It’s a long drawn story

IIPM’s 36th Glorious Year of Academic Excellence

Marketers constantly try new gimmicks to attract consumers; the latest being long TV commercials. But will the strategy work? surbhi chawla finds out

A tense stadium anxiously watches an Indian cricketer batting on 99. In this nail biting anxiety comes a new ball and the batsman hits a splendid six! His fiancée, who is sitting in the audience gets up, dodges security personnel to enter the field and breaks into a carefree dance. And with her, the entire nation sings ‘Kya swaad hai zindagi main.’ This long duration ad and the jingle from Cadbury Dairy Milk was etched in the mind of the audience for a very long time. At a time when marketing budgets were not high and marketers had to watch each penny they spent, coming up with long ads was not considered to be sensible. However, over the years, duration of ads has almost tripled and so have their advertising budgets. So, what is the real reason behind marketers ditching short & crispy ads in favour of long & audacious ad campaigns.

Priti Nair, Managing Partner, BBH India, opines, “With so much clutter around, the idea behind these long ads is primarily to break the clutter and get the ad noticed.” Earlier the trend was to rope in big celebs to draw attention, but now with so many celebrities trying to sell everything from a toothbrush to a car, marketers want to try something different to grab the attention of the Indian consuming masses. Hero Honda to celebrate its 25th anniversary in the Indian market has recently come out with a foot thumping 180 seconds commercial. And it is not just the sheer length of the ad that comes as a surprise, but also the presence of as many as eight celebrities swamping all over the television channels that make one wonder that does it makes sense to have such a lavish ad budget? “It is not just the length of the ad that would hook the customer, but the ad should also provide the watchers with entertainment value,” avers Sanjay Sharma, CD, Draft FCB Ulka (the man behind the Hero Honda commercial). Marketers are now working harder on a storyboard that is interesting and hooks the customer till the end of the ad.

“The size and scale of the ad also helps the brand in creating a statement about itself,” informs Rajeev Raja, Ex. CD, Bates David Enterprise. Little wonder that BIG TV, Happy Dent, Bajaj Pulsar, et al, have made ads that are longer than the normal 30-45 seconds ads. There would be ad-men who would be quick to point out that there has never been a cap on the ad length and even in the past there have been ads of various lengths that have been made from time to time. As a matter of fact, it was not so long ago when Nike came out with its gully cricket ad that clocked almost two minutes. What’s more? Although the Nike ad boasts of a few celebrities, the entire show is run by faces that are lesser known.

So does it always pay to make something grand as attempted by these ad gurus? Not really, and the biggest example is the Pepsi Bubbly campaign. The ad had Big B, SRK & Preity Zinta giving company to Sachin, Dravid, Irfan, Yuvraj, Zaheer & Kaif. The company also launched a remix video with Kareena Kapoor. However, the ad campaign did not click with the audiences. The reason was very simply – with so many stars, brand Pepsi got lost somewhere. Although people do remember the bubbly song yet the association with Pepsi is not that easily to make. The trick here is not to create a long ad, but to ensure that each dime that the marketer spends gives him good solid returns.

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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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HEY, BE OUR GUEST!

IIPM’s 36th Glorious Year of Academic Excellence

According to consulting major Deloitte, international tourism expenditure in India in 2006 was about $8.7 billion and is expected to rise to over $10 billion by the end of 2008. According to them, there were an estimated 105,000 hotel rooms in India as of July 2007 and with these new concepts, this is bound to increase. Avers Amol Rao, Hospitality analyst, PINC research, “If players don’t start now, they will lose market share, as discretionary spending in India is increasing at a fast pace.” Market watchers agree that the growing demand for hotels rooms is stimulating innovations. There are innovations like underground resorts, totally cut off from the outside world. There are even restaurant run by housewives, especially designed for NRI clients. Located in Bangalore, the restaurant has housewives from Bijapur and Dharba cook and serve regional food, just as they would in their own homes.

There is even a military resort in Bangalore called ‘The prestige’. It’s a getaway where corporates send their core teams for training in team-building in typical soldier style. “Corporates like change, so we are trying to innovate and explore new opportunities,” asserts Venu Rao, Director, Aabana Hospitality, the brains behind the underground resort. Adds Amol Rao, “Moreover, products or services of any hotel cannot be in a vertical line as they have to be in a pyramid in order to grow. Indeed alternative tourism in India is a big concept, but in a nascent stage.”

Recently, even Mahindra Holidays and Resorts India (MHRIL) launched a new holidaying concept called Mahindra Homestays, wherein the company partners with home owners for accommodating visiting international tourists for a fee. The intention is to give foreign travellers a unique local experience. Justifies Ramesh Ramanathan, MD, MHRIL: “With shortage of hotel rooms in tourist destinations, it was imperative for us to grab the opportunity for authentic hospitality.” Four Seasons is also developing a destination resort in Puthenkayal (Kerala) which will have 75 villas and also 20 branded, luxury private residences. On similar lines, the Leela Group is investing in a property in Gurgaon which will have 90 apartments called ‘The Residence’.

Interestingly, alternative hospitality is luring even non-hoteliers. Real estate player DLF is building India’s first residential hotel in Goa in collaboration with Hilton Group, with an investment of $2 billion. Likewise, even as you read this, Puducherry-based leather accessories maker Hidesign and Bangalore-headquartered liquor firms, Khoday Group and John Distilleries are busy firming up their alternative hospitality plans. A recent Ma Foi report asserts that an estimated $11.41 billion is expected to flow into the Indian hospitality sector over the next two years. We don’t doubt it. Do you?

For more articles, Click on IIPM Article.

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
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IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
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Now it’s Brand-policing

IIPM : EXECUTIVE EDUCATION

Zaheer Khan,
Chairman, Enforcers of Intellectual Property Rights

Now it’s Brand-policing

The Indian counterfeit market share has gone up significantly over the last five years due to increasing brand awareness. Large sums of money being spent on advertising and promotional activities is increasing the scope for counterfeiters to cash in on the well-known brands. The mushrooming of counterfeit and gray market is encouraged by the fact that the margins involved in counterfeiting are high and penalty for counterfeiting is not that serious. People find it an easy avenue to make quick money. India and China constitute the largest counterfeiting problem that the world faces. Both have a very large user population as well. Not only do we churn out a lot of counterfeit for exports for use in different countries, we also use a lot of counterfeits that we make.

Actually we are the biggest market for counterfeiting. Though there is no one study which can quantify the amount of counterfeiting yet, it is safe to say that in every industry now the rate of counterfeits are alarming. Counterfeiting always happens in the most popular, most advertised and most publicised brands. They are the easiest brands to cash in on because they are the ones who spend most money in building these brands. The downturn and misgiving are by the buckets of counterfeiting, first being the huge revenue loss.

And of course, then there is loss of customer and brand value. If a customer buys a substandard counterfeit product and has a bad experience, he may not return to the same product thereby causing brand value loss and product loyalty loss.

For more articles, Click on IIPM Article.

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
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM’s 36th Glorious Year of Academic Excellence
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...

“It’s wait & watch for all of us”

IIPM : EXECUTIVE EDUCATION

As gloomy market conditions continue to dampen investors’ appetite

Sanjay Hegde
Executive Director, PricewaterhouseCoopers

Whether the upcoming slew of big issues is able to revive the overall market sentiment or would have no impact at all, is to be seen to be believed. However, recent history has shown that PSU divestments have generally helped in reviving the market sentiment...

The general bearish sentiment in Indian capital markets has meant that the pipeline of IPOs is not robust enough as compared to the last year. The negative trend in the primary market was in tune with the movement in the secondary market. The BSE benchmark index Sensex has lost as much as 31.71% till August 26, from its lifetime high of 21,206.77 points on January 10, 2008.

Dull market conditions since mid-January this year have dampened investors’ appetite so much that more than 70 companies, including Reliance Infratel, MCX, ICICI Securities, GMR Energy, are now either holding back or have withdrawn their IPOs (which together were expected to raise more than Rs.400 billion) till global markets stabilise. In fact few of them have consequently allowed their IPO approvals to lapse and are awaiting better times to enter the primary market. However, that is about to change if the recent filings with SEBI are to be believed at face value. After a rather lack-luster eight months of 2008, the primary capital markets are headed for interesting times ahead.

In fact, Indian companies are lined up to raise an estimated $17 billion from 56 public issues during the last four months of 2008 (Thomson Reuters). This list includes some big names like Adani Power (Rs.56.30 billion), Future Ventures (Rs.26.60 billion), Bharat Oman Refineries (Rs.24 billion), NHPC (Rs.16.70 billion) and Oil India (Rs.14 billion) to name a few. These include companies who had deferred their issues due to valuation concerns. They have been waiting for return of positive sentiment in the markets for some time now. However, due to genuine business needs, it might be difficult to delay their fund raising plans. It will definitely be interesting times for merchant bankers to market these high-profile issues in these ever-so increasing turbulent and uncertain markets.

Whether these slew of big issues (if and as and when they happen), will be able to revive the overall market sentiment or would have no impact at all, is to be seen to be believed. It would be difficult to stick one’s neck out to say either way, since markets have a strange way of countering any one view. However, recent history has shown that PSU divestments have generally helped in reviving the market sentiment provided they have been priced at a reasonable discount for investors to lap up the same. This might hold true for other than PSU issues also. Also, the SEBI has done its bit in helping the revival of gloomy primary market cause by amending the rules on collection of IPO money. As per the new guidelines, retail investors’ money will remain in their bank accounts till allotment. Also, it recently reduced the duration for a rights issue from 109 days to 43 days. However, companies that were planning IPOs just because the market was giving money, can, simply wait for better times. Same holds true for firms where IPO was a disinvestment. With a rising fiscal deficit and an unstable political environment, it might be difficult for the government to justify selling its stake in PSUs at lower valuations.

Hence, the verdict is really hard to predict. History has shown that revival of primary markets lead to better secondary markets and vice-versa. It has happened in the past and may happen now also. But, it’s wait and watch for all of us now.

For more articles, Click on IIPM Article.

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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Anti-fall pills

IIPM, GURGAON

Portfolio plays an important role when you have to negotiate a steep downturn in an industry. In the case of real estate, developing both residential and commercial lands have their respective advantages for a developer. Building residential complexes gives you the liberty to work on negative working capital whereas building commercial complexes results in locked-in cash flows, which provide stability in a volatile pricing environment. If we take up an analytical viewpoint, companies, which do not have a problem of liquidity crunch should go for developing residential land otherwise opting for developing commercial land is a safe choice at present. With rising home loans interest rates, residential complexes may see a fall in demand marginally, but if the experts are to be believed, residential properties will see a benign growth even after the rising interest rates.

If you look at the land banks of players like DLF and Unitech, they are investing mostly in commercial properties as a long term strategy. Sources in Unitech confirm that the focus of the company will be commercial only in the near future and their main drivers would be Tier II and III cities. On the other side, there are players like Parsvnath which have a considerable share of their project portfolio devoted to residential properties and are likely to see a downfall in the near future if this scenario continues.

The situation would be less difficult for players who have had the foresight to explore real estate opportunities overseas. We have already witnessed Omaxe’s announcement of entering Mauritius property market after making a prominent presence in the Dubai real estate market. Unitech and DLF have already announced their plans to get listed on the Singapore stock exchange. DLF is already present in Dubai (a Joint Venture with Dubai-based property developer Nakheel) and is a well-known brand at present. Unitech is also a renowned name in London as they are associated with Unitech Corporate Parks Plc. So, forecasting the cyclical change in the Indian real estate market much before, various players have made a strategic move to get into the global real estate market, which has paid off well too.

In addition, brand building seems to be a perfect antidote. As Pradeep Jain opines, “We are spending about Rs.35-40 crore per annum on advertising and marketing initiatives and we see this budget going up by 20-30% in next 3 years. We believe a strong brand name can be built through satisfying our customer and keeping our vendors comfortable.” And we have already witnessed the focus of various realty majors in the country on advertising and various marketing initiatives to create successful brands. Some of the best companies realise that it is very prudent to make sustained investment in brand building even in a downturn. We can see how the prowess of a brand like DLF has enabled it to defy the overall negative sentiment.

As the cliche goes, this is truly the time to separate the men from the boys. While large companies may be able to weather the impact, the smaller ones may need to cut the flab or sell out altogether. It would be better for such players to see the tide coming and avoid a painful situation like the one faced by one of their peers Down Under.

For more articles, Click on IIPM Article.

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
Now IIPM's World-Class Education... for everybody!!
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM : EXECUTIVE EDUCATION
IIPM’s 36th Glorious Year of Academic Excellence
IIPM Ranked No. 1 B-School In Global Exposre - Zee...
4Ps Power Brand Awards 2007
When IIPM comes to education, never compromise
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!
IIPM Ranked No. 1 B-School In Global Exposre - Zee...