The Edge

I I L M I N S T I T U T E F O R H I G H E R E D U C AT I O N Vol-V, No. 4, October 2008

FROM THE DIRECTOR’S DESK "Vision without action is a daydream Action without vision is a nightmare" All socially conscious business schools attempt to ensure that they act not only as providers of higher education but are also seen as responsible stakeholders of the larger community, they are supposed to serve.

Environment - related issues are today in the front burner of government, industry as well as the civil society. Though there are differences in perceptions as to what needs to be done, there is a fairly universal acceptance of the environmental crisis that may engulf the human race and civilization unless preventive measures are initiated.

Realizing the importance of sustainable development, United Nations have launched UN Global Compact as both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices.

UN Global Compact aims to mainstream ten principles in business activity

EDITORIAL BOARD

EDITORIAL TEAM

Mrs Malvika Rai Prof. B. Bhattacharyya Prof. Badal Mukherji Shree Dina Nath Mishra Prof. Kailash Tuli Ms. Disha Dubey Ms. Rohini Rode

Sonam Phogat Yashad Bajaj Isha Gadhok Shivang Mahajan Divya Sareen

Design: www.art4design.info

around the world, which permits the basic philosophy of sustainable development.

Principles for Responsible Management Education (PRIME) is an initiative to inspire and champion responsible management education, research and thought leadership globally, with UN Global Compact and AACSB as co-convenors.

In the current academic environment, CSR and sustainability have not yet been mainstreamed in a Business School curricula and activities. PRIME offers an opportunity to Business Schools and Universities to gradually adopt their curricula, research, teaching methodologies and institutional strategies towards that end.

IILM Institute for Higher Education has just joined this movement. It is one of the few Business Schools in India which has done so. We are in the process of developing activities and courses consistent with the philosophy of PRIME. — B. Bhattacharyya

Published by IILM Institute for Higher Education 69, Sector 53, Gurgaon-122003 Mobile: 9350860132, 9350821438 Printed by Avantika Printers Private Limited 194/2, Ramesh Market, Garhi East of Kailash,New Delhi-110065

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CONTENTS INHOUSE MAGAZINE FOR LIMITED CIRCULATION Vol-V No. 4 October 2008

04

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16

IILM A++ RATING

WANTED GREEN MANAGERS

PLUS POINTS OF RETAIL BANKING

05 08 10 21 25 27 30 33 37

10TH GRADUATION CEREMONY THE BANYAN TREE SCHOOL, JAGDISHPUR MARKETING IN DESPERATE TIMES FERTILIZING ALLIANCES THE BRAND BUILD-UP POSTING TRUE LIFE MARKETING IN THE TIME OF INFLATION HITTING BELOW THE LINE REALITY SHOWS ON THE SHELF

41 44 48 50 54

THE GREAT INSURANCE MIX NO CHILD'S PLAY FLEXI TIMINGS STUDENT CORNER CAMPUS NEWS

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t is of great pride and joy for all of us here at IILM to have been accorded the status of an A++ category B-School by Business India in its latest survey to ascertain the top business schools in the country. It is another year in succession that we have been placed in the top league of business schools in India and it is testimony to IILM's constant endeavor towards providing the finest business education there is.

There are many ingredients which go into the making of a topof-the-line business school. Some of which are: ❚❚ Brand value and market positioning (includes various sub categories from placement performance to connectivity with overseas universities) ❚❚ Intellectual capital (Large number

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++ A Rating

of quality aspects including e-learning program to exchange faculty) ❚❚ Learning ambience (Infrastructure, campus size, connectivity and many more) ❚❚ Growth (Includes factors like increase in batch strength and IT and library investments) Needless to say, IILM scored very highly in each

of the above as well as overall, leading to an inclusion in the top league.

How does the ranking make a difference to your life?

We believe the answer to this question for us as management students is fairly obvious. Being touted as an A++ level institute in a respected, widely read and referred to publication not only leads to better placements through brand visibility, but also attracts the best talent pool of intellectual capital to the institute, be it students, or faculty, besides a host of other benefits.

So what next?

Next, we continue to raise the bar by venturing into newer initiatives such as IILM centre for Innovation and Entrepreneurship.

This is where we become a cradle for new and exciting ventures by brilliant people and forward integrate ourselves into the corporate world we have so long been providing able and young managers with.

So here's hoping that we continue to grow and excel in the same illustrious way we have done, and prove ourselves as a force to reckon with in the world of business education for many years to come.

CONVOCATION

10th Graduation Ceremony of IILM Undergraduate Business School The Tenth Graduation Ceremony of the Undergraduate Business School, IILM institute for Higher Education, New Delhi, was held on Tuesday 4th November 2008 in the campus auditorium. The Award ceremony is one of the highlights of the academic year, a much cherished occasion for everybody, celebrating the tremendous achievements of students of the Undergraduate Business School, IILM Institute for Higher Education.

For around 100 graduates of the batch 2005-08, the day marked a special chapter in their lives as it is the culmination of years of effort put in by them.

Undergraduate Business School, IILM Institute for Higher Education has been running the Undergraduate Programmes in collaboration with the School of Management, University of Bradford, U.K. since 1996. The collaborated programme offered at IILM Institute for Higher Education is identical to the one that is offered at the University of Bradford at all levels including course structure, assessment and degree awarded, making it one of the most sought after undergraduate programmes in the city.

Prof. B. Bhattacharyya, Mr. Paul Jagger, Pro Chancellor and Chair of University Council and Ms. Malvika Rai, Chairperson, IILM Institute lighting the cermonial lamp

The Tenth Graduation Ceremony was a reflection of the milestones the collaborated programme had achieved since it's inception in 1996.

The formal ceremony commenced with the academic procession, lead by the Dean of the Undergraduate Business School, followed by the professors of Undergraduate Business School, members of staff of the University of Bradford, Director General and

Principal, IILM, Chairperson IILM, Dean School of Management, University of Bradford, University Mace and the Pro-Chancellor and Chair of university Council, University of Bradford. As the members of the procession occupied their seats on the stage, the stage seemed set for a grand ceremony to take off.

This was followed by lighting of the lamp and invocation to Goddess of Knowledge and Learning, Sarswati by the Director General

Mr. Paul Jagger, Pro Chancellor and Chair of University Council addresses the 10th Graduation Ceremony The

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and Principal IILM, Prof.

B. Bhattacharyya. He welcomed Mr. Paul Jagger, Pro-Chancellor and Chair of University Council, University of Bradford, U.K. on the occasion and introduced him to the candidates and the esteemed audience present. The Director General then sought the permission from the Pro-Chancellor to declare the Graduation ceremony open. The Pro-Chancellor declared the ceremony open.

The prestigious moment had come. It was now the time of conferment of the Undergraduate Degrees to the candidates. The award of an Honorary Degree is recognition by the University of the contribution that the individual has made to the academic life or to society at large. The Dean of the Undergraduate Business School, Ms. Meena Bhatia presented the graduates and the Pro-Chancellor conferred the Honorary degrees.

Around 100 students were conferred the Honorary degrees, both in present and in absentia.

This was followed by the award of Medals and Certificates of Honour.

The Chairperson Ms. Malvika Rai awarded the Medals and Certificates of Honour to the candidates. Shri Kulwant Rai Gold, Silver and Bronze The

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medals were presented to students who had secured first, second and third position respectively in the Undergraduate Programmes. The students who received the Gold, Silver and Bronze medals were Ms. Nasreen Singh, Ms. Manveen Banga and Ms. Isheeta Sanghi. The girls seemed to be dominating the medal tally. Certificates of Honour were given to the students who had secured the highest marks in each module of stage three. The various

students who received the same were, Ms. Anshika Goyal, Ms. Isheeta Sanghi, Ms. Manveen Banga, Ms. Manvi Singh, Ms. Nasreen Singh, Ms. Pankaj Bahar, Mr. Rahul Dhawan, Ms. Sonam Chachra, Mr. Sunil Devjani, Mr. Vaibhav Raheja and Ms. Veda Morolia. Special awards for the best projects were given to Ms. Nasreen Singh and Mr. Vaibhav Raheja.

After the completion of the award ceremony, the Chairperson

Faculty of IILM, UBS leading the procession

Ms. Malvika Rai addressed the gathering.

In her address she welcomed Mr. Paul Jagger, Prof. Arthur Francis and congratulated the graduates and their family members. She cited the significance of the day as it was the birthday of the founder Shri Kulwant Rai. In her small yet a powerful speech, she discussed the philosophy of Shri Kulwant Rai. She viewed that students need to think globally but at the same time should remain rooted

to the Indian value system to become better managers for tomorrow. She concluded her speech by reiterating the role of the founder in forming and shaping the destiny of IILM Institute for Higher Education.

The Chairperson Ms. Malvika Rai requested Mr. Paul Jagger, the ProChancellor and Chair of the University Council to give his Graduation Address. Mr. Paul Jagger congratulated the students present on the occasion and discussed how

Mr. Simon Croll, head of student Administration support, Mr. Paul Jagger, Mr. Anil Rai, Mr. Keith Hennings

eventful his trip to India was. He also said that India is a great country and wanted to visit India more frequently in near future. A bit of humor and seriousness marked the brief address of Mr. Paul Jagger.

The ceremony had drew to a close. The Director General and Principal IILM, Prof.

B. Bhattacharyya sought permission from the Pro-Chancellor for the formal closure of the graduation ceremony. The academic procession left the auditorium joined by the graduates. The graduates join the procession to symbolize their new status.

The atmosphere outside the auditorium was all charged up.

The young graduates in the academic robes were ready to take on the world. The campus was abuzz with graduates and proud parents congratulating each other on the memorable occasion. A group photograph of the graduates was clicked to celebrate the occasion.

The day finished with a chance for friends, families and members of UBS IILM and the University of Bradford to socialize and take photographs. The students had arrived!

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EDUCATIONAL INITIATIVE

THE BANYAN TREE SCHOOL Jagdishpur

“The objectives of education basically are freedom of the individual, a fulfillment in life, equality among all our people, excellence of each individual and collective selfreliance, and perhaps most of all national cohesion.�

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The Banyan Tree School, Jagdishpur books and lots of fiction magazines for at Sultanpur District U.P, was estab- the development of the children.

One of the special features of the lished in April 2008. It is about 80 km from the capital city of Lucknow School is teaching aids, which are at and is situated in the industrial area par with those available in very modof Jagdishpur where Bharat Heavy ern schools of Lucknow and other Electrical Limited (BHEL) is an big cities. The teaching staff utilizes their experience, wisdom and industrial landmark.

In a short span of two months warmth to create a dynamic academthe school has over 400 children. ic environment. The teaching comThe School has classes from bines the best of tradition and innoNursery, KG through Class-1 to vation, providing our students with a Class-5 and is planned as an solid foundation in humanities, social and natural sciEnglish Medium Senior ence, the arts and Secondary School under technology. Technology the Central Board of is integrated into the Secondary Education daily life of a student at (CBSE). The tuition fee the School. The experiand other charges are enced faculty integrates affordable as per the technology into the curdistrict area.

The riculum so that a student School is proposed to attains high level of have a rich library, well comfort in the stocked with reference Aarti Rai, Chairperson

We, at The Banyan Tree School, honour the ideals of holistic education and not only ultimate young minds but also identify and nurture every child's exceptional trait / quality / character in order to enable them to flourish effectively.

application of technology to their studies. Bright, air-conditioned and childfriendly classrooms provide the right ambience for learning. The Banyan Tree School, Jagdishpur like the other Banyan Tree Schools in the country is a Centre of Learning and Excellence where each child is recognized as a different individual to be aided, to be cared to, to be groomed and to be developed as an all-round personality, which excels in academics as well as in extra co-curricular activities, confident to face this competitive world with the strength of his/her competencies, the character and the value system.

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SURVIVAL BENCHMARKS

MARKETING IN DESPERATE TIMES Banks that had excessively leveraged their capital through borrowing and other devices, losses wiped out much of the capital, and their near insolvency dampened their willingness to lend.

The immediate problem is: How to restart credit flow

T

he great depression of the their sub-prime credits, supplement1930s reached the public lexi- ed by the low interest policy of con as something terrible, Federal Reserve. Banks resold these even though a majority of the people sub-prime credits, slicing and packhave no idea what caused it and aging them with good credits to othwhat needed to be done. For the first ers. This was followed by still more exotic derivatives. As a time during the intervenresult, when the bubble ing 80 odd years, the posdid burst, nobody was sure sibility of an economic how much of their book disaster on a similar scale assets were 'toxic'. is being talked about.

As fear spread, no bank This article is not was willing to offer credits about the financial meltto others, fearing that toxic down which started assets may get in. In addiunraveling with an astontion, the mark- to-marishing speed, but, on ket accounting process what could be the B. Bhattacharyya resulted in huge losses response of business Director General in capitalization of in terms of reformulating marketing strategies. So, only a banks. As Prof E S Philips, who won simplistic and short explanation will Nobel Prize in Economics in 2006, be provided to give the right context. wrote in Wall Street Journal (October The genesis of trouble was in the 6, 2008.) “Uncertainty over the quantity bubble in the US housing market which itself created by the banks and and valuation of banks' toxic assets The

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has meant that many cannot count on loans from each other to meet daily needs, and this has impaired their ability to tend. Banks that had excessively leveraged their capital through borrowing and other devices, the losses wiped out much of the capital, and their near insolvency has dampened their willingness to lend. These are immediate problems, how to restart the credit flow by removing toxic assets so that the confidence level among the banks is regained, is the crux of the bailout plan�.

There are, however, many more fundamental issues at stake which will need debate and policy measures based on the outcome of the debate. These issues are, can market be relied upon to bring itself back to a sustainable equilibrium? Or, if State intervention is required, what should be its nature so that the basic philosophy and working of market-

based capitalism is not unduly disturbed? Or, should there be at least a medium-term regression from the market-knows-best philosophy with its attended consequences for the role of the State and accompanying policy regime?

The second major issue is the attitude to risk-taking. Capitalism, in general, is structurally based on a certain kind of risk taking behaviour, because of its dependence on entrepreneurship as well as the relationship between risks and rewards. The higher the risk, the higher the reward, is the operating principle.

But in the risk and reward model practised on Wall Street, this relationship got flawed because those who were playing the game were not using their own money.

Further, beyond a limited point nor was their rewards system symmetrical i.e. they gain enormously if the deal works out, but hardly loses, if it does not. Such a system is bound to result in aggressive risk-taking leading to business models which, in the long run, are unsustainable because a bull run and economic prosperity cannot go on forever.

Third is the issue of greed.

Making money is important, so is profit maximization. Rational risk taking is conducive to growth. But what is seen in the current context is the predominance of greed in decision-making. Greater the greed higher the risk exposure. This brings us squarely to the issue of ethical behaviour. This goes much beyond corporate governance. This is to deal with one’s own ethical value system.

Going back to economic fundamentals, there has been a gradual de-coupling of the financial markets from the markets of the real world, i.e. goods and services. What will be its effect now? Prof. Philips has answered that question: “The end of the speculative fever and the credit crunch each have structural effects on the real prices of business assets, real wages, employment and unemployment. As I see it,

the former has pushed up the normal or 'natural' volume of structural employment. The latter (and the excess houses) is pushing the economy into a temporary slump. It will last as long as required for the banks' self-healing and Government therapy to pull us out of it."

Prof. Philips is not oblivious of the morality issue behind this meltdown.

"What has occurred is not just an old-fashioned banking crisis, but also a banking scandal. We must institute basic changes in corporate governance and in management practice to restore responsibility and honesty for the sake of the economy and for self respect of the country."

GLOBAL IMPACT The USA, even if it is a political

Compared to an average American, an average Indian has a strong savings propensity. The average savings/ income rate in India is around 30%, as compared to less than 5% in the US superpower, it is no longer so in the economic field. Its share in global GDP is consistently declining and is currently below 25 per cent.

However, Wall Street as the major financial centre will impact the entire world, especially because finance is the most globalised industry.

The financial contagion has already spread to Europe. At least five major banks have been taken over. Financial aid packages of $870 billion has been worked out. The IMF has reworked its estimate of loss — from $945 billion to more than $1.4 trillion.

The IMF has predicted that emerging developing countries, such as India which have so far not been much affected, may start feeling the

impact sooner than later. They "face challenges as global growth slows and the lagged pass-through of domestic inflationary pressures continues, all this against the backdrop of lower confidence and reversal of earlier flows into these markets" (IMF, Global Financial Report, October, 2008) IMPACT ON INDIA Even before the financial apocalypse was on the horizon, the Indian economy was faced with a major surge in inflation whose containment required policies which are bound to undermine growth.

One major showcased development has been, not very judiciously on hindsight, the vertical growth of the Indian stock market, partly fueled by FII inflows. The withdrawal of these funds, along with the restrictive monetary policies pursued by the RBI and the consequential regression from the double digit growth, has brought the stock market down. Nobody, as of now, is sure where the bottom is. From a height of 21000 plus for sensex a year back, a figure as low as 9000 is being mentioned. (It is already below 10,000).

The fall in the stock market has been across-the-board, though interest-sensitive sectors, such as real estate, have suffered more. The decline in the stock market and the fall in the external value of the Rupee are also closely linked. The FIIs took away about $10 billion which put pressures in the foreign exchange market by raising the demand for the US dollar. This resulted in the Rupee's exchange rate to USD to more than Rs 49: $1.

There is a positive side to this mayhem. International crude prices have started declining and are hovering around $70-80. With a massive slowdown in world growth rates, as well lack of speculative finance, the crude prices may fall further.

In line with crude, commodity prices are also expected to fall, especially those of minerals and metals. Since a fair part of India's The

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current inflationary pressure is imported, there will be a beneficial impact on prices.

The long-term affect is too early to contemplate. That will mostly depend on how the bailout packages will impact the market. The initial signs are not positive. The US plan of $700 billion has not prevented the market from sliding. A lot will depend on the co-ordinated functioning of major Governments, which seems to be working out at least in the EU. Consumer Behaviour in Desperate Times: Almost all agree that no change in the direction of economic indices are expected before the beginning of the second quarter of 2009. Effectively, firms have to plan for a fall, or at least stagnation, during the next 6-12 months. The question is, if immediate economic prospects are gloomy, how does a normal consumer react?

There is no standard answer to this in economic and marketing literature because there is no such thing as a normal consumer. The economic theory of a rational consumer is a theoretical construct and does not reflect reality. Each consumer is conditioned by socio-cultural factors specific to him, his mental frame, such as preference of current consumption over future consumption, risk-taking behaviour etc.

During recession, the firm should identify only those features which bring maximum value. Such standard models will improve the value proposition substantially. Nokia has done it quite well for rural markets in India Compared to an average American, an average Indian has a strong savings propensity. The average savings/income rate in India is around 30%, as compared to less than 5% in the US. Culturally, Indians have a strong saving habit to cater to contingencies and future needs, even if that attribute is less visible in the young professionals category. As a country, the share of savings that is put in the equity market is one of the lowest in India. Therefore, the wealth effect of a rising stock market is concentrated among a few.

Few generalizations based on economic literature can be made: People will prefer to go for more liquidity. This will mean that either cash will be held or invested in risk-free

Figure: 1

Market size and share B

A

C

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E

F

G

H

D

instruments such as FDs in banks.

FDs in India are not risk-free but most people are not aware of that.

If they want to maintain the same average savings/income rate, when income is declining, the amount available for consumption must fall.

This will mean an actual reduction in future purchase.

In reality, the average propensity may not be maintained, because some may decide to reduce savings to maintain a consumption level as close to the higher lever already achieved. Some may also go for a drawdown of the savings already made. (Friedman's Permanent Income Hypothesis) Most of such behaviour will depend on what types of consumption cuts they are considering. Children's educational expenditures cannot be reduced in the short run, but expenditures on travel, entertainments etc. can be curtailed with little pain.

Therefore, the impact of a general economic slowdown will affect different business sectors differently.

Goods and services which are more income elastic (eg demand for branded products) will be affected relatively more.

However, at the highest level (luxury goods and services) demand may remain relatively stable, because the buyer’s profile is such that short term economic fluctuations may not have much impact on their buying behaviour.

Strategic Options: Figure 1 shows the market demand of a specific product. The outer parameter represented by ABCD is the pre-melt down market while the EFGH is for the post meltdown period.

Suppose the market has four players with identical market shares.

Each player will then have one of the squares. The questions is: If the market size has declined because of macro economic parameters, what can an individual firm do?

Two options may be there: Try promotional strategies that

Figure: 2

Level of Integration 100

Rest of the World

0 Agriculture

Financial Services India

somehow will push the EFGH towards ABCD (i.e. increase the market size). This will essentially involve generic promotion.

Work out strategies which will alter the relative distribution of market shares among the competitors.

Most firms will be reluctant to go for the first option, for two reasons.

First, it may feel that it has very little market-influencing capability, when much stronger negative forces are in operation. Second, they will also think that in the unlikely event of their being successful, competitors will simply piggyback at no cost.

(The free rider issue in economics).

It is more likely that the firms will go for the second strategy. The usual response of firms in the face of a declining demand is to reduce price.

However, there is every chance that a competitor will do exactly the same, thereby nullifying any advantage to anyone (competitive price cutting). The total volume sold will remain same but at lower prices, total revenue being proportionally lower. (During the 1930s great depression, there was a parallel among nations when countries went for competitive depreciation by reducing values of their currencies.

This came to be known as beggarthy-neighbour policy and did not help any nation. Competitive price cutting may, however, help the firm

with the deepest pocket.)

If price reduction is not the best possible response, what else can be done? Some options are: In times like this, many potential buyers would adopt a 'value for money' attitude. This is especially valid for those who are not that badly affected to trade down but will ensure that they get the best quality they can get within their revised budgets.

LG, for example, has adopted this strategy for this year's festival season. It is not giving any special discount but is presenting a total brand image which strengthens its "Life is Good" positioning. The tripod of that positioning is trust, quality and customer care.

There is another way to look at value for money proposition at such times. One should revisit all features that the product has and critically evaluate whether all of these offer any value to the user. Quite often, it is found that in times of prosperity, newer and newer models with loaded features are introduced.

Invariably, all these have a cost.

During recession, the firm should identify only those key features which bring the maximum value, and remove others.

Such standard models will improve the value proposition substantially. Nokia has done it quite

well for rural markets in India, though it did not do this as a recessionary strategy. In fact, Nokia is a world leader in product differentiation in mobile telecommunication.

A related but a more sustainable long-term strategy is a variant of Prof. Prahalad's Bottom of the Pyramid strategy. A rising number of consumers all over the world, but more so in the emerging developing countries, is more concerned with functionality, how a product/service can improve their productivity. For example, Lenovo has developed a cheap customized PC for Chinese farmers to remain networked and now it plans to market it worldwide.

The final suggested strategy is to identify those market segments which are least likely to be affected by this recession. To identify the segments, consider the level of integration of India with the rest of the world. Higher the degree of integration, greater the impact.

As can be seen from Figure 2, sectors like agriculture is at the bottom level of integration. Therefore, the extent of recession that may be seen in the rural economy due to global financial turmoil will be minimal. Obviously, the people working in the financial services will be most adversely affected.

A change in strategy will, therefore, be required to go for more market penetration in the rural/semi-urban market to make up the loss in the metropolitan financial centres. Given the disparity in the average income levels in the two segments as well as needs profile, it will call for new product designs, pricing, promotional and distribution strategies. But once done, it will create a new sustainable market segment, so far not fully addressed.

It is obvious that these strategies are not mutually exclusive nor are these applicable equally to all firms.

But singly or jointly, these strategies deserve attention from marketers when the going is difficult.

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SAVE THE WORLD

I

n a free market, the community is not just another stakeholder in business but is the very purpose of the existence of business.

Every company, in order to ensure a sustainable business, has to combine the creative forces of entrepreneurship with needs of the disadvantaged, protection of the environment and safeguarding requirements of the future generation.

Whereas making profit and acquisition of wealth is the legitimate objective of business, in business, profit becomes the primary motive.

Sustainable business which integrates management of environment and conservation of resources including social development is a more cohesive and forceful approach and in which an enterprise’s Corporate Social Responsibility (CSR) is seen as a measure to enhance business sustainability.

It also meets two fundamental requirements of sustainable business — wise use of natural resources and protecting the quality of environment. It also fulfills the ethics of business by meeting the needs of the present without compromising the ability of the future generations to meet their own needs.

In the past few years, links between natural environment and economic development have been better understood and management of environment and natural resources have come to the forefront of all development and management planning in India.

This has been mainly due to a virtual explosion of global negotiations to formulate international environmental treaties. These have resulted in national environmental

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WANTED GREEN MANAGERS policies and rules of governance how would be needed. Management which have modified business prac- of environment and natural resources tices in many countries, including is expected to play a key role in susIndia. This has also brought into focus tainable business practices in future. opportunities and challenges in green This new culture of people-centered, growth- oriented goverbusiness. nance and management of The need for green environment and social managers has, therefore, programmes in business become imperative and practices have raised the compelling due to the need for new kind of manopportunities and chalagers (green managers) lenges in green business. who would be technologiAs the State withdraws cally savvy, managerially from direct economic deliveffective, environmentally eries, its role in protecting sensitive and underthe environment, the Barin Ganguli stand the value of poor and the vulnerastakeholder engageble, creating, nurturing Distinguished Professor ment. These managers and championing civil society and its manifestations like local should be well versed with the entire bodies, co-operatives, citizen's groups. gamut of environmental laws, Acts, The partnerships of such groups with statutes, regulations and environmenthe Government and business will tal activism governing business. They become increasingly important to pro- should also be conversant with scimote the Government's social devel- ence and technology as much as ecoopment and environmental agenda. nomic, environment, legal and goverMany private corporations in India nance issues within the global framehave integrated CSR in their business work to address climate change issue.

Green managers are also needed processes and are willing to be a partner in development and green agenda for a low carbon world. The International Emissions Trading of the country.

Tapping the resources of the pri- Association (IETA) has estimated that vate sector to augment public the value of the global carbon trading resources to promote these social and emissions market could reach $100 environmental agenda, including billion in 2008 which is likely to be 40 addressing climate change issues, will to 60 per cent more than the estimatbecome critical in the future. Resource ed $60-70 billion for 2007. The carscarcity will be pressing and clean bon markets, according to experts, is technology, stakeholder engagement likely to grow to $1 trillion and environment management know- within the next 5-7 years.

With successful negotiations among 190 countries at Bali in a post 2012 Kyoto Protocol scenario, carbon markets are expected to see exponential increase in trading. Businesses in India can gain competitive as well as economic benefits through Clean Development Mechanism (CDM) projects. The country can generate 248 million tonnes of carbon dioxide, equivalent of Certified Emission Reduction credit units (CERs), per year including 78 million tonnes from landuse and plantation projects. In monetary terms, assuming the least price of $10 per CER, India can make annually around $2,500 million.

Further, in a recent G-8 Summit in Japan in July 2008, the US has finally committed to reduce its atmospheric emissions to half by 2050. As a followup of the G-8 summit, the US Congress is now working on a $ 2 billion Clean Technology Fund (CTF) with a trigger mechanism to enrich the funds to $8 billion by contribution from other G-8 members. This fund is proposed to be administered by the World Bank.

Thus, the market for carbon will provide enormous business opportunities both during (up to 2012) and postKyoto period. A CDM National Strategy predicts that India could exploit 10-15 per cent of the global CDM market.

Growth of the global carbon market has, therefore, become an enormous business opportunity and will remain so in the near term as well as in the future. Whether one is engaged in a traditional product industry or in service industry like consulting, banking, tourism, recreation, communication, food, all the companies across the spectrum will have to face the climate change issues and deal with the consequences of not being aware of carbon footprints and their obligations to mitigate climate change.

Historically, companies have been of the view that

As Governments around the world enact policies designed to place a cost on emissions, particularly B-schools, have felt the need to educate and develop new world class green managers integrating environmental concerns will have a negative impact on their quarterly balance sheet. This perception has, however, changed considerably over the last few years and the industry now considers that the interest of investors and those of environmentalists is closely aligned.

Many businesses face higher costs in terms of raw material and energy as Governments around the world enact policies designed to place a cost on emissions. It is in this context that educational institutions and universities, particularly business schools, have felt the need to educate and develop new world class green managers who will be the business leaders of tomorrow.

The IILM Institute of Higher Education, under the dynamic leadership of Mr Anil Rai and Dr B Bhattacharya, took significant steps in this direction by asking the author to organize a half-day seminar on Carbon Trading and Prospects for Indian Inc. in January 2008 for PGP students. This seminar was addressed by well known resource persons from the consulting firm Ernst & Young, carbon brokerage firm Eco Securities and representatives from the Confederation of Indian Industries (CII). Further, a compulsory half credit course on Environment and Business has been introduced in the PGP programme. Hopefully, this will be developed into a full credit course

in the near future. A student-driven club SAVE (Students against Violation of Environment) has been established in the Institute to create awareness among students and faculty through various environment-oriented indoor and outdoor activities.

Business schools in India today cannot afford to neglect the importance of teaching environmental management strategies to future managers. Given that the skills required to mange today's business which aims at reaching sustainability goals (triple bottom lines viz: environmental, social and economic) including the carbon footprints, must seek to reorient its course curriculum rather than carry out an incremental marginal adjustment. The course should focus on how business can move beyond an approach that simply seeks to minimize environmental impacts to strategies that seek to proactively manage various environmental issues. Carbon markets have ensured that sound development business practices cannot only make sense from legal, moral and ethical perspectives but economic perspective also. Business schools must come forward and provide the curriculum and training that this opportunity has provided or face the competitive danger of falling behind.

The

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BANK ON THIS

PLUS RETAIL POINTS OF BANKING In the recent past, retail lending has turned out to be a key profit driver for banks. The overall impairment of the retail loan portfolio works out much lesser then the Gross NPA ratio for the entire loan portfolio

R

etail banking is a broad seg- Retail banking in India: Retail banking in India is not a ment. It refers to the dealing of commercial banks with individ- new phenomenon. It has always been ual customers, both on liabilities and prevalent in various forms. For the assets sides of the balance-sheet. last few years, it has become synonyFixed, current/savings accounts on mous with mainstream banking for many banks. the liabilities side; and The typical products mortgages, loans (eg, peroffered in the Indian retail sonal, housing, auto, and banking segment are houseducational) on the assets ing loans, consumption side, are the more imporloans for purchase of tant of the products durables, auto loans, credit offered by banks. Related cards and educational ancillary services include loans. The loans are marcredit cards or depository keted under attractive services. Today's retail Deepak Tandon brand names to differbanking sector is charentiate the products acterized by three Professor - Finance offered by different basic characteristics: Multiple products (deposits, credit banks. As the Report on Trend and cards, insurance, investments and Progress of India, 2003-04 has shown, the loan values of these retail securities); Multiple channels of distribution lending typically range between Rs (call centre, branch, Internet and 20000 to Rs 1 lakh. The loans are generally for duration of five to seven kiosk); and Multiple customer groups (con- years with housing loans granted for a sumer, small business, and corpo- longer duration of 15 years. Credit card is another rapidly growing subrate).

The

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segment of this product group.

In recent past, retail lending has become a key profit driver for banks with retail portfolio constituting 21.5 per cent of total outstanding advances as on March 2004. The overall impairment of the retail loan portfolio worked out much less then the Gross NPA ratio for the entire loan portfolio.

Within the retail segment, the housing loans had the least gross asset impairment. In fact, retailing make ample business sense in the banking sector.

Categorization of Retail Bank Services in India OBJECTIVES: (i) Save Money * Reduce Merchandising Fixture Maintenance Costs * Reduce Collateral Production Costs — Getting the right number of fixtures in the right place * Avoid Compliance Cost —Avoiding fines * Reduce Distribution Costs (ii) Make Money * Raise customer awareness of prod-

Categorization of Retail Bank Services in India Core Services

Facilitating Services

Supporting Services

Payment Service

● ● ● ● ● ●

● Making Payments at door step ● Internet Banking ● Telephone Banking

Current a/c & Savings a/c

● ATM Card ● Standing instructions from customers for making payments ● Inter branch/ Inter Bank transfer of funds ● Safety Vault

● ● ● ● ● ●

Credit cards Debit cards Services to senior citizen Telephone banking Internet banking Conversion of excess balance to time deposits

Loan products: Consumer loans Personal loans Housing loans Education loan

● Current a/c ● Savings a/c ● Time deposit a/c

● ● ● ● ● ●

Delivery of loan at promised time period Interest rate option Fixed/Floating Flexibility in pre-payment of loan Counseling on real estate markets Legal services for documentation ECS for payment of loan installments

Insurance Products: Life Insurance, Pension Schemes

● ● ● ●

● Additional insurance facility for family members ● Counseling on post retirement savings

Cash Foreign Currency requirements Travelers cheque DD/bankers cheque T.T EFT

Current a/c Savings a/c Time deposits Safety vaults

ucts and services * Insulate customers from competition * Increase cross-sales ratios * Increase products / customer * Target customer segments * Reinforce brand * Increase relationship sales success (iii) Save Time * Efficient Merchandising Maintenance * Automatic campaign documentation and instructions * Faster campaign launches * Efficient distribution * Lower campaign support requirements (iv) Save Labour * Reduce the time it takes for branch employee installations Retail business drivers in India: What has contributed to this retail growth?

First, economic prosperity and the consequent increase in purchasing power have given a fillip to a con-

sumer boom. Note that during the 10 years after 1992, India's economy grew at an average rate of 6.8 per cent and continues to grow at the almost the same rate - not many countries in the world match this performance.

Second, changing consumer demographics indicate vast potential for growth in consumption, both qualitatively and quantitatively. India is one of the countries having highest proportion (70%) of the population below 35 years (young population).

The BRIC report of Goldman-Sachs, which predicted a bright future for Brazil, Russia, India and China, mentioned Indian demographic advantage as an important factor.

Third, technological factors played a major role. Convenience banking in the form of debit cards, internet and phone-banking, anywhere and anytime banking has attracted many new customers into the banking field.

Technological innovations relating to increasing use of credit / debit cards,

ATMs, direct debits and phone banking has contributed to the growth of retail banking in India.

Fourth, the Treasury income of the banks, which had strengthened the bottom lines of banks for the past few years, has been on the decline during the last two years. In such a scenario, retail business provides a good vehicle of profit maximization. Considering the fact that retail's share in impaired assets is far lower than the overall bank loans and advances, retail loans have put comparatively less provisioning burden on banks apart from diversifying their income streams.

Fifth, decline in interest rates have also contributed to the growth of retail credit by generating the demand for such credit.

Opportunities and Challenges of Retail Banking in India: The rise of the Indian middle class is an important contributory factor in this regard. The percentage of middle to high income Indian households is expected to continue rising. The The

Edge 17

younger population not only wields increasing purchasing power, but as far as acquiring personal debt is concerned, they are more comfortable than previous generations.

Improving consumer purchasing power, coupled with more liberal attitudes to personal debt, is contributing to India's retail banking segment.

First, retention of customers is going to be a major challenge. Five per cent increase in customer retention can increase profitability by 35 per cent in banking business, 50 per cent in insurance and brokerage, and 125 per cent in the consumer credit card market. Thus, banks need to emphasise on retaining customers and increasing market share.

Second, rising indebtedness could turn out to be a cause for concern in the future. India's position, of course, is not comparable to that of the developed world where household debt as a proportion of disposable income is much higher. Such a scenario creates high uncertainty. Expressing concerns about the high growth witnessed in consumer credit segments, the Reserve Bank has, as a temporary measure, put in place risk containment measures and increased the risk weight from 100 per cent to 125 per cent in the case of consumer credit including personal loans and credit cards (Mid-term Review of Annual Policy, 2004-05).

Third, information technology poses both opportunities and challenges. Even with ATM machines and Internet Banking, many consumers still prefer the personal touch of their neighborhood branch bank.

Technology has made it possible to deliver services throughout the branch bank network, providing instant updates to checking accounts and rapid movement of money for stock transfers. However, this dependency on the network has brought IT departments additional responsibilities and challenges in managing, maintaining and optimizing the performance of retail banking networks.

Fourth, KYC Issues and money The

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laundering risks in retail banking is yet another important issue. Retail lending is often regarded as a low risk area for money laundering because of the perception of the sums involved.

However, competition for clients may also lead to KYC procedures being waived in the bid for new business.

Banks must also consider seriously the type of identification documents they will accept and other processes to be completed. The Reserve Bank has issued detailed guidelines on application of KYC norms in November 2004.

Types of Retail Banks: Commercial banks: The term used for a normal bank to distinguish it from an investment bank. Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.

Community Banks: Locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners Community development banks: Regulated banks that provide financial services and credit to underserved markets or populations.

Postal savings banks: Savings banks associated with national postal systems.

Private banks: Manage assets of high net worth individuals.

Offshore banks: Banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.

Savings bank: In Europe, savings banks take their roots in the 19th or 18th century. Their original objective was to provide easily accessible savings products to all strata. In some countries, savings banks were created on public initiative, while in others, socially committed individuals created foundations to put in place the necessary infrastructure.

Building societies banks: Conduct retail banking.

Ethical banks: Banks that priori-

tize the transparency of all operations and make only what they consider to be socially-responsible investments.

Islamic banks: Banks that transact according to Islamic principles.

Services offered by Retail Banks: Although the basic type of services offered by a bank depends upon the type of bank and the country, services provided usually include: Taking deposits from their customers and issuing current (UK) or checking (US) accounts and savings accounts to individuals and businesses Extending loans to individuals and businesses Cashing cheque Facilitating money transactions such as wire transfers and cashier's cheques Issuing credit cards, ATM cards and debit cards Storing valuables, particularly in a safe deposit box Cashing & distributing bank rolls Consumer & commercial financial advisory services Pension & retirement planning Growth of Indian Retail Banking: The annual growth in bank credit to the commercial sector is at 25.4% as on March 31, 2007 and was lower than 27.2% against previous year. Till 2010, retail banking is expected to grow at a CAGR of 28% to touch a figure of INR9, 700 billion. This requires expansion and diversification of retail product portfolio, better penetration and faster service mechanism. The banking industry worldwide has been showing steady progress since 2002.

Much of the growth in the worldwide banking industry can be attributed to the surge in the retail-banking sector in the Asia Pacific region and the countries of Latin America.

The banking industry in the economies of Brazil, Russia, India and China has been showing exemplary growth owing to improving economic condition, liberalization, changing consumer demographics and large segment of untapped population.

These countries are witnessing steep

growth in the uptake of retail loans, especially housing, car, education, credit cards and other personal loans.

In India, total asset size of the retail banking industry grew at 120% to reach a value of $66 billion in 2005.

This helped the growth of the overall banking sector. The retail banking industry in India is likely to reach a value of $300 billion by 2010.

Category-wise distribution of retail banking: Present scenario: Indian retail banking has been showing phenomenal growth In 2004-05, 42% of credit growth came from retail Over the last five years, CAGR has been over 35% Retail credit level crossed Rs189K Crore in 2004-05 Market has transformed into a 'buyer's market' from a 'seller's market' Comprises multiple products, channels of distribution and multiple customer groups EXEMPLARY PRODUCT: CREDIT CARD: A credit card is a system of payment named after the small plastic card issued to users of the system. In the case of credit cards, the issuer lends money to the consumer (or the user) to be paid later to the merchant.

It is different from a charge card which requires the balance to be paid in full, each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions, and are the same shape and size, as specified by the ISO 7810 standard.

How it works Credit cards are issued after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card.

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates his/her consent to pay, by signing a receipt with a record of the card

7%

CATEGORY WISE DISTRIBUTION OF RETAIL BANKING: Home

49%

Consumer Durables Auto

7%

28%

Other personal Loans

16%

details and indicating the amount to be paid or by entering a Personal identification Number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a 'Card/Cardholder Not Present' (CNP) transaction.

Electronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Other variations of verification systems are used by e-commerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder.

Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit Billing Act for details of the US regulations).

Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire

49%

28% 16%

amount owed. The credit provider charges interest on the amount owed (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding late payment altogether as long as the cardholder has sufficient funds.

Interest charges Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.

For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1 of the total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement.

Financial institutions refer to interest charged back to the original time of the transaction and up to the time a payment was made, if not in full, as RRFC or residual retail finance charge. Thus, after an amount has revolved and a payment has been made, the card user will still receive interest charges on his statement after paying the next statement in full.

The credit card may simply serve The

Edge 19

as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments.

Usually, this compartmentalization is the result of special incentive offers from the issuing bank, to encourage balance transfers from cards of other issuers.

In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card, or even if the issuing bank decides to raise its revenue.

Grace period: A credit card's grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 30 days depending on the type of credit card and the issuing bank. Some policies allow for reinstatement after certain conditions are met.

If a customer is late in paying the balance, finance charges will be calculated and the grace period does not apply. Finance charges incurred depend on the grace period and balance; with most credit cards there is no grace period if there is any outstanding balance from the previous billing cycle or statement (i.e. interest is applied on both the previous balance and new transactions). However, there are some credit cards that will only apply finance charge on the previous or old balance, excluding new transactions.

Benefits to customers: Because of intense competition in The

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If a customer is late in paying the balance, finance charges will be calculated and the grace period does not apply.

Finance charges incurred depend on the grace period and balance the credit card industry, credit card providers often offer incentives such as frequent flyer points, gift certificates, or cash back (typically up to 1 per cent based on total purchases) to try to attract customers to their programmes.

Low interest credit cards or even 0% interest credit cards are available.

The only downside to consumers is that the period of low interest credit cards is limited to a fixed term, usually between 6 and 12 months after which a higher rate is charged.

However, services are available which alert credit card holders when their low interest period is due to expire.

Most such services charge a monthly or annual fee.

Security: Credit card security relies on the physical security of the plastic card as well as the privacy of the credit card number. Therefore, whenever a person other than the card owner has access to the card or its number, security is potentially compromised.

Merchants often accept credit card numbers without additional verification for mail order purchases.

They, however, record the delivery address as a security measure to minimise fraudulent purchases.

Some merchants will accept a credit card number for in-store purchases, whereupon access to the number allows easy fraud, but many require the card itself to be present, and require a signature. Thus, a stolen card can be cancelled, and if this is done quickly, no fraud can take place in this way. For internet pur-

chases, there is sometimes the same level of security as for mail order, requiring only that the fraudster take care of collecting the goods, but often there are additional measures.

The main one is to require a security PIN with the card, which means the thief has access to the card and the PIN. EXAMPLE: Credit card offered by Standard Chartered Bank: The Standard Chartered Gold Card is more than just a credit card.

It's a key to the consumer to the best that life has to offer. Special deals at the customer’s favourite restaurants, privileged access to exclusive areas when he is traveling, worldwide acceptance... get used to Golden Life!

Unique features: Privilege access to Airport Lounges Global Acceptance Balance Transfer Option Revolving Facility Cash Advance Facility Teledraft Picture Card Photo card Zero Lost Card Liability Credit Free Period Cheque collection boxes Airline/Railway counters Instabuys Rewards plus Programme RECOMMENDATIONS FOR RETAIL BANKING Performance oriented leadership Sophisticated marketing Efficient distribution channels Process efficiency Superior credit policy Reaching out to masses Customer/differentiation Data mining/CRM based campaigns Products per customer/loyalty Low risk retail lending products Offer an array of products and financial advisory Cost effective expansion Renewed emphasis on superior execution by front-line employees Should start micro financing.

MARKET MANURE

Fertilizing alliances

F

ertilizer companies have a vast network in rural areas and with such a network, the question invariably is whether it can be exploited both for the benefit of the business as well as the farmer. If the system enables you to ensure optimal utilisation of its infrastructure, then it can be said that the network justifies itself, but if the utilisation is low, then there is a case for having a re-look at the existing infrastructure particularly in the rural sector.

India still lives in villages with 72 per cent of its population in 6,40,000 villages. But even today Indian agri-produce value chain’s growth rate is very low. The fertilizer sector could have worked towards unlocking the potential of agricultural sector and, thus, improving

the quality of work life for a large huge untapped potential lies there, part of the agrarian community as as the rural consumer is fast morwell as give opportunities to the phing to the needs, wants, desires business sector to penetrate rural and aspirations discovered by the urban man. markets. In rural areas, Introduction distribution costs are very Agriculture in India high as compared to perwas historically viewed as centage of costs of goods a traditional occupation, sold. The fertilizer induscatering to the needs of try can assume a new self-consumption rather role of inputs supplier than a commercial activiand collaborating with ty. Later, with the eversuitable partners for optiincreasing population, misation of distribution there was sharp rise network. The chalDr. Anjali Malik in demand for foodlenge that the Indian grains in the latter business is facing is to Associate Professor-Marketing half of the 20th centuarrive at a model, which can provide more disposable ry, which finally led to the ‘Green The revolution incomes to the farmer. This paper Revolution’. explores the possibility of increased the agricultural output to solving this seem- 199 million tonnes in 1996-97. ing paradox Today, farming is becoming more by revamp- commercialised and there’s a growing the exist- ing awareness about the need for ing system. A improved high-yielding varieties

The

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and efficient management of inputs such as water, nutrition and management of pests.

But the indiscriminate use of irrigation water and fertilizers, and lack of infrastructure and marketing facilities has still resulted in lower per unit realisation on produced, sold and huge post harvest losses for those who are practising it. The large segment of the population is still on subsistence agriculture.

Though the profitability of the agriculture sector has improved over the years, it is still very low on the global barometer. Also, if we compare it with other sectors, figures show that the Indian economy recorded an average growth of 5.5 per cent and 7.6 per cent during 9th and 10th five-year plans, but the growth in the agriculture sector was only at a low level of 2 to 2.3 per cent. Also, the foodgrain production in 1996-97 had touched 199 million tonnes but it dropped subsequently and, for a few years, it stagnated at around 193-194 million tonnes but in 2006-07 we produced 217 million tonnes.

As our population has a high growth rate, we have been compelled to import foodgrains to meet consumption needs. Statistics highlight that the area under agriculture is shrinking every year and irrigation resources are also becoming scarcer (Table 1).

Hence, pursuing agriculture for a common farmer in India is not profitable. This fact is also highlighted in the findings of the study conducted by the National Sample Survey Organisation (NSSO), which surveyed 51,770 farm households, out of which 40 per cent said that they would quit farming given a choice.

There is also the other side of the story. Though there has been no significant growth in the agriculture sector, research says that the overall affluence of the rural market has increased over the years. This has been contributed by multiple facThe

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Table 1:

Area, Production and Yield of Foodgrains Along with Percentage Coverage under Irrigation in India (1950-1951 to 2007-2008) Year 1950-51 1970-71 1980-81 1990-91 1996-97 1997-98 1998-99 1999-00 2000-01 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08*

Area (Million Hectare) 97.32 124.32 126.67 127.84 123.58 123.85 125.17 123.10 121.05 113.86 123.45 120.08 121.60 123.71 124.44

Production (Million Tonne) 50.82 108.42 129.59 176.39 199.44 192.26 203.61 209.80 196.81 174.77 213.19 198.36 208.60 217.28 230.67

Yield (Kg. /Hectare) 522 872 1023 1380 1614 1552 1627 1704 1626 1535 1727 1652 1715 1756 1854

% Coverage under Irrigation 18.1 24.1 29.7 35.1 40.0 40.8 42.4 43.9 43.4 42.8 42.2 44.2 45.5 NA NA

Source: www.indiastat.com

tors, like the increase in agricultural output to 200 million tonnes along with increasing awareness about crop-diversification that has led to production of more commercial crops which result in increased realisation for the farmer. Also, a lot of people belonging to the second generation are getting white-collar jobs in nearby towns. So, the overall household income is not only from agriculture but also from wages or salaries. Hence, there is a growing middle class with a monthly income in rural India which is a drastic change from the past where their income was totally dependent on the monsoon and the cropping season.

The importance of the Indian rural market is growing with affluence. According to an NCAER survey, rural India has a large consuming class with 41 per cent of middleclass and 58 per cent of total disposable income and it also shows that in the last 10 years, the income of rural India has grown severalfold. There is a shift from middle to upper-middle class and from the

lower to middle-class segments. But despite the high rural share in these categories, rural penetration rates are low, offering tremendous potential for growth.

Rural marketing has become the latest marketing mantra of most companies doing business in India.

With extensive competition not only from MNCs but also from the numerous regional players and the lure of an untapped market has driven the marketers to chalk out bold new strategies for targeting the rural consumer in a big way. Thus, it is clear that rural India with its plethora of opportunities is a hot future target for companies. Many of the companies are already busy formulating their rural marketing strategies to tap the potential before competition catches up. At the same time, with poor roads and scattered rural habitats, ensuring availability of the product or service to rural India is the biggest challenge that the companies will face. This is the reason why rural distribution has become an important marketing function.

Characteristics of rural distribution A strong distribution channel in rural areas is a prerequisite for making a dent in its market. Rural penetration went up from 13 per cent in 2001 to 25 per cent in 2003.

To ensure availability in rural areas, there has to be a tradeoff between the cost of distribution and incremental penetration.

Challenges due to low per capita income are compounded by the need to maintain low operating costs in a country where formal sales and distribution networks are largely non-existent and difficult to obtain without substantial capital or local guidance. Unlike developed markets where large retail distribution chains are commonplace, India is, by and large, a nation of small shopkeepers, kirana. This poses a tremendous challenge to consumer goods companies, which have traditionally used large retailers as their primary channel of distribution.

Retail chains have not flourished in the rural areas of India because economies of scale do not exist.

Rural consumers live in small homes with little storage space, lack refrigeration and do not own cars.

As a result, daily purchases at the neighbourhood store are frequently preferred by consumers and may be the only avenue to buy goods in smaller rural towns. While independent retailers are a fragmented group, they have a substantial amount of power in driving consumer purchases, particularly in rural areas. The consumer interacts directly with the retail salesperson (usually the owner) and services often include informal lines of credit and home delivery in addition to personal opinions on goods. In rural areas, retailers tend to carry only a single brand in a product category.

In such a retailing environment, being first on the shelf and developing a privileged relationship with the retailer is extremely important and a competitive advantage to consumer goods companies.

Fertilizer companies should seek to forge alliances in possible areas and utilise its vast distribution network for the benefit of farmers as well as improve and strengthen the fertilizer sector To compete successfully with incumbents, new consumer goods companies are forced to build an extensive distribution network to reach India’s rural population. This distribution network relies first, on gaining shelf space in the small independently owned stores that drive the majority of retail sales, and then on establishing a relationship with wholesalers and distributors to further expand the distribution network.

The direct sales force and working capital costs notwithstanding, some companies have succeeded in building a distribution network, and in doing so, created a substantial barrier to entry. HLL says: “700 million Indians may live in rural areas but finding them is not easy.” CocoCola considers rural India as a future growth driver and is working on its distribution model for the rural areas Other foreign companies have overcome the sales and distribution obstacles by entering into joint ventures with local partners. This was an important motivation behind Procter & Gamble’s decision to collaborate with the Godrej group in the early 1990s. Procter & Gamble was able to immediately tap into a well-established sales and distribution network rather than spending time and money to do it alone. ITC is planning to expand its commercially viable distribution system throughout rural India as they hope

to become Walmart of India. ITC is developing a huge network in rural India through it's e-Choupal project.

The company will be launching financial and FMCG products through the choupals on revenue sharing basis. The farmers are also using the e-Choupal to order seed, fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders; the sanchalak typically aggregates the village demand for these products and transmits the order to an ITC representative. In mid-2003, eChoupal services reached more than one million farmers in nearly 11,000 villages, and the system is expanding rapidly. ITC gains additional benefits from using this network as a distribution channel for its products (and those of its partners) and a source of innovation for new products. For example, farmers can buy seeds, fertilizer, and some consumer goods at the ITC processing centre, when they bring in their foodgrains. The system is also a channel for soil testing services and educational efforts to help farmers improve crop quality.

Fertilizer distribution network These examples make one thing clear: Distributing products and services in rural markets is a major challenge for companies vying for a share in rural India. Companies are seeking collaborations for achieving access to rural markets. The fertilizer industry is one of the oldest industries which is in constant association with this rural population. Fertilizers being the most crucial input for foodgrain production has been directly controlled by the Government. Marketing of fertilizers in India has been a subject to Government control. It was only in 1990-91 that the movement of phosphatic and potassic fertilizers was decontrolled but urea still remains under movement control, partially.

The Government has put price The

Edge 23

and distribution controls on selling the fertilizers; hence, the industry realises very thin margins.

Fertilizers in India are marketed by several organisations in collaboration with each other. These include manufacturing companies, co-operative societies, agro-industry corporations, private traders, service centres. The fertilizer industry has a very extensive rural distribution network in India (Table 2).

Through this network, fertilizer reaches even the remotest areas of India. The distribution network that was set up for ensuring equitable distribution of fertilizers in all parts of the country at fair prices in India is a real success story, which has taken India from a position of food importing country to a self-sufficient nation. But now, even the fertilizer industry has started facing problems in terms of raw material availability and an alarming rise in the size of subsidy bill which would force the Government to reduce the level of subsidies. Because of these reasons, the industry is not attracting fresh investment.

Conclusion The fertilizer sector has a strong presence in rural areas with its vast distribution network. The industry needs to focus on new strategies to

do business. It needs to work more closely with the rural sector, helping in creating awareness among the farmers for applying recommended dosages of fertilizers according to the crop grown and also diversifying agriculture for more value addition. To sum up, the need of the hour is to practice precision farming, adoption of integrated plant nutrient system, selective mechanisation diversification, and farmer’s participation in R&D, dissemination of improved agro-technologies and higher investment, which would help enhance the disposable income of rural people.

Fertilizer companies should seek to forge alliances in possible areas and utilise its vast distribution network for the benefit of farmers as well as improve and strengthen the fertilizer sector.

The focus should also be on developing symbiotic relationships so that pooling of resources generates benefits for both partners.

There is huge potential and definitely there is lot of money in rural India but the smart thing would be to weigh in the roadblocks as carefully as possible.

Ultimately, the winner would be the one with resources like time and money and also with the

Table 2

Number of Fertilizer Sale Points in India As on

31-3-67 31-3-69 31-3-71 31-3-77 31-3-79 31-3-84 31-3-90 31-3-96 31-3-00 31-3-04

Cooperative and Other Institutional Agencies (No.)

Percent Share to Total

48031 * 36505 * 30670 * 33404 46224 55279 80040 75093 73933 63995

55 38 40 40 38 35 29 26 23

(As on 31.03.1967 to 31.03.2004) Private Percent Total no.

(Number) share to of sale total points NA 30071 # 50790 # 49916 69293 90538 151130 184158 205360 218473

45 62 60 60 62 65 71 74 77

NA 66576 * 81460 * 83320 115517 145817 231170 259251 279293 282468

Source: Fertilizer Statistics, 2003-04, the Fertilizers Association of India.

The

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much-needed innovative ideas to tap the rural markets. Identifying suitable opportunities for collaboration after complete understanding of the structure of industries would be advantageous. The fertilizer industry has cherished a long association with farmers and they have a better understanding of the needs of the rural consumers as well as their buying behaviour. Besides, the fertilizer sector has a vast distribution network which it can leverage to provide marketing support to farmers produce as well as access of rural markets to marketers. Based on superior managerial and technical skills, this sector can unlock value at different points on value chain; from the farm gate to the food plate.

Fertilizer companies can also use CRM as the new orientation to do business in rural India.

Fertilizer companies can build customer transaction databases and also use it for cross-selling of new services and products. It will also provide managers with the opportunity to identify cross-selling opportunities and exploit them for their benefit. This strategy would improve profitability of the fertilizer and agriculture sectors.

For example, IFFCO-Tokyo General Insurance (ITGI), a company in which IFFCO has a 74 per cent share, is offering Barish Bima Yojana (Weather Insurance) to farmers. The product was launched keeping in mind the dependence on monsoon with nearly 70 per cent of India’s cultivable land still being rain fed.

This product sought insurance against losses arising out of adverse weather conditions. The fertilizer sector has a long association with agriculture and should focus on building a database of loyal customers (farmers), which would be the next generation strategy to do business in the rural sector.

LOYALTY QUOTIENT

THE

BRAND BUILD-UP H

ow important is branding? quality associated and nostalgia.

This is a question often When this bond breaks, the brand asked by marketers and cus- fails.

However, this may not always be tomers alike. When you start connecting to a specific colour, symbol, the fault of the company, but may be tagline or a benefit because of the because of reasons beyond the conproduct or service, a brand is said trol of the company, like recession, to have arrived. Today, people con- product hitting a decline, or technonect Maggi with the colour yellow logical advances beyond the company's scope. Also, what and an instant solution happens in a lot of situafor hunger; they connect tions is that the brand Coke with the colour red becomes too old without and that it's a thirst undergoing any transforquencher. Remember the mations, like in the case taglines: "Mummy, bhook of kushboodar antiseptic lagi hai. Bas do minute" cream Boroline. With betand the oh! so famous ter technologies and “Thanda Matlab�. packaging, products hit As a nation, India is retail shelves and the gradually becoming Monica Mor market witnesses brand conscious and loyalty switches by is seeking quality with Assistant Professor customers. an increased ability to Then there is the case of getpay a premium for the brand.

According to Asia Pacific's 'Top ting the branding right but busi1000 Brands Survey', ICICI is the ness wrong, like in the case of top brand in banks and the credit Global Trust Bank. Post liberalisacard segment. Kingfisher and Taj tion, there was a 200 milliontopped in airlines and hotel seg- strong middle-class consumer ments, respectively. The second segment in India awaiting new most admired brands are SBI, Jet banking options. As they were and Oberoi in their respective seg- unhappy with the poor services ments.Clearly, the top two positions and product options provided by in these three sectors have been public sector banks, private sector banks were given a new playtaken up by Indian brands.

Now why would you want to be field. In this melee, Ramesh Gelli associated with a brand? Well, due created a private bank – the to emotional attachment, status, Global Trust Bank.

The bank had the right brand with aggressive marketing campaigns which capitalised extensively on the owner's personality. Gelli, a banking genius, managed to establish his bank & its brand name, in a short span.

On its first day, the bank in Secunderabad secured deposits of Rs 100 crore, a record in the history of Indian banking. But, with a poor business model, the bank soon went into red and was taken over by the Oriental Bank of Commerce.

Gelli was forbidden from participating in any banking activity.

So, "is branding the domain of companies with deep pockets?"

New players have the biggest drawback of shallow pockets while they might have to spend two to four times the market leader to achieve the same level of brand recognition & recall. Given the huge difference in business volumes, the pressure is much higher. Typically, strong brands do account for more stable business. They need lower levels of incremental investment to sustain them over time.

If we look into brand building exercises undertaken by Nestle & Wipro in India, we will see a bias for long range planning. There are companies that have taken advantage of distinct offerings in their products and have swept the market from under the industry leader's The

Edge 25

feet, that too from a company that had a tremendous first mover advantage, as in the case of Titan having captured the market share of HMT in the watch segment. Since then, Titan has used its umbrella brand name to a huge advantage and come out with successful product extensions like Tanishq jewellery.

To firms, brands represent valuable pieces of intellectual property that can influence consumer behavior. For consumers, brands are their windows to the quality of their product, service and reputation, all of which can be established with brand association. A casual survey of people who connect to certain brands would show how loyalty is exhibited in very few categories like cigarettes, tea and mobile services. Competition is huge but the brand stands out in its category due to factors like pricing, taste, customer care services and even historical connection with the masses. It doesn't have much to do with the country of origin.

Are any of these brands memorable? Probably. They have been here for decades, except for the mobile service provider. You would realise that brand names that are short or monikers of longer names tend to stay in memory for longer time. There are also names that are likable.

Ask someone who buys Armani.

He would continue to do so and also be willing to pay an obscene price for it. You go to Kuala Lumpur and a big hoarding of Colonel Sanders representing 'Kentucky Fried Chicken', stares down at you; in Shanghai it almost feels like Vegas; in India too we see less and less of saris and more western outfits by Arrow or Allen Solly being preferred by working women.

Brands have crossed borders and are firmly entrenched in some cultures, which, just a few years The

26 Edge

back, were closed to the concept of globalisation. The famous golden arch of McDonalds would be visible in over 119 countries with over 31,000 restaurants. People connect with the brand, especially children who love MacD's mascot, Ronald Macdonald. Here's a brand that hasn't failed and has been globally embraced to such an extent that Thomas Friedman in his book Lexus and the Olive Tree propounded the golden arches theory of conflict prevention. According to this theory — the power of MacDonald's is such that no two coun-

A brand is more than just a comfort level. It is a multifaceted, tangible and an enduring commercial advantage for any business, however large or small tries that have the golden arch in their nation will go to war with each other. After a lot of research, even in the erstwhile USSR states it was found to be true.

However, since 2002 about three wars have taken place between countries where MacDonald's has its franchises. Nevertheless, this is an ample reflection of how brand names, colours and logo can have an international implication. Here,

MacD was not just a symbol of burgers and obesity but also international harmony!

So, where does the answer lie for a successful brand? Foremost, a proper understanding of market segments is required. Just because children and teenagers are increasingly becoming more brand conscious, companies don't have to target them. There are much better segments with deeper pockets that can be tapped.

In India, luxury brands are big, especially in Delhi. Boasting of maximum billionaires in India, it isn't surprising that the venue for couture fashion week and launch of the Roberto Cavalli brand is Delhi. These luxury brands are the ones to look out for, especially by those interested in the fashion industry and retail. Brands like Gucci, which has a high recall and is also the most coveted luxury brand in India, already has two outlets, one in Delhi and the other in Mumbai.

Gucci is trying to walk the tight rope between exclusivity & being ubiquitous.

On the other hand, like never before in India, it is also the time to look at the value-business segment which requires keeping the cost low enough to meet customers' low price expectation profitably while spending enough to build a differentiated brand. Marketers need to spot trends in such segment. If a customer is price sensitive then pursuing everyday low pricing would be a good idea, and the Future Group has done a good job with its KB Fair Price shops and Big Bazaar outlets. In conclusion, a brand is more than just a warm comfortable feeling which is very expensive to create. It is without debate a multifaceted, tangible and enduring commercial advantage for any business. It's difficult to be a flyby-night operator in this era of heightened competition.

COURIER WOES

I

n a popular Hindi movie, a postman in his official costume riding a bicycle sings a melodious daakia daak laya as a pretty village belle prances around with a letter from her beau.

Well, time has frozen on this celluloid scene. Daakia still brings the letters, but not from the Indian Postal Department. Indigenous courier services all over the country have metamorphosed the entire postal system. Parcels, letters and documents are entrusted to these private agencies that are more dependable, fast and what is most important is that they are accountable — a packet can be tracked easily in case it doesn’t reach its destination within the stipulated 24 hours. With on-line services provided by the recognized ones, a sender can check the status of his packet by sitting in his office with just a click of a mouse.

Everything comes for a price, of course. But, as the economy booms, and time is considered more pre-

Blue Dart has established a cious than a few rupees, people do brand image over the years as a not hesitate in spending that leading domestic courier company in extra buck for improved service. India. Combined with the internaApart from speed and the conve- tional brand value of DHL, their nience of tracking, courier services alliance is today perceived as a forprovide security and individualiza- midable one in the courier industry in the country. Moreover, tion of services, and comthis being a non-regulatmitted delivery times. As ed industry, DHL-Blue a premium service, use of Dart has potential to couriers is usually remain a market leader restricted to packages well into the future, where one or more of though there is some these features are considcompetition from equally ered important enough to well known courier serwarrant the cost. vices like Fed-ex.

The world’s largest However, it leads a very courier companies are Sujit Sengupta volatile market, depenAramex, DHL, FedEx, Area Head- Marketing dent on the changing TNT NV and UPS, offereconomic scenario of a ing services worldwide, developing country like India, and via a hub and spoke model.

Typically, when it comes to send- is also slave to the draconian ing important documents overseas, bureaucratic set-up and the possiinternational courier services are bility of Government regulations indispensable. In India, DHL is a being introduced in the future with global leader and operates under a a change in the political situation.

As is the trend in today’s technolsales alliance with South Asian firm Blue Dart Express Ltd. Blue Dart out- ogy-driven world to constantly lets all over the country are autho- upgrade one’s services with technorized to collect and dispatch over- logical developments, DHL-Blue Dart seas-bound DHL shipments, against has been providing value-added services like online booking and payDHL airway bills.

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ments, E-tracking, mobile-alerts and the like to retain its customer base. In a fast-moving business like the courier industry, adaptability to changing trends is the key to survival, and the DHL-Blue Dart combo has been surviving in India as a market leader for six years and Blue Dart on its own for the last quarter of a century.

However, our protagonist Sourav Ganguly, a college-student in Calcutta, had a not-so-pleasant experience with Blue Dart recently.

A fourth year architecture student, took over the charge of producing the first journal of the architecture department of his college along with his team in the beginning of this year. He also has a flair for writing, hence, has been made Editor of this journal.

The journal has been published and hugely appreciated by his professors. Now, hundred copies are to be despatched to collaborating foreign universities and overseas patrons, many of which constitute the alumni of his college. The college would have opted for the cheaper Government air-mail when sending out copies abroad, but Sourav succeeded in convincing his college authorities to go in for DHL, which is five times more expensive than Government mail.

A lot was at stake for Sourav — the journal was not only his labour of love, he and his team had to raise fund to get extra copies printed since the college granted limited resources for this exercise. He planned to reach out to overseas student alumni and well known architects through this first effort of his department and create his own network which he knew was essential to start a career in any field. Besides, DHL was a faster and more reliable option.

Sourav also wanted to be able to keep a track of the shipments. His college agreed with his proposal but with the pre-condition that only four shipments be sent out to begin with.

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28 Edge

Accordingly, Sourav booked shipments to Brisbane, Connecticut, London and Edinburgh from Kolkata on July 28 for Rs 5,000. He was asked to retain the airway-bills for reference. The agent manning the outlet informed him that the airwaybill numbers was sufficient to track the status of the shipments.

Things went smoothly this far.

But he wasn’t so lucky hereafter. For the next four days, he tried to trace the movement of his shipments on the DHL website by using the airway-bill numbers, but the website said, “unable to track shipment”. On the fifth day, a disgusted Sourav sent an email to DHL customer-care, quoting the airway-bill numbers, asking for the status of his shipments. Promptly, a DHL customercare executive responded with another email: “We request you to please provide us with the pick-up date.” Sourav was willing to oblige, but the airway-bills were not at hand and he was not sure if the shipments were booked on the 28th or the 29th. He wrote back to customercare, requesting him to check against both the dates.

The executive responded on July 4: “We thank you for writing to us.

Please confirm the exact booking date and the outlet from where the shipment was booked.” By then, Sourav knew the exact date of booking and wrote: “Exact date: July 28, exact outlet: Architecture College Campus, Kolkata.”

He received a response the next day: “Please note that we are unable to locate the shipments. We would request you to please get in touch with your booking counter to check

further. Thank you for your understanding.”

At that time, Sourav had joined an architectural firm for his internship and was out of station. So checking with the counter was not possible. He was seething and replied: “Thank you very much for your failed effort to track the consignments. In spite of providing you with all possible details, the best you can suggest is to go to the counter personally and enquire. The quality of your services leaves much to be desired. Government air-mail seems to be a better option as it is much cheaper, and I will definitely consider it when sending out an overseas consignment next time around. In the meanwhile, I suggest you shut down your online tracking system, which seems to be a dummy programmed to return ‘unable to track shipment’ every time you press the track button.”

This could have been the end of the story. But on August 18, three weeks after the couriers were despatched, and two weeks after Sourav’s last mail to the Blue Dart employee, DHL wrote back: “This is to inform you that we have received information from Blue Dart that the airway bills were franchise booking and as per concerned person of franchise the shipments did not travel on these airway bill numbers. Please hold as we are further checking whether the same was forwarded on new numbers or did not travel at all. We will keep you updated with further information.”

The next day Sourav received the last communication from DHL: “Please note we have checked with Blue Dart and the franchise confirmed that the shipment was not forwarded on the given airway bill from their end. Hence there are no updates for the shipment. Kindly check at your end whether these

shipments were forwarded on different airway bill numbers. Also note, we have closed the file, in case you need to re-open file please do so with further instructions.”

Though Sourav was not interested, he could not resist sending them a piece of his mind: “Thanks for keeping the so called “File” open for so long, though I wonder what good it has served, apart from doing more rounds between Blue Dart and DHL than a pensioner’s file does in the State Revenue Department. As far as I am concerned, I am done dealing with DHL in the future.” Next, Sourav was reprimanded by his college authorities for misguiding them in the matter of funds.

As it turned out finally, the consignments did reach their destinations, as was communicated by the recipients individually. But the entire online support and customer service set-up of DHL-Blue Dart was a futile exercise.

What is wrong in DHL-Blue Dart’s services and customer handling?

Services are a people intensive industry. The first few moments of customer interaction with the service provider creates a perception in their mind on how good or bad the service is. An analysis of the turn of events presents several factors.

At the very beginning Sourav was told that the airway bills were sufficient for future reference and for tracking online, but when contacted, the first thing the executive asked were other details before finally telling him that they were unable to track the shipments themselves.

This smacks of negligence, laziness and lack of sensitivity in dealing with a customer.

Why tell Sourav about DHL’s internal system?

A customer is not concerned at all whether the service provider operates through a franchisee. It doesn’t help him any way. This shows that DHL is trying to give excuses, as if it is not actually a fault of theirs, diluting its brand value.

“Kindly check at your end only” shows that they are neither apologetic, nor responsible on their part.

The closing mail from the executive shows Blue Dart’s extreme high handedness. Is the service provider doing any favour to the customer by responding to his queries while charging him a large amount for the service which it has failed to provide? The statement: “Also note that we have closed the file,” is not only unnecessary, it adds to the agony of the customer

Services are a people intensive industry. The first few moments of customer interaction with the service provider creates a perception in their mind on how good or bad the service is who is already harassed by the deficiency of service.

Customer care failed to give any concrete information about the successful delivery of the shipment.

They should have taken more effort from their own side instead of asking the customer to go and find out from the outlet himself.

Given the fact that the service provider has been unable to confirm the delivery due to whatever technical glitch, a polite apology is not only a desirable response from the executive, it is a must. An ideal response should have been: “Thanking Sourav for bringing up this lapse to their attention, accepting the fault as their own, and apologizing for the same, with the assurance that such will never happen again and urging Sourav to remain a DHL customer.”

Refunding the courier charges

paid and possibly offering a discount of 20 percent for the next five shipments are, means to convert dissatisfaction to satisfaction.

Challenges for Blue Dart: The strategy that DHL-Blue Dart is following is not customerfocussed. The management should focus on customer interaction and customer-relationships by working on two major components of service quality: Responsiveness and Responsibility.

For good customer interaction, proper customer contact training should be provided to the employees. The front office should be well trained and efficient enough to handle non-anticipated customer problems and demands. They should also undergo training sessions on how to deal with customers in an empathizing manner.

There should be proper horizontal communication. Free flow of communication between various functional boundaries like sales, operations, support, etc, so that shipment records are not lost.

Cost-effectiveness: Charging five times more than competitors, they still lose track of shipments. The competitive advantage should be perceptible.

The shipment tracking needs to be made real time. If it is to be promoted as a distinctive feature of the service provider, more focus should be given to this service even by the franchisee.

The challenges that differentiate goods and service marketing are in variability when it comes to specifications and delivery. As it is difficult to make the service delivery process uniform across different locations of the same organization, standardization and quality control are of utmost importance, especially with franchisees. After all, the brand name of the company is at stake, and like Juliet tells Romeo in Shakespeare’s classic, DHL-Blue Dart cannot say, ‘What’s in a name!’

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Edge 29

BEATING THE TIMES

MARKETING IN THE TIME OF INFLATION W

ith a double digit inflation, be felt in almost all traded items, the Indian market is facing more or less. In an inflationary envia crisis, after a decade. The ronment, businesses must work for inflation has risen from 5 per cent in not only to stay afloat but to gain December 2006 to over 12 per cent. some extra points with respect to their competitors. These What does this mean to times can bring certain cutan 'always under presting edge advantages in a sure marketer' of India competitive and inflationInc? Well, it may not be so ary environment. For one, bad for him. Several busiminimising inventory (as nesses can actually beneadvocated by management fit from such inflationary books) may not be a good trends. idea. On the contrary, an Studies indicate that increase in inventory may items where brand does be a good idea. Too not carry weight (like Vijesh Jain much inventory with motor fuels, mineral wrong categories may water, fruits, vegetaAssistant Professor be a risky bet though. bles, groceries) are more susceptible to inflation than If there is certain amount of certainty those products where customer's of rising prices, businesses will do choice weighs heavily on the brand a well to increase their inventory to product carry. However, ripples of their capacities and may profit from the effect of double digit inflation can rising prices.

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30 Edge

As traders, price increases may be coupled with the sharing of costs with the manufacturers who may be constrained to raise prices while their competitors are not following suit. This may lead to little extra profits too to compensate for the falling demand for the trader. However, this will entirely depend on the situation of your kind of business and bargaining power with the suppliers.

Focusing on private labels for retailers will be a great leap forward to maintain profit margins while offering affordability to customers.

This will also keep certain pressure on 'national brands' to keep prices in check due to reduced demand.

Private label consumption will ensure increased base of future loyal consumers of private labels who are forced to try your labels and may be satisfied with the performance of your product.

So for Pantaloons, focusing on John Miller instead of John Player may be a good bet.

Cutting overheads is traditional advice given by management consultant in the inflationary times.

However, is it true about the sales and advertising budget? Not really.

Reducing overheads on wastage may be a good idea but reducing budgets

on growth activities like sales and promotion is certainly not. These activities bring future sales and new customers. Buying more advertising space may be a good idea in most cases since the return on the marketing spend is likely to be high. It is also so because studies have shown that the return on marketing spends depend not only on the quantum but also on the gap with respect to the advertising spends of the competitors.

In fact, this may be a good time to capture the greater market share with respect to the competitors. This situation may also provide an opportunity to consolidate market share of your product with respect to the 'market leader', who may be reeling under the cost cutting phase including that of the advertising budget. In fact, this consolidation may drag on even after inflationary pressures are over. Several manufacturers of different products aspiring to enter their own retail stores may find these times most opportune this way.

Focus on the value-based product range may turn out to be a great customer poaching exercise.

Additionally, retailers can actually cut prices on certain products 'here and there' to get the increased footfalls to entice consumers to other profitable items.

For example, Big Bazaar can actually extend its Wednesday (sabse sasta din) even to other days of the

Watch your competitors closely. This may be the best time to look for and exploit the desperate and wrong moves by your competitors as it will go a long way in pushing through your products

week with some intuitive counter strategies. In case of retailers, focus of promotion may be shifted to such product range where prices have not actually increased too much, like in the electronic items, appliances and some of the branded clothing. Even real estate businesses have a great opportunity to offer attractive prices of smaller dwelling in new locations.

Automakers will do well to focus on the entry-level fuel-efficient models.

For retailers, cutting product prices 'here and there' as explained above, the most challenging part of this strategy is to find, what items and at what price levels the gains can be optimized.

Retailers with several outlets will do well to test the price levels and items of choice by doing different levels of pricing for diverse products in different outlets at different locations to find out the advantageous benefit to price ratio to finalize the milieu. It may not be easy though for some retailers lest they lose their market image. However, it can be tried to some levels by all retailers.

Watch competitors. This may be the best time to look for desperate moves by them, to push through your product. For example, some gel pen manufacturers in India have stopped supply of refills of the fast selling higher priced models of pens popular with schoolchildren.

The reason: They want to keep profits intact in dwindling demand, by forcing children to buy new pens instead of refills.

This may be the best times for competing brands and competing models to push through their products coupled with easy availability of refills, for example.

Value-based manufacturers having retail aspirations can never have a better time to promote their brands. One good example of this is the fact that several Panipat-based value manufacturers of home furnishings have recently increased their investment in pushing through The

Edge 31

their own private brands. For example, 'SAKK' from Panipat has opened 27 nationwide outlets (in a span of just 6 months) for its branded home furnishing range available at big discounts with respect to established brands of similar products. It seems to be doing well with additional franchise enquiries pouring in from all over the country. This company is offering a flat 50% discount on all its products competing with established brands.

Repositioning products may be a good idea for some businesses. Big car models like Tata Safari may be offered at deep discount to a different set of customers who might not have dreamt of buying one. A marketer may be able to convince customers that discounts are offered in bad times to boost sales and this may be construed as good times for that dream large car for value buyers.

The same process may be under way in Gurgaon where some realtors are offering never heard property prices in some locations. This repositioning may be achieved through resizing and/or repacking products.

Local buying may be a good idea for transport sensitive items normally procured from far-flung sources.

One good example is that of vegetables sold in Delhi, many of which are now being procured from suddenly awaken local producers, who are getting good value in the wake of soaring fuel prices and dwindling supplies from traditional sources. In many daily use items, traders will do well to identify local sources even at a slight premium.

One of the most important strategies in the inflationary environment would be to look afresh at the buying behaviour of the customer. He is likely to be different than in normal times. Demand shifts across categories would be obvious. Spend some money in new customer research. It will benefit in short to medium term.

One of the important objectives of The

32 Edge

such market research should be to identify new price points (or pain points) around which depend the purchase decisions of masses.

Businesses will do well to redefine their target segments around these price points. Recently, very big realtors, active in Gurgaon, looked for premium segments to sell their residential units, which in recent times seems to be vanishing. This situation has caused these builders to find new price points (obviously lower) at which they are forced to build

Repositioning products may be a good idea.

Big car models like Tata Safari may be offered at a discount to a different set of customers who might not have dreamt of buying one dwellings may be in far off emerging sectors of the millennium city.

A lot of redefinition of marketing strategies may be required. Apart from redefining the segmenting, targeting and positioning as explained above, even customer value may be redefined. One way of achieving this may require resizing the product to match new price points. An example would be resizing of the cola cans to match new price points of around Rs 15 against the present Rs 25, lest los-

ing all of the market of cola cans to old drawn glass bottles. Businesses will do well if they innovate in products or downsize the packing around the critical price levels.

Unbundling the pricing offers another opportunity to businesses in these inflationary times. Make price breakups of the products/offers and give different price options to the customer. It may be a good idea to offer varying warranty periods on certain items like air-conditioners, automobiles and electronics, and offering differential pricing with several add-ons.

For example, an automaker will do well to unbundle product prices with different post sales services which may be made optional as also the several features of the product which it carry.

Many small businesses, however, may have to leave the ground and leave the biggies to play around with their marketing strategies in these times.

Survival of these small businesses hinges mainly on the innovative thinking, discipline and exclusivity of their offerings. Joining hands with biggies and letting them share your profits (or losses) may be a way to survive, but it may not work in all cases.

However, speed and flexibility of businesses are also the keys to survive. These attributes makes it easy for businesses to achieve benefits from most of the above mentioned marketing strategies. In fact, very big firms which can not attain such speed, find it difficult to absorb the inflationary damage. Building confidence with vendors and customer can also make things easier for a marketer in these times.

Finally, the joke doing the rounds is that it may be a good idea to contact an Argentinean entrepreneur above the age 40. He may be a good advisor for your business to guide you to sail through super inflationary times.

STRAIGHT TALK Major companies are shifting to BTL marketing which means targeting the customer directly through product promotionals, sponsorships and road shows

HITTING BELOW THE

LINE

M

ost companies today have a who could create the better brand or customer orientation (called the lowest price or the most hype. customer focus).

This Marketing in the future will be based implies that the company focuses its on a more strategic approach to activities and products on customer competitive marketing success. needs. Consumer wants are the dri- Marketers will consciously build and vers of all strategic marketing deci- allocate resources, relationships, offerings and business sions. No strategy is purmodels that other compasued until it passes the nies find hard to match. test of consumer With growing competiresearch. Every aspect tion in the marketplace, of a market offering, firms are engaged in a conincluding the nature of stant search for better the product itself, is driways of communicating the ven by the needs of various features of their potential consumers. products and of marketing The starting point is them effectively. With always the consumer.

Anil Vashisht media proliferation, Marketing in the Assistant Professor firms have found tradipast focused mainly on tional marketing and basic concepts like the 4 Ps and the psychological and socio- communication methods wanting in logical aspects of marketing. terms of their return on investment.

Other factors like more educated Competitive advantage was created by directly appealing to the needs, and demanding customers, shorter wants and behaviour of customers product life cycles and growing combetter than the competition. petition have also added to the probSuccessful marketing was based on lems facing firms. Intent on acquir-

ing new customers while retaining the old, firms turned to branding.

Previously, the effectiveness of traditional forms of communication and marketing were adequate in brand building. An increasing number of firms producing similar products led to an enormous growth in advertising. Consumers were subjected to a constant barrage of advertisements.

As a result, they have become more skeptical and developed a mental block towards traditional communication and marketing.

In today's competitive marketplace every marketing activity has assumed strategic importance. With major international brands now entering into the Indian market evade, the development of "Below the Line" activities has started gathering a feverish pace.

Below-the-line is defined as datadriven, quantifiable programmes that include areas like database marketing, direct mail, e-mail marketing, interactive services, affinity marketThe

Edge 33

ing and its new family member: insert media.

The question today is why are dollars moving below the line? The answer lies in the post-Internetboom transformation of the marketing executive's role to one of an operational title, as well as the agency dynamics.

The customer is always right, and if you can’t talk with your customer in a way that is highly targeted and based on his/her selfexpressed interests, then you are missing the boat.

The shift in marketing spend from mass media branding efforts to targeted, direct response marketing, including interactive marketing, is happening faster than some might expect.

The buzz today is 360-degree communication. "BTL marketing services — including consumer and trade promotions and direct marketing — are increasing their role in marketing strategies and budgets of leading corporations, both in developed and emerging markets.

At the same time, this sector is much less consolidated and structured in contrast to traditional media advertising (like TV and press).

That's why leading media groups are looking for acquisition targets in emerging markets".

Marketing efforts tend to be divided into "above the line" spending on mainstream media advertising and "below the line" strategies involving direct contact with potential customers. As consumers have changed radically over the past decade, one of the side effects of the increasing use of very sophisticated 'below-the line' direct marketing is to encourage consumers to change their buying behavior.

Above The Line (ATL) and Below The Line (BTL) marketing services represent two different sides of a marketer's brand awareness and customer targeting strategy. The ATL is synonymous with mass marketing, The

34 Edge

The question is why are dollars moving below the line? The answer lies in the postInternet-boom transformation of the marketing executive's role to one of an operational title, as well as the agency dynamics

big splash advertising, whereas BTL is data driven, highly measurable and focused on customer acquisition and retention programmes.

Simply stated, above-the-line marketing that utilizes generic messages to build awareness is no longer the best way to influence customer behaviour. On the other hand, below-the-line initiatives are more successful because they stress target-

ed and customer-centric communications. Below-the-line also creates measurable results and ROI metrics, which are important to marketers under growing pressure to prove the value of their campaigns.

According to findings, the shift from ATL to BTL spending is, in part, the result of changing consumer attitudes; more sophisticated consumers demand relevant messaging that engages them in a dialog, and which allows them to interact with the marketer through their preferred communication channels. At the same time, technology allows marketers to better target consumers, and to better track results and measure ROI of BTL campaigns, so, agency clients and marketers' bosses are demanding such accountability.

One way marketers are trying to reach consumers is with multi-channel marketing. Many marketers find multi-channel campaigns are more effective, and improve the performance of all channels.

This has been borne out in data from the Internet Advertising Bureau that found overall sales can improve by anywhere from 7 to 34 percent, depending on channel, when multiple BTL marketing programs are used in concert.

By co-ordinating a direct mail drop date with in-statement ads and email, a marketer can expose consumers to the same message in multiple media. More marketers seem to be picking up on this. Another sign interactive is maturing is the change from a single budget line for interac-

The pictorial below describes the ATL/BTL Landscape Above the line activities

Outdoor/ Billboards

TV

Radio

MARKETERS Below the line activities

Email

Direct

Promotional Mail

Events Flyers

Affinity Marketing

tive to separate lines for search, lead-generation, email, and retention activities.

Above-the-line marketing channels are those striving to reach mass audiences with messages that reinforce brands, communicate general product information or inspire emotional response. This includes print and broadcast advertising, as well as outdoor advertising and yellow pages. BTL marketing is made up of targeted, direct marketing efforts with convenient response mechanisms and that are easy to measure.

Examples include database marketing, direct mail, interactive marketing, insert media and promotional marketing.

Below-the-line marketing can be described as affordable yet efficient.

Various target groups can be reached with inexpensive ways of marketing. Several leverage effects (i.e. viral marketing) increase the effectiveness of the campaigns.

Below-the-line marketing activities, are geared towards marketing a specific product or service and normally use a predefined profile to directly target potential customers.

Factors for BTL click: Changing consumer demographics decreases the influence of traditional mass media marketing messages.

Growing consumer sophistication heightens the demand for channel communications.

Widespread marketing "clutter" diminishes the impact of commercial messages that don't address specific and individually relevant consumer needs.

Enhanced information availability empowers both marketers and consumers with insight that allows for precise customer targeting and intelligent purchase decisions.

Heightened client pressure to deliver quantifiable value forces marketing service providers, especially agencies, to re-evaluate services platforms.

Rapid technological advances

Above-the-line marketing channels strive to reach mass audiences with messages that reinforce brands, communicate product information or inspire an emotional response.

This includes print and broadcast advertising

allow for consumer/marketer interactions that are frequent, easier and more relevant than previously possible.

Below-the-line initiatives are more successful because they stress targeted and customer-centric communications. They also create measurable results and ROI metrics, which are important to marketers under growing pressure to prove the value of their campaigns.

Then and Now If you take the classical model for consumer buying behaviour, there are four steps: Awareness, Interest, Desire and Action. In the past, when consumers were less aware, when product choices were limited and media was not fragmented, it was easier for the mass media to take a consumer all the way to the actual action of buying.

When we look back at the late 80s, India had not yet opened up its economy and consumers had few choices. If you were a new brand trying to launch, you would simply place your TV spots on Mahabharat, Hindi films and Chitrahaar. If you had a good product with a story to tell, and had money to spend on good TV advertising, you would be home.

Today, consumers have become more sophisticated in controlling their access to messages from all channels. This is enabled by mechanisms such as e-mail filters, the federal do-not-call-list and digital video recorders. At the same time, technology advances such as faster Internet connections, variable digital printing and advanced search engine algorithms make consumer/marketer interactions easier, faster and more relevant.

Consumers today are savvier in terms of advertising messages and tend to respond more to offerings that are based on their own interests. Through analytics and database marketing, BTL programmes are designed to pinpoint a marketer's customer profile, and then use that data to drive highly targeted and measurable campaigns. BTL marketing services' primary value is that dollars spent are measurable.

Experts account two main reasons for the shift towards below the line activities. The first is that consumer attitudes have been changing.

Instead of settling for generic, onesided messages that aim to convey a message to a large, anonymous, and uniform audience, consumers have become more demanding. They insist on responding better to messages that are more engaging and personal, that allow for two-way communication and interaction with the marketer through preferred communication avenues. Advances in technology have allowed marketers to target consumers and track results with more accuracy and efficiency.

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Corporate Examples Most educational institutes like Career Launcher, Time and PT, hold informative workshops and free tests for students which give a direct interaction of these institutes with the target customer, and hence, a suitable platform to sell themselves.

Ring-tones and music videos on cellphones are helping the entertainment industry promote a music video or a movie for dirt-cheap rate as compared to media promotion.

Various companies sponsor sport events to promote their brands, but nowadays media companies like Hindustan Times are holding weekly events throughout the country in which companies can put up their stalls, display banners and posters and arrange for some fun activities.

These events give the companies a platform at very low price to promote their brand and increase visibility among target consumers.

These companies also give discount coupons to winners in the games, which in turn boost the sales of the products and ensure that first-time users try these products as well.

Pepsi organized an inter-school cricket event for 425 schools across 14 cities which did wonders for the company by promoting the brand among the right target customer for almost no cost. Most pharmacy companies do BTL promotion by getting shelf-space through doctors to display their products or by giving away free calcium tablets again through doctors, knowing that for a patient a personal advise from a doctor would hold more value as compared to a commercial advertisement.

Another interesting BTL promotion was by Nike; an athlete dressed up in Nike sportswear could be seen jogging on an elevated treadmill for the whole day on National Highway 8, New Delhi.

BTL promotions are gaining popularity among all big companies nowadays considering their effectiveness because of the "individual The

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Jindal Photos, which markets Fujifilm products in India, is revamping its strategy to focus on below-theline marketing. Its MD, R B Pal, says Jindal Photo will spend Rs 200m on ads and promotion this fiscal

customer promotion" at a price, which is much lesser than the normal media promotions.

New below-the-line campaign by Virgin Atlantic Virgin Atlantic is starting a new campaign to target premium travellers, in its competition game with BA. It will invest 50m to relaunch it Upper Class Suite. The campaign will be run through direct mailing as well as through email marketing, brochures and a microsite.

Jindal Photo to focus on Below-theline marketing Jindal Photo Films Ltd., engaged in the marketing of Fujifilm products in India, is revamping its marketing strategy to focus more on below-theline marketing programmes.

According to R B Pal, Managing

Director, Jindal Photo plans to spend about Rs 200m on advertising and promotion in fiscal.

Hindustan Lever A Hindustan Lever spokesperson agreed that the company was putting more emphasis on direct consumer contact than ever before. "There is a far greater emphasis on a 360degree communication strategy, which involves a lot of ground-level branding," he admitted.

Conclusion The future of BTL activities seems promising and this is evident from the different researches done on this topic and with big giants continuing to aim at BTL activities to penetrate the market and beat competitors.

Most big brands are following the suit of BTL promotion because of rising prices of media-based promotion, advertising clutter and increased impulse purchasing.

Unlike conventional advertising, BTL promotions give consumers a first-hand experience of products and services through road shows, events and product samplings.

Above the green line campaigns are important for brand lift and generating millions of impressions and audience reach. However, mass marketing dollars are shifting to micro marketing areas due to a marketer's need to increase customer targeting based on segmentation and preferences, and to show quantifiable results based on metrics and return on investment. ATL marketing services tend to be very difficult to measure versus below the line programs.

Marketing campaigns are moving away from using mass media branding through generic and broad messages and going towards utilizing more direct response marketing methods. BTL uses direct mail, insert media etc to create specific marketing campaigns that offer consumers the ability to easily respond while allowing marketers to track the success of the efforts with little difficulty.

TRUE SCREEN

REALITY Reality shows have caught up in India not only because they break the monotony of the soap dish but also because they are interactive

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elevision is more imitative and derivative than ever before in India. With so many channels on air, the television industry in India has been forced to examine what it does, what its audience prefers and how it can sustain their interest in such competitive times.

In order to cope with the times, reality shows have become a key-word for survival of the Indian channels. In the past when finished formats such as sitcoms and soaps were in need of pulling the TRPs, the ideal recipe would consist of creation of a peak by introducing cameo or guest appearance into sitcoms, or events such as character weddings or murders. However, it had become too predictable a formula to sustain audience interest for a longer duration of time.

Over a period of time, new formats emerged to keep the audience

SHOWS ON THESHELF

loyal to a show, the most prominent musical band. The band of girls format being of a reality show. It called Viva that emerged from this had all the elements of adventure, show enjoyed short-lived popularity novelty and surprise and,above all, but marked the beginning of reality shows in India. The trend was folthe element of reality. lowed by Antakshari on Reality shows have Zee TV and Sa Re Ga Ma so far been considered Pa, a music-based reality to be the most domishow, in 1995. But reality nant form of 21st censhows arrived truly in tury television. The India when Amitabh advent of reality shows Bachchan put the ordinary can be traced back to Indian on the hot seat in the 40s with television Kaun Banega Crorepati. shows like the Allen Star Plus, the channel that Funt's Candid Camera DEEPA KUMARI aired KBC, got pushed to which captured reacthe No. 1 slot, with an tions of the masses to Assistant Professor audience of 22 million humorous pranks. With the passage of time, shows with people, when the show was first audience put in real life situations aired in 2001, surging to over 61 became increasingly popular and million viewers in 2005 when the experimentation within the same second season was launched.

As the nation’s appetite for senformat became the key reason for sational living grew, so did the viewthe success of a reality show.

Reality shows in India date back ership — from 2, 98,369 minutes to Channel V's talent hunt for a across all channels in 2005 to 3, The

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93,702 minutes in 2006; a number that any channel, advertiser or marketer cannot afford to lose sight of.

MARKETING REALITY SHOWS: ADAPTED AND INDIAN FORMATS Reality shows come in a variety of formats. They can include a celebrity or a game show, or an adventure show.

The concept of a reality show has evolved over the years and varies from one continent to another. In America and Europe, reality shows emerged in the early forties, while in India, the concept is still in its nascent stages. For instance, there have been shows like Khulja Sim Sim on Star Plus, which is a remake of an American show. In an another instance, when the production house Freemantle entered India for launching Indian Idol on Sony Television, an adaptation of the famous reality show American Idol, it too thought of working on a proven format.

American Idol which had set a record in all countries registered historical ratings in India as well. The first season of Indian Idol was launched on October 28, 2004. The first episode of Indian Idol debuted with a rating of 5.8 growing each week. Indian Idol had grown Sony

Entertainment Television's primetime viewership by 9 per cent and expanded the general entertainment category viewership by 7 %.

In the core target audience of 15-34 year olds, women & men, SEC ABC (C&S), Indian Idol increased prime time viewership of Sony by 16 per cent. The grand finale of Indian Idol, first season, achieved a rating of 14.29 (Hindi speaking markets C&S 4+), according to TAM data. The grand finale was watched by 15.4 million viewers in India, which had set a new record for Sony. A grand total of 55 million votes were cast for the Indian Idol finale eventually.

Reality show formats have been adapted to suit tastes of the Indian audience.

A case in point

is the Indian format of the reality show Antakshari.

Its success has proved that India has the potential to create its own formats too.

REALITY SHOWS: REASONS FOR THEIR SUCCESS IN INDIA Television channels in India have exploited the potential of reality shows and seen a surge in popularity. KBC raised Star Plus to No. 1 position, which it currently enjoys. Similarly, Sony's popularity saw a rise after it launched Indian Idol.

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Reality shows, break the monotony to create interesting scripts and out-of-the-box ideas that make them stand out from fiction based shows.

Reality shows usually translate the experience of real people in an actual and unscripted environment, allowing the audience to keep guessing the outcome of every episode. Though, producers of these reality shows preserve some aura of the real, they also ensure that the show is entertaining and dramatic enough to keep the audience engaged throughout.

People who participate in reality shows are another reason for success. Contestants in these shows are ordinary people with whom the audience immediately identifies.

Also, the contestants are provided with the right platform to showcase their talent. A chef from Chamba managed to reach the final round in Zee TV's Sa Re Ga Ma Pa. In Star One's Lakme Fashion House, 16 aspiring fashion designers strived to create a design to win an assignment with Donatella from the House of Versace — a lifetime opportunity for any beginner.

Other than watching real people in real situations, voting off mechanism has become a major attraction. Voting off mechanism, also called “popular elimination”, is the mega engine of reality formats; it became the central ingredient of The Weakest Link, another reality show.

In Shooting People, Brenton and Cohen (2003) relate how the voting-off engine originated.

Devisor of the Survive! Concept, Charley Parsons had experienced difficulty convincing network executives of the benefits of spending large amounts of money developing his idea of a desert island survivor game show.

During a brainstorming meeting

in the US, the idea of linking challenges to a process of contestant votes emerged (Brenton and Cohen 2003, 47-48).

Voting off also allows TV stations to maximize advertising revenue; viewers are kept waiting until the end of the show, or between shows, to find out who is voted off and who stays.

One reason these programmes attract and retain viewers is that they attract a large number of

Reality shows are getting popular in India as they break the monotony of saas-bahu serials to create interesting scripts and out-of-thebox ideas that make them stand out from fiction based shows viewers: the size of the audience itself is an attraction.

REALITY SHOWS: FROM AN ADVERTISER'S PERSPECTIVE Reality shows have done much to deepen the symbiotic relationship between advertising and entertainment. Most product placements in television has occurred in reality shows, where featured products support rather than jeopardize the realism of the piece. This works well for the advertiser as well as the producer because it normalizes and to this extent ratifies the product. The subtlety of the insertion is also meant to diffuse viewer resistance to commercial messages.

This renders product placement more overt and more active than in most other programming: overt because inevitably foregrounded and active because it becomes an indispensable part of the narrative.

Product placements within television programmes are a popular way for advertisers to reach out to the audience, who increasingly zap commercial breaks.

Product placements within reality shows particularly draw advertisers, since these shows have high viewership ratings which are achieved in short time. In the

last week of August 2007, Zee’s Sa Re Ga Ma Pa Challenge notched up a rating of 8.73 representing the percentage of viewers in Hindi speaking markets.

Reality shows are strong on audience interaction and participation, leading to high brand recall with the viewers.

In comparison to the entertainment fictional shows like Kyunkii Saas Bhi Kabhi Bahu Thhi, reality shows are more focused on youth. They cater to the 18-25 age group. This makes them attractive to brands that want to be associated with young audience. Advertisers tune into these shows for branded content and in-film brand placements, thereby reaching out to the wide set of young audience.

For instance, contestants on Star TV's Amul Star Voice of India rehearsed on their Nokia phones.

L'Oreal Paris sponsored the makeover for Indian Idol contestants, while Scooty Pep from TVS Motor Co. featured prominently in one of the episodes of Indian Idol.

In an another instance, Radio Mirchi 98.3 FM got contestants to The

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play radio jockeys on Sahara One's Biggest Loser Jeetega.

MTV's Hero Honda Roadies saw contestants ride the latest bikes from Honda Motors. The show also tied up with brands like Wrigley India Pvt. Ltd, Fastrack watches L'Oreal Paris and Castrol Motor Oil. Similarly, Channel V's Launch Pad had placement tieups with Hard Rock CafĂŠ, which hosted the performances. It also had placement deals with Bajaj Pulsar DTS-I, Hindustan Coca Cola Beverage Pvt. Ltd and Nokia.

Not surprisingly, consumer product and auto companies as also mobile service providers sometimes pay 80-100% premium for reality ad time over usual commercial rates. A 10-second airtime for reality shows on Star Plus commands Rs 1.7-1.8 lakh, while a fictional show like Kyunkii costs Rs 1.5 lakh for 10 seconds. Product placements are hence also high-priced within reality shows, though rates vary with each tie-up.

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Integration opportunities in a reality show are immense. A product like a Nokia cell phone or a service can be well integrated into the show. The product can seamlessly be a part of the visual imagery The format also lends itself very well to 'Call to Action' advertising. Hence, it serves as a great platform for telephone companies or mobile service providers, who could get viewers to call or message in their support for the contestants. For example, mobile service provider Airtel tied up with Indian Idol and KBC for SMSbased voting.

Integration opportunities in a reality show are immense. A product like a Nokia cell phone or

a service can be well integrated into the show. The products or services can seamlessly be a part of the visual imagery or be combined with the participants' or judges' natural setting.

Parallel viewing is considerably less in reality shows as the format is uncannily unpredictable. Also, every episode has a definite conclusion to that day's occurrences. Hence, many viewers would watch nearly the entire episode. The final episode for MTV's Hero Honda Roadies scored a high viewership packed with immense drama.

Reality shows draw not just urban, but also rural viewership.

These shows see more recruits and participants from small towns and cities, and hence have become quite popular in these areas. With over 300 channels available today and 200 more set to join the bandwagon, the audience is spoilt for choice. So, it makes sense for products and services to partner a show popular all over India.

However, reality shows do not always spell success for an advertiser or a filmmaker. The grand finale of the first season Indian Idol on had a massive television rating of 14.29. In contrast, the grand finale of Fame Gurukul, another reality show, managed a rating of just 8.21. Star One's Lakme Fashion House got ratings of under 1. Reality shows have a low shelf life as they are seasonal in nature. Once the show is off air, the channel may not get the loyal audience in consecutive seasons.

This makes the whole business of reality shows very unpredictable.

Reality shows have already proved their success on small screen. They have now moved beyond television to Radio and the Internet. However, their success on these two mediums still needs to be assessed.

SAFETY FIRST

THE GREAT

INSURANCE MIX

Insurance companies like Tata AIG and Max New York Life have tremendous potential in a country like India where only a fraction of the 1 billion population is insured

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decentralization and delegation of he history of life insurance in authority. Implementation across India dates back to 1818 the wide gamut of sectors was a when it was conceived as a huge challenge. But the Government means to provide for English widtook the innumerable challenges ows. head on and liberalized policies, From there to now, this industry deregulated industries, privatized has seen a plethora of changes and PSUs, as also set up committees to developments, some for the better, bring the economy at par with some not. The impact of the Government reforms was Ms. Monica Mor Ms. Sufia A. Khan developed nations.

The journey of this sector reflected in greater spread Asst Prof Marketing Asst Prof Marketing from private entities (245 in and deepening of insurance in India, which also resulted in restruc- year for the global economy when number by 1956 — 154 Indian turing and revitalizing of public sec- the Indian economy was opened for insurers, 16 non Indian insurers, & global players to become a part of a 75 provident societies) to nationaltor companies.

While talking in detail about the long running successful soap opera, ization (with 1 company having private players in this industry, the the year which marked the awaken- monopoly in life insurance — LIC); a importance of innovative products, ing of a gigantic economy from big player in general insurance General Insurance Corporation and aggressive distribution and smart slumber.

With a billion strong population, its 4 subsidiaries ( National marketing would not be ignored. If one studies the present financial pic- deregulated industries and rising Insurance Company Limited, New ture, it would show almost all com- per capita income levels, the Indian India Assurance Company Limited, Insurance Company panies in the red, registering losses economy brought with it bagful of Oriental running into crores. The future, goodies for companies, where the Limited & United India Insurance interestingly, looks bright! consumer truly became the king and Company Limited), and back to priCompanies are aware of the long wanted more — in sync with an vate sector has been quite eventful. gestation period associated with this advertisement punch line yeh dil One huge factor playing on this more.

The then industry is the fact that of the 1 bilbusiness and are, thus, looking at maange growth, even inclusive to touch the Government under Prime Minister lion population we have, only 35 grassroots of India and prove their PV Narasimha Rao, together with million are covered by insurance. then Finance Minister Manmohan India also has one of the lowest saliency to the consumers.

The year 1991 was a threshold Singh, propelled India on a path of insurance per capita rankings in the The

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world. Change, therefore, has always been imperative to not only bring about betterment in procedures and practices but also to bring about attitudinal change among corporates and customers. The insurance sector was opened up for private participation with the enactment of the Insurance Regulatory and Development Authority Act, 1999. The Government did permit foreign participation through FDIs and formation of joint venture partnerships, but restricted it to 26% of the paid-up equity of the insurance company.

This article is going to focus on the 4 Ps of two interesting players in this sector — Tata AIG and Max New York Life.

THE COMPANIES Tata AIG Life Insurance Company Limited and Tata AIG General Insurance Company Limited (collectively Tata AIG) are joint ventures of the Tata Group from India and the American International Group Inc. from US. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance. Max New York Life is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's premiere multi-business corporations. Max New York Life (to be referred to as MNL) came into existence in 2000 and started operations in 2001.

THE PRODUCTS General Insurance companies have approximately 150 products and offer coverage for

The

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General Insurance companies have around 150 products and offer coverage for everything from bullock carts to satellites everything from bullock carts to satellites. TATA AIG's basket of products fall under broad categories: Trade credit insurance, Casualty insurance, Marine cargo insurance, Property insurance, Fire insurance, Motor vehicle insurance, Personal accident insurance, Shop insurance, Educational institute insurance, Travel insurance, and of course Health insurance.

Covered equipment can include, Gas and steam turbines Engines, pumps & compressors Electric motors, generators and transformers Switchboards and other electrical apparatus Refrigeration and air conditioning equipment

Computers / servers / printers Steam boilers / pressure vessels TATA AIG ventured into pension funds and health insurance as a part of general insurance business. They also have a huge business in the Group insurance for company employees (a part of Life insurance known as COLI - Corporate Life Insurance for the employees).

MNL currently offers a broad portfolio of 43 products and 8 riders that can be customized to over 800 combinations .These products can be further classified as given below.

These are: INDIVIDUAL INSURANCE GROUP INSURANCE HEALTH INSURANCE OTHERS Protection Savings Unit Linked Children Retirement My Options Group term life Group gratuity Employee deposit linked insurance

Unit-linked group superannuation Credit Shield Life Line-wellness and wellness plus plans Life Line Medicash, Medicash Plus Lifeline-safety Net Plans Rural bank assurance MNL launched 13 new products in 2007-2008 and made its debut in the health insurance sector in February 2008 with its Lifeline range of products.

PRICING Most insurance products are priced competitively. For life insurance, everything depends on the age of the insured, term of policy, type of policy, underwriting and, of course, the company from which the policy is being bought. If, for example, you wish to buy a Tata AIG general insurance cover for protection of your home, you have a choice of buying the policy which could be from the following packages with varying annual premiums depending upon various items covered: Value (Rs 1,50,000), Select (Rs 200000), Classic (Rs 2,50,000), Plus (Rs 2,75,000), Excel (Rs 3,25,000), or Premier (Rs 3,75,000).

DISTRIBUTION Tata AIG General has initiated many web-based policy administration systems to help facilitate its business operation and customer service. They have a comprehensive website as far as reaching out to customers is concerned, who can then be in touch with their respective advisors or agents through Internet. They have tied up with banks for assurance. Then there are effervescent advisors who will service you at your doorstep from presales to premium reminders and everything that comes with the policy. To reach out to its customers in rural areas, TATA AIG has vans which move from door-to-door with agents who create direct relations with prospective and existing cus-

For rural business, MNL has designed a Hub and Spoke Model for Distribution. The company plans to invest heavily in the distribution channel tomers. The vans are painted with company slogans and logo.

Max New York Life has identified individual agents as its primary channel of distribution. It has 36,500 advisor agents. The company operates through 233 offices across India and has its presence in 157 cities.

Apart from the agency distribution model, the company is spearheading a major thrust into additional distribution channels to further its business. The company is using a five-pronged strategy to pursue alternative channels of distribution. These include the franchisee model, rural business, direct sales force involving group insurance and telemarketing opportunities, bank assurance and corporate alliances.

The company also strengthened its partnership distribution channel by signing 4 corporate agency relationships, 5 broking house tie-ups and 8 referral tie-ups with banks.

For the rural business, MNL has designed a Hub and Spoke Model for distribution. The company plans to invest heavily into the distribution channel by opening more than 100 new offices every year for the next 3-4 years. During the same time span, the number of agent advisors is expected to grow to 2,00,000 from the current 36,500.

PROMOTION TATA AIG tries to do extensive promotion via direct marketing which has been the traditional form of promotion for all insurance companies. They encourage their advi-

sors to sell policies by giving them a certain percentage as commission.

Apart from that, they have a few commercials that can be seen on TV. Their tagline is "Life inspires us to think ahead, which is why our insurance solutions are one step ahead. TATA AIG Life — a new look at life." This is one of the very popular life insurance ads on TV. Then again, the company also put up kiosks in oft-frequented shopping complexes to reach out to its potential customers.

MNL is aware that the Indian insurance market requires intensive promotion. The company promotional mix relies heavily on mass media advertising & trade promotions. However, keeping in mind the increasing awareness levels of the customer and a need for providing customer focus, MNL is also focusing on public relations as a potent promotional tool.

MNL has recently changed its punchline from museebatein kabhi bataa kar nahin aati hain to karo zyaada ka irada. Ads with the former message were broadcast on TV during the IPL matches. Their tag line was Max New York Life, Your Partner for Life. MNL's pension plan ad with the punchline Ab koi samjhauta nahin is another extremely popular advertisement.

CONCLUSION The two companies have tremendous potential in India. The forecast for the insurance sector is exciting, thanks to the combined efforts of Government and the players in the industry.

With increased competition and more innovative policies on the anvil, it is expected that in 2011, the Indian insurance market would be valued at $87.5 billion which is an increase of 128.5% since 2006.

What needs to be done is to get a grip on the bottlenecks faced along this journey, work out strategies visĂ -vis their marketing mix and execute them wisely.

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CATCH THEM YOUNG

NO

CHILD's PLAY T

he best time of our life is childhood and we carry memories of those golden days all our lives. We have laid our foundation and impressions so early that our future blossoms from there. Now that we are parents, we are willing to go that extra mile to accomplish every dream of our child, to create a beautiful childhood for him/her.

But a word of caution: Marketers, advertisers and the invasion of technology are extracting more from parents and their children.

Global industries’ spend on child advertising has jumped from a mere $100 million in 1990 to more than $2 billion in 2000.

Children represent an important demographic to marketers because they have their own purchasing power — they influence parents' buying decisions and are adult consumers of the future.

Today's kids have more autonomy and decision-making powers . A vital lesson to marketers is that any proposition to the child should not alienate the parent. This implies the use of differential communication through different media, addressing both parents and children.

Parents (guilt parents) today are willing to buy more for their kids The

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of eight, children make most of their own buying decisions. Modern children can often recognize brands and status items by the age of 3 or 4, before they can even read. One study found that 52 per cent of three-yearolds and 73 percent of four-year-olds "often or almost always" asked parents for specific brands.

Smita Shelly Tanuja Kaushik Thus, it is important to follow guidelines when marketLecturer-Retail Assistant Professor ing to kids: Speak to kids: Use age-appropribecause trends such as smaller family size, dual incomes and postponing ate language, use current phrases, be children until later in life means that succinct and do not talk down to chilfamilies have more disposable dren. (Johnson Soap, Oil Advt).

Show children in groups: Kids like income. Guilt can play a big role in spending decisions as time-stressed to fit in with the crowd. (Delhi parents substitute material goods for Marathon) Show Diversity: All kids are not time spent with their children. same. Include overweight, tall, short Impressions early in life Marketers plant the seeds of and ethnic children in your marketbrand recognition in small children ing. (UCB ad) Cool packaging: Kids like colorful in the hope that the seeds will grow into lifetime relationships. By the age things, interesting boxes and shapes.

Be creative. (Cadbury) Positive not preachy: Although We're relying on the you want to have positive, kid-friendkid to pester the mom to ly characters and marketing, you do not want to be preachy. There are buy the product, rather many fun ways to reach kids. than going straight to (Pepsodent) Be responsible: Review your marthe mom keting to make sure you're not send— Barbara A Martino ing a negative message. Double and Advertising Executive triple check that the wording and

photographs will not be misconstrued. Many product lines have been pulled from the shelves because something had a questionable appearance.

Think "Mom and Dad": Kids have to sell mom and dad on the product.

This means being cost-sensitive and demonstrating good value. Example: Back to School Shopping: This promotional theme is being used year after year by retailers to allow consumers rush to stores to shop in the non-peak months of May and June.

The retailers reach out to kids through merchandise, incorporating cartoon characters, children brands and logos, m characters etc.

How TV ads influence kids most in India and the Asia Pacific The countries covered in the study include Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Pakistan, Philippines, Singapore, Taiwan, Thailand and Vietnam. The study covered about 700 respondents conducted by the Media Consumer Insights division.

The findings are: Peer groups play a vital role in the Indian context.

A greater percentage of Indian parents, when compared with their APac counterparts, believe that their views do not have a bearing on their kids' purchasing decisions.

It's ultimately the parents who hold the purse strings and decide for their children.

Indian parents are less inclined to give in to the wishes of their kids.

Indian kids are relatively poor managers of money.

Products that can be marketed to children Children and teenagers spend money on sweets, food, drinks, video and electronic products, toys, games, movies, sports, clothes and shoes.

FOOD: Food categories advertised that target children or teens are candy and snacks, cereal, fastfoods, mithai, chocolates, dairy products, fruit juices, Indian fried fastfoods and icecreams, but there are none for

Brand marketing must begin with children.

Even if a child does not buy the product and will not for many years... the marketing must begin in childhood — James McNeal The Kids Market, 1999 fruits or vegetables targeting children or teens.

TOYS: Toys can be of various categories like; Plastic, Educational, Stuffed & Plush, Wooden, Other, Amusement Park, Toy Cars, Dolls, Inflatable, Electrical, Baby Products, and Activity Mats BOOKS: The ageold tradition of reading books has declined with kids because they need pictures and events to move faster that the eye can

blink. The categories are: Books designed for adults Books for motor and speech impaired readers and users of augmentative communication (AAC) Rhymes and poetry Books without words Symbol books Interactive books and software to support literacy in older students

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MOVIES: Kids have enjoyed watching movies and with DVDs, this popular activity has come to play an influential role in most families' today. While there's a wealth of great films, kids have easy access to adult material. To be aware of the content kids are exposed to, parents need to understand the rating systems for movies and home videos. Parents should take an active role in influencing their children's viewing tastes.

VIDEO GAMES: Parents' concerns about video games include the time their kids spend on them, the physical effects of an inactive lifestyle, and the violent content of games. Playing video games can be a positive family experience if you understand the issues involved, choose games wisely and control the time spent on them.

MUSIC: Music is one of the most popular and powerful forms of media our kids consume. It offers a potent form of expression for the complex issues young people deal with as they pass through adolescence to adulthood: Identity, self-esteem, sexuality, alienation and anger. Parents tend to pay less attention to their teens’ music.

But it's important to remain involved by knowing what your kids are listening to.

SPORTS: Children are an integral part of some sporting activity or the other for which they are end consumers for sporting products and accessories which includes: Ballet & Dance Baseball & Basketball Football Golf Hiking Water sports TECHNOLOGY DRIVEN: The Internet E-marketing is converting old elements of marketing strategies and activities into computerized and networked environs like the Internet. It is the method of generating, allocating and pricing goods and services to children clientele over the Internet. It needs to have a website and make The

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WHAT DRIVES KIDS’ BUYING DECISION Key Influencers TV advertising Peer group Parents % of parents giving regular pocket money % of parents who give in to kids wishes % of kids who spend their weekly allowance

India

Asia Pacific

77 88 35 36 26 26

86 72 41 54 34 14

All figuers expressed as a percentage of the sample size-700

Canadians kids between the age of 9 and 14 have $1.8 billion in disposable income and influence ten times that amount in family spending — Source: YTV Kid and Tween Report, 2000

use of the Internet, achieving marketing objectives through technology.

Our youth are the first generation to grow up with the Internet. They have taken to technology and in many cases, are way ahead of adults in online explorations. This knowledge gap can be intimidating for parents. But our involvement is crucial, because kids need our guidance.

Internet is an extremely desirable medium for marketers wanting to target children: It's part of youth culture. This generation of young people is growing up with the Internet as a part of daily life.

Parents generally do not understand the extent to which kids are being marketed online. They are often online alone, without supervision.

Unlike the broadcasting media, which has codes regarding advertising for kids, the Internet is unregulated.

Sophisticated technologies make it easy to collect information from

young people for marketing research, and to target individual children with personalized advertising.

By creating engaging, interactive environments based on products and brand names, companies can build brand loyalties from an early age.

BUZZ OR STREET MARKETING Buzz marketing is particularly suited to the Internet, where young "Net promoters" use newsgroups, chat rooms and blogs to spread the word about music, clothes and other products among unsuspecting users.

Many companies are using "buzz marketing"— a new twist on the tried-and-tested — word of mouth way. The idea is to find the coolest kids in a community and have them use or wear your product in order to create a buzz around it. Buzz, or "street marketing," can help a company successfully connect with the savvy and elusive teen market.

MARKETING THROUGH EDUCATION INSTITUTIONS Corporations realize the power of the school environment for promoting their name and products.

Marketers are exploiting this medium in a number of ways: Supplying schools with technology in exchange for high company visibility.

Exclusive deals with fast food or soft drink companies to offer products in a school.

Advertising in classrooms, school buses and on computers.

Contests and incentive pro-

grammes: For example, the Pizza Hut reading incentives programme in which children receive certificates for free pizza if they achieve a monthly reading goal.

Sponsoring school events: The Canadian Company ShowBiz brings moveable video dance parties into schools to showcase various sponsors' products.

Mobile Marketing Cell phones are one of the most important digital platforms for marketing to young people, enabling companies to directly target users based on buying history, location and other profiling data.

Television Most of us have happy memories of watching television with our families when we were a child. But what was once a simple shared pastime has become an increasingly complex, sometimes problematic part of modern family life.

Watching television has become a more solitary activity and less shared time, meaning that parents are less able to monitor what their kids are watching.

The following are the negative messages being transmitted to children via TV commercials: Character Be selfish, not generous Be insensitive Show contempt to adults Expect instant gratification Value things, not relationships Violence/Fear Be aggressive rather controlled Use violence instead of negotiating a solution Feel anxious and fearful, not safe and secure Moral/Sexual Use profanity Be abusive, not caring Be promiscuous, not chaste Drugs/Health Use drugs without regard to risks Eat junk

Take pills to feel better rather than taking responsibility to be fit As parents, we can protect our children and help them become caring, responsible citizens by following few guidelines.

1. Teach children to be critical TV viewers. Help them discriminate

Ninety-four per cent of young people say they go online from home, compared with 79 per cent in 2001. Sixty-one per cent report having high-speed access — Young Canadians in a Wired World Survey, Media Awareness Network, 2005

between fantasy and reality and between valuable and unworthy TV content.

2. Help children distinguish between ads and increase their awareness of deceptive TV commercials.

3. Encourage children to be critical of food commercials which appear on television and FM Radio.

4. Select music videos and movies which are appropriate for the child's age.

5. Involve yourself with the child and ask what he would like to do to counteract the harmful messages conveyed through some television programming.

This will help both the child and parent understand the likes and dislikes of programmes and view TV channels with greater productivity.

The essential and most important concern of parents today is junk food which is easily available.

Good news is that junk food is now getting a makeover, a trend which shows that parents are concerned with health. Fruits and vegetables are being made into chips, icecreams are being enhanced with extra vitamins and whole grains and hearthealthy oils are replacing white flour and fats in cookies.

Example: Disney jumped on the bandwagon of healthy food marketing by putting a more nutritious spin on its theme park snack foods.

Disney has the influence and power of the "fun factor" behind its brand that could encourage kids to eat healthier. "Disney characters will not show up on Pop-Tarts, waffles and fruit snacks. This will allow parents to feed their children healthfully."

Despite the risks involved with frequent exposure to various marketing, advertising and new age technology, it's the human brain which beats them when put to right use. As education, information and technology are an integral part of our lives, we as parents can be the best role models for our children.

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SUIT ALL NEEDS

Flexi timings What began as an incentive to attract skilled women employees has also attracted a lot of male employees.

At IBM, an equal number of men and women work flexi-timings. At SunGard Offshore Services in Bangalore, nearly 90% employees have opted for flexi timings The

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Globally the common flexible working arrangements include: Part-time: Under this arrangement, an employee works less than the normal hours or works fewer days per week Flexi-time: Under this arrangement, an employee chooses when to work, usually there are "core hours" when all employees are present Compressed hours: Under this arrangement, an employee works for the agreed hours over fewer days Staggered hours: Under this arrangelexible working is a phrase that ment, there are different starting, break describes a working pattern or and finishing times for employees in the schedule different from the tradi- same workplace tional working day and week, aimed at Annualized hours: Under this arrangeadapting to suit an employee's personal ment, the employee hours are worked out or family needs. It could either be formal- over a year and he can choose to work compressed or staggered over ly written into the company the period policy or can be an informal Job sharing: Under this agreement between the arrangement, an employee employee and the employer. shares a job designed for one The idea of flexi time was person with someone else developed in Germany and Home working: Under this spread to the UK in the early arrangement, an employee 1970s. Today, with nuclear works from home families being the order of the Leaves and sabbaticals allow day and the work force an employee to return to his becoming more and more Kakoli Sen job after a gap conscious about establishing work-life balance, flexi- Asst. Professor (OB & HRM) Gradual retirement: An employee works for fewer ble working is emerging as a viable option in India as well, viable hours but longer years to be at the job Over a period of time with technologboth for the employee and the employer.

While an employee chooses to work ical advancement, there has been a flexible hours that suit him and allow change in the nature of work, shifting him/her to carry on with other responsi- away from jobs in industrial production bilities, it also makes a good business to occupations associated with knowlcase for employers. edge and information. It has trans-

F

formed the nature of work and its content and has altered the work-environment too. There is a decrease in the manual jobs and a rise in the tertiary employment.

The job content now demands higher levels of knowledge and skills. There is a priority to analytical skills, problem solving abilities and capacity for innovation.

The changes are at individual as well as at organizational levels.

With the shift in required skills at the workplace, employees in the 21st century are an organization’s greatest asset. More and more organizations are realizing that different individuals will have different expectations and needs at different times in their lifecycle and would like to establish a balance between their professional and personal needs. It also results in an organization's increased ability to attract, retain and motivate high-performing and experienced employees. While on one hand it reduces absenteeism, on the other it helps employees manage their other responsibilities. Overall, it leads to increased job satisfaction and happier and motivated employees. Organizations also acquire an extra appeal as a preferred employer.

In order to retain and keep their employees happy at work, companies like IBM, P&G India, Agilent Technologies and many others have realized the benefits of flexible timings and have amended their HR policies to offer various options, including work-from-home.

Interestingly, what began as an incentive to attract and retain skilled women employees has also attracted a lot of male employees. At IBM, an equal number of men and women work flexitimings. At SunGard Offshore Services in Bangalore, nearly 90% employees have opted for flexible working hours.

The best part about it is that it does not affect the career growth of an employee at all. As these employees enjoy flexibility of working hours, they are at ease with their work. As a result, these companies have seen employee productivity go up. HR managers also say that it helps them save valuable office space and cut on HR costs.

As Akila Krishna Kumar, CEO, SunGard Offshore Services sums up, "With increased accountability and a positive view to the organization's flexible policies, flexi-timings have only proven to increase productivity through engaged and happy employees."

With the right checks and balances in place, it is a win-win situation for all — organization, employee and families.

For the employer, the benefits include ability to provide round-the-clock cover, ability to retain valued staff when other demands on their time may be high and make more efficient use of facilities.

However, in order to establish a balance between the individual, customer and organizational needs, key things need to be ensured. First, the duties, expectations and deadlines should be clearly outlined and agreed upon by the employer and the employee.

Performance standards, performance appraisals, incentive systems etc should be clearly outlined and parity maintained among all employees who opt for such an option.

Supportive organizational culture, clear communication, teamwork and reciprocal support between management and employees will help ensure the success of these initiatives. A work-life HR policy that respects the individual, customer and organizational needs can be beneficial to all.

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STUDENT CORNER NEW FACE OF ADVERTISING CHITRA BHAWNANI :- PGP - HA (2008-10)

A

dvertising is a promotional activity for marketing a commodity. In today’s world of mass production and distribution, advertising serves as a powerful tool for marketing.

Advertisement carries a convincing message about the availability, utility and superiority of a commodity. It is only through proper advertising that a new product can be introduced and turns out to be successful in the market.

But is advertising always useful and advantageous? Along with the merits of advertising, it has several demerits also. Sometimes, the advertisement is so interesting and attractive that viewers' attention is carried away from the product. At times it forces people to desire and buy goods, which, in fact, are not within their means. Most of the advertisements contain tall claims and the consumers do not enjoy the benefits of the advertisement in full. They are shortlived. In simple terms, advertising has mostly meant a shrewd, smart and entertaining route to woo the consumer into committing himself/herself into purchase-intent mode or at times leads to impulse buying.

However, the recent ad campaigns of Lead India and Teach India - promoted by the TOI group have worked as a wonderful surprise. Rarely does it happen that public service campaigns ("issued in public interest�) across print and TV media are powered by such passion, intensity and focus and, at no time, has it happened in the history of Indian advertising that they have received such an optimistic and huge response from a usually noresponse state.

The idea behind the lead India campaign was to reach out to the common man and ask him to stop cribbing about the system of which he is a part and instead take initiatives to improve the grim state of affairs. The basic premise was to convert a mass of people into a nation and this land of philosophers into a land of doers with the punch line "TUM CHALO TO HINDUSTAN CHALE." For creating this impact, the concept involved The

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eminent public figures like Big B, SRK and Priyanka Chopra. A proud Grand Prix winner at the recent festival of festivals - Cannes, Lead India represented a truly defining moment in our advertising history. Presently, Teach India appears all set to repeat history.

The newly launched Teach India Campaign has taken off with Amir Khan as its brand ambassador.

It is a nation-building initiative (or social initiative) that brings together children in need of education and people who can give time to teach them. It is based on one simple principle: If you have the desire to teach, we will put you in touch with underprivileged children who are willing to learn.

'Jaago Re! Campaign' awakens young India; The campaign ranges from challenging the qualifications of a politician to run the country, to empowering the youth to influence politics by exercising their right to vote. The advertisement has transformed tea from a medium of mere physical and mental rejuvenation to a medium of social awakening and consciousness as rightly put by, Ms. Sangeeta Talwar, Executive Director- Marketing, and Tata Tea. Har Subah Sirf Utho Mat, Jaago Re. The Idea TelecomIdea campaign has gone far beyond just delivering messages in a light hearted, funny or emotional manner. It didn't prove to be different by just offering value-added services but has been adding value to the users' life in various ways via social messages. Advertisements casting Abhishek Bachchan show a sarpanch resolving the caste wars and later as a guide enabling the communication with the disabled tourist. But probably these had just covered the so-called emotions of a single community or category of users, so now IDEA is back with the latest one which is all set to administer the poor penetration of education in Indian villages in which Abhishek Bachchan plays a priest and comes up with this brilliant idea of educating through mobile phones. All these and many more have been put with an Indian flavour and these for sure capture more audiences.

Innovative public service advertising is bringing loads of appreciation and fame for all involved.

TOO MUCH HOT AIR IN NUKE DEAL TARUN SHEKHAWAT :- PGP (2008-10)

T

he partisan rancour over the Indo-US nuclear deal has helped obscure facts, allowing shibboleths and fantasies to substitute for an informed debate on a critical issue. Several myths continue to be repeated untiringly. The biggest of them draws a meretricious link between nuclear energy and soaring oil prices to justify the proposed import of high-priced, foreign fuel dependent power reactors from overseas.

What does N-power have to do with the price or import requirements of any transportation fuel?

Thanks to the oil price shocks in the 1970s and 1980s and new energy technologies, the share of global electricity produced from oil shrunk from 25% in 1973 to barely 4%. The remaining oil-fired power plants - of which India has only a handful will be phased out or refitted to run on gas. Oil is primarily used for transportation, while the reactor-import option is about electricity generation.

The link between Npower and oil is specious. In the years ahead, the world could move toward electric vehicles and use grid power to make hydrogen for the fuel-cell vehicles of the future. In another futuristic scenario, nuclear energy may indirectly serve as a substitute to some oil use in the commercial and industrial sectors. But today, greater nuclear-generated electricity is not going to reduce any country's oil needs, certainly not India's. In fact, with little overlap in the oil and nuclear global-market structures, nuclear power now competes principally against coal, natural gas and renewables.

If global oil demand is threatening to outstrip supply, so is the case with uranium. Current concerns associated with oil's price volatility, supply security and geopolitical risks are no different than uranium's. And if global oil reserves are finite, so are uranium resources, with proven uranium reserves likely to last barely 85 years. In fact, in the past five years, the international spot price of uranium has risen faster than that of crude oil, with uranium today trading six times above its $10 a pound historical average. Oil and uranium prices

are likely to stay volatile, but the long-term trend for both is surely up.

Just as cheap oil seems fanciful, cheap nuclear power for long has been a mirage. More than half a century after the then US Atomic Energy Agency chairman Lewis Strauss claimed nuclear energy would become "too cheap to meter", the nuclear power industry everywhere subsists on generous state subsidies, not reflected in the published costs of generation. The current electricity-market liberalisation trends spell trouble for the global nuclearpower industry as they threaten the state support on which it survives. International studies have shown that nuclear power, although a longmatured technology, has demonstrated the slowest rate of learning in comparison to other energy technologies, including newer sources like wind and combined-cycle gas turbines. Instead of the price declining with nuclear power's maturation, the opposite has happened. Power reactors also remain very capital-intensive, with high up-front capital costs, long lead times for construction and commissioning, and drawn-out amortisation periods that discourage private investors.

Illustration: ZAHID ALI The US industry has yet to receive its first domestic power reactor order in more than three decades, despite the Bush administration offering most-attractive tax sops. In India, there has been a debate on the nuclear deal's premise - that the way to meet burgeoning energy demands is to import power reactors. While Npower deserves a place in a diversified energy portfolio, reactor imports will be a path to external fuel dependency and exorbitant plant costs. India ought not to confuse its electrical generation problem with transportation fuel problem. Also, India cannot correct its oil-import dependency on the Gulf region by fashioning a new dependency on a tiny nuclear-supply cartel made of a few state-guided firms. While oil is freely purchasable on world markets, the global N-reactor and fuel business is monopolised and politically regulated commerce, with no sanctity of contract. Without having loosened its bondage to oil exporters, should India get yoked to the nuclear cartel?

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STUDENT CORNER SPIRITUALITY MANAGEMENT Even employees and employers share a closer relationship and there are lesser chances of n this materialistic world, we are forced by strikes, etc. The quality of work, no wonder, has the laws of nature to face several problems. improved and so has the concernedness of the How can we escape this ocean of problems? employees towards the common goals of the We have to understand the basic problem company.

It has been said that those who are spiritualwhich is the cause of all other problems. Our problem is that we usually have our priorities ly awake work harder than anyone else. Now-awrong. We tend to postpone that which is days, like almost all types of management pracimportant in our life i.e. our spiritual perfection, tices and theories, spiritual management is also and give more importance to our bodily activi- gaining momentum, and more and more comties. So we need to seek knowledge of that panies are realizing the benefits from it.

Companies that incorporate spiritual mansupreme power, which is in fact, the source of all existence. But simply understanding the agement to their concepts, indulge in a variety supreme power is not sufficient. So we have to of activities: They become more caring to the needs of the implement it into our day-to-day activities.

The term Spiritual means "Divine" and employees which may include their family problems.

Management is the process of getting Many companies start their activities completed efficiently We usually have our work by offering prayers and and effectively with and through other people. priorities wrong. We need asking God for grace on each individual employee Thus, the term spirituality to seek knowledge of that and on the company as a management basically consists of dealing with supreme power, which is in fact, whole.

They tend to bring employees and the labour on the grounds the source of all existence. But sim- spiritual ethics and a of humanity, rather ply understanding the supreme code of conduct in their work culture. This than the traditional power is not sufficient. often involves reading approach of senior and junior. Though that relaSo we have to implement it from spiritual texts in meetings and maintaining tionship has to be maininto our day today that the directives of those tained, at the same time, highly authoritative texts can the human factor should not activities be implemented in the present be ignored, which is often the scenario. case. This traditional approach often Instead of buzzing parties and enjoying the creates a chaos and unrest in the companies and people often find themselves grinded in the swagger in terms of pomp-shows, companies congested atmosphere. They certainly need turn to some social activities that are oriented to some fresh air, and "Spiritual Management" provide social service, valuable information to offers them such relief. Spirituality in work and people and helping the social sector.

Though some companies still shy away from management has been an active area of interest for academics and researchers for the last few openly stating the spiritual management approach, many companies are coming forward years.

Sometimes, people tend to question the ben- to make a significant statement in this regard.

Spiritual management does work and it fits efits and effectiveness of spiritual management and its value in terms of business. Well, many perfectly in the new definition of management! companies have reported that they are able to Spiritual management appears a new entrant in create a more favourable work environment the field of business and management, placing everyone as a human first and then an employthrough it.

Even bigger companies and production hous- ee! That’s not just a commendable and great es have resorted to the spiritual management. thing to do but is also lucrative in the long run.

NITIKA GARG :- PGP (2008-10)

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RETAIL SECTOR: A QUICK VIEW HIMANSHU MASURKAR :- PGP (2008-10)

I

ndia is an ambitious economic liberal country.

We can divide the Indian retail sector majorly into two parts. In India, a large size of the retail sector is fragmented in unorganized retail sector that includes street vendors, supermarkets, departmental stores, restaurants and even two and four wheeler showrooms.

The unorganized sector, where ownership and management lies only with one person, can be classified as traditional, where the labour usually requires low skills as the work is shared by the family with minimal rental cost because of traditional property and negligible overheads and taxes. However, unorganized retailers suffer loss due to poor shopping experience and inability to offer a wide range of products.

History: The organized retail industry in India had not evolved till the early 1990s. Until then, the industry was dominated by the un-organized sector. It was a sellers' market with a minimal range of choices and a limited number of brands available to customers. Lack of trained man-power, high taxation and Government laws and regulations, all discouraged the growth of industry.

PHASES OF EVOLUTION: There are four phases of retail evolution: FIRST PHASE: New entrants create awareness of modern formats and rise consumer expectations.

SECOND PHASE: Consumers demand modern formats as the market developers, leading to strong growth.

THIRD PHASE As the market matures, intense competition forces retailers to invest in back-end operating efficiency.

FOURTH PHASE: In the final phase, retailers explore new markets as well as inorganic opportunities as growth tapers off.

Right now, India is in the second phase of retail evolution so there are a lot of opportunities in Indian market.

ANALYSIS OF INDIAN RETAIL SECTOR: Retail sector is contributing 10% to the GDP. Organized retail sector is growing at a rate of

25-30% P/A. Indian retail sector analysis (2006-07) has accredited the Indian retail industry as a significant revenue churner with a market size of Rs. 10 Trillion.

It is estimated that by 2011 there will be 3000 super markets, twice as many as there are today.

Big business houses like, Reliance, Godrej, Bharti, Birlas, Tatas, Wadias, Subhikhsa, Amul etc. are now looking at retail sector for their future expends.

Organized retail sector is expected to touch from US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015.(AT kerney) 12 million retail outlets span across the country.

As per the market research of 2005 DRIVING FACTORS: Market liberalization.

Wal-Mart, the biggest retailer globally, is going to open 10-15 whole sale cash and carry facilities (worth US$ 288 billion) throughout the country in next 7 years.

Change in customer's focus from just buying to broad shopping, i.e. buying + entertainment + experience.

51% FDI in retailing has made India a preferred choice for foreign brands.

Indian retail market is the Vth largest retail destination globally.

Consumerism and brand proliferation.

Availability of cheaper real estate options in tier II cities.

Large pool of emerging middle class with population of more than 350 million buyers.

Media proliferation, increased ads and brand promotion.

Increased young working force, hefty pay packages, nuclear families, increases in disposable income, and increase in working women population.

Availability of quality retail space.

The Indian retail sector has become a 13000 crore industry.

Reliance retail is going ahead with plans worth an investment of US $ 3.77 billion for setting up 205 stores.

Spencer's is also planning to set up 500 more stores by 2008 with an investment of nearly US$ 125.89 million.

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CAMPUS CAMPUSCAM NEWS NEWS NEWS NEWS NEWS NEWS NEW

IILM College Batch 2008-11

The IILM College has been set up to impart quality education in the field of management and to groom young people to become tomorrow's business leaders. We have successfully moved into the second year of the Undergraduate Business Management programme in collaboration with the University of Bradford at the Gurgaon campus and have students from different parts of the country and abroad. The 2008 batch has students with excellent academic records, many above 85% in Class XII. We not only offer an invigorating and dynamic academic environment but also provide a platform through enumerable student activities to showcase their talent.

We offer transfer facilities to our students to either Bradford University or any other university in the UK after they complete their first year at IILM. We also have exchange students coming The

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from foreign universities to join a semester. The IILM provides its students with a summer school programme, wherein students can join the London School of Economics or the University of California, Berkeley, for six weeks and study a course of their interest. The University of Bradford and IILM jointly sponsor two students for a one-month visit to the University of Bradford which gives them academic exposure and encourages cross-cultural learning.

IILM offers a range of student support services to instill a sense of belonging among students. A Student Staff Liaison committee handles queries and works for the betterment of the programme.

The IILM provides a platform to students to pursue academic and non-academic interests. There are student societies that encourage them to participate in various extra-curricular activities such as

debates, dramatics, sports and cultural events. The concept of mentoring was introduced last year where the focus is to help students tackle low aspirations and under performance in academics. A faculty mentor guides his students on academic and psychological issues.

Summer placement is a mandatory component and one of the progression tools to the third year.

Each student has to undergo a training period of 8-10 weeks after completing his/her second year. The students get an opportunity to apply concepts learnt in classrooms to real-life management situations.

These students have the potential and we wish that they achieve their dreams and make the most of the enriched teaching learning environment provided at the IILM college. –Compiled by Priti Pandey

MPUS CAMPUS CAMPUS EWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS

IILM MoU with PHDCCI Shri Krishan Kalra, Secretary General, PHD Chamber signing MoU with Prof B Bhattacharyya, Director General, IILM. Also seen are Shri L K Malhotra, President, Shri S Kapur, DSG, Shri P K Sharma, Legal Advisor, Shri C M Krishna, Honorary Advisor, Shri Suneel Sehgal, Senior Secretary (NRD), Ms. Rimneet Kaur, Assistant Secretary, PHD Chamber, Shri Rakesh Chaudhury, Professor and Shri Anil Rai, Advisor, IILM

With a view to building competency in managerial skills of executives and entrepreneurs, the PHD Chamber signed an MoU with IILM on September 6, 2008. The IILM Institute for Higher Education, one of India's leading business schools,

through its academic programmes, invites faculty from renowned international institutes to conduct courses and management development programmes/workshops for management students, industry executives and entrepreneurs.

As per the MoU, both organizations will jointly organize management development programmes by visiting international faculty for managerial competency and skillbuilding in small and medium enterprises.

ACADEMIC ACHIEVEMENTS Ms. BHAWNA AGRAWAL Assistant Professor - QT & OR

❘❘❘❚ Published a Paper titled "Synergism in Incomplete Sampling Frame using Cluster Sampling Design" in "Management & Change" of IILM, India, Vol.11, No.1 (2007). ❘❘❘❚ Published a paper titled "Selection of Preference Scale for Pairwise Comparisons in Analytical Hierarchy Process" in " Proceedings of International Seminar conducted by Rukmini Devi Institute of Management" on (15th March, 2008). ❘❘❘❚ Published a paper titled "Estimation from Incomplete Sampling Frame in case of Simple Random Sampling" in the special issue "Statistical inference with mising data of Model-assisted Statistics and

Application, Netherlands" (2008) ❘❘❘❚ Presented a paper titled "Information Communication Technology (ICT): A Tool for Development of Management Practices" for the upcoming National Conference on "Changing Paradigms in Management of Apeejay School of Management, New Delhi" will be held on (15 May 2008)

Mishra, senior professor, Government College, Ajmer.

Ms. RICHA DANI Lecturer - Business Economics

❘❘❘❚ Joined M Phil in "International Business" from the Delhi School of Economics Prof. KAILASH TULI

Ms. SANGEETA YADAV

Professor, OB/HR

Assistant Professor - Eco

❘❘❘❚ Invited for presentation and workshops for Leaders and Teachers of Gestalt Institutions and Organizations from around the World in Hungary from 24-28 March 2009. Theme is, "InclusionExclusion: Who, What, How?". Organised

by Leaders 2009, Hungary.

❘❘❘❚ Awarded Doctorate by M.D.S. University, Ajmer (Rajasthan). The topic of the thesis was,"Globalisation and Indian Agriculture — Impact, Prospects and Challenges Ahead" and the research was done under the guidance of Dr. Manjula

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CAMPUS CAMPUSCAM NEWS NEWS NEWS NEWS NEWS NEWS NEW

IILM India Forum conference

H.E. Dr. S.S. Sidhu, Governor of Goa, lighting the lamp

The IILM India Forum, in partnership with the Universal Peace Federation and other civil society organizations and academic institutions, has initiated a series of conferences in different parts of India. The effort is to bring together leaders from across the

political spectrum, academia, media and business, on a common platform to discuss issues relating to governance, leadership, inclusive development, education, inter-faith co-operation and voluntary service in the cause of poverty alleviation.

H.E. Dr. S.S. Sidhu, Governor of Goa, Giving the inaugural address

Hon. Digambar Kamat, Chief Minister of Goa, delivering his address The

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Hon V. Vaithilingam, Chief Minister of Puducherry lighting the lamp

MPUS CAMPUS CAMPUS EWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS

The series of conferences, titled A New Paradigm of Leadership and Good Governance, was inaugurated in Goa on September 27, 2008

by Governor S S Sidhu. It was addressed by the Goa Chief Minister, Shri Digambar Kamat, President of the Bharatiya Janata Party (BJP)-Goa, Shri Shripad Naik, President of the National Congress Party (NCP)-Goa, Dr Wilfred D'Souza; former Chief Minister of Goa, Daman and Diu, Smt Shashikala Kakodkar and President of the Goa Pradesh District Committee Shri Subash Shirodkar.

The conference discussed issues of importance and concerns facing India, the dreams and aspirations of the people and the challenges which need to be overcome if they are to be realized. It endorsed the call for a new paradigm of leadership and good governance which would be guided by ethical principles and a sense of service, accountability and transparency. It called for an end to ostentatious living, and acknowledgement by businesses and industries of Gandhiji’s idea of them being the "trustees of the nation's wealth." It emphasized the importance of character education in schools and colleges which teach young people the importance of living for the sake of others, of respecting different cultures, traditions and faiths and of resolving differences and conflicts amicably and through dialogue and understanding.

The need to harness the power of faith and spirituality in establishing value-based governance and in guiding civil society and individual responses to the challenges of our times was also stressed.

The conference was followed by a similar high level meeting at Puducherry, which was inaugurated by the Chief Minister of Puducherry.

International learning experience It is almost a year now since the IILM launched its International Visiting Professors Programme, in January 2008. The first stint began with three senior professors coming in from wellknown universities , namely AIT, Thailand, Griffith University, Australia, and University of Illinois, US, who brought new ideas, methods and ways of thinking to IILM. Before leaving, they gave valuable insights and reasons for us to move on with our initiative.

Looking back, the International Visiting Professors' Programme was started to add an international perspective to the new modular structure and encourage creation of more exchange programmes. In the second half of 2008, IILM invited more than 25 professors from the world's best B-schools. A large amount of funds and efforts were put in to this programme to make it an enriching experience, both for the visiting faculty as well as for students. Although the participants’ opinions on the usefulness of the teaching by guest faculty from abroad were split, the appreciation of the spirit of this programme was unanimous. It was believed by all that this programme will have enormous potential for crosscultural learning and knowledge sharing.

The experience so far has shown that this programme provided a good opportunity to

know the varied teaching methodologies adopted by faculty across the globe. The exchange of academic inputs helped us to further enrich our course structure and make it comparable to the best. The philosophy which was advocated throughtout this programme was to share and learn the latest developments in management education across the globe.

The second advantage that was quite evident was that the students felt reassured about the universal application of classroom learning. Yet another benefit which it offered to IILM faculty was a platform for collaborative research or case writings with world's eminent professors in management.

This research initiative will go a long way in improving the quality of courses.

The valuable international faculty resource was shared with industry professionals, senior Government officers and NGOs through Management Development Programmes (MDPs) on issues. MDPs allowed fresh ideas to flow in with a meaningful application of research in professional management. Some appreciated MDP topics were ‘Learning to Lead & Leading to Learn’; ‘Internationalization of Emerging Markets & Firms’; ‘International Business, Law, & Contracts; Leadership Development’.

Inputs by Surabhi Goyal

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CLUB & SOCIETIES HOLD FORTH The Word Power debate club organized a debate on 29th July, 2008 on the topic "Is Nuclear energy really in national interest?"

Four students spoke in favour and an equal number against the topic. The contest was enjoyed by an audience which constituted not only the PGP 07-09 batch but also the PGP 08-10 batch.

The winner was Pulak Tandon who spoke in favour of the topic.

The runner-up was Sheba Lal from PGP 08-10 batch who had gone against the topic. The debate was also heard by two judges who gave their comments for future reference.

The Word Power also organized an extempore competition on 1st October, 2008 in lecture hall 1A at 4:00 PM. Six candidates of PGP 2008-2010 batch participated, even though the event was majorly for the 1st year batch. Sheba Lal, Shruti Bhatia, Yogita, Tanvi, Shalini Tomar and Nitin Mittal took part.

There were two rounds in 'Extempore'. Each candidate took up the challenge of speaking on a topic without preparation. They had to pick up a chit from a bowl and speak on the topic written in the chit. They had put their points of view across in 2 and a half minutes. Shalini Tomar from PGP 07-09 was declared the winner and Nitin Mittal was the first runner-up, closely followed by Yogita. The event warmed up when judges asked students to repeat the Extempore with one more round, which resulted in participants becoming more confident speakers.

Werk-statt -The Workshop Club WORKSHOP ON ADJUSTMENT ISSUES ON 20TH AUGUST 2008 A workshop on adjustment issues was held at IILM Lodhi Road on 20th August 2008. Dr. Renu The

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Kishore, a psychologist and reader in Delhi University, who has also written many books, is a member of prestigious organizations and a student counselor for NDTV came to address the issue.

She talked about the challenges and opportunities faced by college students and their major adjustment concerns. She went on to explain how to deal with issues related to academics, independent life away from home, inter-personal and intra-personal issues, stress and also discussed various stress management techniques.

The students were divided into groups and asked to make on-thespot presentations as also deliver a role play. She also made students do breathing exercises which were a part of stress management techniques. The students loved the session. The interaction and response of students was indicative of the success of the programme. The guest speaker was impressed by the overwhelming response of the students and expressed her pleasure of holding this workshop.

Kala-The Cultural Club ONE-MINUTE SHOW ON 22ND AUGUST 2008 Kala, the Cultural Club of IILM Lodhi Road, organized a oneminute show in the IV trimester for PGP 1st year and 2nd year students. Students showed great enthusiasm in participation as it was the first activity of the cultural club for first-year students.

Activities like bindi sticking on face, fruit-eating, turban-tying, chocolate-eating, threading-theneedle, dart game and many more such funfilled activities were organised. Around 30 students took part in the competition. Two teams won the one-minute show. Abhinav’s team won the first prize in the com-

petition. The event was an obvious success. The glee on the faces of the students was a clear indication of their enthusiasm and enjoyment.

Requests to conduct more such events were in abundance.

COLLAGE MAKING AND PHOTOGRAPHY COMPETITION ON 29TH SEPT 2008 Kala also organized an event on collage-making and photography on 29th September 2008 at IILM Lodhi Road. Students from both the years participated with great enthusiasm. It was an obious display of talent on the campus. The topics were ‘Terrorism’ and ‘21st century women’. Most of them made their collage on the latter topic, as it seemed to be more amusing to them. The winners Radhika Dahawan and Apali Mohanty of PGP 08-10 chose "terrorism" as their topic. Different facets of women were shown by Reetika Kuarm and Swati Jhamb and that fetched them the second prize.

The photography competition was also a rave event and an exhibition of innate creativity. Themes selected by them were remarkable and everyone did a commendable job. Vasurat Shukla and Nishit Pandey won the 1st and the 2nd prizes, respectively.

Warriors - The Sports Club CRICKET MATCH Warriors successfully organized a cricket match between PGP 07-09 and PGP 08-10 on Sunday, 20th July 08. After winning the toss, PGP 07-09 decided to field first and restricted the opposition at 84 runs only. As this wasn't a big total, PGP 07-09 outscored the seniors by reaching the total easily and won the match by 7 wickets. Man of the match was Vivek Tiwari who made 48 runs.

–Compiled by Anil Vashisht

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Hospitality, the gateway to success HOSPITALITY is the mother of all services; the world's oldest profession with a universal demand.

Every type of operation, whether it be smart basics or the high-end elite, hospitality and allied services industry requires professionals with global competencies & skill sets.

This people-oriented industry which provides memorable experiential services makes or breaks depending upon its quality service providers. Professional education and training holds the key to success in this sector. A tremendous opportunity awaits those who seek to pursue a career in hospitality.

The Indira Gandhi National Open University (IGNOU) offers an excellent Hospitality career education option to Indian students by launching the first ever full-time 3-year Degree Programme in International Hospitality Administration - (BAIHA) incorporating courses of American Hotel & Lodging Educational Institute (AH&LEI).

The program consists of Tourism courses from IGNOU, Industrial Exposure Training in the hospitality industry, Industry Project and AH&LEI courses. This program is an innovative initiative from IGNOU on the lines of Public -Private partnership model in education delivery. The programme is being offered by 45 IGNOU approved Programme Centers in 15 states.

The Programme Centers are equipped to deliver the program, both theoretically and practically.

The Program Centers are distributed across the country, including smaller towns such as Kalimpong, Patiala, Panchkula, Kolhapur, Nashik, Tirupati, Salem, Trichy, Munnar, Dehradun, Patna, Ranchi, Varanasi, Vishakapatnam, Trichur, Calicut, Mathura, Pune, etc. This considerably enhances the profes-

sional education access opportunity to the rural & remote population of India.

There is a huge demand-supply gap for trained manpower in the hospitality & allied service industry.

IGNOU seeks to bridge this gap through this program and other innovative initiatives. India, with its demographic advantage, stands to gain immensely from an international program such as BA-IHA as it will equip India's youth for employment and entrepreneurship in hospitality across the globe.

With India's fast track economic development and high speed service sector growth, over half a billion people are on the move needing some form of hospitality service.

Quality hospitality and allied services are basic services critical to human development and economic growth. Hospitality service is an integral part of Service Infrastructure & Support Services, a basic essential for any sustained development. Accommodation of every kind - Hotels, Lodges, Hostels, Food Services of every kind Restaurants, Cafeterias, Dining Facilities, Leisure and Recreational Facilities, Events and Functions, Travel and Transport Services, Tourism and Trade services - all these and many other require mil-

lions of trained, skilled manpower.

The immense investments being made in the hospitality industry require a huge number of skilled professional, not only at the base of the pyramid, but also at the middle and top levels of its management.

India's own hotel industry is expected to double its room inventory within the next 4-5 years. With the popularity of Indian and International branded hotels, there is a scaling up and professionalism is gaining importance.

Hospitality is an ideal career opportunity for those who enjoy a people interactive occupation and are willing to make a commitment to a service vocation. The challenges & rewards are commensurate and are very promising in the long term. If you are on the threshold of making a career choice, let hospitality be your career of choice and there is nothing better than IGNOU BA-IHA as an entry point.

You will be one among the first few privileged to be path-breakers. An excellent educational and training foundation in hospitality can equip and fit you for any industry with a service focus. This is the time to invest in a life long career and IGNOU extends an invitation for a glorious future in hospitality. –Compiled by Shweta Khanna

BA-IHA Program Facts Title Awarded by Incorporating Conducted at Duration Pre-requisite Qualification

Bachelor in International Hospitality Administration (BA-IHA) Indira Gandhi National Open University American Hotel & Lodging Educational Courses (USA) IILM, Gurgaon 3-Year Full time including 6 months of Industrial Training & Project 10 + 2 or equivalent with English as a compulsory subject The

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MAXimum utility visit A GROUP consisting of 15 PGPHA students and Ms. Daminni Grover, IT and HMIS faculty, were taken around the Data Centre by Nr. Venkat, Manager, System Control, and MAX IT Healthcare department.

Activities conducted: Mr. Venket started the introductory session with a welcome address.

He shared his views on Hospital Management Information Systems at MAX IT Healthcare. The lecture was taken further by stating the primary role of the data centre at MAX and its activities. A data centre is a facility used to house computer systems and associated components, such as telecom and storage systems. It generally includes redundant or backup power supplies, redundant data communications connections, environmental controls (e.g., air conditioning, fire suppression) and security devices.

This presentation was followed by a data centre visit in which MAX Information systems and networks applications were showcased. Wide varieties of servers are housed in their data centre to provide a range of basic & value added services to the MAX hospitals.

Mr. Pradeep Saha, Head IT, MAX IT Healthcare gave an overview on Max Healthcare system. He told the students that Max Healthcare Institute was founded in 2001 and offers various health plans, including Max Happy Family, Max 360°, maternity packages, and Max stroke program. MAX also offers international and corporate services. He explained various MAX healthcare services ranging from consultation to diagnosis and from surgery to pharmacy. Along with that, MAX offers medical services in various areas, including anestheThe

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Students on visit to MAX, IT Center, Okhla

sia, arthritis, audiology and speech therapy, autism and child development and cardiology.

Mr. Saha highlighted that MAX operates specialty centers that offer various services, including nuclear medicine and cardiac imaging, labs, scans, interventional cardiology, cardiac pacing and electrophysiology, neurosciences, orthopedics, gynecology and obstetrics, pediatrics, maternity services, diagnostic services, pediatric ophthalmology, neurophthalmology, internal medicine, general surgery, urology, nephrology, gastroenterology, men-

Mr. Pradeep Saha, Head, IT

tal health and behavioral sciences, rehabilitative services and pulmonology.

Demonstration of Online Patient tracking system with HIS application (Out Patient, In Patient, Lab services, Material Management) by Mr. Venket, Manager System Contol, MAX IT Healthcare.

During his presentation, Mr. Venket gave us an overview on Hospital Management Information Systems. He told us that at MAX, patients are provided with a MAX ID. It is an auto-generated unique ID assigned to all the patients visiting for the first time for any of the facilities under MAX group.

This MAX ID can be used for unlimited visits or medical episodes for related patrons thereafter and it remains associated with the patients for lifetime.

Question and Answer Session This was followed by a 10-minute Question and Answer Session wherein students were given an opportunity to put their questions on hospital management information systems to the staff of MAX. Inputs by Daminni Grover

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FICCI Ladies Organization (FLO) Workshop on Management Skills

Prof. Kailash Tuli, Ms. Vani Bajaj, Prof. Tripti Desai, Ms. Deepshikha Khaitan, Ms. Mridula Mehta, Ms. Deepika Jindal, Ms. Mukta Nandini Jain, Prof. B Bhattacharyya, Ms. Anuradha Goel, Ms. Malvika Rai, Ms. Usha Agarwala, Ms. Usha Gupta, Ms. Meera Goyal, Ms. Sharda Goyal, Ms. Anuja Narain Agrawal

A programme on "Personal Effectiveness and Leadership " was conducted on 25th and 26th of September 2008 at the IILM premises for the FICCI Ladies Organization (FLO) and had 20 participants. The mix of participants was diverse and comprised seasoned entrepreneurs, career women, homemakers and women on the threshold of starting their own businesses. This diversity brought in a lot of varied and lively questions which in turn enriched the discussions that followed each session.

The workshop sensitized the participants to their personality profile, some aspects which they were aware, some which they may have been unaware of. The program was designed to sensitize people on the issues that they may face in the

workplace and home. The sessions ranged from Self Awareness to Conflict Management to Leadership in Current Times. It also glimpsed at "Conflict" and the various aspects of conflict resolution.The programme was designed from twin perspectives-from the point of view of practitioners of industry and homemakers who deal with it in day to day living. Issues at home and the workplace were examined and methods suggested to deal with them effectively. Lastly, it attempted to give some inputs in "Leading and Managing" both in the professional and personal space.

The facilitators also came from different backgrounds and areas and comprised of an ex-Dean of IIM-Ahmedabad, a Professor from USA with vast experience of working in China, and in house senior

faculty of IILM-Lodhi Road and Gurgaon.

A film called "Wasted" was shown as a closing piece to sensitize the participants to the environment and environmental issues, since the proceeds of the programme were donated to the cause of environment.The film explored apathy towards the waste situation in Delhi by its citizens. It traced the journey of waste from a house to a landfill and beyond. It brought out facets of how globalization and consumerism has led to ignorance, indifference, arrogance and complete abdication of responsibilities by a civilization towards its environment.

The program was very well received and the participants were keen to have many more such training programmes.

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NEED of the hour A.Balasubramaniam, DEAN, IILM SCHOOL OF DESIGN DESIGN Education is going through consolidation and colloborations identical to what is being witnessed in other sectors of the economy. The country's premier institutes like NID, Ahmedabad, IILM School of Design, Gurgaon, Srishti School of Art, Design & Technology, Bangalore, Pearl Academy, Delhi, IICD, Jaipur, DJ Academy, Coimbatore and WLC College have formed IDIA( Indian design institutes alliance) to work for the common good of design education. This consortium has now put together a case for a common qualifying entrance examination for design called NEED : National Entrance Examination for Design.

What is NEED? NEED is a qualifying examination for admission to the undergraduate level programmes in design for all the consortium partners, including NID and IILM School of Design. It was a move that was waiting to happen. By doing this, all the consortium partners agree to one methodology of conducting and evaluating design aspirants.

Why NEED? In the absence of a common qualifying exam, all institutes were working on different formats for their entrance exam. A lot of the efforts were being duplicated as students had the tendency to apply to most of the major institutes to broad base their selection. NEED will now be the national qualifying examination. Therefore, candidates can seek admission to all these major design institutes through one entrance exam, thereby savThe

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ing their precious time and resources.

By aligning together, all partnering institutes can now be assured of the quality of the candidates and their evaluation and ranking. It is being spearheaded

by NID this year in collaboration with the other partners, but in subsequent years all the founding members will be have a role in leading the exercise of administering the examination.

ROLE of IILM Along with the other major institutes, IILM has taken on the onus of being in the forefront to see the process of establishing NEED in India. The task will require to collaborate on setting

IMPORTANT DATES Issuing of forms start from: OCTOBER 6, 2008, MONDAY Last date for receiving completed forms by NID: NOVEMBER 28, 2008, FRIDAY All candidates fulfilling the requirements of minimum qualification and within the prescribed age limit will be called for the Entrance Test (NEED) to be conducted at 12 centres Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Kanpur, Kochi, Kolkata, Mumbai and Oman.

(NID reserves its right to cancel any of these centres).

Date for the entrance test: NEED (at all centres) January 4, 2009, Sunday Hall Ticket/ Call Letter will be posted

by December 20, 2008. Those who do not receive the call letters by the end of December 2008 may get in touch with NID's Admissions Unit. http://iilm.edu/content/school_design.aspx

up papers, evaluation and establishing norms for the examination. This may also involve conducting the examinations in select centres across the country.

The NEED secretariat is housed at NID as of now, but it will eventually spin off into an independent body with its own offices and infrastructure.

Benefits of NEED The first, obvious benefits are: ❚❚ Candidates need to apply and go through the entrance exam only once. ❚❚ Candidates can apply to all institutes with their NEED score and seek admission in any of the major design education establishments in India. ❚❚ There will be uniformity in standards of the entrance exam and will now be more broadbased.

The other benefits are ❚❚ Partner Institutes will now agree on common standards and therefore raise the bar for the education standard in the country. ❚❚ There will be more candidates applying because of it being a common entrance examination.

For instance, candidates from Gurgaon, who had plans of applying to IILM will also give the NEED exam. ❚❚ The search for good candidates will extend beyond each individual institute's reach. ❚❚ The consortium can now work together to bring more students into the network by pooling in their centres and locations. ❚❚ The alliance can also look forward to more collaborative exercises thereby benefitting the quality of design education in the country.

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Chanakya was a great scholar (350-283 BC). He is known for his genius of diplomacy, sharp mind and great foresight. He is identified as economist, as Indian Machiavelli and a man of great thinking, vision and action. His sayings are often read by scholars, politicians, diplomats, managers and administrators. Some of these quotes are produced below.

"A person should not be too honest.

Straight trees are cut first and Honest people are screwed first."

"The biggest guru-mantra is: Never share your secrets with anybody. If you cannot keep secret with you, do not expect that other will keep it. It will destroy you."

"There is some self-interest behind every friendship.

There is no Friendship without self-interests.

This is a bitter truth."

"Before you start some work, always ask yourself three questions - Why am I doing it, What the results might be and Will I be successful. Only when you think deeply and find satisfactory answers to these questions, go ahead."

"As soon as the fear approaches near, attack and destroy it."

"Once you start a working on something, don't be afraid of failure and don't abandon it.

People who work sincerely are the happiest."

"A man is great by deeds, not by birth."

"Treat your kid like a darling for the first five years.

For the next five years, scold them.

By the time they turn sixteen, treat them like a friend.

Your grown up children are your best friends."

"Education is the best friend.

An educated person is respected everywhere.

Education beats the beauty and the youth."

Compiled by SANJAY KUMAR JHA and edited by KAILASH TULI The

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Institute for Higher Education