MTC- Knowledge in Practice- VOL-3 , Issue 7

8/2/2019 MTC- Knowledge in Practice- VOL-3 , Issue 7

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M T C Gl o b a l

K NOWLEDGE IN PRACTI CE

Volume 1, I ssue 1

I ssue- 7 (Jan Mar 2 01 2)E-bulletin: Volume- 3

Message from the Chief Editor

I take immense pleasure to release the seventh issue of our e-bulletin. ThePrevious six issues of e-bulletins were great success and earned lot of accolades across differentwalk s of life and well r eceived by all esteemed team members of MTC Global.

I sincerely acknowledge the support, encouragement and motivation extended by all the membersof the team wh o contr ibu ted towards the growth of our Team.

I am really grateful for the contribution made by all our team members. The restriction of pagenumbers limited inclusion of all the articles. The articles submitted would definitely be placed inour subsequent issues.

Happy Kn owledge Sharing.

Prof. Bholana th Dutta

Chief Editor: MTC Global- Knowledge in PracticeFounder & Convener: Management Teachers Consortium, Global

Cell: +91 96323 18178Homepage: www.mtcglobal.org

IMPORTANT ANNOUNCEMENT

1. MTC Global Award forExcellence2012.

Deadline Extended01.05.2012.

2. The Venue for Sankalp-2012 is

VIT, Jaipur on 01.09.2012.

3. MTC Global is the advocacy

partner to CAMPUSINNOVATION award by

Employability Times

Title: Management ofManagement DepartmentARoad to Excellence

ISBN: 978-81-922178-0-2

Pages: Approximate 500

Book Release Function:Officially the book will bereleased in a Grand Function

Estimated time: By April EndOR First week of May (Subject

to little variation)Price: Rs. 425/-

There is a pre-subscriptionoffer for the book at the priceof Rs. 275/- inclusive ofcourier charges. Once the

book is out in the marketMTCians and associate collegelibraries can enjoy 25%

discount.


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SOFT SKILLS IN MEDICAL ADMINISTRATION

Sharu S. Rangnekar.

STICK & THE CARROT

Motivation is one of the most important soft skill a medical administrative hasto acqu ir e. The tr adit ional ways we can motivate people are very simple. Thestick and th e carr ot, fear and money. If we tell a subordin ate: I want t his t obe done by this evening otherwise please do not bother to come tomorrow,there are good chances he would do it.

If fear doesnt work, then of course we can use money if the stick doesntwork , use th e carr ot! Bu t money creates it s own problems. The first and thmost important problem is how much money is available for giving? Theeasiest way of givin g money is overtime. Bu t once a person gets accustomed to

overt ime, then he refuses to work in normal t ime. A worker said, Time ismoney, bu t overt im e is more money! The more money a person gets, more hewants and th e overtime keeps in creasin g. This managing-by-overt ime createsit s own pr oblems and very soon you cann ot manage wit hout overt ime. Whenmoney is not available for this overtime, the management goes out of thwindow.

Then we have to th in k of someth in g else to motivate people. There are thr eeother things which are th e moti vati ng factors for: Sense of Ident it y, Sense ofImportance and Sense of Development.

SENSE OF I DENTITY

First let us take Sense of Ident it y. Once a person feels that th e organization ishis organization, there is no reason for creatin g any fur th er motivation. Thatfeeling it self is a motivat in g factor. The best example of thi s is the hou sewife.We talk of bonded labour. Has anybody seen labour more bonded than t hehousewife? First to get up in th e morn in g to get milk , last to go to bed. Noholidays Sundays, festival days, everybody says: Extra dish is requiredtoday. So extr a work . The one who work s lik e th is is not even born in t hatfamil y. She was born somewhere else, brought u p th ere for t went y odd years.One fine morning, aftern oon or evening, we th row some ri ce at her, b ring her to

th e house and say: This is you r house. Very silly tr ick! Bu t it works!! Within20 days when she talks of my house, she does not mean the house she hadbeen for 20 years bu t the house she has been for 20 days!!! And once shthink s that it is her house, we dont have to put standing orders: This housshall be kept clean at all times. She nags you, your chi ldren, your servant s, tokeep it clean. As we can see, th e sense of identi ty is a very powerfu l motivator.


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+91 963217

How can we create thi s feelin g? Frank ly, thi s is not a new problem t hat we arfacing only in industry today. It is a very old problem start ing wit h religion.How do people of a religion feel that they belong to th e same group? We fin dth at the tr ick used is physical work togeth er. People work ing physically

together get a feeling of ident it y. You go to a chu rch. As soon as th e servicstar ts, people get u p, sit down, sing together. This work in g together creates anidenti ty. I saw a film on Haj. Mu slims from all over the world go th ere. EachMuslim coming from a different country has a different cultural background.But once he goes there, goes around the holy stone so many times according tothe rituals with everybody around him, he starts getting a feeling of identity.This is probably why all important Hindu temples are at the top of the hills.Tirupati, Sabarimala, Badrinath, Kedarnath, Vaishno Devi. The reason ispeople shou ld climb t ogeth er.

In Japan, th is idea is used in industry also very effectively. First ly, everybodywears a uniform right from the chairman to the sweeper, same colour, samcloth, same uni form so th at a visual ident it y is created. Secondly, as soon asthe siren goes and the factory is started, everybody gets together, standstogeth er and sings the company anthem. In India, we have problems in peoplsinging the nat ional anthem. Somebody has to put a record on and when threcord goes on, people stand at attention as if they are paying respects in somfun eral! If you ask somebody, Why dont you sing? he wil l say, With m yvoice, how can I sing? Bu t if you start an arati of God, he wil l join. Why? ThGod is hi s. The nat ion is stil l on probation. We have not confirmed it . InJapan people are ready to sing the company anthem so identity with thcompany is already established. The thi rd th ing th ey do: as soon as thcompany ant hem is over, over th e pu bl ic address system comes: 1, 2, 3, 4 -th ey do physical exercises togeth er for th ree min utes. What happens? Thinkof a sweeper sweepin g the chair mans room. The siren bl ows th e chair manand the sweeper stand together, sing the company anthem, do physicalexercises togeth er. The sweeper think s: This chairman , I dont k now howmany levels he is above me. Bu t he is st il l a par t of my team; we have thsame uniform, sing the same song and do the same exercises.

SENSE OF IMPORTANCE

Let u s look at th e second aspect : th e Sense of Importance. Let u s go back t ohome. Every wife feels she is very important . With out h er, the house is goingto fall! In the fir st year or two after marr iage, she occasionally goes to thmatern al place; but th ereafter she does not want to go out . I remember thfirst time I was invited at Kathmandu, they wrote: Please bring Mrs.Rangnekar along. I told my wi fe, You have to come along, you are in vited.She said, How can I come along?


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Who is going to look after the house? Who is going to take mi lk in t hmorning? Do you th ink children will get up in th e morning and take mi lk? Infact, do you th ink t hey wil l get u p at all? They pu t the alarm on, I have to put

it off and wake th em u p! And th e servants have to be told th e same thingevery day otherwise th ey dont do anythi ng. Children wont do that thhouse wil l be in a mess. Unfort unately the children heard it. They said,Noth ing doing, Mu mm y! You go. For four days we were in Kathm andu ,every morning she would get up and say, Let us book a trunk-call toBombay. Find out what is happenin g. Bu t thank s to P& T not one call wentth rough! Fifth day we retu rn ed to Bombay, ru shed home, opened th e lock.She was expect in g the whole house to be in a mess. Nothi ng was in a mess.Bu t I am a management expert not for noth ing. I told her, Good! We camon the fifth day. Another t wo days and the house would have collapsed! Shwas very happy. Always remember. Your wife goes somewhere, comes back

after a few days and asks, How are thi ngs? dont say We enjoyed. Alwayspu t on a long face and say, We somehow carr ied on! This is importantbecause of ego. In all spir it ual discourses, we are told : Forget your ego. Inmanagement, we dont forget ego. We pamper an d exploit t he ego.

SENSE OF DEVELOPMENT

The third important aspect is the Sense of Development the feeling ofgrowth. I am work ing here, I am growing here, I am learn ing someth ing new.This is a great m otivator, part icul arly for youngsters. Youngsters of today ar

very ambi ti ous. To the extent they feel th ey are learn in g they are motivatedand ready to work . Whenever they feel they are stagnated, they are get ti ngnowhere de-motivation comes in.

CONCLUSION

These three senses: Sense of Identity, Sense of Importance and Sense ofDevelopment are vital if you wan t to motivate people. When we are not goin gto use the stick and the carrot as the main motivators, these three motivatorsi.e. Sense of Identity, Sense of Importance and Sense of Development becomvital and thi s is th e way we can keep on motivatin g a group of people to workwith u s.


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WHAT MAKES YOU AN EFFECTIVE MANAGER?Vijendra Kumar S.K.*

This is quite tricky! There are umpteen numbers of theories on leadership, bestmanagerial practices and enhancing peoples skills. Every concept, theory or a practiceis supposed to have inherent limitations or handicaps (including what I am talking!).

How ever, when we collaborate many concepts and practices using chunking procedure,we get some residu e, wh ich I believe is qui te potent and i mpressive.

There are many things we would like to change within ourselves, help to change inothers and the organization, we are committed to. There is one psychological trait,which will encompass all these behaviors or concepts and stands alone as a distinctent it y. The followin g Persian story will i ll ustr ate th at.

The mullah, a preacher, wanted to get some nuts for his wife, because she hadpromised to cook him Fesenjan, a dish prepared with nuts. In the joy of anticipating hisfavourite dish, the mullah reached deep into the nut jar and grabbed as many nuts ashe could reach with one hand. When he tried to pull his arm out of the jar, it got stuck.As hard as he twisted and pulled, the jar would not release his arm. He cried, groaned,and cursed as a mullah really shouldnt. But nothing helped. After many futileattempts, he called neighbours for help. One of the neighbours said, I will help you ifyou do exactly as I say.

Mullah promised to do everything. The neighbor asked the mullah to shove his armfurther into the jar. This seemed strange to the mullah, for why should he put his armfur ther in to th e jar when he wanted to get i t out of there? But he did as he was told.The neighbor continued, Now open your hand, and drop the nuts you are holding.This request u pset t he mu llah . Relu ctantl y, he followed h is succorers instructi ons. Theman now said, Make your hand very small, and pull it slowly out of the jar. The

mullah could do that, but was not satisfied. At that the neighbor took the jar, tipped itover, and let as many nuts roll out as the mullah needed (Courtesy: NossratPeseschkian).

Well, the case may fit for testing logical reasoning or creativity but I see it in a differentcontext. It can be your ability to delay your needs to be met, for getting the same needsmet or changing the process to get the desired out come. Many of us becomeapprehensive and get stuck wit h our issues but do not solve th em.

The trait I am talking about is called Flexibility! A psychological component, which canhelp us reach any of our goals or heights. This is the core component in our Self,which helps us to adapt, change and still be free within ourselves and feel good.

Get it checked and enhance it. Even if you do not want to change anything within yourself, st il l i t i s O.K. to be flexib le and at least change th e belief, I do not want toMay all of you pr ogress towards becoming more effective as managers.

*The author i s Assistant Professor (Counselling &Guidance), Department of Science andHumanities, PESInstitute of Technology, Bangalore,INDIA.Can be reached at: [email protected]


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GROWTH AND GREED HAVE LED MFIs IN INDIA TO THE PATH OF DECAY

AND DOOM BUT NEED REVIVAL AND NOT EXTINCTIONDr. SN Ghosal

No wonder growth and a passion to outreach poor at a faster rate would nothave been questioned but for the fact that the same was associated withgreed under the guise of commercial strategy considered inevitable forsustenance of any institution. It is true that India provides large space forgrowth of any institution that aims for poverty alleviation and attempts toprovide universal financial accessibility in the country. However that shouldnot have been considered as open sesame to loot poor and disadvantagedpeople by adopting opaque products and procedures to fund them andrationalizing the same by stressing that poor people need timely credit andth e cost of such credit is actually immateri al for them. It is really very

unfortunate that in India we have been sincerely concerned to provideaffordable credit to the poor we have always erred in developing anappropriate insti tu tion t hat could really fill t he gap.

This has been happening for ignor ing two basic facts. These are:

Poor people are not aware and equipped to counter all types of marketri sks arising due to natural hazards as well as business hazards;

Poor people not only need timely credit but also affordable credit.It is unfortunate that over so many researchers have been made and manycomm it tees have been appointed to develop an appropriate instit u ti on tocater to the needs of poor people bu t n owhere above two factors have beentaken into consideration with due seriousness and desire to comprehend. Infact in most cases it has been stressed that poor should be provided timelycredit as they could afford to bear even reasonably high cost for the same.Perhaps perpetuation of money lenders despite all roadblocks provided handyevidence to such rationalization. No wonder therefore MFIs in India alsostr ategise th eir bu siness model based on th e above rationalization andproved the same by maintaining a very attractive almost unbelievable rate ofrepayment despit e charging not only comparatively high rate 0f int erest bu talso levying various types of visible and not so visible fees for one reason orthe other.


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In fact the model proved so attractive that many investors both foreign andIndian vied with each other to build and fund these institutions as thesebecame safe haven for investments by such investors. It obviously helpedrapid growth of MFIs in India part icularl y in sout hern states but gradually inother states also as not only the retu rn on capit al was very high bu t also it

provided highest level of safety as repayment of loan was almost 100% as hasbeen shown in their au dit ed financial statements. This double edged benefitobviously made these institutions not only attractive to private equity firmsbu t also enabled th ey raise money by floating shares even at a high premiu m.One of the live examples is SKS recent attempt to r aise capit al thr ough sharemarket at a very premium rate and usurping the most of the gain by resellingpromoters share. Indeed this proved to be an eye opener to people and thenlot of hue and cry was raised to question the opaque procedures andproducts of these institutions, so much so that Andhra Government wheremost of the MFIs have been working, had to issue highly questionableordinance to restrict and prohibit their charging high rate of interest and

restr icting bank s to fund th ese insti tu tions with an in terest cap so th at th eseinstitutions may not be able to charge high rate of interest from theirborrowers . The ordinance do more harm than good and it is therefore verywise step taken by the RBI to appoin t a sub-comm it tee to go iint o th e detail sof the malaise and recommend some healthy steps to restore the glorious pastof MFIs so that these institutions could pursue their business much moreefficiently and without in any way fleecing and or exercising undue pressureto collect their loans from their borrowers.

In fact t he most crit ical area that has to be examin ed is the cost of credit t hatth ese MFIs have been charging from the borr owers par ti cular ly wh en n ot onlythis is unbearable for their borrowers who are pursuing small business orfarming wherefrom any high return is almost impossible and further to addfire to the fuel they are often subject to natural hazards beside marketvolatility both in price and volume of demand. It is therefore very muchquestionable to continue charging such exorbitant rate of interest andexploiting the gullibility and culpability of poor people who often have toignore the cost of credit to meet their emergent needs.

It would therefore be imperative to explore the feasibility of lowering the rateof int erest so th at poor farmers and tr aders to whom such loans are advancedcould afford the same without undergoing any stress and strain. In thisregard Mohd.Ynus in his recent book CREATING A WORLD WITHOUTPOVERTY (2009) has aptly observed that there could be a methodology forthe assessment to justify high interest rates charged by MFIs. He haselaborated th e concept of in terest r ate premium as the difference between th einterest rate charged and the cost of sourcing fund at the prevailing marketrate. On that basis he has categorized MFIs of three typesGREEN, YELLOW


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According to him those MFIs could be classified as GREEN that are totallyfocussed to alleviate poverty and charge interest not exceeding 10% of thecost of raising fund to meet their operating cost and also ensure their

sustainability. Whereas the YELLOW classified MFIs fix their interest rate forlending at 15% above the cost of garnering their funds from the market, toenable them to earn some reasonable rate of profit. Similarly he has classifiedRED categories are th ose MFIs who levy in terest on th eir lending more th an15% of cost of raising their funds to lend as this way they actually strategiseto maximise their profitability and lose sight of their core objective ofalleviation of poverty.

It is t ru e th at it is just a thum b ru le basis of classification bu t i t does providea benchmark to assess the vulnerability of MFIs towards profiteering andmoving away from the basic objective of lifting the poor to higher echelons of

the society and not to succumb to poverty and remain trapped and chainedfor lifelong by the so called philantrophical and social amelioratinginstitutions. It would be shocking revelation that based on the abovebenchmark it has been established that:

1. Worldwide 3 out of 4 MFIs would fall u nder RED CATEGORY;2. It is the operating expenditure that usually compels MFIs to levy high

rate of in terest and not ju st to earn profit. Bu t it has also been

observed t hat in th e operat ing cost th ere are many h idden charges that

actually inflate the cost;

3. So much so that it has further been found that even if profit is shownin the books of MFIs there would be revealing improvement in

categorization of MFIs as stated above if hidden costs are removed from

the operating cost of MFIs.

It would be therefore justifiable to probe the hidden costs rather than raisehue and cry over the working of MFIs and issuing ordinance and or furtherregulatory norms or institution that may ultimately lead to extinction of MFIsand or restore licensing raj and adjunct corruption a galore in the name of

poverty alleviation instead of developing as well as empowering the poor toearn th eir livelihood wit h dignit y and self support.


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In this regard it would be worth emulating the innovating experiments introduced quitelong back by I.T.C. to assist the tobacco growers in adopting up-to-date methods offarming and apprising them all the latest soil and seed tests as well as marketintelligence. In fact they established kiosks at villages having cluster of tobaccogrowers. This not only enriched the tobacco growers but also I.T.C. also by getting

steady supply of tobacco of good quality and at fair price. Later on Unilever alsofollowed simi lar approach to bu ild up supply chain to outr each customers in vill ages.

In fact such innovation and introduction of such digital infrastructure could also beintroduced by MFIs as that would obviously reduce cost of operation and help inreduction of rate of interest for loans disbursed by MFIs as digital infrastructure couldbe used not only to channelize credit, money transfer, insurance, health supportfacili ti es and also help developin g fin ancial lit eracy to vill agers to develop atransparent credit delivery model th at coul d make un iversal financial accessibil ity areality.

Beside this t here is genu ine need t o understand the inabilit y of poor farmers, art isans,and traders to withstand the usual market risk beside the almost in built natural riskarisin g from failu re of monsoon and or heavy rains l eading to floods. Most of them alsolack management acumen and access and comprehend market intelligence and for thatreason it would be helpful if the funding institutions not only join hands to share therisks but also management of their businesses. To achieve this ATLEAST for somereasonable period there is need to form partnership in between banks and MFIs andcluster group of farmers, artisans and traders to develop management skill and abilityto assess and assum e r isks wi th confidence and bu ild reserve by poolin g th eir savingsand surpl us earnin gs along with the ability to ru n t heir business on t heir own. It wouldbe like venture capital investment by banks and P.E. funding institutions who wouldpar ti cipate MFIs formed as detailed above as th ey could move out as and when th e

business promoters (group of farmers ,arti sans, and small tr aders gain enough m arketexperience to withstand market risk.

None should have any misgiving with regard t o the pioneerin g and in novative productsand practices have been introduced by the MFIs in India over the years and that waythey have been able to outreach large number of poor people even in far flung villageswhere banks would not have gone but through MFIs and perhaps to some extentth rough SHGs also. It would th erefore be un wise to even t hink of windin g of MFIs. It i stherefore surprising to find the recent move by RBI and the state government ofANDHRA to suggest debt swaps to help poor borrowers of MFIs to switch from theirhigh cost MFI loans to low cost bank loans. It is surpr ising also to find Andh ragovernment to come out with almost annihilating ordinance for MFIs. It is true that it

is very easy to kill an institution but very difficult to build one. After considerableexperimentation MFI model could be developed to outreach poor and it helped at leastpartially to free the poor people from the clutches of moneylenders who have beenvirtually uncrown king in villages of India.


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No one have any doubt that ordinance and restrictive laws generally lead to corruption

and ultimately to collapse of all initiatives and innovations of entrepreneurs. This isperhaps exactly what is happening particularly in ANDHRA PRADESH where most ofthe successful and large MFIs have been nurtured and grown by socially motivatedentrepreneurs with proven knowledge and expertise in management. It has thereforerightly been opined by KUSHIK BASU- CHIEF ECONOOMIC ADVISOR of GOVT. ofINDIA- that over-regulation of MFIs would not be helpful for its growth. According tohim these institutions need to be regulated to develop more transparency in their loancontract with the borrowers and it should be done to the point that they go out ofexistence. Similarly RBI , DEPUTY GOVERNOR has also opined that banks can easilybear cost of financial inclusion but t he absence of a deli very system causing the mainstumbling block for them to go ahead with a strategy for financial inclusion. In view ofthis it is rather surprising that no one is considering a marriage of commercial banks

with MFIs as that would h ave easily solved the present cr isis and banks aspiration toachieve fin ancial in clu sion. The marr iage could be based on th e model of regional ruralbanks with some modifications to provide participation of farmers, artisans and traderswhose farms and firms would be funded and managed. It could be 50% by MFIpromoters,3o% by Banks funding the MFI, 10% by the state Government and 10% byborrowers.

It is an establ ished fact th at MFIs have done some yeomen service to th edisadvantaged poor people by creating this new paradigm of unsecured loan services forth em and in t he process also helped th em to avail growing economic opport uni ti es,enhance th eir income, enabling them to meet th eir all consum ption needs rather helpedthem to improve their living standard and consumption pattern and more importantly

reducing their vulnerability by maximising their earning and providing much neededsupport service health, insurance, and education. So much so even World Bank hasadmi tted that MFIs fit squarely in to the Bank s strategy. As th Bank s mission is toreduce poverty and improve living standards by promoting sustainable growth andinvestment in people th rough loan,techn ical assistance and policy guidance. It hasadmitted that MFIs contributed directly to this objective.

In fact having realized the importance of MFIs , the WORLD BANK has taken a majorin it iat ive to develop th ese in sti tu ti ons by forming a CONSULTATIVE GROUP to ASSISTTHE POOR (CGAP) in 1995 and also has established MICROFINANCE MANAGEMENTINSTITUTE in 2003. CGAP acts as resource centre for MFIs, where it incubates andsupport new ideas, innovative products, inducts and develops cutting edge technology,

novel mechanism of delivery of financial services and provides well defined practicalsolutions to challenges and problems encountered by these institutions. It has alreadydeveloped a dossier on best practices and on key principles that need to be adoptedby all MFIs to achieve sustainable growth with defined social mission assigned to theseinstitutions.


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Even ASIAN DEVELOPMENT BANK has also emphasized that access to servepoor is more important than the cost of fund to outreach them. It hastherefore emphasized that the key point is to develop sustainable institutionto outreach poor. The underlying logic is that donations, grants, subsidiesand loan waiver just demoralize the urge and passion to grow and also couldbe made available up to a limit and thereafter growth should be self fuelledand propelled. It would be th erefore imperat ive th at pri vate capit al mu st flowto this sector and that too at faster rate to quench the unmet demand ofth ese people for long per iod. It is tr ue in the process many flaws may creepin as has been recently observed inn Andhra but such flaws are curable andfor that state intervention through demoralizing enactments are not at all

necessary instead a better oversight system could prevent occurrence of suchunhealthy practices.

In fact MICHAEL MEDWED in his recent book THE 5 BIG LIES ABOUTAMERICAN BUSINESS has rightly observed that when successful people andinstit u ti on earn m ore money it does not mean less of anyth ing, and in factmeans more growth, more investment, more jobs. Creating wealth does notcause povert y, it br ings progress. According to him th ere is no such thing asobscene profit. It is therefore nothing wrong to earn profit and achievegrowth by deploying such profit . Bu t wh at went wrong is th e coercive methodadopted by some MFIs to collect repayment of loans to achieve almost ni l

non performing asset status to glorify their achievements and thus presentingan illusory image before the funding and investment institutions.

It would be th erefore helpful if MALEGAM comm it tee appointed by RBI arr ivesat some positive conclusion and recommends an appropriate model asdetailed above and as has been rightly observed by ANIL KUMAR CMD OFIFCI LTD., THAT GIVEN THE STRONG PUBLIC SECTOR IN OUR COUNTRY,IT IS POSSIBLE TO LOOK AT A HYBRID MODEL OF A BANK BEING JOINTLYOWNED.


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FUTURE OF BRANDING

Prof. Bholanath Dutta

Brand management holds the key in the modern markets. In a world where productsare multiplying and becoming more and more similar, management of brands iscritical for survival of the products as well as the companies making them. A big,strong brand is always be the best protection a manufacturer has to protect hisfranchise.

The classic definition of a brand from the Harvard Business Review over 40 yearsago is as follows: A brand name is more than a label employed to differentiate among themanu facturers of a product. It is a complex symbol that represent s a variety of ideasand attributes. It tells the consumer many things not only by the way it sounds(and its literal meaning if it has one), but also more important by the body of

associati ons it h as buil t u p and acquir ed as a publ ic object over a period of time. Thenet result is the public image, the character of personality that may be moreimportant for the overall status (and sales) of the brand than many technical factsabout the product.

To attempt to glimpse into the future it helps to glance back at the past, to identifythe genesis of brand design. It all began, allegedly, 5,000 years ago in Egypt, whenbranding was more about making an impression on an animal to denote ownershiprather than in someones psyche. Greek and Roman potters used brand marks toidentify the maker, and by the 12th century, crusaders were designing heraldic

marks for their shields, tunics and tents to establish individual identities. But thesedesigns were mostly concerned with the identification of the sender rather than thepercept ion of the receiver .


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Even early 20th century brand design was more arts and crafts than industry,serendipity often playing a greater role than strategy. Shells name and symbol werebased on the founders sentimental memories of his fathers antique shop (which

sold decorative sea shells) rather than on what would become the companys fossil-based products.

By the mid-20th century the advertising industry, led by Madison Avenue, had awhole new canvas on which to develop brands in a truly emotive way. Televisionbrought the potential of sound and movement to often-inanimate objects, andprovoked organizations int o think ing about th emselves and their p roducts in a wholenew light.

Modern brand design probably began in 1950s US when Thomas J. Watson Jr.contacted industrial design consultant Eliot Noyes about the visual disarray of hiscompany, Int ern ational Business Machin es (IBM).

He realized there was a disconnect between his vision for the company as it enteredthe electronic era and its dated architecture, interiors and array of trademarks.Noyes brought in Paul Rand to create a cohesive new look, and in the process Randcreated the now famous IBM logo. But this marks the start of contemporary branddesign not because of Rands logo, but because it was a holistic approach, andfocused.

The tr aditi onal percepti on of brand ing has been shortsighted and has cast brands asbeing cynically manipu lative. This i s due to an overl y skewed attent ion t o one groupof stakeholders, namely shareholders. It is time for brands to prove their worth to

consumers, their guidance to employees and business partners and, because ofthese activities, their value to shareholders.

The main reason why brands have been developed in the first place has to do withcompetition and subsequent increased consumer choice. However, contrary topopular belief, consumers do not desire choice per se. Choice is mainly a mechanismthat allows consumers to obtain the products and services that they want at a pricethat they want to afford. As peoples wants, needs and budgets differ, choicefun ctions as a way to ful fill the requ irements of different consumers. Br and providesspecific consumers with specific rewarding experiences. Experiences that makeconsum ers happy to part wi th their money and make them satisfied in the process.


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Brands will increasingly need to balance on the tightrope of modernization andtr aditi on and need t o prove themselves to sophisticated consum ers. Product b randswill be provided with service enhancements that bring consumers into increasedcontact with employees, conversely service brands will decrease their humancontacts with consumers thr ough fur ther au tomation of services.

Consumers increasing power over manufacturers and retailers, which is a functionof competition, spending power and technological developments, mean that they willincreasingly require more real-time gratification from brands. From ordering acustomized car from the comfort of their homes to the immediate effectiveness ofdrugs, consumers expectations will need to be met with more urgency than everbefore.

The increased focus on consumers means that employees and business partnersneed to be instilled with a clear sense of the brand to be able to deliver on the brandexperience. In addition, they will need to recognize the differences betweenconsumers and tailor the brand to meet differentiated b rand experiences for di fferentconsumers segments and ultimately individual brand experiences for individual

consumers.

In the future brand to success the following areas need to be focused:


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Documents

MTC- Knowledge in Practice- VOL-3 , Issue 7