Mandi_Volume1_July08.pdf

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The Editorial 1

Editor Speak

Readers,It gives us immense pleasure to bring forth, the first edition

of Mandi. A marketing magazine at heart, we will try tobring insights, business ideas, avenues and potential areas ofthis stimulating field of business. When the team behindthis magazine sat together to brainstorm for a name thatcaptures the spirit of marketing, we came up with severaloptions. However, the name Mandi lit a collective spark inour minds. The name captures the essence of our initiative,an attempt to go right where the action is. Being a team ofoffbeat individuals, it is only natural that we have chosen thetheme of the current edition: Offbeat Avenues in Marketing,Marketing in FMCG, services, B2B are avenues that stare at

your face when you think of this broad field of business. Inthis edition, we try to bring to light, a few areas that holdpotential, have similar or even tougher challenges, and mostimportantly avenues where marketing plays a pivotal role. Awholly student’s initiative, we look forward to yourfeedbacks and comments.

Editor,Gokul Kandhi

2 Selling Sachin

6 A shot in the arm10 Metaquizzics

12 Creating leaders18 How Crude?

20 Beat from the street21 Reconnaissance22 Ad-Sense

Contact Mandi For queries, suggestions, contributions or for thatmatter, anything else related to this magazine, pleasecontact:[email protected], 09907668411

The Editorial Team

Rishabh SachdevaA second year PGP student from IIM Indore, an artist, amechanical engineer, an advertising enthusiast all rolled intoone. Great at thinking out of the box, he is learning to thinkinside the box out here at IIMI.

Srikumar SA mop of hair, a lumbering hulk, he is all what hedoesn’t look like. A second year PGP student, he lives andbreathes marketing and swears by Kotler.

Tejas BhatA doctor by qualification, doing his second year in IIMIndore, Tejas is an avid traveler with a strongentrepreneurial pull. The creative energy in the team, healso maintains the sanity of it.

U Gokul KandhiThe ever energetic "maaple". Avid sports buff, blogger andfood junkie, his adventures with Hindi are legendary.Impossible to miss his enthusiasm and wit.

mailto:[email protected]:[email protected]


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2

When the famed Pakistani attack lined up to

bowl on November 15, 1989, few gave the

batsman, Sachin Ramesh Tendulkar a chance.

The moment he stood up in the series to smash

the likes of Abdul Qadir, Imran Khan &co, a star

was born; in the worlds of both sports and sports

marketing.

In an age when sports stars were confined to

stereotyped symbols of masculinity like a

Vensargkar for Vigil or Farokh engineer for

Brylcream, came a fresh faced kid who could

endorse anything from Pepsi to AIDS awareness

with equal ease. In 1995, Sachin signed a record

sports management deal worth 30 crore rupees

Wordtel for a period of five years. That was the

proverbial tipping point of the Indian sports

management industry.

Indian sports management industry has come a

long way since then. A host of international

players have led the field with the Saatchi &

Saatchi’s Iconix the latest big name to enter the

fray. Indian tennis star Mahesh Bhupathi is

himself the Managing Director of Globosport,

the biggest Indian sports management company.

Sports management can be broadly divided into

three- Facility management, Sports

Administration and Sports Marketing.

Facility Management deals with organizing and

maintaining sport infrastructure, amenities and

related activities. Sports Administration deals

with managing the sport as a whole or a smaller

entity of it. Typically it involves coordinating

with other business enterprises that have a stake

in the sport. Sports marketing deals with

applying marketing principles to sports products(from events to sportspersons) and marketing

non- sports products (from cigarettes to

computers) through associations with sports.

Sports marketing is a unique field. People who

provide the sport experience cannot predict the

outcome because of the spontaneous and

uncertain nature of the activity. Such unique

challenges combined with the media explosion in

sports have made sports marketing a great career

option.

Globally sports’ marketing industry, covering

everything from television rights to

Selling SachinSports Marketing – Where economics courts emotionby Gokul Kandhi


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3endorsements, sponsorships, and merchandising,

is an important sector and growing rapidly. In its

Global Entertainment and Media Outlook ,

PricewaterhouseCoopers estimated that thesports industry accounted for around $50 billion

in revenues in the United States in 2007, up from

just under $35 billion in 2001. On a global scale,

total revenues are expected to be nearly $100

billion this year, compared with $70 billion in

2001. In India the industry has huge potential for

growth and has touched almost all sports from

kabbadi to golf.

Given a short shelf life, high degree of

uncertainty, and a looming threat of failure in the

playing field, what makes a marketer desire a

sportsperson? Sportspersons make excellent

brand ambassadors, if chosen with the right

amount of diligence. They have a consistent

brand image unlike heroes and heroines (the

other big endorsement angle) who at times have

image changeovers to suit their professional life.

They are the ones who spark a multitude of

emotions in the public and hence have a

tremendous impact on the public psyche while

endorsing. From among musicians, film

personalities and sports icons, it is the sportsstars who are the preferred choice because of the

universal appeal of their profession (for example,

the FIFA World Cup Football has more diverse

viewership than a Hollywood blockbuster) and

more significantly because their achievements

are real and not make-believe. It is natural that

fans adopt the consumption patterns of their

sporting icons, making sports heroes the ideal fit

for brands particularly those trading in consumer

goods and durables. With audience of today

getting more and more diverse in needs, demands

and ideologies, sports is one of the last remaining

bastions that offer a consistent reach to a mass

audience.

Given huge prize money, the honor of playingfor the country and adulation of a frenzied

billion, why does a sportsperson desire a

marketer? A sports person knows perfectly well

that his shelf life is getting shorter and shorter,

the vagaries of fate are tricky, and the fickle

mindedness of the audience. Adding to it the fact

that not many sports persons are equipped to take

on a career after their sporting life, they look to

cash in on the opportunity at hand. Endorsements

today pay much more than what a player could

possibly earn from his sporting ventures in his

lifetime. Endorsement contracts and the


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4consequent income thus provide a fair level of

financial security to the players. For a job that

doesn't provide the benefits of a Provident Fund

or Gratuity, one way to look at endorsements isthat they help in securing the athlete's future.

Hence the verdict is out, loud and clear. In a

country where sport is the lowest common

denominator, marketers need sportspersons for

the appeal and pull they have. In a country where

maximum public memory is only till the previous

match, sportspersons need marketers for

financial stability. In this marriage of sports and

commerce, lies the field of sports marketing.

Challenging and stimulating at the same time,

and with the proverbial tipping point crossed, it

is now time to ride the avalanche.

The career sounds glamorous, compelling and

attractive, doesn’t it? Well it is all that and much

more. Hard work, persistence and ability to thinkon your feet are the most important requisites of

a sports marketing profile. The jobs not only

involve event management, but also athlete

representation, TV rights, sales and distribution,

and licensing and promotion. In an era where

companies want accountability and return on

every dollar spent, bringing a Coca Cola or a

Nike to the playing field is a demanding job.

Employment comes from all angles. You can be

working for a league like EPL or a corporate or a

franchise like Manchester United or an entity like

BCCI or a player. There are also jobs available

with agencies hired by corporations to do this

type of work. In India, the craze for cricket, the

huge success of IPL, the growing acceptance and

recognition for other sports like Golf, Tennis andFormula One throw up a myriad of opportunities

for a professional in this field.

The marketer in this field might spend the day

coordinating the details of contracts or

negotiating with an athlete for an appearance or

commercial. There is also time spent meeting

with your peers in advertising or PR and

promotion to strategize about how to best

leverage sponsorships or assist with event planning and coordination. The job is

demanding, multifaceted, and requires creativity

and attention to detail.

A sportsperson is above all, a brand. Hence the

most important area of expertise required in this


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5field is Brand management. Advertising

knowledge and nuances will be a big plus for any

professional looking to enter this field. Expertise

in complementary fields like investments, business management, financial and risk

analysis, as well as about the particular sport and

the trends in the sport will be a huge asset.

Staying up-to-date on sports investment and

market changes is also critical.

Sport has emerged as the biggest and most

enduring form of entertainment. Sports

marketing deals with packaging this and

presenting to the diverse client base ranging from

viewers to fans to corporate. Challenging,

glamorous, demanding and interesting at the

same time, this field is one of the sunshine

sectors in marketing. Apart from trysts with

celebrities and high value deals, there are

invaluable perks like having a Sania Mirza or aSharapova as your client.

Well, that’s something!!

In the early 1900s, George Smith made a living selling candy on a stick. As competition wasfierce, he endeavored to find a marketing twist which would differentiate his own product frommany others.One day, he took a break from work to visit the track. Having placed a large amount of money

on a certain horse, he was delighted to see it win - and named his candy "Lollipops" in honor ofthe victor (Lolly Pop).

Walt Disney made his first little nest egg as an 18-year-old ambulance driver in France in 1919,shortly after the Armistice. Together with a Southern con-man he transformed brand newGerman military headgear into 'sniper's helmets' by adding fake bullet holes, mud, blood andhair, to be sold as souvenirs.


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6

Healthcare marketing is a relatively new term in

the marketing circles. Although considered a

very radical concept when first introduced in

1975 by Evanston Hospital, Illinois, USA, this

concept has permeated to all major healthcare

organizations and any hospital worth its salt now

has a dedicated marketing team.

Healthcare as a commodity

Till recently, healthcare service providers did not

consider their practice as a business. It was

rightly considered that their primary purpose was

the provision of medical services and that

attending to the details necessary to successfully

provide this care, namely promotion and

advertising of the practice, was not only

unnecessary, but actually contrary to the ideals of

a good practice. When accosted with the term,

healthcare marketing, doctors and hospital

owners would exclaim- “I am a doctor, not a

product!” or “If we provide quality care, people

will find us by word of mouth.” Not so anymore!

Although there is still an element of marketing

by reputation, healthcare marketing is being

increasingly recognized as an important

functional discipline to be utilized in healthcare

management. It is important to realize that the

dynamics of the healthcare market has been

changing. With increasing standardization of

healthcare it is just not enough to let the quality

do the talking. Hospitals which till now used

word of mouth as the main channel (rather the

only channel) of awareness and marketing are

resorting to extensive marketing campaigns toincrease awareness and divert patients from

competitor hospitals. In short, healthcare is

becoming more commoditized and all the costs

are transferred to the end consumer; the patient.

The healthcare organizations like any other

industry are forced to strategize in terms of

answering questions like: Who are our target

consumers? What is the value being provided to

the patient? How to build long term relationship

with patients so that he keeps coming back to the

same hospital? This transition can be attributed

to various factors:

A shot in the arm A look at the relevance of marketing in healthcareDr. Tejas Bhat


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7 Rapid increase in demand resulting in

increased competition

Excess capacity in private healthcare

Rising costs

Healthcare turning capital intensive with

advent of technology

Consumer activism-right to choose

How is it different?

In many aspects, marketing healthcare is not

vastly different from marketing a small business

in other industries. Basic marketing principles

that apply to other industries including marketresearch, competitor analysis, strategic planning,

positioning, branding, marketing strategies,

media options, public relations, tracking and

monitoring processes, also apply to the

healthcare sector. However, there are several

reasons healthcare marketing is approached

differently than marketing for other businesses

and industries. In the healthcare industry, the

marketing process is complicated by many

unique variables.

- A consumer may be willing to make a tradeoff

on the cost of a pair of shoes for ones of lower

quality, but the same consumer will be reluctant

to apply the same reasoning to his health

decisions. Healthcare is different in that quality

is a necessary primary factor.

- Unlike in other industries, most healthcare

providers are conditioned or inclined to view

marketing as inappropriate, distasteful, and

sometimes, even unethical. As a result, the

competitive arena for marketing has been left

wide open for the relatively new business savvy

practitioners or corporate houses getting into the

healthcare sector.

- Hospitals and Practices have to conform to

marketing and advertising guidelines imposed by

the medical licensing boards like Medical

Council of India.

- Unlike other services or products, healthcare

cannot be aggressively marketed; it has to be

subtle.

Components of Healthcare Marketing

Marketing in a healthcare organization includes

the following functions:

Marketing research: As with other organization

this can be used to assess consumer preferences,

Over a 12-month period, a marketing

management system implemented at an 888-bed

medical center in Tennessee tracked more than

$1 million in gross revenues per month in

incremental business attributable to marketing

activities. A Pennsylvania hospital's marketing

management system found that of 1,000

individuals contacted for the first time through

hospital marketing activities, 250 became new

patients during a two-month period. A system

used by an Illinois medical center determined that

approximately 225 new patients and $200,000 in

new patient business per month were related to

the activities of the marketing department.


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8how consumers do their shopping, perception

about the hospital among other things.

Marketing planning and strategy: Identify target

segments and decide on the strategy to capture

these segments.

Communication and public relations: Making the

target segment aware of your value proposition

and USPs.

Patient Liaison: Acts as an intermediate between

the provider and consumer. This includes

relationship marketing.

Contracts and partnerships: Partnering with otherservice providers and contracts with

organizations and corporate houses for

healthcare.

Healthcare: Creating a Brand

In recent healthcare marketing, the hospital

“brand” does a lot to a ttract patients and also

create word of mouth referrals. Take for

example, Apollo Hospitals. The brand has gained

so much strength that people are now less likely

to look for specific doctors and in turn rely on

Apollo Hospitals to do the job for them. It is now

assumed that the hospital employs only the best

of doctors.

Whether marketing a specific specialty of the

hospital — like the cardiac care division, or

branding the hospital as a whole, creating “the

brand” or personality of the organization has a

huge ripple effect on other marketing activities

like advertising and public relations efforts. Sothe all important question to ask is “What makes

your hospital different from all the other

hospitals in the locality?” If your answer is that

you provide quality care, then you need to

rethink the value proposition of your hospital;

for, all hospitals are in the business of providing

quality care or at least would advertise to do so.

More and more hospitals are choosing to select

one or two areas that they are really good at and

advertise these aggressively to patients. Thus

Escorts has positioned itself as a Cardiac

specialty centre in spite of providing treatment in

other specialties. Or you could advertise yourself

as a multi-specialty hospital if and only if you are

the only provider of such facilities in that area.Building Relationships

Apart from the usual marketing activities such as

advertising (billboards, posters, handouts etc.),

public relation activities (e.g. publicizing a

successful complex surgery performed at the


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9hospital, publicizing celebrity patients), personal

selling (conducting regular health camps, using

opinion leaders), the most important component

of healthcare marketing is relationship

marketing. Recognizing the fact that in

healthcare, it is as important to retain existing

customers as attracting new ones and also that

healthcare choice is still determined largely by

word of mouth marketing, healthcare marketing

at the present time is moving away from

advertising and more toward relationship

building.Relationship management is based on the fact

that it is five times easier to obtain repeat

business from an existing customer than it is to

get business from a new customer. Relationship

management acknowledges the increasing role

consumers play in the selection of healthcare

providers. Hospital marketing departments

identify individual consumers with whom they

may build a relationship. Rather than waiting for

consumers to contact them, hospitals become

proactive, identify previous users of the hospital

and facilitate access for these users to programs

and services that are particularly suited to their

individual needs. They create sampling

opportunities, such as health fairs and mobilehealth status screenings which allow consumers

to test the organization's services as the

consumer decision model suggests that

consumers develop a preference for a product or

service after sampling or testing that product or

service over time.

Summary

The role of healthcare marketing has never been

more important. With increasing competition in

this sector, hospitals are exploring new ways in

which to deliver their services and attract clients

to the same. Healthcare marketing can play a role

in determining the needs of healthcare

consumers, designing programs to meet those

needs, and directing consumers to those

programs. Such systems can also help manage

relationships with existing customers on a long-

term basis.


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10 Metaquizzics

1. A stock index formed by a collection of

thirteen companies stocks’. The

companies were all related to a movie

series. This stock index was created by

StockPitr. Identify the index

2. Which global brand was recently

launched with “Its time to think HATKE”

as one of its taglines?

3. Connect

a.

4. Who is the author of the Purple Cow?

5. Mark Barraud’s 1898 painting with

Nipper as its model is famous by which

name

6. In this 1971 commercial, young people

from around the world were shown

singing on hilltop outside Rome, Italy,

and was so popular that the song became

a hit in its own right. The song's success

was particularly notable in the UK where

it is one of the 100 best selling singles of

all time. When the company planned to

broadcast this commercial in South

Africa, they wanted the ad to use an all-

white version, due to the apartheid

government. Identify the commercial andthe jingle

7. Identify this personality

8. What is otherwise known as SOx or

Sarbox?

For knowledge’s sake only!!


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11 Metaquizzics9. This is a part of logo of which global

company

10. Which Indian restaurant won the Food

Oscar for having the best wine in UK?

11. Identify the entity that sports this logo

a.

12. Thinnovation is the Tagline of ………..

13. Connect

14. What is nomophobia?

15. Connect

Clue: This international chain was

involved in a lawsuit recently for the

reasons shown.

Solutions to the quiz will be released in

the August edition of Mandi.


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12

IntroductionIf selling something to somebody could change

their lives, then the market place in question

ought to be politics. A political contest can

determine the course that countries, states,

communities and cultures take. Not always too

dramatically, I have to agree, but often. A

politician is a strong candidate only if there is a

right combination of issues/ideas and public

relations in his armor. This brings us to the point

that, many out there think of politics and its

contests today as nothing more than a carefully

orchestrated public relations and marketing

exercise.

Marketing and Politics

Experts consider a political contest as an aptmirror of a market scenario. You've got an

incumbent versus a challenger. In marketing

language, that's an established product versus a

new entrant.

Typically, challengers don't have as much

awareness in the minds of consumers as

incumbents do. To build awareness, brand

structures have to be created. That essentially

means that you have a brand “Republican”

versus a brand “Democratic” in the US or

quoting from closer back home – a toss between

brand “Congress” and brand “BJP”.

Aspects of Political MarketingThe most obvious stage for political marketing is

election time.

‘India Shining’ Campaign by the NDA

Effort spent on campaigning spells the difference

between being there and almost.

The various aspects of campaigning would have

to be:

1. Party Image Building

2. Personality Selling

3. Message Development

4. Communication Strategy

Creating leadersPolitics and Marketing by Rishabh Sachdeva


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135. Implementation of Strategy

The idea of campaigning is to be able to

differentiate one candidate from another. This is

especially important for a new candidatecontesting an incumbent.

On the Indian political scene, the Congress and

its set of allies comprising the UPA are what one

might call the „Secular Front‟, the BJP and allies,

the „Saffron Front‟ and then there‟s the „Left‟.

The point being that basically all political parties

represent a certain image which in a market

scenario could be equated to “Brand Image”.

These images remains mostly consistent as party

ideologies never really change that much.

Oscillations are primarily temporary.

Next, of course there are the all important party

leaders who at any time are the face, heart and

soul of the organizations they belong to.

Ideologies need a platter of charismatic, strong,intelligent leaders to be sold on. Ok, maybe not

always but ideally yes. In campaigns either

personalities of contesting candidates or of

national leaders of the party are sold to citizens.

Therefore it is not surprising that Narendra Modi

who is the CM of Gujarat was seen recently

campaigning in the Kannada speaking heartland.

Rahul Gandhi has also been touring the country,

although the ultimate benefit of his excursions

remains largely undiscovered. His famous

second na me hasn‟t ignited voters yet. Maybe his

personality isn‟t striking a chord and needs to be

worked on or maybe the message he is delivering

is not quite relevant.

Yes, the “Image” might be in place, but it‟s a

dynamic world and political parties need to keepthemselves abreast with issues relevant to a

voting populace. A vision for governance; an

understanding of local - socio economic issues of

constituencies and respect for independent

cultures are essential. It is however true that a

voter is not always rational and logical in choice.

Rampant ignorance, tendency to vote within

caste, language, religious and cultural divides

and deep rooted corruption at most levels of

governance are some causes which could affect

choice. The idea still is to make the offering

worthy of consideration . So, if the “Image” of

the party isn‟t enough, then the stress sh ould be

on combining the right “P ersonality ” and the

right “Message”. Content is an exceedinglyimportant component of the “Packaging” . The

whole American presidential nomination race

this year was a remarkable example of a duel

fought on dual platforms of personality and

message. In fact, given that the American voter

was faced with two equally compelling

personalities in Obama, 46 and Clinton, 60 the

message became central in the contest. Obama‟s

message of “Change” in a paranoid America won

over Clinton‟s call to “Trust in Experience”.

Once the foundations of a campaign are made,

communication becomes important. To build and


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15 participation of spokespersons on shows like

„We the People‟ and „Big Fight‟ aired on NDTV

among others on News Channels. In American

politics, presidential candidates grill each otherin publicly telecasted debates. Also, presence on

expert panels and interviews can go a long way

in creating awareness of a party‟s stand.

Barrack Obama‟s campaign team powered by a

$500 m war chest plans to advertise during the

Olympics broadcast later this year.

III. Print Media – The CPI (M) has 5 daily

papers in 4 languages in India. Parties also have

their very own weeklies and fortnightlies. The

Congress has „The Congress Sandesh‟, the BJP –

„The Kamal Sandesh‟ and the CPI (M) has „Lok

Lehar‟. In fact the CPI (M) is so ac tive that it

owns a news network agency – Indian News

Network and a publishing house – „Leftword

Books‟.

An Australian Political Ad

IV. Direct Mailing / Phone Centers – Not so

well developed in India but used extensively in

the west. Target segments through extensive

research using components of Segmentation andTargeting.

V. The Internet – The internet is an essential

component in today‟s communication strategies.

Barrack Obama‟s website has been a critical cog

in the success of his nomination campaign.

Blogs, Video and Audio Feeds, Wikis,

Discussion Forums are the rage today. In India

the media is not very well developed if we

consider political party websites but one can find

e – newsletters, videos, screen savers,

photographs and articles on them.

V. Lobbying\Lectures\Celebrity Shows – An

interesting way to connect with voters, support

groups, community representatives and political

networks. Essential for raising funds forcampaign and party activities.

Implementation - Experiments

In the recently concluded Karnataka polls the

election commission put severe restrictions on

campaign budgets and big rallies. Innovative

ideas to reach the populace spurt forth from

political parties then. A scientist turned assembly

candidate rallied in a solar car to stress on

ensuring a green Bangalore, Masks of the

contestants were distributed by one political

party amongst children, pamphlets slipped into

newspapers, door to door visits by candidates.


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16When the DMK came to power in Tamil Nadu,

the Chief Minister distributed free TV sets

promised to BPL families at the time of

elections, very much like a „Customer Loyalty‟ program. The same minister also partnered a

number of restaurants in TN to offer a special 30

- 40% discount on Dosas on his birthday this

year.

Rahul Gandhi recently conducted a cricket

tournament for villagers in his Amethi

constituency where Sachin Tendulkar was in

attendance. The „Amethi Premier League‟ got a

lot of attention from the Indian national media.

We have spoken already of the advertising

campaigns of two successive governments –

„India Shining‟ and „Bharat Nirman‟. The Radio

is another important media used extensively in

countries like South Africa.

Political Bandhs, Political Party supported uniongroups, Dharnas and Road Blocks are also

interesting dimensions to the attempt of getting

heard.

Recruiting Film Stars has added the tinsel town

element to politics. We have names like

Shatrugan Sinha, Hema Malini, Jaya Bachan

among others who have joined ranks of political

parties. In American Presidential elections

endorsement of a candidate by celebrities can

help raise mammoth funds and connect

candidates with communities. Powerful African

American figurehead – Oprah Winfrey has

aligned herself with Barrack Obama in this

year‟s race and so have a host of other names;

giving Obama a wide ranging popular appeal.

Quirky, eccentric personalities like Lalu PrasadYadav, Bala Saheb Thackrey and Narendra Modi

are also an essential part of politics. They affirm

the domination of personalities in politics.

Associations

Like commercial brands, political parties are

recognized by their Logos, Color Schemes, and

Slogans. So while the Congress is an „Open

Palm‟, the BJP is a „Lotus‟, the RJD is a „Lamp‟.

One Slogan that inspired BJP supporters for

many years was – „Agli Bari Atal Bihari‟ (Next

time its Vajpayee‟s turn).

An Obama Campaign Ad


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17Careers in Political Marketing

1. Campaign Communication Managers

2. Fund Raising

3. Advertising Agencies4. Opinion Pollsters

5. Message Formulation Strategy

6. News Media

7. Campaign Managers

8. Event Management

Marketing and Politics have an age old equation

which has and will always shape the road we

take. Someone once said “Leaders are not born,

they are made‟. For a marketer that means that

there is some business to be done somewhere.

Well, that ’ s something!!

Irked by Concorde's $97 million loss in 1981, Lord King of Wartnaby, a Conservative firebrand in theHouse of Lords, assumed the helm of British Airways and appointed future British Airways flightdirector Jock Lowe and another pilot (Brian Walpole) to turn the ailing company around.

"We did some research to find out who our passengers were," Lowe recalled, "and it turned out theywere presidents, chairmen, and directors, and they travelled on Concorde because that was theirentitlement in their company. So an idea formed that maybe telling them it's not that expensive - whichis what BA had been doing - is not the route.

I then had some research done which said, 'Ask them if they know how much the fare is.' Well, 80 percent of the passengers didn't know what the fare was, because it was booked by their travel companyor their P.A. When we asked them to guess, most of them guessed that the fare was higher than itactually was. So we just said, 'Well, we'll charge them what they think they're paying.' And we gradually

put the fares up."


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18

Source: Wikipedia

INDIAN YOY PRICE BASED on WPI: Source: OEA

On the day this piece is being written, crude oil prices stand at $142 per barrel. The lowest pointreached was $16 in the year; hold your breath,not couple of decades back, but in 1999. From1996 onwards the crude price has witnessedspike after spike of price rise to stand at $142today, fuelling inflation all around the world, punintended.

Why this has happened and how this mad rush is

going to come to end ? is a question every onewho matters in the Oil world is trying to answer.The answer or the lack of it, though may lie withthe OPEC cartel, an oxymoron, in itself . For ,acartel should not exude power just outside it, butshould have the strength to wield power over itsmembers too, a fact, OPEC fails to deliver. Withno real control over member countries, nostringent production quotas, OPEC at the end ofthe day , is just a bunch of kids from different

streets who decide the game because they havethe balls, pun unintended.

Talking of the end , how exactly is thishappening? Experts, as usual, have multipleviews( Which is why I keep saying, not all ofthem are experts). Demand/ Supply mechanics,every official in the rest is ready to point out.

This demand/supply theory helps them targettheir favorite whipping boys, India and China onthe demand side and OPEC countries on thesupply side. Financial speculation, say some,supported by the OPEC secretary, GeneralAbdullah al-Badri. According to Badri, currentworld consumption of oil at 87 million bpd is farexceeded by the "paper market" for oil, whichequals about 1.36 billion bpd, or more than 15times the actual market demand. The US war on

Iraq, say a few, citing examples of how pricesdropped down during the build up to the warseeing a quick end but rose steadily on with noend in site. And yes, governments beinggovernments, what is a threat to world economythat cannot be attributed to terrorists.

All this back end mechanics means just onething, the common man, who has to fill petroland cook on LPG gas everyday has no respite in

sight. And the governments seem hell bent ondoing exactly the wrong things at the right times.

How crude?Opinions on the oil price rise and regulation


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19

Looking the at the RSP of petrol products overyears ,from when it was Rs 24 a litre in 1999 toRs 60 a litre today, less than three fold increasecompared to the nine almost nine fold increase in

crude oil prices.Though very heartening for the consumer in theshortest of short runs( even if we keep makingnoises, have bandhs and hartals to bring pricesdown) it will have a devastating effect in the longrun. Petrol is currently being sold at a loss of Rs16.34 a litre and diesel at Rs 23.49 a litre.

In the long run, this means two things. One,spiraling loss for the state run oilcos to the tuneof Rs 2,000 billion this fiscal on sale of petrol,diesel, domestic LPG and kerosene. Though thegovernment does compensates the state ownedcompanies upto one third of the loss due to underrealization, this is hardly enough to keep anorganization on its competitive toes. Two and themost important aspect is, it prevents the naturaldampening price rises effect to bring downconsumption. In the face of dwindling supplies

and burgeoning demand, controllingconsumption by market dynamics is the best wayout of this hole.

Deregulating fuel prices would mean the pricesof petrol, diesel and associated products are inline with the prices. This would mean a hike Rs16-17 in petrol and Rs 24 in diesel. Though thenation would be hardly happy about it, this will

be a bold step in the right direction. Such a move

will have multiple effects, it will dampenconsumption, stimulate demand for alternatefuels that will lead to innovation and yes, alsoinflation. Now what do you do about the greenlittle monster called inflation, you might betempted to ask.

Fuel prices cause inflation because they are suchan integral part of consumerism in FMCG, fromcooking LPG to trucks and lorries that are part ofthe supply chain. So the next best thing would be

keep diesel and LPG prices regulated while petrol prices should be deregulated. Deregulation petrol will help reduce losses to the tune of Rs20000 crores. Petrol hardly forms a significant

part of the value chain in inflation and hencewould not have an adverse impact on inflation.However, the advantages are manifold .Consumption for private vehicles will reduce,demand for fuel guzzlers will go down, need foralternate fuels will be felt, sights of one man

driving a SUV will be rare and yes, it will bringdown congestion on our little roads in its ownway. And of course, maybe we can see good oldcycles back on the streets soon.


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20 Beat from the street

Rau is a bustling small settlement just before

entering Indore. A hub for a number of villages

around the place, it is a small market place full of

activity and life. This colorful market is our

destination for occasional cups of tea and hot,

tasty kachoris. So I decided to have a

conversation with one of the many shops that dot

the market. Deadpan practical, shooting straight

from his hip, our hero was a revelation from our

world of jargons.

A snapshot of his profile. Deepak Nagar wasfifteen when he entered the business world,

starting by helping out his family run food and

consumer goods store. Called the Kirana Store,

the store , deals with all FMCG goods from both

branded and unbranded players.

After striking a conversation, between bites of

Dairy Milk, I tell him of my interest in marketing

and my attempts at understanding it better. He

asks me straight then and there whether I have a

shop. And when I tell that I don’t and I am just

an interested student, he has a look of wonder

mixed with worry. Somet hing on the lines of “

Oh My God! What has this world turned into?”

Intros made, the ice broken, I proceed to ask him,

goad him, quiz him to come out with his ideas of

how the marketing world functions, his insights

on everything from HUL to Govind ghee.

The best part of the conversation came right at

the start. On asked what is his nature and level of

business. He replies in impeccable lingo “ Semi -

wholesaler” . His explanation “ I buy fromwholesalers. Village shopkeepers buy from me.”

He thinks he is one among the Top five in Rau.

Marriage orders, village festivals are his main

big contracts.

Next came a slew of marketing insights that I

would call Nagarisms. On asked about shelf

space the FMCG guys fight and buy for, he says:

“ One has to be very car eful about giving shelf

space to distributors for money, because once

they pay you , you cannot determine the product

line you want there. Imagine if I sell it to Godrej

Deepak Nagar, 19. Owner, Nagar KiranaStores, Rau, Indore.


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21 Beat from the streetso I can stock Godrej NO1 and they instead use it

to keep Cinthol Deo Spray?” he quest ions.

And having the best ignorant face I could conjure

up with I ask him the difference in having products displayed in different places. He sports

a smug look of confidence and drawls out “

When customers see new products, they feel like

trying it out, and feel they want it for some

purpose”. Well that’s Kotler on impulse

purchases for you.

Well, I realize, its no more a conversation, I

realize. Then I ask him about the number of

freebies companies dole out these days. For that

too he has an answer. And what an answer it

was. He says in a very matter of fact manner that

freebies matter only when they are offered in a

separate pouch or packet. Only then people feel

they are getting something extra. Having extra

twenty and thirty percent in the same SKUdoesn’t influence purchase, he feels.

Now, realizing I have an expert within my grasp,

I ask him a question I thought never had an

answer. I asked him how he felt men and women

were different as customers. Well, he had

answer for that too and what an answer it was.

Men, he says, buy bigger packs, do not haggle

much about prices and spend a extra on

cosmetics. Women he says , try out a lot of

brands, are influenced by freebies, and haggle a

lot about prices. And the final nail, women, he

says , are more knowledgeable about new brands

and products and ask to see them even if they

don’t want to buy it. Oof, that’s enough

knowledge for the day, I resign. Before I shake

hands and take leave, I ask his opinions on the best and most favorite brands in market, his

market.

His view of FMCG companies: HUL has the

strongest gamut of brands and brand recall, while

ITC’s FMCG products have extremely low brand

awareness.

Dominant Brands in his market:

Hair Oil – Parachute, Nihar

Edible Oil – Kriti, Fortune

Toothpaste – Colgate

Toothbrush - Pepsodent

Shampoo – Clinic

Soap – Godrej No.1

Biscuits – Parle G

Detergent – Wheel, Nirma, GhadiChocolates – Cadbury

Tea – Goodricke


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22 Reconnaissance

Does all the weekend binge makeit difficult to catch yourself in the

mirror?Scared thatthe first

words that you might hear be “You have put onweight!” UB has decidedto play on your thoughts,and introduced DietWhiskey and Diet Vodka in the US. Looking at how Kingfisher Airlines is

bleeding, maybe he will need quite a few shotshimself.

After waiting for ages, the original roadstylecrossover SUV ishere. The

MitsubishiOutlander would

be out thisSeptember, and

priced at the upside of Rs 16 lakhs. To be pittedagainst Captiva, the CRV and the Grand Vitara.

One banner is crowding the Apple website, andsearch crawlers frequent the site more than anyother website. IPhone 3G is here. And consideringthe withering sales of thefirst version, Apple couldnot have timed it any

better. Halving the price,adding features that were

sorely missed on the earlier version. And with pushmail integrated, the new IPhone tries to be aSwarovski embedded Blackberry. Cheers to that!

The Hottest brand of theseason? Four letters in red!The whole world watches 16countries going to war. Andscreen audiences in India

peaked to watch all thecolorful lady fans at theStadium.

She should have retired, but then here she is. 60years old, the multi-

billion dollar EsteeLauder brand enteredIndia on a back of strongAsia sales. They openedin Mumbai, and plan toenter Delhi and Bangaloreshortly. And since Liz Hurley is hot on the web-site, should we be looking at a high-profile

promotion just like her wedding?

To Round off thisedition; a company hasfound a solution for thecase of the missing

Sock. And how! Byselling three socksinstead of two, Throx(www.throx.com) think they can remedy the ageold problem. Now that is the find of the season,literally!

Market WatchDebutants


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23 Ad-sense


25/25

Dear Readers,

Heartfelt thanks for your readership ad support. We

intend to make it a magazine that is as much yours as

ours. In this regard, we will be publishing two articles

every edition from the readers. The article should be in

line with the theme of that edition.

The Theme for the Next Edition is:

New Avenues in Advertising

Please send in your entries to

[email protected]

Format : MS Word, Times New Roman, Font size 12,

Word Limit: 2500 words

Everybody is invited
mailto:[email protected]:[email protected]

Documents

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