IIPM - Live: March 2013

Thursday, March 28, 2013

Sunny Side up for DTH Firms

India’s DTH Industry is Making a Bold Gambit to take off into Profit zone on The Back of Growing Popularity for High-Definition and value-added Services.

Decades ago, when celebrated American author and critic John Mason Brown spoke about television being chewing gum for the eyes, the visual medium was still years away from efflorescence. Today, as the total number of digital TV households worldwide fast approaches the 1-billion mark, representing a penetration rate of 65%, those words have even found global utterance.

According to UK-based research and forecasting agency Informa Telecoms & Media, which delivers strategic insight on the display industry based on global market data and primary research, more than 401-million digital TV homes are expected to be added between the end of 2010 and the end of 2015, with China contributing a massive 136 million, followed by India with 47 million. A recent report by DisplaySearch, a leading global market research and consulting firm specialising in the $770-billion display supply chain market, says total worldwide television shipments increased 6% from 205 million units in 2009 to 218 million units in 2010.

The boom in TV sales is feeding the demand for high-end LCD and LED television sets by consumers looking for quality TV viewing. Industry observers say that there are about 13 to14 million households buying LCD and LED TVs every year in India. Approximately 700,000 LCD TVs were shipped by brands in India during the month of October alone last year. As television buyers in India gravitate to purchasing more of flat panel displays, direct-to-home (DTH) satellite television has emerged as the choice medium for digital and high-definition (HD)-quality video over other media channels like digital cable networks or IPTV, offering a broader entertainment experience to subscribers. On offer are entertainment, news and lots more options such as searching for job vacancies on TV, looking for prospective marriage partners and choosing travel packages across India that DTH viewers living in even remote nooks & corners of the country can choose from. Proliferation of television channels, viewers increasing sensitivity to quality transmission & programming of their choice and a growing demand for value-added services, have further promoted DTH revolution in the country.

“The need to be entertained, coupled with the diversity of broadcast channels, pay-per-view (PPV) opportunities, gaming and interactive services are the biggest growth drivers for DTH in India,” says a senior executive of a DTH service provider. “The big opportunity for DTH in India”, believes R. C. Venkateish, Chief Executive Officer, Dishtv, “is a virgin market served only by terrestrial broadcaster Doordarshan”. There are still large swathes of cable-starved areas in the country, where people watch only Doordarshan channels. Also, by and large, cable networks in India still run on analog technologies and are not yet digitised. According to analysts, the Indian market has a huge opportunity despite having seven DTH players, including government-owned DD Direct. The total number of households in India is estimated around 232 million, of them only 141 million have TV sets. Of the total number of the households, 116 million have cable and satellite connections of which DTH users count for just 31 million.

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Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Monday, March 18, 2013

For Feeding Mouths Aplenty

While India continues to reel under The Effect of rising food Prices & Increasing hunger, The Proposed National Food Security Act can be a Panacea. But with a narrow minded Focus & Select targets, The Upcoming Legislation might end up Nowhere & can worsen The Delivery of food grains to The Hungry.

John Van Hengel, born 1923 in Waupan, Wisconsin, was an ordinary man with all vices and sins – as per America’s Second Harvest, a company founded by Hengel himself. He undertook various occupations; from being an ad man to a beer truck driver in Hollywood, married a model, divorced her and underwent spinal surgery post a deadly fight. It was while working at a soup kitchen post his surgery when he met this mother of 10 and her dying husband. She survived by rummaging in food bins and was desperate for a place to both deposit food and check it out – like a bank. Hengel, hooked to the idea, persuaded a grocery store manager to donate surplus food. From a defunct church bakery selling more than 250,000 pounds of food to 36 charities in its first year, America’s Second Harvest was born in 1976, the world’s first Food Bank Chain. For a country like the US with around 20 million people belonging to households suffering from ‘very low food security’ (households where at least one person remains hungry during a year), food banks have been a revolution. But for India, where ITC pioneer Sam Pitroda recently unveiled his ambitious food bank scheme, the 250 million plus hungry population might prove too Herculean a task. The only light at the tunnel end is the National Food Security Bill, touted to hit harder at hunger than NREGA did at poverty. But a clichéd narrow focus and lack of holistic research-backed provisions endanger the entire system of fighting hunger in India.

Despite numerous measures and programmes – Targeted PDS, Mid-Day Meal Scheme, National Food for Work Programme, Antyodaya Anna Yojna and Integrated Child Development Scheme – the number of undernourished people increased from about 210 million in 1990-92 to 252 million in 2005-06. India houses around half the world’s undernourished children. Also, there has been a general decline in per capita calorie consumption in recent decades. Grain mountains and hungry millions continue to coexist. According to the Global Hunger Index 2009, India is ranked 65 among 84 developing countries – worse than nearly 25 Sub-Saharan African countries and all of South Asia, except Bangladesh. The reason – all government schemes have been victims of narrow minded targets, rampant corruption and perpetual battles between central and state government owned entities.

The Targeted Public Distribution Scheme (TDPS) was introduced in 1997 as a revised version of PDS, allegedly serving only the urban poor and being a miserable failure to effectively serve the poorer sections of the population. But even this has slowly bled from the entangled web of poor targeting, high administrative costs, and low effectiveness of the programme. The NFSA, if enacted, mandates the provision of a minimum of 25 kg of rice or wheat to Below Poverty Line (BPL) families per month at Rs.3 per kg. The TDPS targeted same at Rs.4.15 per kg for wheat and Rs.5.65 per kg for rice. But as you go into the depth of the meaning behind each word, the proposed legislation faces sure shot stumbling blocks with the debate regarding the definition of hunger and hungry and the number of BPL families.

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Tuesday, March 12, 2013

4Ps B&M Exclusive – India’s best Market Research Companies

Objective, accurate and actionable consumer intelligence means the force is with you, for it is widely regarded as the soul of business. But market research companies have to themselves evolve and be in ship shape with respect to the environment in order to stay relevant to their clients. B&E’s sister publication 4Ps B&M undertook a survey on India’s best market research companies, which provides an exclusive insight on the top research firms that make the cut. And surprisingly so, Nielsen isn’t one of them!

For every aspect of marketing we look at, market research is viewed as the logical starting point, and also the end game. Research gives you the input on how you develop your entire market action plan, and let you know about the outcome, thereby helping you plan for the next cycle.

On that very promise, market research has to be one of the most essential investments to make for an organisation. But do companies always understand and appreciate this fact in practice? Or do they believe more in the Jack Welch diktat of being ‘straight from the gut’? While it’s far from being a black and white debate, market research has been alluded to by many industry greats in the past, and not necessarily in the pleasant sense. Henry Ford once famously said, “If I had asked my customers what they wanted, they would have asked for a faster horse!”

There were a number of beliefs that Henry Ford had that were relevant for his time, but aren’t relevant today. But there is one fact that would be hard to ignore even today. In short, though customers look for value maximisation always, it isn’t necessary that they know their value maximiser proposition themselves, despite getting smarter by the day. So can you rely on your own customer when you formulate your market research strategy? One can argue that if customer intelligence was the only criteria, a number of breakthrough innovations, like the iPod would never have come into being. In fact, Apple consistently abides by an aversion to market research to date, just like Infosys in India has an aversion to advertising. Steve Jobs once quoted to Fortune, “We do no market research. We don’t hire consultants.”

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Sizzling Apples, Burning Berries!

With RIM’s Traditional Stronghold Under Attack, Balsillie is hoping to do a Counter Attack in the Tablet Space. But it would be much more Important to Ensure that the Smartphone Battle is not Lost Forever

Apart from his role as Co-CEO, RIM, Jim Balsillie is well known for his repeated unsuccessful attempts to buy a hockey team and take it to his home state of Ontario, Canada. For those who know him, he is the ultimate fitness expert and sports enthusiast. But one would certainly doubt whether Balsillie would count apples as one of his favourite things, given the tit-for-tat slanging match that Jim is into with none other than Apple CEO Steve Jobs.

The match is now more than a mere one off altercation. First we give a quick snapshot of the prologue. Simmering sentiments were spurred among all competitors when Apple was in the midst of Antennagate, the negative backlash linked to iPhone reception problems. Even that time, Apple had chosen to make a generic statement to the effect that smartphones from RIM, Samsung and HTC had similar problems with attenuation and signal loss; a claim to which RIM reacted vociferously. The RIM standoff really started with the Apple quarterly result announcement, where Steve Jobs bragged that RIM would not be able to catch up with Apple any time soon. He got those bragging rights when Apple posted sales of 14.1 million iPhones in the quarter compared to 12.4 million Blackberrys (IDC). Also, on Job’s firing line was the Blackberry OS (RIM plans to upgrade to Blackberry 6 and also bring in the QNX for its upcoming Playbook tablet) as well as the concept of small 7 tablets (like Playbook); in fact he called the latter tweeners! Jobs said that with 3,00,000 applications on Apple’s app store, RIM had a “huge mountain to climb”. Balsillie has responded by taking potshots at antennagate, Adobe Flash (which Apple does not support), reiterated his confidence that 7” tablets will succeed and his belief that Apple’s app centric approach is no longer relevant, since all apps that developers really need are available online. He summed it up by saying that customers were now “getting tired of being told by Apple what to think” and dividing the world into people living within and beyond Apple’s “distortion field”. If recent reports are to be believed, Apples ‘field’ has extended to some of RIM’s enterprise sales personnel, who joined Jobs’ forces recently.

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Thursday, March 07, 2013

Back to Being Human!

The actress who started the size-zero craze in Bollywood, has suddenly turned into a foodie. These days Kareena can’t stop raving about food. The actress is gaining weight for an upcoming movie and is really enjoying herself. She says that she can’t live without food even for a day and admits food is more important to her than even her would-be husband! Kareena loves cooking and given the chance would want to cook for Prez Obama! Now, that’s a new side of Kareena!

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Wednesday, March 06, 2013

“Carrier believes in Sustainable Growth”

Gaurang Pandya, the newly appointed MD of Carrier India, reveals to B&E the strategies that have worked for them in India

B&E: You have been associated with Carrier for long now. How has been the journey so far?

Gaurang Pandya (GP): It’s has been wonderful. In fact, I have gained a lot when it comes to understand the international markets. I was in Singapore and US with Carrier on the financial and business side. I was also involved in lot of programmes in Asia Pacific region and have worked on areas like localisation, signing of JVs with partners apart from various distribution initiatives taken up by the company. The learnings from these experiences have been really helpful as one can now see these activities happening in India as well.

B&E: Carrier has always believed in maintaining a very low profile opposed to its competitors when it comes to promotions? What is the logic behind this strategy?

GP: As we are a part of the US-based United Technologies Corporation (UTC), therefore there are certain set of laws under which we are governed. For instance, it is the US law pertaining to defence, anti-trust regulation of India and anti-competition laws of US, et al, that applies to us. Thus, if you ask us our growth rate for the year we might answer the question in two ways. First, these rates are for internal usage, and second we don’t want to disclose it to the outside world.

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Monday, March 04, 2013

CEO of Tamilnad Mercantile Bank in conversation with B&E’s

Managing Director and CEO of Tamilnad Mercantile Bank in conversation with B&E’s Avneesh Singh

B&E: Your bank is targetting business worth `26,000 crores in the present financial year? What will be the possible mix of deposits and advances?
GNR: We are looking at a target of `15,000 crores in deposits and `11,000 crores in advances.

B&E: You also have mentioned a target of `500 billion in assets by 2013. What would be your basic? What is your strategy to achieve this target?
GNR: Our strategy is manifold, the simplest one is to open more branches. We have 217 branches as of now and by the end of March 2011, we plan to take the number of branches to 250. Thereafter, in the next 2 to 3 years, we plan to take the number of branches to 500. We have a very aggressive expansion plan to take the staff strength from 2500 to 5000. All these will automatically put us into the bracket of `50,000 crores.

B&E: Many banks like Union Bank, Canara Bank and Andhra Bank have changed their logo as a branding exercise? Do you have any similar rebranding plans in the pipeline?
GNR: A changed logo and a re-branding exercise give added advantages of visibility because when you change your logo, you undertake a lot of publicity; and then people tend to give a lot of recall value to the bank. This is one thing that even we are thinking about; but it is only at a preliminary stage right now. At a right time, we shall also go for what you call brand building or re-branding but right now, it is too early to say anything about it. But re-branding is required and that is why a lot of banks have gone through the same. Once you have already spent 90 years with a particular logo, probably you need to make the society realise that the bank is also changing to show to the world that yes, we are also changing – this is clearly one physical appearance that makes the difference.

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