A Political Yawner In The Making

The merger of Chiranjeevi's PRP with the Kirankumar Reddy-led Congress may prove to be successful in staving off the Opposition's bid to unsettle the government but it will surely make Andhra politics extremely boring, feels Naresh Nunna.

Vaudeville refers to a stage-variety entertainment show, featuring a series of short acts, songs, dances, acrobatics, comedy skits and animal acts; 'turnaround' denotes a film that has been abandoned by a studio; 'unbilled role' means a supporting role for a major star. Now let's put these jargons to use. In Andhra, a vaudeville-like PRP has made a 'turnaround' by merging with the Congress, confining PRP founder and megastar Chiranjeevi (Chiru) to an 'unbilled role'.

Before and during the launch of the much-hyped PRP, TSI had foreseen the possible walk-on (minor brief role) of Chiru in the political arena. The predictions were not based on wild political speculation but on psephological hypothesis. When the second daughter of Chiru eloped with her friend and got married, it was said that it was a conspiracy hatched to embarrass Chiru by Congress leaders who allegedly paid for the travel and stay of the young couple and the hefty legal fees. Chiru was then unsure about his entry into politics. Chiru made up his mind for a counter-attack with his own political outfit. A real leader would not have been impulsive and no party should have its roots in personal whims.

“A real leader should not be impulsive. It is not a film, there is no avenging hero. Despite his huge fan following, which could be equal to that of the legendary N. T. Rama Rao’s, Chiru was at receiving end, owing to his imprudent steps,” noted psephologist Ramalingam D. Vavilala.

PRP was confined to winning just 18 seats in the 294-member state Assembly in the 2009 elections. In a jolt to his personal ambitions, he was unsuccessful in his native district where he lost to a Congress lady. The actor managed a narrow win in Tirupati, one of the two seats he contested for the Assembly.

“It is not a debacle for a new entrant. It was wrongly perceived to be disastrous since the expectations were high. Though PRP won only 18 seats, its contestants came second in 34 Assembly constituencies. Garnering 17 per cent of the total votes, PRP played a key role in deciding the fate of 65 seats,” Vavilala added.

According to political analyst and senior journalist Ashok Tankasala, Chiranjeevi is an unfazed romanticist, a wrong man in the political paradise.

“The romanticist generally has strong likes and dislikes, irrespective of logic. With all his emotions and fancies, he dreams, imagines, sometimes they are utopian. The flip side of the romanticist is that he is aware of no reality, no rationale, and no logic,” Tankasala told TSI.

If Chiru had been a romanticist in the classic sense of the term, he could have learnt a lesson from the outcome of 2009 elections. It was the first time that his romanticism was faced with the hardcore reality outside. But, the election results did not change the man. An over-ambitious Chiru failed to generate a sense of confidence among its people. During the days of preparation, his discussions with the intellectual gentry merely resembled his sittings with film directors.

“Chiranjeevi tried to fill the voids within, being formed by more than three decades of ignorance - an ignorance of reality,” political commentator Sanjiva Reddy said. Juxtaposing the icons of Gandhi, Mother Teresa with Phule and Ambedkar led to further confusion. In fact, his party's slogan was also very filmy: 'preme lakshyam, seve margam (Love is the destiny and service the only means.' He started disappointing his followers at the very first meeting at Tirupati when he read out a prepared speech.

Chiru became a virtual non-entity in state politics and Y. S. Rajasekhara Reddy's sudden demise changed the political equations in Andhra Pradesh. The Congress high command started experimenting with the veteran K. Rosaiah. Now, a new guinea pig in the shape of Kirankumar Reddy is being used with the sole aim of ending ‘YSRisation’ of the state Congress. This gradually isolated Jagan and ensured his exit from party. The issue of a separate Telangana state also jolted state politics. There were serious doubts about the survivability of the government.

“Appointing Srikrishna Committee to study the feasibility of a Telangana state was the first move of the Congress high command. The Telangana ferment was pacified for time being,” Reddy said. Referring to the allurement of Chiranjeevi by the Congress, senior political analyst Prakash Tadi said that the Congress clinched an instant victory with the merger of PRP as ''victories in politics are (must be) immediate and momentary''.

“Individually speaking Chiru is a weak politician. The present CM, Kirankumar Reddy is a constituency-level leader. But, the strategic combination of these two feather-weight champions marked a remarkable victory over the two gigantic figures of Y. S. Jaganmohan Reddy and N. Chandrababu Naidu,” he told TSI.

Naidu dare not go for a no-confidence motion against the present government as it could become ‘counter-productive’. Jagan, who bragged that the government is running at his mercy, is now in a fix as he is uncertain of his strength, after the merger. Some MLAs in the Jagan camp are gradually distancing themselves from YSR's son and are reiterating their loyalties to the high command.

By roping in Chiranjeevi, the Congress, which has 155 MLAs, is now confident of facing a trial of strength in the Assembly. But Chiru's romanticism won't go away. After coming out of 10 Janpath, he said his party merged with the Congress to fight more fiercely for social justice. Since his feeble shoulders could not bring about any change, he decided to take the support of the more muscular Congress. Chiru's romanticism may turn Andhra politics into another yawner (a boring film).

HCL ‘ME’ Series

What’s up with me?: After alluring the world with its Leaptops launched last year, HCL made a lot of waves in 2009 with its all new ‘ME’ Leaptop series. The new series claims to be the world’s first ‘One Touch’ that tenders immediate service and support to the user. Moreover, the product line also provided the user some unique features like Lock ME (to prevent data loss), Encrypt ME (restricts unauthorised access of data), et al, along with face recognition and finger print recognition which empowers this range to get an instant recognition among the target audience. Targeted at the collegiate and young executives in the age group of 18-29 years, the product is reasonably priced in a range of Rs.23,000-44,000. With the initial overwhelming response, the consumer has so far conveyed that ‘it’s all about ME’ to the competition.

Pawan Chabra

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Source : IIPM Editorial, 2010.

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

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Cartels are the most pernicious of anti-competitive practices!

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PRADEEP MEHTA, SECRETARY GENERAL, CUTS CENTRE FOR INTERNATIONAL TRADE, ECONOMICS AND ENVIRONMENT

"Cartels don’t only relate to price fixing, but also division of business, territory, restriction on output..."

Which are the sectors in India where cartels exist or may be in process of coming into being?
Airlines, banks (setting of bank charges and interest rates on savings A/Cs), cement and telecom sectors have come under the scanner for cartelisation in India more recently. Also, collusion has often been found in a number of government procurements, for example in construction activity. Most of these cartels work under guise of trade associations. In cases abroad, even trade associations have been charged for aiding and abetting collusion.

What is the impact of cartels in an industry and economy?
Cartels are considered the most pernicious of anti-competitive practices. In many jurisdictions cartelisation or collusion is treated as a criminal activity under the law. While companies have paid heavy fines, senior executives have even undergone jail sentences. Besides, cartels don’t only relate to price fixing but also division of business, territory, restriction on output, et al. They can create barriers to new entrants and non members to the cartel agreement.

Any efforts to quash cartelisation?
A recent example is in the cement sector where the MRTPC passed cease and desist orders on some old enquiries. The recent alliance between Jet and Kingfisher in the airline industry is being analysed from the perspective that it maybe a cartel. Few months ago the private airlines had got together to set up the Federation of Indian Airlines and proposed benchmarks for fares, but the low cost airlines fell out.

Are there steel cartels too?
I do not see any signs of cartelisation in the steel industry. Prices went up phenomenally due to high demand, which resulted from high economic growth.

The likely impact of the Jet-Kingfisher alliance on the industry?
The possibility of price fixing is very high and most likely to happen. The flip side is that if these airlines do not cooperate on prices then they would operate in a dirty way and hurt themselves badly. They may even shut down, thus affecting the whole economy.

Would you consider this the end of the low-cost regime in Indian skies?
The low cost regime will stand on its own and not relate to these major players. However, if the major players raise their prices, then smaller/low cost players will also raise prices.

Which are the international cartels operating in India and what is their impact on consumers and economy?

Very little work has been done to find out the impact of international cartels on India. One study done by Evenett on the impact of an international cartel in vitamins did show a cost of about $25 million on India. CUTS had moved the MRTPC to investigate the matter but they did not bother to do anything. Another recent case of airlines fixing prices on cargo rates across the transatlantic route and elsewhere has also had an impact on India, for both exports and imports. But nothing has been done. Perhaps there is no appreciation of facts. One hopes that the new Competition Commission of India will do something when it comes into action, as it has extra territorial jurisdiction powers.

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Source : IIPM Editorial, 2008

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

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“Private labels will rule the retail world”

PAUL MARTIN, GLOBAL SALES MANAGER, PLANET RETAIL

Recently, an interesting thing happened in the UK retail market. Tesco, regarded as the worldwide pioneer of own brand private labels, suddenly started introducing ‘phantom’ private label brands in its stores. For the first time, Tesco was abandoning its policy of only offering own labels under its own name. The move is important as Tesco has been at the vanguard of the three-tier private label strategy (‘good, better and best’ approach) which is now adopted by most of the world’s leading grocers.

This surely indicates that the growing power of retailers across the globe and their growing focus on private labels, which offer higher margins and a point of difference over rivals, means that private labels are becoming increasingly important in almost every market. In fact, in developed markets, private labels are moving beyond their original price and functional benefits, to more sophisticated tools for promoting retailers’ ethical credentials. Private labels generally need a highly developed retail environment to succeed with high levels of concentration, consumer trust in retailers and the presence of international players. For these reasons, the share of private labels is highest in Europe, where private label penetration has reached 53% in Switzerland. In contrast, the private label share in a fragmented market such as China is under 5%.

In immature retail markets, penetration of private labels tends to be generally lower. This is due to the fact that retail markets are usually quite fragmented, consisting of a large number of smaller retailers where price competition is less intense. Smaller retailers also generally have less control over the supply chain. Having a grip on the supply chain is an important requirement for launching private labels.

So keeping all these in mind, launch of phantom is a nice strategic move by Tesco. However, it remains to be seen how consumers will react. Will they be happy to see more variety or will they be even more confused now?

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Source : IIPM Editorial, 2008

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

Kamal Gianchandani

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Kamal Gianchandani: on the other hand, is the man who micro-retails film content – via stores, online, home delivery service – under ADA’s youngest venture (four months old to be precise) Bigflix. Gianchandani, an MBA from Pune University and another former PVR Pictures employee, believes that Bigflix is a result of the “group’s vision to have comprehensive presence in filmed and non-filmed entertainment sector.” His total focus these days is on tapping the home entertainment market in India, which he believes is largely untapped. Sample this: Unlike in India, where theatrical revenues account for 67% of a studio’s revenues, domestic theatrical revenues account for only 18% for Hollywood studios. With growing relevance of alternate revenue streams like telecast rights, home and mobile entertainment, the share of theatres in media consumption is likely to stagnate. When that happens, Bigflix will be ready to net in the moolah. Gianchandani plans to spend a cool Rs.25 crore to build the brand Bigflix in this financial year and says that “over 40-50% of (his) time is spent on increasing numbers (adding more customers and clients) and the balance 50% time is spent on identifying gaps in service and improving them.” For now, the company is busy packaging its latest offering, of allowing users to download movies through their set top boxes for viewing.

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

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I care for you......and for your eyes. Trust me

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Bausch & Lomb India eyes greener pasture and rolls out its new ad campaign. But will it succeed in its latest endeavour? Or will it lose out to competition? angshuman paul explores...

‘Eyes speak more than words’ and Bausch & Lomb (B&L) seems to be following this statement quite literally. This is also evident in their latest TVC, ‘Ankhon Ki Antakshari, Khelte Raho.’ Whether playing Antakshari will help B&L in the long run will depend on its consumers, but the million dollar question is, why is B&L suddenly upping its promotional activities. And if you look at the India story, B&L has ably steered its ads as a clinical and eye care company. So why has the company shifted its ad strategy from an informative one to the trendy type we are seeing today? 4Ps B&M analyses the shift in the promotional strategy of Bausch & Lomb Eyecare (I) Pvt. Ltd. and reveals to you, what’s propelling the eye-care company to target a new class of audience.

After completing one and a half decade in India, B&L commanded a whopping 70% market share of the Indian eye care market. Of course, conquering the market where contact lenses per se were considered a luxury fashion accessory, was not easy. But B&L did it through immense marketing resourcefulness and exceptional pluck. They rolled out a slogan coined as ‘Optics India 2000’ and by 2000 the company had in fact made a dent in the traditional glasses and spectacles market. But till 2000, B&L was perceived as a fashion accessory company rather than an eye care company. And this was primarily because of the company’s strong connect with Tom Cruise and Ray Ban. For globally, Ray Ban was under the umbrella of B&L. It was, however, much later in the year 1998 that B&L globally hived off its popular sunglasses venture to deepen its focus on its eye care business.

Globally, B&L wanted to position itself as an eye care company and the same sentiments were reflected in its India strategy also. So post 2000, the company’s ads paid more heed to establish B&L’s clinical eye care side, with a clear emphasis on the comfort side of soft lenses. Such strategy enabled the company to develop an edge and filled the gap delivered by the momentary setback laid by the hiving off of Ray Ban. According to Harish Natarajan, Managing Director, Bausch & Lomb Eyecare (I) Pvt Ltd., “Sunglasses was a big business for us. Without that we needed to focus more on eye care. We created a competitive edge for our soft lenses, which helped us create a strong market.”

Product innovation and promotional activities helped the Indian division of B&L to bounce back and make up for the losses caused after bidding adieu to Ray Ban and soon it conquered the market. But rather than enjoy the fruits of supremacy B&L soon had to contend with competition from Johnson & Johnson, which was slowly and steadily capturing the market with its positioning for the youth. Entry of new players like Fresh Look & Zeiss, which with their wide range of colour lenses were beckoning GenNext, were making a dent in B&L’s market. Their zealous effort was making contact lenses more popular as a fashion accessory, rather than an eye care solution positioning that B&L had. This really disturbed B&L, driving its market share southwards. Sources within B&L also confirmed to 4Ps B&M that at the beginning of 2008, B&L’s market share had declined by 20-30%.

Increasing market share and regaining its lost glory, became crucial for B&L. Work thus began for revamping B&L. Right from its campaigns, to its offices, everything had a facelift. The moment you step inside B&L’s office, a tangible zest can be felt in the air. Slogans like ‘If you don’t take care of your customer, someone else will’ is ubiquitous in the sprawling office. But that is not enough to cajole the consumer and they started a marketing research exercise to find a way to connect with the consumer. “We felt that there was a need to connect with the youth and for that we wanted to come out with new ads. Ads that will show the colourful side of B&L, but without compromising the brand image of the eye care company,” explains Natarajan. So promoting the brand as a fashion accessory was strictly ‘no’ and they rolled out ads to entice the younger generation. This was brilliantly done in the antakshari ad, where a young man tries to lure his girl with ‘Ankhon Ki Antakshari’ and conveys the comfort side of the product. Affirms Anurag Bhalla, Creative Supervisor, FCB Ulka, “The ad conveys the comfort side of the brand, showing that you can put it on a continuous basis, without any hassle. Compared to the earlier ads, the new ad is very trendy, yet never disturbs the image of the company as an eye care company.”

Apart from traditional advertising, B&L is also focusing on below-the-line activities like offering trial packs at a price easy on the pocket (earlier B&L never offered such trials). It’s hard to digest the fact, but such offers are even motivating FCB Ulka’s Anurag to go for contact lenses. But then why wasn’t he using it till now and using glasses (especially when he’s the creator of contact lenses ad)? “I need my glasses only to read, so to that extent I don’t put on glasses regularly. But yes the ads really convey how putting on contact lenses is very comfortable. Even now I am thinking to opt for contact lenses,” replies Anurag. To achieve their vision and to cash in on their earnestly generated goodwill, the ads are trying to woo not only GenNext, but also the glasses users. And soon, there won’t be just one but several Anurags who will be browbeaten (sweetly!) to go the contact lens way.

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Source : IIPM Editorial, 2008

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

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New look for CNN-IBN

From August 8, CNN-IBN’s onscreen look will change with a new and improved design for its news tickers and Astons (the top-most section displaying information on the current story). The overall pace of the animation has been designed to keep the screen buzzing with information. While the previous lay-out has been drastically revamped, the new addition is a vertical navigator box on the right-hand side that will display the latest weather information, cricket scores, time and date, information on the current, upcoming shows and advertising messages. More importantly, the navigation box allows for display of video clips, such as sneak previews of upcoming programmes. States Sanjay Dua, National Sales Head, CNN-IBN & IBN 7, “The navigation box will provide excellent visibility for those choosing to advertise with us as well as weather, stock and programming information for the viewers with enhanced readability of the advertising messages.” Another feature of the new on-screen display is the use of different colours to denote the genre of the news story being aired. This will allow viewers to distinguish between the nature of the various news bulletins being shown all day long.

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Source : IIPM Editorial, 2008

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

It’s gonna be cash-and-carry for Wal-Mart in India

In one of the most eagerly awaited announcements in the industry circuit, Wal-Mart Stores Inc. & India’s Bharti Enterprises said, that the duo had signed on the dotted line for a 50:50 joint venture for cash-andcarry – or wholesale – operations, to be called Bharti Wal-Mart Pvt. Ltd.. Over the next seven years (it is being estimated that the venture will employ about 5,000 persons in these seven years), the JV will open anything between 10 to 15 cashand- carry outlets that will sell vegetables, groceries, fruits, staples, footwear, stationery, clothing, consumer durables etc. These will be spread over an area of 50,000- 100,000 square feet. The first of the cash-and-carry facilities is going to be opened by the end of 2008. India’s retail industry is valued at around $350 billion; according to experts, this figure is all set to almost double by 2015; significantly, organised retail accounts for only 3% of the sector, but come 2010, it will grabbed at least 10% of the retail pie. Wal-Mart Country President (India) Raj Jain, said, “If retailing (in multi-brands by foreign companies) is ever permitted in India (by the government), we would like to come to the front-end.” What he meant was that if ever the sector were to be opened up, Wal-Mart will obviously consider entering the front-end retailing segment in India. Currently, foreign multiple brand retailers are limited to cash-andcarry and franchise or licence operations. Wal-Mart has a cash-and -carry business in Brazil as well; India is the second country where the world’s biggest retailer will be following the model.

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Source : IIPM Editorial, 2008

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

Getting high on fine wine

Saying cheers to the growing wine market in India, Chateau Indage plans to open more than 1,000 retail outlets that will specialise in selling and educating consumers about wines. For this expansion drive, the ‘company-owned outlets’ mode as well as the ‘franchise mode’ will be used, and the outlets will be called ‘IVY Wine Bars’. At these wine bars, there will be a wide spread of wines available: and other than Chateau Indage’s own brands, there will also be imported wine from Australia & South Africa. Recent reports p e g that Indian wine market stands at 4.6 million litres in volume terms and Rs.450 crores in value terms. By 2010, the wine market is expected to grow to 8.3 million litres. Cities like New Delhi, Mumbai, Chennai, Kolkata, Pune and Bengalooru consume about 80% of the wine sold in India. And more than 60% of the volume sales of wine happen in five-star hotels, pubs and bars.

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Source : IIPM Editorial, 2008

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