Brand Image & Perception

Hero Honda loves riding on a rough terrain and value pricing and coming out as winner

Interestingly, while Airtel & Tata have maintained their positions in this category, it is Hero Honda, which has climbed up the stairs to sit prettily at No.3 in terms of Brand Image & Perception. Hero Honda, gained the maximum thanks to its rural foray, which gave it immense mileage. On the contrary, despite its vast expansion in the hinterlands, Maruti slipped down the ladder because of intense competition and long waiting periods.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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


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Out of the Mandir; Into your Living Rooms

Meet NRI, Dr. Ravi Krishnamurthy, a Program Manager in Nanotechnology Victoria Ltd., of Australia. Dr Ravi recently donated a cottage in memory of his (late) father at Tirupati. But because his hectic schedule really did not allow for a trip to India at the time, he simply used the more convenient e-Donation option on Tirumala Tirupati Devasthanam’s (TTD) website. “The e-Donation option makes the distance from Tirumala for people like us irrelevant,” he told 4Ps B&M.

Varaprasad Pakanati, Associate Manager, GMR group, Bangalore is another happy customer… oops devotee of the e-Seva facility provided by TTD! While his family pays regular visit to Tirumala, Pakanati himself could not take out time for the pilgrimage. “Being in the team of higher echelons at office, my schedules are hectic and time-management during the visits to Tirumala used to become difficult,” he told 4Ps B&M. But that was before e-Sewa came to his rescue. The web based interface allows pilgrims (like Pakanati) to book for various services, minimum three days and maximum 90 days in advance. “That has greatly reduced my toil,” says a visibly happier Pakanati.

In as much, the digital age seems to have given a new lease of life to these iconic temples of religion. D. K. Adikesavulu Naidu, Chairman, TTD told 4Ps B&M, “Devotees can even book the e-Seva and e-Accommodation at Tirumala through the Internet.” To ensure security, the veracity of the identity cards, scanned and submitted via the Internet, are physically verified at the security office at the time of the personal visit.

Seeing the potential and growing number of NRIs and RIs eager to make digital connect with their gods, a rash of fly-by-night operators have rushed in to gate-crash this ‘divine’ party. Talking about online pujas offered by private sites, TTD’s new Executive Officer, I. Y. R. Krishna Rao laments, “Yes! Some private organisations are collecting fees for the on-line puja at Tirupati. It is ridiculous as there’s no way that they are eligible to do so.”

Not that Lord Vekateshwara of Tirupati needed the support of his virtual devotees to retain the honour of the world’s richest god. The lion’s share of the income of the TTD is derived from the sacred ‘Hundi’ – the place where the visiting devotees deposit their offerings in fulfilment of their vows. The bulk of the TTD’s income, Rs.3.43 billion in 2003-04, Rs.3.49 billion in 2004-05, Rs.3.82 billion in 2005-06, Rs.4.81 billion in 2006-07, Rs.6.08 billion in 2007- 08 has now soared to a whopping Rs.8 billion per annum and is derived from these offerings. The collection from the temple hundi at present is not less than Rs.1 crore a day. In fact, it is not uncommon to find huge individual offerings ranging from Rs.50 lakh to Rs.1 crore dropped into the hundi, with rich devotees making spectacular offerings to the Lord. On a single day (May 30, 2009) for instance, the temple’s ‘hundi’ received a record Rs.2 crore worth of donations in cash and jewellery!

And while TTD’s financials are not public and there’s hardly any information about how these funds are used, with that much quick money in their coffers, small surprise that there is a visible enhancement, both in terms of facilities for the devotees as well as TTD’s marketing budgets. There’s in fact even a flourishing audio and video cassettes, compact discs and publications business that is booming alongside, including a religious monthly magazine, Sapthagiri, which is being sold across the country in five languages viz. Telugu, Tamil, Kannada, Hindi and English.

The Siddhivinayak temple in Mumbai – that receives around Rs.45 crore as donation annually – is another big revenue earner. Talking to 4Ps B&M, Subhash Mayekar, President of the Sree Siddhivinayak Trust says, “About 40% of our total donation is used for poor people and development.” The temple premises, set in the heart of India’s financial capital, plays host to around 25,000 visitors everyday, while thousands visit the temple via virtual channel. Marketing is now acquiring bigger proportions in the temples annual budget. “We are building waiting halls – five storey buildings equipped with a library – which can accommodate 5,000 devotees,” adds Mayekar. Having roped in TATA SKY as their marketing partner, the temple has recently also ventured into mobile marketing as another way to attract customers (read: devotees) into its arms. The temple has even gone ahead to release a movie based on the deity titled Vighnaharta Shree Siddhivinayak. Marketed by Vistaas Media and Eros International, the producers have been able to rope in Master Blaster Sachin Tendulkar, Divya Dutta and Parmeet Sethi for the movie.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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GURU SPEAK - “Indian banks just can’t enter the US or any market without proper standards in place”

Bimal Jalan, former Governor of RBI, and currently member of Rajya Sabha, in a free wheeling conversation with 4Ps B&M’s deepak ranjan patra, shares his view on the course of Indian banks. How is the current economy impacting the Indian banks and what was it that helped them show good performance, even during the slowdown. As a banker who has always kept a close watch on the exchange rates, he speaks about the opportunities present in the domestic market and what is it that Indian banks should keep in mind before going global. Excerpts:

4Ps B&M: Do you think that this is the right time for Indian banks to expand their global muscle?
BJ: It depends. Some are going global anyway. But then, that is to be done with a long term perspective. If they are doing so, they must follow sound banking norms. The Indian banks just can’t enter the US or any other market without proper standards in place. The banks, which are going abroad, need to be careful.

4Ps B&M: Do you mean they should be careful in making global acquisitions?
BJ: It is not fair to generalise. There are big as well as small banks. So, it’s a mixed experience. However, this is more of a bank’s management decision. But as far as policy is concerned, there is no negative view of the banks, which want to expand abroad. But there are two parameters, which need to be followed (in case of going global), first, the bank has to be strong in India and second, it must follow the regulatory system of India, so that the main company remains totally safe and sound.

4Ps B&M: Where do you think the opportunity lies for Indian banks now?
BJ: It is within India itself. As such the banking sector in India is not fully developed. The number of banks (and branches) are much less than what they actually should be. There is ample opportunity in the rural areas, which has not been properly tapped till now. So, it is the large size of the untapped Indian market, which provides tremendous opportunity for the banks.
4Ps B&M: What has been the impact of the global slowdown on Indian banks?
BJ: The Indian banking industry has come out really well. Not only has the Indian banking industry come up stronger after the recent slowdown in the economy, but has also shown good growth figures. In fact, it’s the careful approach that has worked in favour of Indian banks. Moreover, RBI’s strict policy stance has provided banks the much needed safe haven against the slowdown.

4Ps B&M: While India Inc. is talking about a slowdown in the economy, the recent quarterly results are showing a sign of recovery. What does this mean for Indian banks?
BJ: First, let’s talk about the economy. The signs are absolutely positive. Whether it’s 5.5% or 6.5%, we still are showing the second highest growth rate in the world. Therefore, the recovery is also coming faster. This means good news for the banks as well.

4Ps B&M: Do you see any particular concern, which should be taken care of by the government?
BJ: No, there are no concerns. But yes, there are priorities that should be noted and kept in mind. Since the trouble is worldwide, what should be controlled is the cost of borrowing funds. The lower the cost, the better it is.

4Ps B&M: Given the present economic conditions, is there a scope for further rate cuts by the central bank?
BJ: Definitely. The demand is high and it needs more push. The difference between RBI’s main rates like the repo rates, reverse repo rates, BPLR, SLR is still very high. So yes, there is still scope for further rate cuts.

4Ps B&M: But, even if the RBI reduces the key rates, many times banks do not pass it on to consumers. Comment.
BJ: The RBI is the lender of last resort. There has been a lot of misunderstanding about RBI’s rate cuts. The rate cuts done by RBI are actually symbolic in nature. Banks don’t depend on the RBI rates for financing their business. The main ingredient in determining the bank rates is their own deposit rates. They have come down, but are still higher than the RBI rates.

4Ps B&M: If you are asked about one significant requirement in the Indian banking industry that you want the regulator to address...
BJ: There are two different things that need to be addressed. The first one is that the Indian banking system should be aware of the international system of doing things and should be prepared to face any kind of requirement set by that. The second one is that Capital Adequacy Ratio matter should be addressed in such a way, that the risk-averse nature of Indian banks remains intact. So, it’s like providing growth opportunity along with increasing the systematic risk taking ability. It’s a delicate issue, which needs proper supervision.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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...AND THEY FOUND A SMART CONNECT

In 2007, Nokia’s market share had slipped in the face of hungry rivals. But the handset giant used the slowdown as an opportunity to stage a comeback...

Okay, so the slowdown in India has not bothered the telecom players much. Yet, enhancing your market share by a whopping 10% (as per the 2009 Voice&Data Gold Book) within the year – and that too in the face of mean and hungry rivals – is no mean feat. And that’s precisely what Nokia India is going to town about.

“We have been committed to develop the market for mobile telephony and deliver the best ‘value mobile experience’ to customers across the nation’s geography,” Vineet Taneja, Marketing Director, Nokia India told 4Ps B&M. Taneja says that the handset major had realised early that the global meltdown would have little impact on the lower rung of the market. With the result that Nokia strategised accordingly and continued to focus heavily on their rural strategy by packing in features relevant to the customers in that segment.

For example, when a recent Nokia survey in emerging markets informed the company that ‘mobile phone sharing’ was a hot trend among existing and potential consumers, Nokia launched a slew of entry level phones with multiple phonebooks to make it easier for the users to share their mobile phones. The move turned out to be a key ‘wow factor’, particularly for India’s price sensitive joint families and sales are following suit. To deal with erratic power supply in far flung areas, some entry level phones even came with the ‘power saver mode’, allowing consumers to extend their talk time without running out of battery.

Not that they ignored their primary urban and semi-urban markets though. They have spiced up the smart phone market with a slew of launches over the last year, including the QWERTY-keyboard laced E75 and the stylish touchphone N97. The year also saw the Finish giant make a conscious effort to reposition itself as a service and solutions provider rather than a plain vanilla handset company. The more visible effects of the same have been the launch of Ovi services (on the lines of Apple’s App store) in the Nokia N97 and other forthcoming high end models that would enable the users to download a host of applications and customise their mobiles phones as per their individual preferences. In line with their new rural focus, Nokia has big plans for India’s hinterlands even in the service space. They’ve launched a service called Nokia Life Tools solution which offers agriculture related news, daily weather updates, apart from routine advice and tips to subscribers. For a slightly higher cost, subscribers can even monitor the closest market prices of three chosen crops.

Of course, reams have been written about how consumers turn to trusted brands during a slowdown and perhaps Nokia’s increased market share is simply a reiteration of its long standing reputation in the Indian market. Whatever the reason, gaining ground in these troubled times, especially when many other players have been losing market share, is worth an ovation. Do we hear some claps?

Surbhi Chawla

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).

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Fun for you, but they mean business

With over 90,000 members MHRIL is set for big move, but the road ahead is bumpy, says Neha Saraiya. Nevertheless, you enjoy your holidays, that’s all they want...

“Yes, the land is under litigation. But we are staying crucial financially. As we think we have a very strong case in Munnar property and above all we are proud of our resort as it is the first resort that we had set up,” gushes an effervescent Ramesh Ramanathan, MD, Mahindra Holidays and Resorts India Ltd (MHRIL). (For those who don’t know much about the whole episode, on July 3, 2007 an order was passed by the Sub-Collector, District of Devikulam canceling the assignment of the Munnar land to the company stating “it as an agricultural land.”)

But then the days have changed, today MHRIL has a rock solid number of members, 91,997 (as on May 31, 2009), and the list is growing at a CAGR of 32%. What’s more interesting is that the same Munnar resort now contributes around 2.17% to the overall revenues of the company (FY ‘09).

However, what has done a wonder for this holidaying arm of the Anand Mahindra Group is its unique business model. The company has an integrated model, which takes care of all its operations – marketing, acquisition of land, servicing of clients, providing value added services, and resort operation et al – under one entity. Thus this mixed business model not only enables the company to tone down the cost of operations considerably, but also provides an edge when it comes to adoption of a change. Probably that’s the reason for which the recent downturn that left all major hospitality players in despair, could not dent MHRIL much.


Ramanathan avers, “We are a company that is totally focused on domestic tourism. That is why we are in a way safe from global recession. Although we lost in the third quarter of last year, we covered it in the fourth quarter by focusing on customers, who have not been affected much by the slowdown like doctors, lawyers et al.” This can be well substantiated from the fact that almost all resorts of the company witnessed an occupancy rate of around 75% last year (69% members and 6% by non members). The company even successfully rolled out is Initial Public offer (IPO) last month for the expansion of some of its resorts and setting up of new projects to support its expansion strategy.

So is it all so good with MHRIL? Well, not exactly. There are few issues encompassing the credibility of the company. And the first one comes from its membership agreement. It is a long service obligation on part of both the company and its customers as the membership duration lasts for as long as 25 years where in the admission fee (60% of the total cost) and the entitlement fee (remaining 40%) needs to be paid on EMI basis. This is not only a burden on the part of the consumers for a quite elongated period, but also an obligation on the company to maintain its resorts for that stated time. The second problem for the company comes from the issue of demand seasonality and dependence on travel industry. Explains an industry analyst from Angel Broking, “The company relies on discretionary spending by consumers, which is a lot vulnerable to economic cycles.”

Meanwhile, in order to expand their portfolio now they are even looking at branding of their Spas, ‘Swastha’, so that it can be extended to cities as well. But how will that be possible when the company does not even have a pan India presence? Well, Ramnathan answers, “Currently we have around 23 resorts, but we have bought land in many parts of the country. Our focus will be to grow in India.” Presently MHRIL has resorts in the west and northern India only. Thus the challenges are humongous, but then that does not stop Ramanathan from dreaming big for his company, at least not at a time when the travel and tourism industry is set to contribute 8% to the Indian GDP.

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.
IIPM fights meltdown, places 2300 students By Education Mail Bureau
Delhi/ NCR B- Schools get better By Swati Sharma
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IIPM Admission Detail
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IIPM, GURGAON