“In india, for india...”

B&E: How did you started off in India?

VR: GE Healthcare came to India in the year 1990 through a joint venture with Wipro Corporation. We obviously started at the bottom of the table as most of the big players had established business in India. GE Healthcare was represented through a GE business unit called IGE, which had some presence in the X-ray imaging business. Thus, our immediate vision was to establish ourselves as a top-of-the-line medical equipment supplier and a preferred partner for Indian healthcare practitioners.

B&E: So, how has been your journey till date?

VR: The biggest challenge we faced was do get business from the government. As we were a new entrant in the market therefore we could not grab a good mind share and were able manage only a meager percentage of its business. It took us time to educate them on our technology and service capabilities. However, today, with our investments in technologies, resources, education, et al, we are getting a good chunk of government business as well. Other learning was to bring in more local products and solutions for the local market. We believe we could have accelerated with “In India, for India” solution a lot earlier.

B&E: What is your advice to a MNC that plans to enter the Indian market in the near future?

VR: India is a huge market, but it’s a unique market. On one hand, it has an urban market, which is at par with the developed world, on the other it has a huge under-developed market that is crying for basic necessities. I would say that the key to growth in India to get a deep understanding of the Indian consumer. One should be patient enough to play a long innings and should bring out products/solutions that are aligned to Indian consumer needs.

B&E: What, according to you, are the factors that must be taken care of by the government?

VR: Infrastructure is a big issue here, whether it is road, electricity or healthcare, it really needs to be improved. However, government seems committed to growth and is willing to invest in infrastructure. It’s a very good sign.

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2009

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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To support new launches and to connect more with its target audience, the company is looking for a 360-degree mass market and integrated marketing promotion across many media vehicles (with a huge focus on radio broadcast). But there are challenges too. Today, the brand is facing an issue regarding distribution channels. For instance, in case of watches, except for Titan exclusive showrooms, neither are the other retailers stocking the full range of Fastrack watches, nor are they offering many of the new products launched by Fastrack.

However, to counter such bottlenecks, the company is planning to establish its own Exclusive Buying Outlets (EBOs) on a pan-India basis. To quote a number, it plans to open 50 such EBOs across tier II cities, as well as in metros by 2010. But at the same time, the surging real estate costs may pose a huge challenge to opening up new outlets. So is investing such amounts worth the risk? A confident Bhasin defensively argues, “Till now we have eight stores and most of them have reached break-even within just a year. We also know that even our most recent investments would generate good returns soon.” Not a hollow boast as its store in Pune can get loud about 50-70 footfalls per day. With the sales conversion rate falling in the range of 50-55%, reaching break even within 11 months of its opening appears real. The reason for reaching break even so early can also be attributed to the geographical positioning of these stores, as most of them are located in the youth catchment areas, such as near colleges, et al (to cite an example, the store in Bangalore is located in Bel Road, next to Ramaya college).

Today, 25% of Titan’s revenues come from sales of Fastrack watches. And what’s better, to further fuel and support the growth of these stores, the company has plans to roll out more merchandise categories and is planning to promote such products online. However, for now, the company has no plans of manufacturing the products in-house, and therefore plans to outsource all its requirements.

Talati may have been worried when Timex broke its ties with Titan, but for sure, Fastrack has burnt past tracks in time for Titan to be rest assured that they have another winner of a brand in their pockets. While on one hand competition is pouring over all kinds of blueprints to slice through Fastrack’s growing charisma; Talati and his youthful team on the other hand are optimistic that core attributes like ‘fashionable’ and ‘affordable pricing’ will attract more young consumers toward Fastrack; after all, that alone has helped its metamorphosis into a complete accessory brand that it is today.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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Quagmire TV: LIVE!

While DTH players are trying to gain subscribers in the face of challenges by peers and Cable TV operators, they are wondering – “How do we do it?” arun roy transmits the direct-to-home ‘service’ solution.

“Not only are cable frustrated customers switching over to DTH, but many Non-Cable and Satellite (C&S) homes/cable-dark areas are turning to the service for home entertainment...” These are the words of Sugato Banerji, Chief Marketing Officer – DTH, Bharti Airtel, which explain how the DTH business is growing from a niche delivery mechanism into a mainstream business in India. The industry has seen significant growth over the past few years, with the number of subscribers increasing from a 1.5 million subscribers in 2004 to over 16.9 million as of August 2009. So how big is this number slated to grow to? Talking about the future of the DTH growth, an optimistic Banerji opines, “The DTH market has tremendous growth opportunities with the count of subscribers expected to reach 45 million by 2013 from the current 13.5 million.” The industry till date has been growing at a CAGR of 35% and is further forecasted to grow at around 30% over the next three years! Though the current number of DTH subscribers constitutes only a meagre proportion of the total number of over 130 million TV households, superior digital quality of video and sound along with interactive services and real-time recording and increasing number of value added services (VAS) are particularly enticing the Indian consumers to try their hands on DTH services.

The India DTH market is currently served by six private players – Dish TV, Tata Sky, Sun Direct, Big TV, Airtel Digital TV and the most recent entrant Videocon. Six providers, indeed, but the issue here is in differentiation of content, for each offering appears a twin-sibling of the others! As far as the consumers are concerned, their final choice of operator is not made on clear distinction of services.

The channel black outs by local operators and frequent pay-channel hikes by broadcasters had led to the demand for the introduction of ‘addressable system CAS’ by consumer protection groups in 2003. The scheme was rolled out in the three metros of Mumbai, Delhi and Kolkata. However, there were not many success stories to write about them as Shushmul Maheshawari, Chief Executive, RNCOS E-Services Pvt. Ltd, agreeingly elucidates, “Mandating CAS or DTH in some parts of the country haven’t brought fruitful results to the DTH industry... 25% of the subscribers subscribed to pay channels, while the remaining were content with the Free to Air (FTA) channels.” Of course, that calls for a very poor proportion of what was expected when the estimations were made public before the rollout happened. The main reason for low response to the scheme was the high cost of the set-top box. Keeping in mind this past experience, TRAI stepped-in by framing conducive rules to ensure the success of CAS and implemented CAS in certain notified areas of the three metros in January, 2007.

Though local cable providers have lost some market control, they still enjoy significant market shares in the bigger cities. Reason: first mover advantage. Even if you analyse various First World satellite TV markets, the first to market has always exercised excessive control over the market. To mention a few, in US, Cable TV rules the roost while in Europe it is Dish TV. The deciding factor for them too is who entered the market first. Cable TV entered the Indian market long before the DTH and has achieved significant penetration. Even today, DTH has a long distance to cover before it can compare its penetration to that of Cable TV in India.

And the near future will not get any easier for the DTH army as the Set top box armed Cable TV providers are working towards improving the audio-video quality of transmission, which for long has remained the differentiator between DTH and Cable TV services. So the fight will ultimately boil down to VAS feature, provided by the respective service providers. “Today the discerning Indian customer is very conscious about the service, and is sensitive to price as well. The winning DTH or Cable TV service will be one that offers superior content and interactivity to its viewers,” asserts Banerji.

Then comes the question about rural India, which is still vastly untapped by the DTH and Cable TV players, and presents a greater potential for growth. Question is – who will convince them first. In the areas where Cable TV network has not reached yet, DTH has an advantage. The reason being that unlike Cable TV network, DTH does not require the setting-up of ‘headends’ and laying of cables to the viewers home. This will allow DTH to reach these untapped areas faster than Cable TV. With sufficient marketing efforts, DTH can capture a large viewership base in these areas. Secondly, as it stands today, the Cable TV/CAS vendors are not putting in substantial efforts to increase their competitive superiority. As the switching cost to DTH reduces further and word-of-mouth marketing increases, more households would migrate onto the DTH platform. Then there is the IPTV launch (as planned by BSNL & MTNL) threat to the DTH business, which can be ignored for now at least as Maheshwari confirms, “Competition is big for DTH players to get into a market which is dominated by Cable TV. As far as IPTV is concerned, I don’t see any significant impact of this technology because it is still in its nascent stage...”

The Indian DTH market is currently worth Rs.30-35 billion, but is known to be plagued by huge losses. So financially, the operators are under huge pressure. To combat this, DTH players are pushing forward marketing efforts to gain volumes in the market. For example, Airtel Digital TV is offering the latest in technology while many others are banking on a widespread distribution network or on out-of-the-box packaging or programming. Tata Sky is leveraging the Tata brand equity to win hearts, while Sun Direct is playing on the price front.

Truly speaking, though it is a highly competitive market, price will not be the ultimate deciding factor that decides the winner; it’s the service (both in terms of customer service and quality of content) which matters, as an industry analyst puts it, “Customer service will be the key driver for customer retention.” Keeping in mind the same, operators have started offering a number of VAS such as ‘movie-on-demand’, live recordings of TV content, job searches, loan activities, matrimonial match-making, et al. “In India, value-added-services are features that give DTH operators the edge. Each operator looks at ways of monetising these services by offering enhanced services to customers, which help retain or add new subscribers”, says Banerji.

So there you are Mr. DTH provider, simply leveraging your brand power won’t be enough this time! It has to be service-led this time!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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Zen-Next. No more!

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Dropping a successful 17 year-old brand isn’t an easy task... Pawan Chabra questions whether Maruti is doing the right thing by killing the Zen!

“Zen is a brand which I have grown up with and it is more than a car to me,” asserts Ankush Kohli who drove the ‘Jellybean’ Zen for a decade, and has been associated with the Maruti Zen brand since then. (He even purchased the ‘Teardrop’ Zen Estilo for his wife in 2008.) But then, only change is evitable; for many like Kohli today, the fact is that the Zen brand no longer remains ‘the’ banner brand for Maruti Suzuki (even he drives a Maruti Swift today). And as far as the management was concerned, it was all made clear with the launch of the new Estilo in August 2009, during which, Maruti declared that the company would now promote the Estilo brand and Zen will only be engraved accompanying the Estilo tag – in other words, reduced to a ‘dormant’ brand!

There is no questioning the fact that the Zen has been one of the cash cows for Maruti in the Indian market. The company sold a mind-boggling 7,60,000 units of the ‘Jellybean’ Zen in 14 years (before it was replaced with the ‘Teardrop’ Zen Estilo in 2006) – no mean feat by any standards. But it was perhaps after the advent of the ‘Johnny-come-lately’s’ that the Zen took a beating. The launch of the tall boyish Hyundai Santro and WagonR pushed back the sales of the Zen, which had started to fall faster than anticipated by most critics. That set all minds at Maruti working towards a replacement model. In fact, the nation’s largest automaker also spent a considerable time in building-up the WagonR brand in the Indian automotive market, all at a time when the Zen was being cannibalised, witnessing falling sales, quarter after quarter. But the new ‘Teardrop’ version of the Zen was able to somehow successfully make a mark for itself in the Indian market as Shashank Srivastava, Chief General Manager – Marketing, Maruti Suzuki affirms, “It was selling on an average of 3,000 units per month, which was more than GM’s Spark sales which accounts for its 80% of GM’s sales in the country...” One can always argue that it is still lower than the standards set by the entry level Alto and the youthful A-star, but the numbers are credible when it comes to reviving the brand and the product Zen, especially when it had almost reached the plateau of the Brand Life Cycle. Today, the automaker, which replaced the Maruti logo with a Suzuki logo some time back (to give its customers the feel of its ‘realigned superior technology and radical design’ focus), is quite pleased with the performance of the Zen Estilo during the initial months of its introduction. All said and done, the question remains – does it make sense to phase out over time (which is a definite possibility) a brand (Zen), which is today amongst the most recalled brands in the automotive sphere and has had a splendid run in the Indian market?

To establish Estilo brand in the Indian automotive market, the company is using the brand alone in its 360 degree integrated marketing campaign. “It was a part of the long-term plan to establish the Estilo brand first in the Indian market with the launch of the Zen Estilo and eventually take the Zen brand out of the umbrella,” explains Mayank Pareek, Managing Executive – Sales & Marketing, Maruti Suzuki. But ask Srivastava and you’ll see the management philosophy being shot in another direction as he claims, “The Zen Estilo was totally different from the old Zen, and is therefore today one of the most interesting marketing case studies as the Zen Estilo didn’t match the Zen brand one bit.” However, Srivastava takes no time in further disclosing that the seeds for phasing out the Zen brand was sown on the basis of customer feedback and the confusion in positioning of the vehicle ignited the fire. “We initially planned to position Zen Estilo as a synonym for style but with the use of a female model in our communication and some feminine colours, the Zen Estilo was perceived a vehicle made for girls and hence we missed out on many consumers,” he said. However, as mentioned earlier, for now, the company has no intentions to kill the Zen brand completely; of course, they don’t mind its dormancy...as “the Zen brand is one of the most reputed and recalled in the industry, and has a huge set of loyal consumers for whom Zen is more than a car,” adds Srivastava.

Yes, critics argue that eight products in the A2 (hatchback) category may just create cannibalism within the Maruti umbrella, but the management discards all such fears; one of whom is Shinzo Nakanishi, Managing Director, Maruti Suzuki, who avers, “Maruti Suzuki has been very successful in drawing segments within the A2 segment and this is the way the industry will drive the growth forward taking it to the other segments as well.” Well, the management seems very clear on the positioning there... But just a thought – what if the A-star had that Zen tag on it? Wouldn’t it have worked just fine? “Values of the Zen brand were matching more with the A-Star but we had just launched the Zen Estilo around 4-5 months earlier. So the A-star became an altogether different brand. But you never know, it may have repeated the success if the Zen brand had been used with the A-star,” opines an optimistic Srivastava.

Optimistic indeed, but isn’t it also a fact that the Indian consumers seem to lap up everything that bears the ‘Maruti’ tag? Pray, don’t drop that...

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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