costs that were expected to rise with the formation of a new company.

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Source : IIPM Editorial, 2008

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

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The Colour of Retail

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Another way in which retailer’s are getting returns from their ‘green’ investments is the last 5 seconds of any marketing programme - We refer to the fourth P viz. Packaging. For instance, bags used by green retailers are reusable and recyclable and employees are trained to add more items per bag, reducing overall packaging cost. Mark & Spencer, made a bold move earlier this year by becoming the first major retailer to launch a nationwide carrier bag charging programme. To their dismay, however, there was a huge protest from consumers across UK . But, though there may have been some teething problems around customer inconvenience, “carrier bag usage is down by 80%,” explains Berg. Moreover, retail specialists claims that in regions like Europe where private labels command an equal if not bigger market share than big brands, most in-store labels are promoted as eco-friendly brands and the unique positioning helps retailers steal the show from big brands. No wonder Carrefour Eco Planète (a ‘natural’ tagged private label from Carrefour) is one of the most popular brand’s in its category and Carrefour holds the distinction of being France’s largest organic products retailer. Carrefour also is a propounder of recyclable bags. Even German super value store Aldi promotes its store brands with eco-friendly paper bags.

In tune, the global organic and eco-friendly market is growing by 39%, a mouth-watering delight for retailers in UK and USA. “In concentrated markets like Switzerland, USA and UK, supermarkets play a much greater role in community and that’s why these players are successful is promoting organic food,” explains Jonathan Banks, Business Insight Director, The Nielsen Company, UK.

About a year ago, when Lee Scott unveiled Sustainability 360 for engaging Wal-Mart’s associates, suppliers and customers in his ‘green’ campaign, altruism was far from his mind. He was indeed thinking about the great business sense it makes to reduce waste (of energy and packaging) on the one hand, and make money by selling environmentally friendly products, on the other. Sustainablity is vital for profitability, at least for retailers, it seems. Long Road Out of Eden gift-wrapped in sustainable paper, anyone?

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Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
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BIG TV's teaser before the war cry

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The second round of DTH war is on and ADA's BIG TV has made its war cry by slashing its prices heavily and offering the connection at a 43% lower price compared to the existing players' offer. Earlier this month, BIG TV created a big buzz when it ambushed Airtel Digital's teaser campaign and made it its own. What else, they patted themselves by sending a detailed press note on exactly how they did it! Well keeping in mind the DNA of ADA group, it's not surprising. In fact, with festive season 'round the corner, such fireworks were expected and anticipated from the BIG men. Just to raise some eyebrows: BIG TV has already grabbed 500,000 subscribers within 50 days of its launch & expects to touch five million in the first year of its operations. Too ambitious?

Pallavi Srivastava

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Source : IIPM Editorial, 2008

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

For More IIPM Info, Visit below mentioned IIPM articles.
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