USP AGE JAIN KAMAL
VOL IV
THE COMPLETE MAGAZINE FOR MARKETING COMMUNICATION PROFESSIONALS
ISSUE NO.5 MARCH 2007 Rs 40
MARCH 2007
The
Q&A
Business ofTourism
STEFANO PELLE
ADVERTISING
Stop! Danger Ahead VOL IV ISSUE NO 5
MEDIA
A Symbiotic Relationship MARKETING
4 Ps, Cs, Ts R E TA I L
Gearing up for action
BY
INVITATION
III SUNIL GUPTA SOTC & Kuoni Holidays III ANIRBAN SENGUPTA Grand Hyatt III RADHIKA SHASTRY RCI Global Vacation Network III STUART CRIGHTON Cleartrip
Q&AIII38 AMITABH KANT III Joint Secretary, Dept. of Tourism, Govt. of India
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THE COMPLETE MAGAZINE FOR MARKETING COMMUNICATION PROFESSIONALS
STORY
The
BUSINESS of TOURISM Brand Tourism, if nurtured well, can be one of the biggest foreign exchange earners and employment generators of a nation.
BY
INVITATION
30 III SUNIL GUPTA SOTC & Kuoni Holidays 32 III ANIRBAN SENGUPTA Grand Hyatt, Mumbai 34 III RADHIKA SHASTRY RCI Global Vacation Network 36 III STUART CRIGHTON Cleartrip
Q&AIII38 AMITABH KANT III Joint Secretary, Dept. of Tourism, Govt. of India
GUEST COLUMN BY T. J . W A L K E R & R A V I S H Y A M
72 III Smarten up, and talk well Don't end up putting your foot in your mouth. Smarten up and talk like a pro
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ADVERTISING
44 III You’ve been Warned! As marketing redefines its role in a changed business environment, are advertising agencies geared up for the future?
MARKETING
CONCLUDING PART
46 III 4 Ps, Cs,Ts A rapidly evolving global market is shifting the focus from 4Ps to 4Cs, and now, 4Ts. Are Indian companies ready for the change?
MARKETING
54 III Media sans Marketing Just as with any other category — FMCG, telecom, consulting, or durables — it is time for the media too to be treated as a brand.
RETAIL
60 III Gearing up for action
Q&AIII58
As the quota regime comes to an end, global retailers are keenly looking at India as a sourcing destination. Is India ready?
STEFANO PELLE
Author of the book “Understanding Emerging Marketing: Building Business MEDIA BRIC by Brick”, VP and COO, business unit, The media and companies share a mutually dependent bond. Russia and South Asia, And, the fragmentation of the media is only strengthening this Perfetti Van Melle (PVM) Group, and chairman, relationship. Perfetti Van Melle, India.
66 III A Symbiotic Relationship
3 III LETTER FROM THE PUBLISHER 6 III READER’S WRITE 8 III QUICK FIX 76 III WWW 82 III EDITOR’S NOTE
78 III BOOKS III GETAWAY III WINE-N-DINE III ENTERTAINMENT III MUSIC
what’s on
MARCH 2007 USP AGE 5
from the publisher
TOURISM — A GREAT BUSINESS Dear Reader, With the enviable growth of the Indian economy, tourism business has started creating an array of exciting business opportunities. India, for long, languished with lower “footfalls” in the global tourism scenario. A paradigm shift is now taking place. The world is looking at India as a preferred marketing destination. Everyone is vying for a piece of the action. Earlier, it was just Mauritius. But, now,
nature’s wonders are not fortified with exotic “man-made” tourism opportunities. Look around the world — each country combines history tourism with adventure tourism, religious tourism and business tourism, and all with exotic man-made locations. India continues to be primitive in the second category. It is a tremendous business opportunity to create the world’s best theme parks, sea-worlds, casinos, recreational tourism and allied activities. Whilst the infrastructure facilities are still under development, 5-star hotel rooms are inadequate, public transportation is antiquated, cultural activities reach only a small fraction of the population. India is still a great place for making it among the world’s top destinations. For the global traveller, he has over 100 interesting tourist destinations to choose from and “packaging India” in every respect will go a long way. In an
In an “Experience Economy”, a great experience offered will result in exponential growth of footfalls. Singapore, Thailand, Dubai, Sri Lanka, Scotland, Europe, USA, and even China, is looking at strengthening their marketing tieups — both within their countries and in India. Many of the economies of the world depend on tourism for survival and growth. Egypt’s and Thailand’s economies are run on tourism. Huge investments have been made and continue to be made on adding on more “man-made” attractions and infrastructure facilities. Whilst India has an unparalled history which provide unique glimpses across the country, is gifted with exotic beaches and natural surroundings, can boast of nature’s gift of snow-clad peaks and turbulent rivers, these
“Experience Economy”, a great experience we offer to a traveller will set the tone and result in exponential growth of footfalls, which advertising alone cannot achieve. Tourism has been a state subject in India. But around the world, the private sector beneficiaries of tourism, like airlines, tour operators and hotels, proudly tout what their States have to offer. It is a collective effort to accelerate footfalls and benefit the society around them. There is a piece of cake for everyone in the Tourism sector. Which is your take? Happy Reading.
C D RAMACHANDRAN cdramachandran@usp-age.com
MARCH 2007 USP AGE 3
THE COMPLETE MAGAZINE FOR MARKETING COMMUNICATION PROFESSIONALS
readers write
PUBLISHER & EDITOR C D R AMACHANDR AN
even venture into setting up retail outfits there. In that sense, the article, though a good thought, was a bit too early for its times. RAKESH KHERA, VIA EMAIL, DELHI
Not really ready for take off! Apropos the article by Manisha Bapna (Ready for take-off, USP Age February 2007), seems a bit too early to really state that Indian airports are ready for the retail revolution. Far from it, Indians are just about getting their retail act together, and setting up retail outfits in Airports is a different game altogether. At best, what we Indians can do, as we have been doing in other sectors, including retail, is tie-up with an international specialist to 'assist' us in setting up and running retail outfits at Airports. Moreover, our
airports have to upgraded to international standards first before we
More noise, less substance Your February issue cover story was what one would call a 'half-baked attempt'. Whilst the writer has managed to interview some big players in the industry, he has missed out on others, such as Radio City, Radio One, Virgin Radio and most of the players from South of
FM stations.
DIRECTOR — STRATEGIC PLANNING G R AMACHANDR AN
KIRON KAIKINI, FUCHS INDIA LTD., MUMBAI.
DIRECTOR J BALASUBRAMANIAN
Radio Ga Ga
EXECUTIVE EDITOR SHASHIDHAR V
I liked the cover story on Radio industry (USP AGE February 2007),
Your feedback will be highly appreciated. Email your views to: s h a s h i d h a r @ u s p - a g e . c o m
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CONTRIBUTING EDITORS RAJ SARAN VARMA (NORTH) KAVITA RAMCHANDRAN (USA) ART EDITOR JAIN KAMAL LAYOUTS NITIN JAIN MANAGER — DIGITAL COMMUNICATIONS KAUSHIK R HEAD — MARKETING INDERPAL SINGH REGIONAL MANAGER SALMAN ALI KHAN (NEW DELHI)
especially the interview with Sindhu Shanmugham of ISB. She provided a good insight into intranet radio. It is such pioneering efforts that need to be highlighted in your magazine. Interesting reading, to say the least. D MURALI PRASAD, RETD. GM, STATE BANK OF HYDERABAD, HYDERABAD.
India. Also, he has not presented any information on community radios, which started off with much fan-fare but wound up rather quietly. The reasons as to why they failed, the procedure involved to start community radios, etc could have been looked at in detail. Also, an interesting area that could have been touched upon is Internet radios and their impact on the present
DEPUT Y EDITOR AMIT BAPNA
Short & Crisp I am a regular reader of your magazine and quite like it. A grouse though — I feel that you guys should be covering more on what is happening in the Indian advertising scenario. And also I find some of your stories too long and often pedantic. Crispness in today's media-cluttered world would be much appreciated. AMBIKA SAHU, BY MAIL, BHUBANAESHWAR
SPACE MARKETING TEAM DEEPA BHATTACHARJEE (MUMBAI) SRINIWAS KUMAR (MUMBAI) VENKATESH K IYER (MUMBAI) FAHAD FAHIM (NEW DELHI) RAJENDRA PRASAD (HYDERABAD) RETAIL MARKETING TEAM MICHELLE ABEL — BOOKS SHANTARAM AMBERKAR — NEWS STAND SALES SWETA SHRIBATHO — SUBSCRIPTIONS EDITORIAL ADVISORY BOARD N RANGACHARY FORMER CHAIRMAN, INSURANCE REGULATORY & DEVELOPMENT AUTHORITY OF INDIA K V KRISHNAMURTHY FORMER CHAIRMAN & MANAGING DIRECTOR BANK OF INDIA PARTHA S GHOSH INTERNATIONAL POLICY & MANAGEMENT CONSULTANT BOSTON PRAKASH DUBEY INTERNATIONALLY WELL-KNOWN NATURE & WILDLIFE PHOTOGRAPHER T RANGANATHAN MANAGEMENT CONSULTANT
PUBLISHED BY C D RAMACHANDRAN ON BEHALF OF BRAND VISION (INDIA) PVT. LTD PRINTED BY HIM AT MAGNA GRAPHICS (I) LTD, USP AGE DOES NOT ACCEPT RESPONSIBILITY FOR RETURNING UNSOLICITED ARTICLES AND PHOTOGRAPHS.WHILST CARE IS TAKEN PRIOR TO ACCEPTANCE OF ADVERTISING COPY, IT IS NOT POSSIBLE TO VERIFY ITS CONTENTS AND BRAND VISION (INDIA) PVT. LTD CANNOT BE HELD RESPONSIBLE FOR THE SAME. BRAND VISION (INDIA) PVT. LTD 103, MITTAL CHAMBERS NARIMAN POINT, MUMBAI 400 021 TEL.: 3028 8388 FAX: 2283 7214 WEBSITE: WWW.USP-AGE.COM email: feedback@usp-age.com
uick fix
Eye on Asia GREY GLOBAL GROUP REDEFINES ASIAN CONSUMERS
"People in Asia-Pacific are seeking a higher degree of personal enrichment through a wide range of experiences. This new breed of consumers is also completely multi-channel in the way they absorb news, information and entertainment - and they want to experience the brand at the same time." Surprised? Well, then, know that Asians are increasingly moving away from social conformity to choosing their own individual lifestyles, characterised by a shift away from living in the future to living in the present as they grapple with a work/life demands that are in disequilibrium. Well, if you didn't know that already, then, you don't know your consumer. This was the underlying theme of the Eye On Asia 2007 presentation that explored three key areas Asian life, today and tomorrow: What are people's hopes, dreams and biggest need states; What are the fundamental building blocks of a great brand in the Asian Pacific region; and What are the Peoples of Asia calling for in advertising and marketing. The study also highlighted five new trends that are redefining the marketplace. The study, with inputs from over 14 countries, highlights the pulse of the region while trying to understand the new consumer. While people's aspirations are redefined, how, then, can marketers stay ahead of the curve and yet be relevant? Is advertising of goods and products relevant and keeping up with time? These and other such issues are highlighted in this study which tries to unravel the changing Asian consumer while providing a roadmap for marketers to reach out to them.
Shine on, India GLOBAL ENTERTAINMENT INDUSTRY LOOKS TO INDIA
According to a recent report by Research and Markets, the global entertainment industry (read, Hollywood) has evinced keenness to invest in the growing Indian entertainment and media industry for its ample opportunities that it offers, be it in animation, films, dubbing, music, etc. The report further states that India is slated to acquire a sizeable share out of $1.8trillion mark of the success earned by global entertainment. Film, entertainment and television segments are the ones to mainly dominate the industry, followed by print, radio and the music segments. No wonder, there is no business like show business!
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One way ticket
Jet, Hutch tie-up for innovative M-Ticketing initiative
ALL it harnessing the power of technology or just another strategic tie-up, it certainly foretells the shape of things to come. India’s leading airline, Jet Airways, and Hutch, another leading telecom service provider, have come together for a pioneering initiative — M-ticketing. Developed by C-Sam Inc., USA., a leading secure mobile transactions technology provider founded by Sam Pitroda, this mobile ticketing solution will be available to Hutch customers with GPRS-enabled phones who are also Jet Privilege members. So, customers can now book, pay and generate e-tickets on their phones. Said Gaurang Shetty, vice president — marketing, Jet Airways (India) Pvt. Ltd., “To avail this service, JP members need to download the JetWallet application on to their
C
GPRS-enabled Hutch phones, and, upon activation, they can book tickets using their unique activation code generated while downloading. Customers can pay by using credit cards and can generate e-tickets which will be automatically emailed to a member’s preferred email address.” What’s more, the member will also receive the booking details on his Hutch phone via SMS. Thankfully, the system is designed to provide a booking experience similar to the web booking, thus retaining the effectiveness and convenience of use to passengers.
quick fix
Muscle power? Scale in Context?
EDIA IS EVOLVING and how! No longer are media agencies merely buying space and time. Rather, they are travelling that extra mile and creating newer opportunities. Services and solutions are being customized and scale is playing a very major role in creating a unique viable advantage. Against this backdrop, Publicis Groupe Media recently announced the launch of the consolidated Media Negotiation
M
I N D I A M E D I A E XC H A N G E M A K E S H E A D WAY
Unit — India Media Exchange, or IMX. The unit has been created to manage the combined buying functions of Starcom MediaVest Group and Zenith Optimedia. Media Planning will continue to remain within the respective agency brands, which will maintain their unique identities, though. IMX will be headed by Shyam Shanker as the president, and will be based in Mumbai, with offices in Delhi, Bangalore and Chennai. Jack Klues, chairman, Publicis Groupe Media, who was in India for the announcement, said, “The media assets of the Publicis Groupe in India, represented by Starcom MediaVest Group and ZenithOptimedia, will be leveraged to create significant scale, which will translate into an approach that creates a unique competitive advantage for their clients.”
At the core of communications MUDRA FOUNDATION LAUNCHES MICOR
After the success of its communications management school, Mudra Institute of Communications, Ahmedabad (MICA), Mudra now intends to bring global standards in the field of communication research through its second venture, Mudra Institute of Communications Research (MICORE), which will also be located in Ahmedabad. Though not an educational institute on the lines of MICA, the communications research conducted at MICORE will be available for sharing with MICA and the rest of the media fraternity. With the vision of contributing knowledge
talent back to the society, its core focus is to demonstrate how communication models can empower communities and increase the effectiveness of industry and social institutions. The research team will have 80-100 members and this will be MICORE's driving force. "MICORE will aim to achieve communications-centered solutions for developmental and organizational challenges facing the country," emphasis Madhukar Kamath, chairman, The Mudra Foundation, and managing director and chief operating officer, The Mudra Group. The proposed research domains it will operate would be on integrated marketing communications, cultural communications, semiotics, entertainment, film studies, computer games, cyber culture studies and social and developmental communications, which will be in a symbiotic relationship with MICA.
Tech That! MEDIA IT SPENDING TO TOUCH $300-MN BY 2010
According to a recent research —
India's Booming Media & Entertainment Industry: IT Market Trends and Opportunities 2006-2010 — conducted by Springboard Research, IT spending by the Media and Entertainment (M&E) industry is expected to grow from the current $100 million (Rs445-crore) to $300-million (Rs1,320-crore) by 2010, a growth of 32 per cent. The market was around $62 million (Rs275crore) in 2005. The report reveals that the majority of M&E companies have spent more than $225,000 (approx Rs1-crore) each on IT in the past 24 months. Around 41 per cent of them have spent more than $700,000 (approx Rs3-crore) implementing IT solutions during the same period. Industry analysts claim that the primary reasons for M&E companies to invest in IT is because of the digitisation of content, urgency to reach new markets and increasing competition. The findings of the
MARCH 2007 USP AGE 9
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Stridein-style
CASIO LAUNCHES NEW DIGITAL CAMERAS
METRO SHOES COMFORTER RANGE FROM DAVINCHI
The EX-Z1000 is a stunning new addition to the growing family of EXILIM ZOOM series of digital cameras from Casio. The EX- Z1000 can take users to new heights of
Celebrate womanhood AN EXOTIC COLLECTION FROM THE HOUSE OF SHOBHA ASAR
From wild sensuality to serene
gracefulness, from divine beauty to
photographic expressions with its multitude of functions and 10.1 Mega Pixel resolutions. A 1200 cd/ sqm LCD backlight makes screen images easier for outdoor viewing. The wide, highbrightness 2.8 inch LCD makes images crisper, clearer and brighter. Price: Rs29,995
Corporate world is where one has to walk the walk and talk the talk, and Comforter range of shoes from daVinchi has more to offer than just its good looks. Made of best quality leather, this hand-made footwear features a contour support with planter mould and anti skid foot bed that technically ensures maximum foot stability, giving the user a feel of walking in the clouds. Price: Rs2490 - 12990
alluring exotica, there is something beautiful designed by Shobha Asar, for the woman of today. And, this particular piece of jewel has rose cut diamonds with interchangeable rubies, emeralds and a pearl, which takes the breathe away. Price: Rs3 lakh plus
DOPOD PRESENTS THE AFFORDABLE D600 PDA PHONE
Powered with cutting edge technology, the D600 is one sleek and stylish mobile handset. It features the revolutionary
Talk to me
Microsoft Windows Mobile 5.0 and has designer applications that include DirectPush Mail, Internet Explorer Mobile, Office Mobile, Windows Media Player 10 Mobile, pictures and videos, and Pocket MSN. It is also
complimented with an inbuilt 2 Mega pixel CMOS Camera, a speakerphone with push-based wireless email, and personal organizer applications. Price: Rs22893
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continuous talk time on a fully charged battery, and VoIP capabilities. Based on the new Windows Mobile 6 platform, the HP iPAQ 500 series provides business professionals with an enhanced Outlook Mobile experience and enjoy quick access to contacts with the ability to search a call history and contacts database.
Loud and Clear THE NEW SMART PHONE, FROM HP
The HP iPAQ 500 series Voice Messenger, is a powerful smart phone with voice control and hands-free operation that offers mobile professionals a wireless email experience. It features long-lasting battery life with up to six hours of
As sharp as it gets
Price: Will vary internationally
SHARP LAUNCHES NEW NOTEVISION PROJECTOR
The new range of Notevision projector -'XG-
C430X and XG-C330X' - provides high-brightness, high-quality performance in a compact and lightweight body with ease of operations, maintenance and network controls. The projectors employ cutting-edge optoelectronics technology in a three-LCD projection system to maximize light output, providing 4000 ANSI lumens brightness, delivering a bright, easy-to-see image even in large, brightly lit rooms. Price: XG-C430X - Rs1,99,500 XG-C330X - Rs1,37,000
Movie on the go ARCHOS LAUNCHES GEN 4 PORTABLE MEDIA PLAYER
The brand new ARCHOS 404 Camcorder is the
complete portable digital media player for anyone wanting to both take all of their entertainment content with them and take digital video while on the go. It provides consumers with a 30GB hard drive for capturing up to 80 hours of VGA-quality video (640 x 480), combined with the option to play back video on the device's 3.5-inch LCD screen. Price: $299.99
MARCH 2007 USP AGE 15
quick fix
INTERNATIONAL
Pssst! You said something? RESEARCH THROWS NEW LIGHT ON PROJECT AWARENESS ACCORDING to a new research from a Crucial Conversations Online Survey, 82 per cent of employees say there are significant organization-wide initiatives underway in their workplace that will likely fail, and 78 per cent say they are personally working on a "doomed" project right now. And, what's more, it's not just big business that suffers from project failure. Among the key survey findings are: - More than 90 per cent say they know early on when projects are likely to fall short. - Eighty-one per cent of the surveyors claim that approaching a key decision maker about the project is nearly impossible. In other words, only 10 per cent feel they can effectively speak up about the probable failure of the project. - More than 71 per cent say they try to speak up to key decision makers but don't feel they are heard, while 19 per cent don't even attempt to have the conversation. Some of the reasons people cite for being unable to discuss crucial issues with a decision maker include worrying about damaging their credibility or reputation, as well as fear that the decision maker might get angry or defensive. Says Joseph Grenny, coauthor of the bestseller, Crucial Conversations, “The reason most employees don’t speak up when they know a project is doomed is that they don’t know how to speak up in a way that solves the problem. So, there is a strong tendency for people to ‘go silent’ on important issues because they expect the conversation will go badly. But, with the right set of skills, employees and senior leaders should be able to discuss crucial issues that, if resolved, can ultimately save companies billions of dollars in wasted time, squandered resources, lost jobs, and sagging revenues.” Backed by Grenny’s previous research study, Silence Fails: The Five Crucial Conversations for Flawless Execution, released by VitalSmarts and The Concours Group late last year, the study points to five key conversations that, if held quickly and effectively, can decrease failure rates by 50 to 70 per cent.
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A global footprint! PUSHES ADS GLOBALLY ASK YAHOO! how to make technology work smart. With its presence in 19 countries across Europe, Asia and the Americas, Yahoo! intends to focus its acumen in display advertising and be number one in mobile monetization. So, for the convenience of the customers of its advertisers, the company has decided that advertisements will run near the top of the Yahoo! Mobile Web home page, and consumers only need to click on these interactive ads to directly call the advertiser to learn more information about the advertiser’s offer. Also, to keep the consumer quotient intact, Yahoo! will provide comprehensive solutions across both display and search advertising, which will include customized research, which, in turn, is expected to have unparalleled targeting and measurement capabilities. The inaugural mobile advertising campaign has global advertisers like Hilton's Embassy Suites, Infiniti, Intel, Nissan, Pepsi,
Procter&Gamble Asia Pacific and Singapore Airlines playing a major role. With such a progressive venture, Yahoo! has ensured its position as the leader in the display segment.
ROI? What's that? MOST CLIENTS CAN'T MEASURE AD ROI So, how do you measure the return on your ad investment? Don’t fret, cos you’re not alone. According to a recent survey of agencies and their clients, conducted by Forrester Research, Ad agencies are failing miserably to deliver what clients want, never mind that most marketers can’t measure what they’re getting from their shops anyway. The report is based on one simple question that was posed to the respondents: How likely are you to recommend a particular product or service? Agencies registered a dismal aggregate score of 21 per cent, meaning that very few clients would recommend their agencies’ services to others. However, the report found that 76 per cent of marketers had no way to determine their return on investment from their lead agencies. Sixty-nine percent said ROI is too difficult to measure. The report, titled “Help Wanted: 21st Century
quick fix
INTERNATIONAL
Getting a sharp focus INTRODUCES NEW FACES FOR GILLETTE CHAMPIONS PROGRAM
GILLETTE, the world leader in men's shaving products, has announced the launch of the new Gillette Champions program with the unveiling of Gillette's newest brand ambassadors - three of the bestknown, most widely respected and successful athletes competing today: Tiger W oods, Roger Federer and Thierry Henry . The three ambassadors are to be fully integrated into Gillette brand programs and will be leveraged through multi-faceted marketing initiatives, including global print and broadcast advertising, consumer promotions, point of sale materials, online and public relations in
support of Gillette's premium shaving products. The Gillette Champions program is scheduled to roll out in over 150 markets in the first year, making this the largest current sports marketing initiative for the brand. According to Chip Bergh, President, Global Grooming, at Gillette, these three ambassadors were selected not only for their sporting accomplishments, but also for their behaviour away from the game, in their charitable actions, support of social causes or their reputations as icons of true sporting values, in consistent with the program values. "They are as much champions in their personal lives as they are in their sports," says Bergh.
Click for fraud RETAILERS ADVERTISING ON SEARCH According to a recent data, click fraud presents an increased threat to the online advertising industry. Click fraud is especially high for advertisers who run campaigns on the content networks. The industry average click fraud rate was 14.2 per cent, the highest level in 2006.
Agency”, queried about 140 agency executives and marketers. It found that agencies’ perception of their performance in crucial areas, such as helping marketers navigate emerging channels and understanding business channels were more optimistic than the actual judgment of marketers themselves.
What a life! TREND: PETS “HAVE IT ALL”, NOT HUMANS
A new study fromThe Goodlife Recipe brand reveals that 80 per cent of cat and/or dog owners
choose to treat their pets before they treat themselves. They want to give them the kind of life they’d like to lead, and give them gifts — diamond-studded collars and nail polish — which they might actually want and need. Forty-five per cent of pet owners want to come home from activities because they know it’s what their pets want. Sixty-eight per cent of people make room for pets in bed, and 52 per cent make sure their pets get more flavourful and balanced diet than they give themselves. Now, who wouldn’t want a dog’s life?
Honing a retail skill MARRIAGE OF CONVENIENCE
Bazaarvoice, an innovator in helping brands use online word of mouth to build their businesses, and IBM have joined hands to help retailers create a more interactive and customercentric shopping experience. This, say Bazaarvoice company sources, will be done by working with online merchants to integrate its leading ratings and reviews solution, which will allow retailers to build a community of their most influential customers, and can use the authentic customer voice to help shoppers make more informed and rewarding purchasing decisions.
MARCH 2007 USP AGE 17
quick fix
Awards and Rewards Time THE GOAFEST-2007 IS BACK
It’s that time of the year again…Time for GoaFest, which is all set to make a come back with a bang in its second avtaar. Organized by the Advertising Agencies Association of India (AAAI), the festival is to be held on April 20 and 21 and, as with every year, would be recognizing excellence in creativity and media. Says Srinivasan K Swamy, president, AAAI, “This year’s GoaFest will be at the same scale as an international fest with exhibitions, highend seminars and awards for two consecutive days along with fun and frolic in the beaches of Goa.” Depicting creativity talent at its best, the TVCs of GoaFest are already a rage on the Internet with a high viewership amongst the advertising fraternity. On the anvil are print campaigns and web campaigns for the event, on the same creative lines. “It’s not just an awards show; it is much more than that, with all the exhibitions and seminars revolving around it. Moreover, this year, we will see delegates from all over the country, and not just the big cities," promises Arvind Sharma, chairman of the AAAI GoaFest Committee. The full details including call for entries brochures as well as the entry forms can be easily downloaded from www.goafest.com
Asia, the leading Pan-Asian advertising agency network, with David, Ogilvy India's second agency network. The new entity, christened Bates David Enterprise, will be led by Subhash Kamath as its CEO, while Mohammed Khan will continue as founder chairman of the new entity. Says Kamath, "The merger makes perfect sense, as this brings together some great minds on an enviable set of brands. Historically too, both Ted Bates and David Ogilvy were very close friends and had a lot of respect for each other." With offices in Delhi, Kolkata, Bangalore, Chennai and Mumbai, the agency purports to offer a complete range of communication services.
Branded entertainment TATA MOTORS JOINS THE BANDWAGON
‘In-film brand placement and advertising’ is finally becoming big
12 USP AGE MARCH 2007
business with a host of brands apportioning a sizable component of their marketing promotional budgets here. Tata Motors recently associated themselves with Farhan Akhtar and Ritesh Sidhwani's multi-starrer film 'Honeymoon Travels Pvt. Ltd.' to promote the 'Tata Starbus'. The
placement was made a part of the script and to suit the requirements of the script of the film, the 'Starbus' was specially customized. What's more, to promote the innovation, a 360-degree campaign was carried out with a mix of Web and SMS contests, Vox Populi, out-of-home campaigns etc.
India Metamorphoses
when compared to the global PR scenario? These and many such burning issues are to be debated in the three-day global meet on corporate communication and PR, that is bein oganised by the Public Relations Council of India, in Bangalore. The meet, scheduled for the 16th of March, will see some of the big names in the industry coming together to impress upon each other the urgent need to adapt global practices while taking a reality check on where exactly Indian PR stands. Some of the people who will be speaking at the event are Harish Bijoor, brand consultant, and Mathew Hibberd, deputy head and director, Universty of Stirling, UK. As one of the organising committee official says, "It will bring about a metamorphosis in all the participants." The event will also see participation from representatives of the state and central government. Form IV (See Rule 8) 1. Place of Publication 2. Periodicity 3. Printer’s Name
Nationality Whether a citizen of India Address
Is India in sync with global PR, or is the 5-star routine the furthest that Indian PR can go? How abreast are Indian PR tools
Yes Magna Graphics (India) Ltd 101-C&D Govt. Industrial Estate, Kandivali (W) Mumbai - 400 067
4. Publisher's Name Nationality Whether citizen of India Address
C. D. Ramachandran Indian Yes 103, Mittal Chambers, Nariman Point Mumbai — 400 021
5. Editor’s Name Nationality Whether citizen of India Address
C D Ramachandran Indian Yes 103, Mittal Chambers, Nariman Point Mumbai — 400 021
SHAREHOLDERS 6. Names and addresses of individuals/body corporates who owns the magazine and shareholders holding more than one percent of the total paid-up capital as at 28th Feb,2006 Mr C D Ramachandran 30, Ameeta, Gen. Jagannath Bhosale Marg, Mumbai — 400 021 Mr G Ramachandran 401, Sriram Bhavan, Plot 745, Jehangir Vima Dalal Street, Parsi Colony, Dadar (East) Mumbai — 400 014. Mrs. S Ramachandran 30, Ameeta, Gen. Jagannath Bhosale Marg, Mumbai — 400 021 Ms. Kavita Ramchandran 30, Ameeta, Gen. Jagannath Bhosale Marg, Mumbai — 400 021 Mr. Kaushik Ramchandran 30, Ameeta, Gen. Jagannath Bhosale Marg, Mumbai — 400 021 Kaushik Holdings Private Ltd 103, Mittal Chambers, Nariman Point, Mumbai — 400 021 Imageads & Communications Private Ltd. 103, Mittal Chambers, Nariman Point, Mumbai — 400 021 I, C.D.Ramachandran, hereby declare that the particulars given above are true to the best of my knowledge and belief.
GLOBAL MEET ON PR SET TO ROLL
Mumbai Monthly T.P. Pandey Director Magna Graphics (India) Ltd. Indian
Date: 1st March 2007
C D Ramachandran Signature of the Publisher
marketing
4 Ps Cs Ts
A rapidly evolving global market is shifting the focus from 4Ps to 4Cs, and now, 4Ts. Are Indian companies ready for the change? Product becomes Trade GLOBALIZATION offers extensive opportunities for truly worldwide development. One of the major initiatives towards world trade and economic cooperation is the recent signing of the Uruguay Round (UR) of the General Agreement on Tariffs and Trade (GATT), which is seen as the most comprehensive and ambitious of all rounds of talks among GATT-member countries. Economic "globalization" is a historical process; the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through trade and financial flows.
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The term sometimes also refers to the movement of people (labour) and knowledge (technology) across international borders. There are also broader cultural, political and environmental dimensions of globalization. Global markets offer greater opportunity for people to tap into more and larger markets around the world. It means that they can have access to more capital flows, technology, cheaper imports, and larger export markets. There are two factors why firms go international. One is the pull factor, which is proactive. In such a situation, companies opt for international markets for their
marketing
attractiveness, widening the scope, relative profitability and growth prospects. The other factor is push factor, which refers to compulsion of domestic market, like saturation of the market, thrust of competition, etc. Most of the push factors are for reactive reasons. Multinational companies, such as Whirlpool, Samsung, LG and Electrolux, are making their presence felt in India and China. Two key points which are driving them to these two Asian countries are their cost-effective manufacturing capabilities and R&D facilities. Indian manufacturers like the Tatas, Ambanis and Birlas, brought about highly commendable improvements in their operations and products, living up to the dictum 'survival of the fittest'. These are the positive effects of globalization. The Indian economy has grown rapidly over the past decade, with real GDP growth averaging some six per cent annually, despite external shocks. Recognizing the important linkages between trade and economic growth, the Government has simplified the tariff, eliminated quantitative restrictions on imports, and reduced export restrictions. It plans to further simplify and reduce the tariff. To help counteract the anti-export bias inherent in import and other constraints, export promotion measures have gained in importance. The government has recently announced a further increase in these measures and pledged to reduce export restrictions. The policy has also suggested the creation and strengthening of enclaves, such as export processing and special economic zones, which would "immunize" exporters from the constraints affecting the rest of the economy, such as infrastructure and administrative problems. The government estimates that annual export growth of almost 12 per cent is required in order to raise India's share of world trade from its present level of 0.67 per cent to a target of One per cent by 2007. International trade has become the key word of the present era. It has grown phenomenally.
Price becomes Tariff In today's business, the exchange of goods and services across international boundaries is become commonplace. In most countries, it represents a significant share of GDP. Tariff refers to the duties or taxes imposed on internationally traded goods when they cross the national borders. Virtually all of today's
Multinational companies, such as Whirlpool, Samsung, LG and Electrolux, are making their presence felt in India and China. Two key points which are driving them to these two Asian countries are their cost-effective manufacturing capabilities and R&D facilities. developed countries built up their economies using tariffs and subsidies (and many other measures of government intervention) throughout the 19th century and most of the 20th century (in particular, until the early 1970s). The United States of America maintained average industrial tariffs at around 40 per cent, and never below 25 per cent, except for brief periods — far higher than many other developed countries. During 1950-1973, the so-called 'Golden Age', the six fastest growing countries, including America — Japan, Italy, Austria, Finland and France — were high tariff countries. One of the most important feature of the international trading environment is the proliferation of trade barriers. A country can have several reasons for imposing a tariff. For example, a revenue tariff may be applied to an imported product that is also produced domestically. The primary reason for this type of tariff is to generate revenue that can be used later by the government for a variety of purposes. This tariff is normally set at a low level and is usually not considered a threat to international trade. When domestic manufacturers in a particular
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marketing
When domestic manufacturers in a particular industry are at a disadvantage, vis-a-vis imports, the government can impose what is called a protective tariff. This type of tariff is designed to make foreign products more expensive than domestic products and, as a result, protect domestic companies. industry are at a disadvantage, vis-Ă -vis imports, the government can impose what is called a protective tariff. This type of tariff is designed to make foreign products more expensive than domestic products and, as a result, protect domestic companies. A protective tariff is normally very popular with the affected domestic companies and their workers because they benefit most directly from it. India has had one of the highest tariff walls in the world. The Chellaiah Committee steadily reduced the peak level of tariffs from over 300 per cent in 1995 to 25 per cent in 2003, excluding agriculture and dairy products. Organizations, like WTO, prefer tariffs to non-tariff-barriers (NTB) because tariffs are transparent and less regressive than NTBs. Thanks to WTO, there has been a significant replacement of NTBs by tariffs.
Place becomes transportation The importance of transportation to economic growth and productivity is undisputed. Transportation confers place-utility and time-utility to products and services. At the macro level, progressive transportation modes contribute handsomely to the national economy. At the
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micro level, techniques have been developed and refined for determining the economic impact of transportation programs and projects. It has been observed that there is a shift in hiring services of contracted and third party transporters by many organizations. An increasing reliance on the use of externally contracted services eases out maintenance and logistics tensions. In transport terms, this is witnessed by the growth of the logistics and total distribution providers, including express freight and logistics services companies. Economies of scale achieved within the transport sector by logistics providers act to reduce the costs of provision of the transport element of a business, together with increased complexity and benefit of using Intelligent Transport Systems (ITS) in the delivery of the logistics 'product'. UK High street retailers, including Marks and Spencer and Sainsburys, regularly contract a majority of their distribution functions to third party suppliers, although Sainsburys maintains a small number of own account transport distribution facilities. Close home, big retail organizations like Shopper's Stop, Viveks and Subhiksha, also work on intelligent transportation logistics to achieve economies of scale. Key to the increasing globalization of industry is the provision of quality air transport. Air services have a vital role in reducing travel times, increasing accessibility and, therefore, improving economic efficiency and productivity. Critical factors in a company's decision to locate near an airport include the need for rapid delivery of products (air freight) and for international business travel. Airports serve an important role in attracting inward investment, particularly from overseas, help to stimulate and sustain the growth of local businesses by opening up new markets and supply chains. Of course, of particular importance for air transport is the level of services provided (e.g. direct flights to relevant locations at suitable times or good inter-connections), and surface access as well as the actual physical infrastructure. A research shows that businesses in computing, software, research and development, biotechnology and some food manufactures as well as the banking, finance and insurance are heavily dependent on air freight and air services, and prefer to be located near the airports. Airports can promote the 'clustering' of businesses, whereby a number of interlinked manufacturing and service activities are concentrated in one place. It is important to examine transport factors, such as timing,
marketing
reliability and perception of cost in the value chain. Sometimes, it can be as important as cost itself. Movement of goods, both upstream and downstream, of elements of the manufacturing process has become typified by inclusion within the wider production process. The transport elements of the production become internalised to the costs and pressures of the wider supply structure. Tighter control of delivery and use of stock, Just-in-Time (JIT) practices, and a demand for added value in components (part finished and partial component assembly) increases demands on the logistics elements of the supply chain. Demands placed on businesses and supply is also changing, in line with increased accuracy and flow of information, and in terms of consumer expectations. Multi-national and large firms have maintained and increased the complexity of their operations while reducing own account transport requirements, while many smaller-sized companies have developed around geographical and technical clusters, resulting in changed demand and reducing costs of transport provision. The changing pattern of logistics, especially (but not solely) in manufacturing has potentially profound implications for the role and impact of transport upon employment location (consumer service companies are also greatly affected by logistics changes, but front line premises are more dependent upon the best customer location, although warehousing may be affected by logistical changes). Transportation plays a pivotal role in making the goods and services available to customers — progressive transportation models help the businesses to become successful.
Promotion becomes transformation The dictionary meaning of the word 'transformation' means to put into simpler terms; to change from one form, function, or state to another; convert or transform. Promotion keeps the product in the minds of the customer and helps stimulate demand for the product. Promotion involves ongoing advertising and publicity. Activities like advertising, translating message to the consumers and transforming the business with profitable sales are often considered aspects of promotions. The advertising industry is passing through one of the most disorienting periods in history. The stalwarts of the industry say this is because of a more aware and
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Critical factors in a company's decision to locate near an airport include the need for rapid delivery of products (air freight) and for international business travel. Airports serve an important role in attracting inward investment, particularly from overseas, help to stimulate and sustain the growth of local businesses by opening up new markets and supply chains. intelligent customer than before. The media, on the other hand, is growing more and more diverse. Diversity is the central issue of the global village. The multicultural and multilingual effects of society reflect on media diversity. Television networks, which, once upon a time, were the best option of reaching the mass audience, are no more a favourite of advertisers. It does not attract the same amount of viewing anymore. Change in TV-viewing habits is, however, only part of a much wider shift in the way media is consumed. Moreover, people are spending less time reading newspapers and magazines; this is because they are hard pressed for time. But, they are going more to cinemas, listening more to FM radio stations; the younger generation is habitual to listening to the radio from early hours of the day and they are turning in everincreasing numbers to the Internet. This shift is due to a need of the consumers to access information easily. The technology bust is changing the media habits of the
marketing
Prosumers are ahead-ofthe-curve in their attitudes and behaviour. Early adopters tend to be more "one dimensional", i.e., they tend to be defined by the particular behaviour of adopting early. Prosumers demand transparency and authenticity from the marketers. Hence, transforming them into consumers requires a different ball game altogether. people like never before. Getting trendsetters to buy new products or service is no more considered a great idea. The scene is changing. Everett Roger's innovators and early adopters are no more the favourites of the markets; instead, now, they look forward to pursue the prosumers, a term used to describe professional consumers. A large chunk of marketers are of the opinion that this group is a lot more powerful than previously thought. They are not impulse-driven, like the innovators, and early adaptors; they go slow and steady, but once they accept a product, they support it. They are serious buyers in the sense that they do a lot of research before their buying decision. From a high-tech product like a camera, or computer, to not-so-high-tech products like clothing or a professional course, prosumers venture to buy only when they are satisfied with their self-study.
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This group of consumers is proactive in nature. Euro RCGC, a world-renowned market research agency, recently completed their prosumers survey spanning over nine countries in the world. The study concludes that prosumers represent 20 per cent or more for any category of products. They can be found everywhere in the world; they are vanguard of consumerism movement. The prosumers often reject traditional ads and invariably use the Internet to research for what they are going to buy and how much they are going to buy, and for what price, etc. They don't trust companies and brands which are not advertised on Internet. Companies have to be extremely open about providing information on the Net to attract these prosumers. Prosumers are ahead-of-the-curve in their attitudes and behaviour. Early adopters tend to be more "one dimensional", i.e., they tend to be defined by the particular behaviour of adopting early. Prosumers demand transparency and authenticity from the marketers. Hence, transforming them into consumers requires a different ball game altogether. Traditional marketing is changing; customers are getting more sophisticated and price sensitive. They expect products and services to be delivered faster, and more conveniently, and they have no qualms about switching to competitors. Competition is tight, with new developments picked up almost immediately by competitors. All this makes it vital to constantly innovate, stay tuned in to customers' needs, and to anticipate who tomorrow's customers might be. Be flexible, innovative and, importantly, 'close to your customers'. The market was and will always remain elusive. The lesson is giving your customer what he/she wants. Companies survive on the strength of their brands; failures of brands can, at times, be fatal for the company's existence. Often, companies suffer due to unclear objectives, "fuzzy" business mission, wrong market information, blurred marketing intelligence, unfocused promotional strategy etc. When products reflect corporate desire rather than customer needs, it portrays 'Marketing Myopia' of the company. The present market scenario is signalling to shift to the 4 Ts.
DR . VIDYA HAT TANGADI The author is director and professor of Marketing Management at Allana Institute of Management Studies, Mumbai. email : vidyah_28@yahoo.com
media
A Symbiotic Relationship The media and companies share a mutually dependent bond. And, the fragmentation of the media is only strengthening this relationship. HE GROWTH OF corporations and their role as the prime movers of the economy can be traced over a period during which the mass media also made rapid strides. Although operating in different domains, there have been invisible threads which have forged close relationship between the media and the corporate world. They have been mutually dependent and have supported each other through the process of their evolution. The initial phase witnessing the rise of big businesses and corporations was marked by a comparative
T
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disregard to the public opinion. This attitude was probably thought to be appropriate for preventing any intervention. This was the era of "the public be damned". But, such an attitude did not stand the test of time. In the early 1900, the rise of powerful monopolies and concentration of wealth and power in a few hands in the US, led to the generation of mass antagonism towards big business. In fact, one can see the replication of such developments in other countries and situations where the big businesses have started wielding greater influence on the society. These developments everywhere
media
led to a change in attitude on the part of corporations, who knew that their survival and long-term growth depended on the stamp of approval from the people at large. So, corporations started realizing the necessity of combating popular resentment and hostility besides trying to build large-scale acceptance of their operation. This called for the ability to reach out to the masses. Hence, media came to occupy a place of great importance and emerged as an indispensable institution in the emerging situation. In the highly competitive business environment today, the greatest scare for any corporate is the generation of public disapproval. No organisation worth the name can afford bad reputation and, as is the common knowledge, media is the vehicle for building and maintaining the reputation and image for the corporate entity. As for the media, there are media groups which can even give tough competition to big corporate houses. So, in a sense, these media groups themselves are a part of the corporate world. However, since the corporatisation of media is a different issue, here we can treat the corporate world and media as two separate entities. Society is the common link between these two, as corporations as well as media work for the common good of the society, in addition to serving their own interests. A symbiotic or mutually beneficial relationship between the corporate world and the media is, therefore, inevitable. With the convergence of communication channels, the relationship between the two has grown much stronger. Take a look at the Tatas and Reliances of India to get an idea of how closely knit the world of corporate and media is. You can see the media filing their reports or AV clips through their laptops, using telecom networks of these business houses. Newspapers are bringing out multi-city editions, and internet editions, while TV channels are offering video-streaming of news on their websites. And, what about the FM radio that you listen to on your mobile phones, without consciously thinking about this linkage? All this shows how investments in research by telecom companies worldwide have benefited the media industry. But, obviously, this is, by no means, a one-way street. The big corporate houses are equally benefited from this media revolution of sorts. The huge increase in mobile and private telecom phone usage is largely due to the media add-ons they are able to offer, whether it is live news, match scores, FM radio or other interactive offerings. But, telecom is not the only industry where
In the highly competitive business environment today, the greatest scare for any corporate is the generation of public disapproval. No organisation worth the name can afford bad reputation and, as is the common knowledge, media is the vehicle for building and maintaining the reputation and image for the corporate entity. this symbiotic relationship exists. It is there everywhere, in every industry and corporation. Business organisations don't operate in vacuum. They owe their existence to the society which has accommodated them. Their survival depends on the acceptance by the people who constitute the society. Media provides a significant support to them for accomplishing this objective. Media, in its role as the watchdog of society, highlights the contribution of companies as corporate citizens, while exposing the shortcomings as well. This way, media is instrumental in building the image for the organisation and determining the stature of the organisation in the national or international arena. Media also provides the platform for corporations to fight their competitive battle. We are quite conversant with the ad campaign and counter-campaigns by Coke and Pepsi, which occupies media space from time to time. Media is also used by big companies at the time of crisis, to give updated information to the public to prevent rumours. A major bank faced a similar situation a few years back, when a rumour gained currency that cash deposited with the Bank is no longer safe. People started rushing to their branches and ATMs to withdraw cash. The Bank jerked into action, and with the help of the media, reached the account-holders to dispel such notions and doubts and made a conscious effort to improve public confidence. This literally nipped the problem in the bud and a major crisis was averted. Similarly, when a worm was found in Cadbury's chocolate, the company devised a strategic media plan and implemented it at break-neck speed. Amitabh Bachchan was cast in their ad-campaigns highlighting the fool-proof system used for manufacturing Cadbury's chocolates. Did it work? Well, if, today, you don't hesitate to pick up a Cadbury, then, probably, their media strategy
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media
has worked. Media, because of its wide reach and acceptability, serves as an important tool in communicating a corporation's message to the audience. In general, too, companies use print as well as electronic media to publicise their products and services. Media, in turn, gets revenue from these advertisements, which is its prime source of income. Invariably, the price at which we avail the communication from media is only a small fraction of the actual cost of that communication. The cost of newsprint used in a newspaper is many times higher than the price at which it is sold to us. The difference comes from advertisement revenue that is generated from the business organisations. Flow of funds from the corporations ensures the financial viability of newspapers, magazines as well as the electronic media. Thus, we can easily comprehend the mutual dependence of corporations and media. Business newspapers and magazines as well as business channels have recorded substantial growth in recent years. These media draw most of their contents from the activities of the corporations. Hence, they keep closely interacting with the corporations on a day-to-day basis, both for news material as well as for their marketing requirements. Another area where both media and the corporations work towards a common goal is Corporate Social Responsibility. Media reflects the major issues that gain currency in the contemporary society. To that extent, they play the role of responsible corporate citizens, just as committed corporations do. Several crucial problems of the society at large are being addressed jointly by the media and corporations. The emergence of citizen's media has become another phenomenon which has the potential to strengthen this symbiotic relationship. A new concept born out of the technological revolution of the new era, citizen's media is the result of cheap accessible digital publishing tools being available to a mass market for the first time. Blogs are an apt example of the new type of citizen's media. It is commented that "People now own printing press and the broadcast tower and the barrier to entry to media has been blown away." A key element of this new type of media is the trust that people have in it. If someone's blog raves about a new product, people take notice because they know the publisher has no vested interest. Dissatisfied customers can immediately tell the world and hook up with their disgruntled brethren. The resulting energy and passion can make traditional media
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Business organisations don't operate in vacuum. They owe their existence to the society which has accommodated them. Their survival depends on the acceptance by the people who constitute the society. Media provides a significant support to them for accomplishing this objective. look quite pallid in comparison. Podcasting is increasingly becoming a major concern for companies. The new communication media are providing opportunity to every net-savvy person to share his/her views with the world. Blogging has become so popular these days that certain blogs have been converted to printed books. Technorati.com, for instance, tracks more than 14 million blogs and says that the blogosphere is doubling in size every five months. Blogs, a part of so-called 'citizen media' have comparatively more credibility than advertisements, because these are written by peer groups. Last year, when a customer of the US cycle lock manufacturer, Kryptonite, found that his super-tough lock could be opened with a ballpoint pen, he immediately published his findings on San Francisco's bikeforums.net. The post was read by more than 400,000
media
people, and a video, showing a ballpoint in action, was downloaded more than three million times in just a few days. Within a week, Kryptonite retailers were clearing their shelves, thousands of products were being returned and the New York Times had picked up the story. The company has since replaced 350,000 products at their own expense. For companies, this means that they now have to keep an eye on blogs related to their product or service. Any one of these blogs can snowball into a big issue if it has some credence and acceptability. There are blog-watcher groups now offering package services to the companies. Similar is the case with podcasts, whether these are through internet or radio. Imagine people or groups interested in tarnishing the image of a company, for valid or invalid reasons, and keeping a track on these activities. So, now, we have entered the world of Infotech. No doubt there are hidden opportunities in the internet world for reaching out to more and more people. But, these bring their own set of challenges too. And the corporate world should be prepared to meet these challenges.
Here, too, combined efforts of media and corporate houses can bring in the desired result. Corporations can support media for these new initiatives in the web-world, and media companies can bring in control systems to check and prevent malafide blogs or podcasts. Having said that, the genuine concerns of customers cannot be ignored. These have to be promptly addressed. Here again, corporations have to demonstrate speed and resilience in responding to questions which can snowball into a major issue. This process can be facilitated by the media, thereby enhancing their image and credibility. In summation, the relationship between media and corporations can best be described as mutually dependant. A word of caution is that such relationship should not degenerate into becoming a nexus. In any case, the new developments, such as the citizen media, will always prevent such developments. This article has been written by D E B J I T R A T H , general manager, corporate affairs, SAIL, and S A N J A Y G O R A , deputy manager, corporate affairs, SAIL. The views expressed in this article are personal and not necessarily of the company they represent.
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USP AGE The Media for Discerning Media. Today, decisions on choice of media are far more complex than what they were until recently. Multiple choices in every sphere — print, electronic, outdoor, promotions, events and other niche media — continue to confuse and confront advertisers, their agencies and even media planners. To develop top-of-the mind recall of communication to your vast target audiences, you need a sharp focus in what you say and where you say it. A focus that only USP Age, the complete magazine for marketing communication professionals, can give you.
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retail
Gearing up for action As the quota regime comes to an end, global retailers are keenly looking at India as a sourcing destination. Is India ready? E HAVE HEARD a lot about IT and ITES services, but not much about retail sourcing from India. Reasons might be many but, nevertheless, it is a huge opportunity. The end of the Quota Regime — beginning 2005 or, in other words, end of the Multi-Fibre Agreement — has set pace to the already huge volumes that retailers source from India. There is a spurt in demand from the big foreign retailers for various products from India. A majority of the top 20 giant retailers worldwide have plans to increase
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sourcing from the country. Till now, many just had thirdparty buying offices in the country, but now, they are setting up closely-held sourcing and buying offices. The market that we are considering consists of all material/goods sourcing done by global retailers from India. About 60 to 80 per cent of the market consists of textiles/ apparels/ garment exports and cotton made-ups (terry towels). The market size has been estimated based on the sourcing volumes of several big retailers. Some of the global retailers are Wal-Mart, Carrefour, J C Penny,
retail
Metro AG, GAP, Tommy Hilfiger, Marks and Spencer, India is a very capable cotton producer Tesco, Nike, Reebok, Children's Place, Sears Roebuck, and one of the largest in the world. Levi Strauss, Sara Lee, Otto, H&M, Banana Republic, Labour is cheap compared to most of Federated-Macy's, K-Mart, and Target. the other countries. China might have Retailers follow four types of formats to source from an edge over others in terms of mass India: production but, when it comes to Directly to a retailer in his country: Suppliers customization of products, India scores produce the goods and deliver it too. Branch office: Many retailers are trying to establish better. their closely-held branch offices in India for buying skilled personnel, latest technology and competitive goods. Target, J C Penny, Wal-Mart, K-Mart and GAP costs will keep attracting international players. Unlike have branch offices in India. China, or other countries, Indian firms will not have to Buying houses: These are third-party buying houses. contend with shortage of cotton in the short-term. India's Carrefour, IKEA and Metro follow this format. other key strength lies in its pool of skilled labour. Contract Importers: These importers work on a caseAt a time when major global retailers like Wal-Mart to-case basis and facilitate the process. are eyeing India as a huge market and are trying to After the end of the quota regime, more than threeestablish retail shops here, it looks clear that sourcing is fourths of the sourcing of goods by retailers is expected bound to go up. Once a retailer commences store to go to a few countries instead of many of them. These operations, its companies worldwide start sourcing countries are the ones who have a reputation of being the products from local suppliers for international markets. most competitive and provide cheaper products at a good We have already seen this in the case of China's Walquality. China tops this list of countries, but global Mart. retailers would not want to source all their requirements Buying volumes for many of these players are already from China. in excess of $400-million per year or more. This might go This is where India has a big advantage being the next up significantly if the government opens up the retail best destination in terms of labour costs, quality, and a arena for Foreign Direct Investment. The government fairly developed production base. Anticipating growth, a provides various benefits to the suppliers/vendors who number of firms are responding to the opportunity by supply to the retailers and bring in valuable foreign improving production efficiency through increasing currency. Export Credit and Duty Entitlements Pass capacity, increasing automation, re-engineering of Book (reimbursement of customs duty) are some of these production systems, and backward and forward benefits. It is also trying to attract all the big retailers to integration of operations. Some firms are trying to climb source their products from India and has decided to set up the value chain by diversifying their product ranges, up an inter-ministerial committee to facilitate the exporting high value apparel, and improving their design retailer's purchases from the country. capabilities while others are collaborating with foreign According to reports, if the re-evaluation of Yuan partners for technology. India is a very capable cotton producer and one of the largest in the world. Labour is Table 1: The likelihood of the drivers over short-term, cheap compared to most of the other medium-term and long-term. countries. China might have an edge over Drivers 2006-07 2008-09 2010-12 others in terms of mass production but, when Post-Quota Regime: China surely is the big winner, it comes to customization of products, India but India too offers its advantages Medium High High scores better. Indian suppliers are known to Mature Industry; Abundance of raw materials; Production capacities Medium High Medium have better designing skills than the Chinese Retail FDI: Foreign retailer's stores will rev up and are also possibly more adept at delivering sourcing volumes in turn Medium High High niche orders. Government Initiatives: exports promotion Medium High High The availability of raw materials, wellImpact of re-evaluation of Yuan Low Medium Medium integrated operations in the textile chain,
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Indian supplier industry is highly fragmented. Post-quota regime prices have started falling. Thousands of small exporters will have to sell more volumes to survive. Unlike China, there are not many big, modern apparel factories in India takes place, Chinese goods might be dearer than before, which might trigger the move towards sourcing from India. Wal-Mart currently sources more than 80 per cent of its requirements from China. Even a few percentage point shift to India would mean huge business. Even Chinese suppliers to big retailers are moving some part of their production to India. Likewise, suppliers from some other Asian countries are doing the same. This could be another huge opportunity for India. Challenges to Overcome To be prepared to match up with this huge opportunity, there are a lot of things to be done by suppliers/vendors, government and other stakeholders in this business. Delivery on Time — Infrastructure Issues:
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The labour cost and the cost of production in India and China are comparable. But, India loses out because of its greater logistics expenditure in the form of port handling and inland transportation. If India has to tap this great opportunity, it needs to have better infrastructure that can reduce the transportation cost similar to global standards. Sometimes, international orders either get delayed or even get cancelled by buyers, resulting in huge losses and credibility issues with suppliers. The government must step up and invest heavily in infrastructure. FDI in Retail — Debate Continues: Although the government is pushing hard for reforms in retail, as of now no FDI is allowed. Current FDI norms don't allow global retailers to step in, except for cash-and-carry formats, franchisee operations and special licenses. Many global retail giants, such as Wal-Mart and Carrefour, are doing everything possible to enter the Indian market but have to wait till FDI is allowed in retail. Consolidation — Big is Beautiful in Retail: The retail industry, be it retailers or suppliers, is one where the big brother wins. Companies need to have deep financial pockets, need to bring in economies of scale and diverse product portfolio to survive. Indian supplier industry is highly fragmented. Post-quota regime prices have started falling. Thousands of small exporters will have to sell more volumes to survive. Unlike China, there are not many big, modern apparel factories in India. Indian suppliers need to take the risk and scale up their operations. Consolidation might be the name of the game. Climbing up the Value Chain Suppliers need to move from commodity supply to becoming suppliers of valued products. Many suppliers are already thinking on the same lines and acting fast, integrating themselves vertically. Fall in prices after the end of the quota regime can only be offset either through volumes or higher margins. Suppliers can enjoy higher
Table 2 The force of each challenge over short-term, medium-term and long-term Drivers
2006-07 2008-09 2010-12
Delivery on Time — Infrastructure Issues FDI in Retail — Debate Continues Consolidation — Big is Beautiful in Retail Climbing up the Value Chain
High High High Low
High Medium High Medium
Medium Low Medium High
retail
Exhibit 1: Some of the major Vendors/Suppliers, products offered, and some of their customers and comments. Vendors
Products
Customers
Orient Fans Woodland Mirza Tanners Liberty Farida Shoes Arvind Mills
Fans Leather Products Leather Products Leather Products Leather Products Knits Division
Wal-Mart Wal-Mart Wal-Mart Wal-Mart Wal-Mart Nike Golf, Marks & Spencer, Target, Arnold Palmer, others.
Comments
New Deal New Deal New Deal New Deal New Deal Acquired accreditation for its Laboratory and Testing Facility from prestigious customers. All major retailers. Arvind Mills Denim One of the world's largest denim producer Marks & Spencer, Next and Arvind Mills Shirting Fully vertically integrated Tommy Hilfiger and well-positioned to scale up operations. M&S, Next, Levis, DuPont, Arvind Mills Khakhi Only one in South East Asia others. to launch two collections annually. Arvind Mills Garments export division Gap, Levis, VFC and others Garment export factory in in Bangalore Bangalore. Denim apparel. US Retailers Raymond Fabrics, Blankets, Integrated business model. Garments. Big expansion plan is on the sleeves. Wal-Mart (15%), J C Penney, Welspun India Terry Towel, bedsheets Welspun is among the top Shopko (100%) and curtains five manufacturers of terry towels in the world. Wal-Mart, J C Penney and Trident (Abhishek Terry Towel and others Trident is among the top five many others. Industries) manufacturers of terry towels in the world. Ralph Lauren, banana republic, One of India 's largest Orient Craft Shirts, blouses, skirts, Gap, Susan Bristol, Nike, Levi's, garment exporters jackets, children wear Dockers Abercrombie & Fitch Trading Gokuldas Exports Jackets, coats, shirts, Leader in higher value Indian trousers, shorts, blouses, Co., Lebek International export markets with other women's suits, children's Fashion, Mexx Canada Inc., customers like Nike Inc., Wal-Mart Stores. wear Sear Canada Inc., The GAP Inc., Tom Tailor Sportswear. Big Retailers Poppys T-shirts, sportswear, Poppys is a vertically nightwear, Jackets, integrated knitwear maker trousers, shirts, short and exporter. The company is noted for Jyoti Apparels Woven and knitted Specializes in high fashion having developed a clear ready-made garments apparel, and exclusive prints strategy for the post-quota era and embroideries for and home furnishings in 2005 garments Shahi Exports Wal-Mart, GAP, Nautica, Old Garments Among top five garment Navy exporters with annual revenues of USD 120 million. Madura Not Available Garments Ramping up capacity by Garments further investments. (Indian Rayon) Vardhman GAP, Target, and Tommy Hilfiger Vardhman is an approved Garments and Fabrics Spinning supplier to global retailers which would help it ramp up sales post-2005. Mahavir Spinning Garments and Fabrics Not Available Exporter to global retailers. Uni Design Wal-Mart and Others Gems and Jewellery Exporter. Bombay Dyeing Cotton made-ups. Not Available Ramping up capacities to meet the growing demand in the international market Alok Industries GAP, JC Penney, Macy's, WalWeaving, knitting, Integration efforts at the Mart, Bed Bath & Beyond, and company has made it a processing, home Linen & Things textiles, embroidery, one-stop shop for importers garments. Apparel Manufacturer and TCNS Clothing Not Available Apparels Exporter. Amul Wal-Mart and Others Food Products Wal-Mart pilot project in Houston (TX) with Amul India, to sell their sweets and ghee to the Indian population settled in the USA. Designco Wal-Mart and Others Gift Articles Small town firm. Mangal Exports Gift Articles Wal-Mart and Others Mumbai based firm.
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margins by adding value to their existing low-value products and offering new high-value products. China's share of direct sourcing to retailers would grow tremendously now after the end of the multi-fibre agreement. But, India, with its strong cotton textile and customization capabilities, would be the next best destination for big retailers trying to consolidate the suppliers. Indian firms already deliver quality products to Wal-Mart, Tommy Hilfiger, J C Penney, and many others and have made their mark. Suppliers like Welspun, Trident (Abhishek Industries), and leading Indian Apparel Exporters like Gokuldas Exports, Poppys, Orient Craft, and Jyoti Apparels are among the ones with permanent presence on global retailer's radar screens. Some of the other products that are sourced are curtains, cushions, cushion covers, floor cushions, toy cushions, chair pads, tiebacks and tassels, throws, woven fabrics, blinds, trash can, shoes and accessories, home furnishings, floor coverings, gift wares, Christmas gifts, food products, processed food items, house wares, bathroom accessories, storage accessories, garden dĂŠcor, hand tools, decorative hardware, lighting and others. The list is rather exhaustive and endless. Looking at the current scenario and the possibility of future success, it is expected that the retail sourcing opportunity from India is huge and the suppliers have a long way to go. AMIT GOEL The author is the research manager of Zinnov Consulting, a leading global research and consulting organization.
STEFANO PELLE is a man of eclectic vocations - he is the vice president and chief operating officer, business unit, Russia and South Asia, Perfetti Van Melle (PVM) Group, and chairman, Perfetti Van Melle, India. Prior to Perfetti, he headed the High Speed Division of the Italian State Railways. He has also recently authored a book "Understanding Emerging Markets: Building Business BRIC by Brick" (Sage Publications), aided by his experience in the developing and emerging countries. Here, he shares with AMIT BAPNA some of the key insights on how business is done in different markets, amongst many other things. What are some of the universally common characteristics of the emerging markets? A relatively high rate of growth, inflation, but relatively low per capita GDP are some of the common characteristics that one can find in most emerging markets. On the other hand, there is generally a big divide between the very rich and the very poor people, and middle classes that are normally not very large, thus with low disposable income. How true is it that western markets are getting saturated and, hence, brands are looking at emerging markets for improving their bottom-lines? If we look at the slow GDP growth of the western countries (e.g. some European ones have recorded stagnation of growth around One
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"It's easier to build brands in emerging markets"
q &a
per cent during the most recent years), it is clear that the gap between these and the emerging countries, which on the other hand have shown very healthy growth, well above four-five per cent, is getting even larger. As a result, many MNCs have shifted their focus on the emerging countries, not only as manufacturing bases, but also to exploit the potential of the local markets. India is often compared to China. How do you evaluate the two emerging markets? How similar (or dissimilar) are their patterns of growth? They are both profoundly different countries, yet with their rate of growth becoming more and more similar. The Chinese economy's growth was led by FDI, mainly from the Chinese emigrants in the surrounding countries (Honk Kong, Taiwan...); it is mainly a manufacturing-led economy growth, driven by a strong and committed Government. Whereas, the Indian economy is mainly a service-led one: FDI has started flowing in a significant way just recently. The growth in India has been lower during the last decades versus that in China, but if we consider that the country is a democracy ruled by a coalition government, it is quite surprising that India could touch growth-rates of above eight per cent. In terms of brand-building, how do emerging markets differ from the developed ones? It is relatively easier to build brands in these (emerging) countries, since the competition is generally lower and the promotional costs are also more reasonable versus those of the more developed ones. Particularly if one can get the first mover advantage, it becomes more difficult for later entrants to bridge the gap. In the next few years what, according to you, would be some of the emerging paradigm shifts and trends in the emerging markets? The emergence of the middle classes (also thanks to growing level of salaries) would bring a higher average disposable income, an increased quality of the available products, a progressive sophistication of the consumers, and thus, a shift of the consumption patterns, from mainly food and clothes towards also leisure, durables and housing. How does a company/brand get the right mix of Glocalisation? Is there any learning from the successes or failures of brands in certain markets? It is a matter of experience. Some times, they get it through a trial and error process. In general, it is advisable to have general guidelines to protect the global brand identity, but indigenize products and positioning to match local consumers'
Failures come when companies believe that 'it worked very fine here, so it has to work there also', without realizing that every market is different. Look at Fiat Palio, for instance. It was a big success in Brazil, but not a great success story in India. expectations. Failures come when companies believe that 'it worked very fine here, so it has to work there also', without realizing that every market is different. Look at Fiat Palio, for instance. It was a big success in Brazil, but not a great success story in India. How do you see the role of Corporate Social Responsibility (CSR) and its relevance as a business strategy in the developed markets and the developing ones? Is it still a feel-good slogan in the overall philosophy or has it evolved any further? It is a growing role (luckily!) and companies are realizing that it is much more than mere feel-good. It is actually a win-win situation for them, since they gain mileage with the local communities, build brand loyalty, save taxes and help develop potential consumers. Successful practices are very easy to find in a country like India; they go from helping develop the infrastructure (roads, water accessibility‌), useful both for the company's business and for the population, to helping people help themselves by enabling them, and, for instance, to have their own small shops, where they could sell the company's products. Internationally, the IT code of conduct, extended to the suppliers, is a good example of a successful CSR practice undertaken by the big Multinationals in the industry. In India what Tata does is another good example. In the emerging markets, which are some of the brands that have been deploying best business practices consistently? These are normally the global brands, those one would find in the list of the international business Magazines (e.g. Business Week Scorecard), though not all of them. They used to be mainly FMCG brands once, but now IT brands, such as Microsoft and HP, are coming up with business practices that are not only successful but also socially responsible.
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The
BUSINESS of TOURISM
The current revenue of tourism industry, at Rs 6.8 billion, is more Brand Tourism, if nurtured well, can be one of the biggest foreign exchange earners and employment generators of a nation. AMIT BAPNA finds out the various facets of this global-sunrise industry.
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The tag-line of South African Tourism — "South Africa — it's possible" relies on big, sexy cities; fabulous shopping malls; restaurants; resorts; casinos; wonderful golf courses; some of the best cricket stadiums in the world; all backed by an excellent infrastructure. The Lord of the Rings trilogy gave New Zealand "an unparalleled opportunity to raise its profile", reaching an estimated 90 million viewers and readers worldwide. What has become known as the "Frodo Economy", named after the movie's main character, Hobbit, is pouring tens of millions of dollars every year into the country. Without buying a single ad, the family's tiny tourism business has pulled in nearly $350,000 from Tolkien fans hero. The Gold Coast City in Australia houses more than 65,000 bed spaces, 40 resort and championship golf courses, 500 restaurants and
corners of the world, all united by the realization of the value that a robust tourism-brand can bring to the country as a whole, on a long-term basis. Closer home, the tourism industry just got a shot in the arm in the recently announced budget for the year 2007-08. Tourism infrastructure has got an allocation of Rs520crore as against Rs423-crore last year (2006-07). There has been a tax-incentive for star hotels and convention centres to provide the impetus to the hospitality sector, keeping in mid the forthcoming Commonwealth Games. The World Travel and Tourism Council believes India's tourism industry will grow at 10 per cent per annum in the next decade, making it a leader in the world in terms of growth. Tourism is becoming big business globally and in India, too. Tourism contributes nearly six per cent of India's GDP and employs 40 million people, making it a driving factor in the country's economic growth. Conde Nast Traveller, in
than the total FDI that came to India this year. major convention and exhibition venues. With a subtropical climate of 287 days of sunshine annually, and an average water temperature of 22 degrees, the Coast has hosted more than 1,700 meetings and 182,000 delegates in 2005/06, equating to almost 790,000 delegate days injecting over $390 million to the Gold Coast economy. Recently, it has opened its office in India too. Ireland achieved a record of 37 million overseas visitors who visited the island over the last five years. Revenue from the overseas visitors to the island of Ireland exceeded 18 billion Euros. These are all nations and destinations in different
2006, ranked India the fourth "most preferred travel destination". Close to four million tourists travelled to India in 2005, each spending approximately $1,470 per person, higher than many leading tourist destinations of the world. Heritage Tourism, medical tourism, wedding tourism‌are but some of the new buzz words doing the rounds globally and earning valuable foreign exchange for the country. For any country, tourism is not just about ferrying people from one destination to the other. It has a much deeper and significant importance. There is no doubt that this industry has tremendous potential for the nation's economy. It is a major employment generator,
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Tourism in any developing country is an upper-end brand. It is a category that really sits atop the hierarchy of needs. HARISH BIJOOR Brand - domain specialist & CEO, Harish Bijoor Consults Inc.
provides impetus to many ancillary industries, and helps generate wealth. According to industry estimates, as against 1.20 lakh new jobs expected to be created each year in the software sector over the next few years, nearly 5-10 million new jobs will be added each year in the tourism industry. However, hitherto, the tourism industry in India was disorganised, and the organized and systematic growth has been a recent phenomenon. The Indian economy is on an upswing and many cities and sectors, in the last few years, have shown a phenomenal growth. For example, the IT boom has made cities like Bangalore and, now, Hyderabad and Chennai witness a large-scale travel growth, which, in turn, means a lot of good news for the local hotels, airlines, etc. Air tariffs are skyrocketing, hotels are seeing never before occupancy rates with cities across the country capitalizing on this boom - the growth being a mix of tourism-led travel as well as business-travel, adding a sizable muscle to the industry. Indians are increasingly travelling outside the country too, which again is an indication of a booming economy. Moreover, with technology making the world a global and a smaller village, travelling out-of-country is no longer a wish-list. So, now, a weekend holiday may no more be about going to Goa. Rather, it is a quick trip to Singapore, or Malaysia, and back. Globally, too, the Indian product is gaining respect and acceptance, of course, with a fair amount of intelligent positioning and branding. So, while at the
KIRAN NAMBIAR Manager India — Tourism New Zealand
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national level, the Ministry of Tourism is spearheading the 'Incredible India' campaign, states like Maharashtra, Rajasthan, Kerala, Goa, Tamil Nadu, Jharkhand, and Uttaranchal are trying to re-enforce the differential product offerings through the various Tourism Development Corporations. Tourism as a leisure activity may be centuries old. But, as a business-led proposition, it has gained eminence only recently. And, with this has also come the recognition of the role that marketing and branding can play in building a healthy and robust economy. And, more and more brands — nations and all other entities related to travel and tourism, such as hotels, airlines, tourism boards, travel agencies; online booking partners, etc. — are realizing the importance of branding. Today, when a traveller has to decide on a destination for a holiday or a business conference, several "brands" are vying for his share-of-mind. And, that is where the differentiation borne out of concerted brand-building efforts can play the deciding role. In tourism-branding, while factors such as cost of travel, convenience, and quality of facilities are important, equally important would be the "image". According to an international travel-branding specialist, "Image puts a destination on the consumer's "shopping list" and creates an emotional appeal, which enhances that destination's chances of being chosen over others." Some interesting perceptions were thrown up in a survey that was commissioned by the Malaysian Tourism Promotion Board — while Thailand had a brand image of being "exotic, fun, and friendly people", Singapore was seen as being "clean, modern and safe", and Malaysia was seen as being "multicultural with many beaches". Of course, that is not to say that perceptions and imagery are the only deciding factors. Infrastructure, connectivity and others would be the pre-requisites. Harish Bijoor, brand-domain specialist and CEO, Harish Bijoor Consults Inc., provides an interesting analogy for the concept of tourism branding. "Tourism in any developing country is an upper-end brand. It is a category that really sits atop the hierarchy of needs." So, while in a
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pyramid, brands of food and beverages would occupy the lowest rung, once a society satisfies these basic needs, they fit in detergents, clothes, personal care and basic cosmetic brands on the next rung. Just above that pile will sit more higher-end need brands, such as brands of cosmetics and cosmetic wear, perfumes, etc. And, higher than this would sit brands that promote holidays, tourism and such pursuits as sports, adventure, etc. "Right at the top peak of the pyramid of brands, as I build it conceptually, would sit brands that help a consumer self-actualize, like yoga, meditation, spiritual brands, and movements, such as the Aurobindo movement, Mahesh Yogi, etc.," says Bijoor. "Brands that seek charity work also sit here. Tourism is, therefore, a relatively higher-end brand in the consumer stakes for markets." As consumer markets mature and as economic affordability of consumer segments improve, consumers tend to climb the brand-mountain higher and higher. With the current economic prosperity of India at the top-end of the market, there is a great degree of interest in the tourism brand. This is more so for overseas travel and adventure first and, then, it moves to domestic tourism destinations. The paradigm shift lies in the fact that Indian consumers want to travel and are not averse to spend money. Today's Indian is willing to spend more money on foreign shores than within the country. That is a shift. Indians are suddenly getting comfortable with dollar-denominated rates of expenditure and they no longer cringe as much as they used to in the old days. In the Indian context, branding in tourism sector is HUZAN FRASER MOTIVALA Director, Tourism Ireland
It is an aspirational brand. We want to bring the model of not just a low-cost carrier but a high value carrier (HVC), i.e., full value for money. M THIAGARAJAN managing director, Paramount Airways
a much recent phenomenon. The "Incredible India" campaign is probably the biggest and most consistent campaign done, which has actually changed the perception of the country across the globe. Of course, Goa and Rajasthan were probably the earliest destinations that brought in a large component of tourism-revenue, but that was more owing to the inherent advantages and awareness (that the two enjoyed) than a well-thought out marketing plan. As a successfully conceptualized and implemented campaign, the positioning of Kerala a few years back would qualify as having the first-mover advantage amongst the domestic brands. As Bijoor proffers, "If you view the brand promotion kit of Kerala Tourism, you will see the entire fine details that are contextually correct for the inbound audience. Not only has this been done but efforts have been made to educate every cog in the tourism game, from the taxi-driver at the airport to a restaurant waiter and even the bell boy. The effort has been a seamless one, and does not depend on advertising alone. And, this is the mistake most tourism brands make. They make lovely pieces of advertising that promise the sky, but deliver the boondocks. No effort is made to correct the ground level realities of infrastructure, soft
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‘Incredible India’ Campaign INCE 2002, the country has been marketed under the umbrella of Incredible India. It's been a positioning and a slogan that have perfectly captured the multitude of sights and sounds and spices that make India the vast land that it is. And across the years, every campaign has driven across the world's media on the energy of this now well-recognized expression. While for the last couple of years the campaigns have concentrated on art, culture, heritage, landscapes, wildlife etc. the 2004 effort showcased the country's most familiar and globally recognized monument. It unveiled the romance of the Taj Mahal through a haze of colours and words that captured its eternal relevance across all time and humanity.
S
PRATHAP SUTHAN, National Creative Director — Grey Worldwide, India
Shares, the thought behind the incredibly successful campaign
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India and its 2005-2006 advertising campaign The Ministry of Tourism looked at extending Incredible India to the world with a completely new and differentiated effort. While the new campaign would focus on the wealthier travelers, the strategy was also to include first time visitors and repeat travelers. The marketing strategy took on the understanding that India needed to repackage its offerings to the potential tourist in a brand new avatar. So that India would come through with a completely differentiated appeal despite the much saturated tourism category. This both in terms of content that was unique to India, along with an aesthetic sensitivity that sprang from the
A 360 DEGREE C A M PA I G N A C R O S S G LO B A L T E L E V I S I O N , I N T E R N E T, P R I N T, AND OUTDOORS
enormous canvas of this 5,000 year old nation. This year's stated objective was to deliver a 360 degree campaign that would be seen across global television, internet, print, and outdoors — with the creative designed around the increasing importance of yoga and ayurveda, the beauty of India's distinct wildlife, and the pulsing colours of its festivals and fairs. Along with the content that was
extremely Indian, the art style that drove the campaign largely moved away from photography and employed what's currently called kitsch — the colourful Indian school of expressionism. For once, while the content and the offering are Indian, this time even the visual grammar is Indian. Extremely colourful, bold, and an aesthetic sensibility garnered from across the cultural mosaic of the country. Much as India stands for an incredible dose of experiences, colours, flavours, spices, legends, myths and legends, this new campaign is yet another presentation of the many riches of the land, as well as an example of a style borrowed from an equally infinite palette.
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issues of tourist handling, courtesy and convenience and a host of 47 issues that need to be looked into to provide a seamless brand offering." Tourism is, indeed, a tough business, as there are a host of deliverables that need to go right. Satisfaction in this space is a cascade of positive experiences, which need to be seamlessly right. One wrong experience can nullify the effort of all else that has been done right. God is, therefore, in the details of the delivery. Hence,, Kerala needs to be not only God's Own Country, as in its advertising promise, but in its physical delivery terms as well. Consistently. Finally, tourism branding relies on providing that unique clutter-breaking experience to the traveller or the guest — be it in the hotel or airline, or the destination. Agrees Shriji Arvind Singh Mewar, chairman and managing director of the HRH Group of Hotels, Udaipur, "Guests, today, are searching for authentic experiences in the cities and towns they are holidaying in. No longer are they just interested in hotel room facilities and amenities. So, this is the real challenge for Indian hospitality. We have to offer guests an authentic experience that would define their holiday and make it memorable for them. This, I would say, is a dramatic shift from the tourism of the 1980s and 1990s. Realizing this, we have positioned HRH Group as India's only chain of heritage palace-hotels and resorts under private ownership offering the promise of 'Experience the Original in the Abode of Kings'." An integral part of the Golden Triangle, Rajasthan has smartly exploited its relatively preserved cultural landscape to position itself as one of the most sought-
LANCE LITTLEFIELD Country Head — India, South African Tourism
With heritage tourism coming of age, the forts, palaces and ancient temples are becoming the focus of attention of global and domestic travellers. SHRIJI ARVIND SINGH MEWAR Chairman & Managing Director - HRH Group
after destinations in the world. Adds Shriji Arvind Singh Mewar, "In India, especially in Rajasthan, heritage tourism has come of age and the forts, palaces and ancient temples are becoming the focus of attention of a host of global and domestic travellers. While we are proud that our 'grand heritage palaces' and 'royal retreats' are attracting guests from all over the world, our major achievement has been to successfully focus on the 'destination' rather than just the heritage hotels." Goa, too, is a successful brand globally, ranking amongst the top five destinations of the world. From a backpacker's paradise in the 70s and early 80s, Goa has become a multi-layered hub with a varied profile of travellers flocking in from all over the country and the globe. Approx two million tourists visit Goa every year. Goa can, therefore, boast of the presence of most of the major hotels and airlines. The hotel industry, which is an important component of the travel and tourism sector, has been going through a high growth pattern, which is, in itself, an indication of the growth of the cities as destinations, be it for business or leisure. Global and local hotel chains, such as Starwood Hotels, Shangri-La, Four Seasons, Hyatt, Marriott, Hilton, Taj Group, Oberoi, The
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BY INVITATION
As Indians increasingly take to travelling, the success of the tourism industry will be found through innovation and customer focus. HE INDIAN OUTBOUND is presently undergoing a very promising phase as compared to other international markets. A buoyant economy and growing purchasing power coupled with high awareness generation are leading to new customers entering the category of holidays. A holiday is becoming one of the options to beat stress of a rapidly globalizing economy. Outbound travel for conventions, incentives and business has also seen a rise. The key driver for the growth of the Indian tourism industry has been a fast growing economy for the last 34 years. The Indian demographics, wherein 50 per cent of the population is under 25 years of age, will lead to a relatively long period of growth. The boom in Indian tourism has benefited Indian travellers with outbound tourists from India growing at one million a year. In 2003, there were a mere five million Indians travelling out and in 2006, the figure is up to a whopping seven million. With the onset of private Indian carriers to various countries, accessibility to European destinations has eased. Low fares coupled with high disposable income of the Indian traveller, who are ready to experiment with choices, has contributed to increase
T
Boom Time!
in outbound travel from India. Foreign holidays are becoming more aspirational by nature. With so many tourist offices from different countries looking at India as a potential tourist market, Indian outbound is surely going to face an upsurge. Tourism in India is booming, multiple travel destinations have emerged and online bookings are surging on the back of increasing internet penetration. The travel market is growing at a rate of 17 per cent whereas the number of online offerings is growing slowly and steadily, but is definitely the future. Moreover, smaller towns are emerging as high growth hubs and an enhanced distribution through brick and mortar and the web is becoming critical. And, as the market evolves, customer segments by price, life-stage and activity emerge and put a greater stress on product innovation. The cost of a foreign holiday is a considerable portion of the Indian customer’s disposable income, thus making him very price conscious. For the first time traveller, the intangible product seems undifferentiated and he/she can switch between alternatives at no cost. This reduces the pricing power of the industry in India. The projected figure for 2020 by the
The outbound travel industry is booming and the number of Indian tourists travelling abroad this year has outshone previous figures. The numerous initiatives undertaken by tour operators, tourism boards and airlines this year has brought about a definite increase in international travel.
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World Tourism Organisation is 50 million. The figures indicate that there is great potential in the travel industry. To a certain extent, this can be attributed to the entry of low-cost carriers in India and liberalisation of aviation policies. Some of the trends towards travelling outside India include: The Indian society is being increasingly driven by consumerism. Foreign holidays are becoming more aspirational by nature. As a result, the societyconscious Indian is making an international holiday an essential element of his/her annual plan. As the average Indian’s spending power has gone up, so too has his/her interest in overseas travel and the willingness to shell out money. The rise in disposable incomes has led to more families opting for annual foreign holidays. With a larger number of international airlines entering the Indian skies, there has been a rise in capacities and airfares have become more competitive, thereby benefiting the customer. Over the last few years, there has been subsequent reduction in tour prices and increase in value-added offers, such as "Holiday now, Pay later". Noticeable changes in travel habits witnessed in the last few years are late bookings and individual travel. Tour operators are increasingly trying to bridge the gap between destinations and products in the market. This has led to increase in the flexibility of products they offer in order to adapt rapidly to changing markets. This year, travellers are looking for exciting/unique destinations, great
Pic courtesy : SOTC
getaways, attractive/discounted priced packages, a hassle-free holiday, Indian meals, exciting new activities the traveller can enjoy with the family or friends while on a holiday, and the traveller prefers destinations for which visas can be granted easily. Last year saw a rise in golfing and spa vacations. The upmarket tourists, as well as the experienced ones, are increasingly travelling to foreign shores to try their hand at putting or to enjoy a rejuvenating spa massage. While Britian, South Africa and Dubai are looking to cash-in on golfing holiday, Singapore and Egypt are focusing on spa experiences. The outbound travel industry is booming and the number of Indian tourists travelling abroad this year has outshone the numbers that travelled internationally in the last two years. The demand from last year’s pent-up travel will be the driving factor that has defined the bulk of bookings. The spillover, as well as the numerous initiatives undertaken by tour operators, tourism boards and airlines this year to tap the potential outbound market has brought about a definite increase in international travel. The travel industry is growing rapidly and, thus, contributing to an expanding and evolving customer base. In future, we can see two segments that would be emerging namely, the customer segment, and the product segment. In the case of the customer segment, we will have various categories, such as the youth, senior citizens, students, etc. In terms of products, we will have packages like adventure sports,
medical tourism, premium holiday packages that would be preferred by travellers. Specialized tours will also gain importance and one will see more and more travellers opting for health holidays, spiritual getaways, adventure, and wild-life vacations amongst others. Today, their numbers might not be so substantial, but these specialized and short haul holidays will drive the Indian tourism industry in the future. Recognition of shifting realities and the ability to fine-tune operations to hone in on the emerging opportunities are of critical importance. Thus, success will be found through innovation and customer focus. The industry must become accustomed to creating products for niche markets and, at the same time, cater to the populace through focus on all markets separately.
At a time when tourism in India is booming, multiple travel destinations have emerged and tourists have turned savvy, aspirational globe trotters, online bookings is surging on the back of increasing internet penetration. From hotels to airlines, railways to travel agencies - virtually every segment of the travel business is seeing a surge in online bookings. In such a situation, the travel agents are bracing up to the Internet’s onslaught. Internet is virtually wiping out their intermediary role. Due to the Internet, travellers are becoming computer savvy and now have all the information required to plan a holiday at their finger tips. The World Travel and Tourism Council (WTTC) estimates a 4.5 per cent per annum increase in the total amount of travel and tourism economic activity between 2002 and 2012. This is largely attributed to a rise in global wealth, liberalization of international airspace, cheaper flights and the use of the Internet as a travel tool. As the Indian traveller is becoming more experienced; he/she is adopting the characteristics of evolved and discerning travellers. As a result, Indians are getting savvier and are now expecting more from a tour operator. So, overall, a booming economy, falling airfares, increased seat capacities, and a prospering middle class will together contribute to the large number of outbound Indian travellers. SUNIL GUPTA The writer is the COO, SOTC & Kuoni Holidays
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HE TOURISM INDUSTRY in India is one of the fastest growing industries today. Year on year, for the last five years, it has reflected double digit growths. This is in spite of having a fairly low level of foreign tourist arrivals in the country. This year, the total arrivals may touch the five million mark. This number has almost doubled over 2002 levels. However, when compared to other countries in this region, like Singapore, Dubai or Thailand, the number does not justify the size and scope of this country. A series of events have affected global tourism since 9/11, leading to a general slow down/stagnation of the tourism industry. In India, however, the tourism numbers have recorded a steady growth year-on-year. This can be attributed to domestic tourism, i.e., Indians travelling within the country. This year alone, over 350 million Indians are expected to travel within India. Domestic tourism has been growing at the rate of 20 per cent since 2004, compared to foreign tourist arrivals of 13 per cent. Domestic tourism was largely responsible for fuelling tourism growth when other markets were stagnating. The current boom in the tourism sector has had a direct impact on the hotel industry in India. Occupancy levels and average rates have had bullish growths in all major cities. In the traditional high season months of November to March, demand has far surpassed supply, resulting in the growth of average rates and, more importantly, the RevPAR (Revenue Per Available Room).
T
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BY INVITATION
Bridging the gap As demand far outstrips supply, the future of Indian tourism industry will be dependent on capacity growth, both from hotels and airlines.
There are various reasons for this growth : general health of the economy, investor-friendly governance, reduction of inland air travel tax, thus leading to the birth of budget airlines, increased airline capacity, infrastructure development, easing of cross border tensions etc. In short, the business and social environment in present India is conducive for a healthy tourism growth Bulk of the current supply growth took place between 2000 and 2003. Those three years would also be remembered for its global turmoil with incidents, such as the 9/11 attacks, Iraq war tensions and SARS, affecting global tourism adversely. This was also the time when India was witnessing the growth of domestic tourism. Hotels shifted their focus to this emerging segment. Like in any other business, the initial reaction to the sharp drop in demand was price war. Soon, hotels in India learnt that price does not induce demand; it only shifts demand. If the environment was not conducive for travel, even a $50 per night rate was not enough to grow demand. For future growth of the sector and maintaining the standards of
product and services, it is very important to be correctly priced. This was the first significant change in the way tourism conducted business in the modern era. Hotels overcame the trailing demand levels through focused targeting of specific market segments. Pricing was no longer a blanket offer. Business was broken into market segments. Demand patterns of each segment were studied and priced accordingly. Segmented pricing subsequently matured to dynamic pricing. Rack rates are being replaced by ‘rate of the day’, or ‘best available rate’. Tourism industry operates in an economic environment where supply is not affected by demand. It cannot be varied with the changing patterns of demand. In other words, it is an economy of fixed supply. If at all supply needs to be changed, the gestation period is far too long to be impacted by immediate demand levels. Therefore, the varying factor, apart from demand, in this kind of an economy is price. In the modern era, a traveller has a choice of either committing to a year round fixed rate or take advantage of floating rate induced by demand patterns. This is very much like bank interest rates for home loans. Similar pricing patterns have been popularised by airlines in India. ‘Budget airlines’ is a correct reflection of dynamic pricing. The steady nature of hotel supply has also led to expansion of traditional tourist season. High and low seasons have been reclassified as summer and winter. Apart from certain areas or months with extreme weather conditions,
occupancy levels in India have become, more or less, constant all year round. This has to do with demand levels not able to grow at certain times of the year however, the need to travel to India still remains. Travellers are now ready to shift their dates or events based on availability. Weather conditions, unless very extreme, are no longer a hindrance, particularly for a business traveller. Leisure travellers as well are spreading their options. Shift of demand is not only taking place between seasons but also through days of the week. City hotels are tactically inducing demand over the weekends and leisure hotels over weekdays. Travellers who are not influenced by days of the week can take advantage of this offering. Often softer demand periods have additional value or even reduced price to attract this segment. Like most other businesses, technology is playing a very important role in shaping the future of the tourism sector. Today, an airline ticket or a hotel room can be booked through a home computer. Apart from price, even live inventory is available on the internet. Customers not only look at rates but also get an instant confirmation of his/her reservation. Technology is also being used for business forecasting. Since supply is a common factor in an environment of dynamic demand and pricing, forecasting plays a very important role in the modern business environment. Forecasting in the tourism sector is the ability to correctly plot the demand
marketing efforts were also taking place at similar time period, resulting in a mass destination campaign — although subconsciously. Customers were not only been made aware of the brand but also of India at large. Since most of this communication was happening almost simultaneously, branding played an important role. It was necessary for each brand to speak for themselves and create their own positioning to avoid clutter. Markets are also getting diverse, further necessitating a clear brand positioning and communication.
The beginning of this decade marks the beginning of modern era of India tourism industry, since the industry not only grew but it matured as well. Bulk of the current supply growth took place between 2000 and 2003. patterns and match them with correct pricing. To stay ahead of the game, forecasting needs to be close to accurate and also well timed. The earlier one is able to forecast demand, the more number of options that are available to strategise. Software is being written and used to enable this process accurately and quickly. The advent of global brands in India has paved the way for increased reach of the destination through their global distribution systems. In the 90s, there were limited choices of brands in India. The supply burst at the beginning of this decade almost overnight, exploded the distribution of Indian hotels. Business levels necessitated these brands to spread awareness in their source markets. Since most of these brands came into being at almost the same time, the
Other than the product, the brand needs to communicate the distinction in the minds of the customer. Along with expansions in guest rooms, hotel chains are introducing more than one brand to capture the varied segments of the diverse market. These brands, or sub brands, need a specific communication line. Indian tourism industry, today, is at a buoyant phase of evolution. The next big burst of supply is expected in 2009-2011, with an estimated 30,000 rooms planned. New supply will usher new demand. The future of Indian tourism industry will be dependent on capacity growth, both from hotels and airlines. A NIRBAN S ENGUPTA The writer is the director of marketing, Grand Hyatt Mumbai
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cover story
IMESHARE HAS EVOLVED at a rapid pace since its first appearance in the mid sixties in Europe. The concept of timeshare was first conceived in the French Alps and then found its way in the early 1970s to Florida in the United States, when second home real estate developers adopted it. The concept of Timeshare, also widely known as Holiday or Vacation Ownership, offers the customer the right to use holiday time, for a set period of time (usually in intervals of a week) over a certain number of years, at an apartment, villa, chalet or any other kind of lodging that is part of a resort development. Effectively, it is an advance purchase of a holiday accommodation. The buyer pays a capital sum to acquire the timeshare and then pays an annual maintenance fee to the resort developer. Holiday ownership is one of the most evolving and profitable sectors in the hospitality and leisure industry. However, whilst sales took off to a flying start, very soon buyers discovered a drawback in this innovation. Flexibility was restricted, requiring purchasers to holiday in the same resort at the same time, each year. Recognizing this gap, the concept of Timeshare Exchange was introduced by RCI in 1974, in what is perhaps recognized as the most strategic marketing innovation to have ever happened to Timeshare. The customer’s objection of same place, same time, every year, evaporated and RCI became a catalyst in the meteoric growth of the Industry. It now became possible for a time-
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BY INVITATION
As vacation ownership gains prominence, companies need to employ newer marketing strategies to grab
share owner to enjoy holidays in properties in different parts of the world. In fact, research findings show that over 85 per cent people across the world buy Timeshare because of the facility to exchange. As the RCI network grew, with increasing number of resort affiliations across the world, so did the timeshare industry. By the seventies, the concept had spread across the world. Furthermore, the product offering that began with fixed weeks morphed over time as the industry adapted itself to the needs of timeshare owners across the world, offering floating weeks, split weeks, points-based holiday clubs and, now, even fractional ownerships. There has been a corresponding explosion in variety of lodging
Got time to share?
facilities; the facilities on offer range from apartments, chalets, villas, log huts, palaces, and manors to houseboats, catamarans and, even, caravans. The marketing of Timeshare differs from the marketing of traditional forms of real estate and holidays. In both these, the demand stems from the consumer and is addressed by the real-estate or travel agent. Given the newness and complexity of the sharedownership concept, a more proactive marketing and sales approach is required. Once a resort is developed, the company steps into high gear and becomes a sales and marketing entity or outsource it to an external sales and marketing company. Not only is this a complex area, but it represents a substantial expenditure for the company after development costs. In order to properly evaluate programs, the systems and financial tie-ins must be in place for the management to make crucial day-to-day decisions on marketing and lead generation programs. Such programs need to track plenty of variables throughout the marketing and sales process. Sales and marketing can be a double-edged sword for those of us in the business of timeshare. Whilst the industry has been able to introduce a new vacationing concept, to thousands of Indians, through ingenious marketing programs, and persuasive sales presentations, on the other hand,
we find would-be purchasers who express excitement when they hear of the product but are not quite comfortable with the purchasing process. Paradoxically, today’s customers express great interest in holidaying in condominium-style resorts and, yet, perceive timeshare as an unsought good! Sales and marketing processes have, over time, morphed into more sophisticated methods - better segmentation of customers, focused and targeted marketing approach, product improvement and increased consumer satisfaction, ultimately, also leading to higher conversions through word-ofmouth. Furthermore, the entry of well-known brand names into the industry enhanced the quality and methods adopted for selling timeshare by investments in both, off-site branded retail outlets as exclusive sales decks, as well as successfully utilising the channel of on-site experiential sales. Meanwhile, increased consumer protection and the formation of self regulatory bodies in India, such as AIRDA (All India Resort Development Association), and the introduction of a post-purchase cooling off period have helped to give the industry greater credibility. Marketing plays another important role in timeshare - that of reinforcing the sale after the purchase has been made. An emotional purchase requires reassurance and reinforcement to reduce buyer’s remorse. Timeshare is an intangible product and, therefore, the consumer needs a kind of post-purchase marketing effort to keep him engaged until he
An emotional purchase requires reassurance and reinforcement to reduce buyer’s remorse. Timeshare is an intangible product and, therefore, the consumer needs a kind of post-purchase marketing effort to keep him engaged until he decides to take his first holiday at his timeshare resort. decides to take his first holiday at his timeshare resort. The principal marketing and sales methods used include: Mini-vacations (sometimes called ‘Fly-Buy or Drive-to’) Programmes through initiatives such as this, the customer actually experiences the product and services and is completely convinced with it before he/she makes the buying decision. Under this programme, prospective buyers are invited to the resort by offering a free or reduced-cost stay at the resort, as a trial. Trial Membership and Exit Programmes — this programme offers a vacation product for a shorter duration and at a lower price than the primary product. It usually originates from the customer’s non-affordability of the primary product or their unwillingness to make an actual commitment without experiencing the product first. Off-site sales decks — These are company-owned and purpose built sales centres, such as the Club Mahindra-operated "Holiday
Worlds", which are designed for the sole purpose of selling Timeshare for that company and to help existing members plan their holidays. Telemarketing — This is usually offered as a discounted or complimentary holiday or minibreak as the incentive to experience the resort and attend the sales presentation at an off-site sales deck. Referral Programmes — These are the least expensive marketing programmes where existing customers are effectively used as surrogate salespersons. This is one of the most effective methods of selling timeshare as the product has already been endorsed by a satisfied customer. Future Perfect The approach to marketing of the timeshare product is changing with the dynamic changes taking place in consumer purchasing habits as well as the consolidation of the industry with established credibility. Focused segmented marketing and targeted communication has helped in bringing down the cost of sales and improving market penetration. Other new avenues in the future for marketing and sales of branded shared ownership products with established credibility are through tele-shopping channels and retail stores. These channels are expected to evolve from lead generation channels to sales channels over a period of time. R ADHIKA S HASTRY The writer is the MD, Indian Subcontinent, RCI Global Vacation Network.
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cover story
HE TRAVEL MARKET in India (which is around US$13.5 billion in 2005) presents massive online opportunities for legacy and startup travel companies. In a country with over one billion people, according to the United Nations, the market potential ultimately surpasses that of the U.S. and Europe combined. The middle class in India is expected to exceed 100 million before the end of the decade. Furthermore, the number of Internet users is expected to reach that same milestone by 2007.
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The supply factors that have driven e-commerce in the travel sector include: Travel supplier partnerships with the banking industry promoting online payments, The early online success of the Indian Railways and the explosive growth of low cost carriers (LCC) traffic, An emerging technology sector permitting home-grown online solutions, and A flood of capital into the online travel agency sector. An early catalyst for ecommerce in India was Indian Railways, a continuing online success story. Indian Railways teamed with financial institutions to boost online transaction comfort levels and increase the number of electronic payment options available to consumers. Now, both LCCs and traditional airlines are driving consumers and agents to book domestic tickets online. LCCs currently represent nearly two-fifths of all domestic air gross bookings after less than three years
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BY INVITATION
The growth in tourism is being further aided by India’s technological prowess.
of operations. There is no major market in the world where LCCs have grabbed such share from traditional travel providers in such a short period of time. In India, LCCs and Indian Railways have driven online distribution growth and their size, scale and marketing budgets, aggressively, and directly targeting consumers. In the U.S., the airlines had to catch up to the online intermediaries. In India, the online agencies are catching up to their supplier counterparts, and doing so with smaller marketing budgets than the U.S. suppliers. The liberalization of domestic aviation resulted in the launch of six major airlines in 2005 and 2006. The past two Indian governments have pursued open-sky policies with key international markets, such as the U.K., Singapore, Sri Lanka and Dubai, resulting in significant additions to outbound capacity. Tour operators and wholesalers have been focused on outbound opportunities, mainly sold offline, due to the group travel nature of packages. The large tour operators have just begun to target the domestic market, but more than 95 per cent of their revenues are generated from outbound travel and their online efforts are nascent. No Indian tour operator has the scale or structure to impact the online market the way U.K. tour operators have. Currently, accommodation lags significantly behind the air and rail sectors. But, that will begin to see
Driving Miss Daisy traction in 2007 and 2008. The absence of consolidators for the fragmented lodging inventory in India presents a significant opportunity for intermediaries to bring bookings online. The car rental and bus segment should also begin to see some traction online by 2007-08. Key trends Among the factors impacting the development of the online travel market in India chief are : unprecedented economic growth and a burgeoning middle class, rapid growth of domestic consumption of goods and services, increasing comfort with and demand for leisure travel, growing Internet penetration despite slow uptake of broadband, development of virtual cash platforms to supplement bank debit payments, extensive and growing wireless usage, increased popularity of online banking and investing, accelerating investment in travel transportation and hospitality infrastructure, liberalization of the aviation industry, Indian Railways’ online success, new online sales strategies for outbound travel from international airlines, and principals targeting more costefficient ways to distribute product.
Role of technology Online travel agencies have domestically been able to build scalable technology platforms at competitive costs, leveraging the competency of the Indian IT services industry to develop dependable and secure technology platforms comparable to those of their global peers. The availability of high speed Internet access in the corporate environment has helped fuel online personal travel bookings. To address the rapid growth of online banking and credit card usage, companies have launched virtual cash platforms. India has also been a test market for other electronic innovations, such as Visa Bill-Pay, Visa Money Transfer (first introduced in India and then in APAC and other parts of the world) and M-cheque (mobile payment). Branding in this sunrise industry Most companies in the current online space have launched with a focus on building a large base of customers and positioning of the brand has been largely dominated by the price factor. In a retail environment, where price is largely determined by the principal, using already wafer-thin margins to
In the U.S., the airlines had to catch up to the online intermediaries. In India, the online agencies are catching up to their supplier counterparts, and doing so with smaller marketing budgets than the U.S. suppliers. differentiate on price is not a sustainable model. However, this has worked currently to attract customers and create usage for the product. Given the use of a plethora of media platforms, all online players are currently competing for ‘share of voice’ and are trying to shout louder than competition. The challenge lies in moving away from commoditization of product and transforming into an agent for the customer than just an agent of the supplier. The challenge also lies in differentiating on two more key factors that include, the overall customer experience through a simple-to-use interface, and providing a spectacular customer experience. The objective is to access and deliver the product seamlessly to
the customer, which is what most players attempt. On the Air front, the inventory is accessed either through integration with a global distribution system that gives you access to network carriers or through a direct connect relationship with airlines by linking up through an Application Programme Interface (API), or web services (if it exists). Largely, companies use a combination of both since LCCs are not available through any GDS. On the delivery of the product, since most airlines are not eticketable, the reservation on a travel portal creates a real-time reservation on the airline system and generates back confirmations that create the e-ticket, which is emailed to the customer. The booking process only takes a few seconds. For Hotels and other products, this is no different and includes integration with consolidators and hotels directly.
(*Source: All facts and figures from PhocusWright) S TUART C RIGHTON The writer is the COO, Cleartrip.
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Q&A
You have been associated with the path-breaking ‘Kerala — God’s own Country’ campaign. How did this innovative brand-building campaign come about? The world of tourism works on differentiating a product from the rest of the world. Kerala is a unique example of a place which is differentiated on the basis of its inherent strength which includes its unique culture, dance-forms, martial art, cuisine, natural landscape, the backwaters, Ayurveda, etc. What we were able to do with Kerala was to establish it as a unique destination, with products that did not exist in any other parts of the world and that added value. When I took over as secretary — tourism, Kerala , it used to get a lot of back-packers and, very frankly, they used to take more from the destination than give to it — these were all $10 a night kind of tourists. So, what we did was to stop these charters, which was a tough process, and we managed to create new products out of the
He has been hailed as the posterboy of Indian tourism, and responsible for positioning and branding Kerala as "God’s Own Country" way back in the early ‘90s. He is known for the innovations and marketing focus that he has managed to bring into Tourism, turning it into a viable business proposition. The results of his efforts have been such that the industry has been growing at an enviable 15 per cent p.a. for the past three years. Currently on a stint with the Tourism Ministry, Government of India, where he
"Tourism is a lot about economics and business" backwaters and Ayurveda. It was a very difficult but exciting process of creating new products. Kerala is also a unique example of an entrepreneur-led development with the government acting as a great facilitator and catalyst encouraging private sector to deliver. What were some of the unique features of the Kerala campaign? It is the first state which got into electronic marketing, and Internet marketing. It is also the first state which went with private sector to international Trade fairs and marts. So, it really encouraged the private sector to work and deliver. The destination marketing has been done by the government and has been very successful.
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has been behind the clutterbreaking ‘Incredible India’ campaign, AMITABH KANT, joint secretary, Ministry of Tourism, Government of India, shares some of his insights on the role that brand-building and the various elements of marketing can play in the business of tourism, in an exclusive chat with AMIT BAPNA.
How did the promise made by the brand slogan — God’s Own Country — translate in the ground reality to ensure a unique consumer experience? Actually, the brand slogan had been earlier used by New Zealand and then discarded. We felt that it was very apt for Kerala, since it is the only state which, in close geographical proximity, has beaches, back waters, hills, wildlife…everything rolled into a closed geographical terrain. It was also the state which had, at that point of time, three international airports. Tourism works when several factors work together — good airports, airlines, tour operators and travel agents, all have to join together in clock-work precision. Only then can things work. We did a lot of work in capacity building, in terms of training taxi drivers, training guides. So, all of this combined together helped in making the slogan a reality. Communication, to me, is just one aspect of branding; a branding exercise can be a disaster if the product does not match the reality. And, that is why while branding Kerala as ‘God’s Own Country’, it had to be ensured that the experience (of the travellers) be equally good. And that’s what we tried to do — create an experience that was unique and different from anywhere else in the world.
is the amount of research that is done to understand the segment of the market that is being tapped, like, who is the consumer, what is his requirement in terms of the products, etc. So in the case of Kerala, the positioning was very clear. It was a shift from being a mass destination to an up-market, high-value destination. Of course, it was successful because it was backed by the outstanding experience — the outstanding quality of hotels, the unique experience in the resorts. These were all products which were distinct with the backdrop of Ayurveda and backwaters, very different from a normal 5-star hotel kind of experience. The product (Kerala) was constantly improving with a lot of new resorts coming in all the time, upgrading of infrastructure, etc., and that made all the difference. Globally, if you were to recall, which are some of the other successful campaigns which have been backed by the product also? I think ‘Malaysia — truly Asia’ has been a good campaign. They innovated, used the strength of Asia, got some good filmmakers for the creative delivery... A very important thing in a campaign is the need to work with good professionals and creative people. What drives a campaign is its creativity. That is the crux. Everything else is secondary to my mind. The ‘Amazing Thailand’ campaign too was, creatively, very good. But the problem with it was that it
Pic courtesy : CII
Gradually, the political and administrative realization came that it was tourism which was creating employment, and driving growth, which had actually had its huge direct and indirect impact in terms of a multiplier effect. It was in the year 1992-93. And, this realization led to much greater allocation and an increased degree of commitment by the state government for tourism and, then, a lot of support was provided by the central government too. So, this branding process of Kerala as ‘Gods Own Country’ was a result of constant innovation and growth. The destination marketing concept was a very innovative one.
What are the other critical aspects of a successful destination branding initiative? One of the most critical aspects in a campaign
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Q&A
Kerala is a unique example of entrepreneurled development with the government acting as a great facilitator and catalyst encouraging private sector to deliver. was changed by their tourism authority and they came in with new campaigns on an annual basis and kept changing it every year. So, it never really registered. The important thing is that the brand-line may or may not change but, in terms of communication, there has to be a forward movement — by bringing in new products constantly. And, that’s what we have been trying to do with the ‘Incredible India’ campaign. Tourism is also a lot about economics and business. All these factors, combined together, led India to tourism destination. So, where has Indian destination branding and marketing been lagging? What was the genesis of the ‘India Incredible’ campaign? India tourism marketing had been lacking in conceptual clarity as well as the understanding of the market. We have tried to bring in a lot of market-research, consumer testing, etc., and that’s how arrived at ‘Incredible India’. The important thing was that the product ‘India’ is very unique and different. It is like the mother brand with a lot of subbrands, i.e. the states. The quality of product is very uneven. There are issues of national carriers, on-ground, etc. So, all these issues had to be addressed. And, yet, despite the many problems, India has a unique culture, and heritage making for a unique experience. And that is how the ‘Incredible India’ campaign was arrived at, with that uniqueness captured in the creative output. This is the 4th year of our campaign. We have constantly tried to move forward every year, looked at the campaign anew every year and worked with some very creative people on this campaign. In the domestic markets, we have different agencies and for
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the global campaign we have worked with Ogilvy and Grey India. What are some of the differentiating features of this campaign? How has it evolved over the years? This campaign has also been a 360-degree kind of campaign, where we looked at electronics, print, Internet, outdoor, etc. So, it was a campaign where all foreign offices, across world, had a similar kind of branding even though the campaign had several themes and sub-themes. For example, if the theme was Buddhism, than the campaign was targeted at south-east Asia; for adventure-themed campaign, we targeted the German market and, if it was theme was culture, then we looked at the UK and USA market. So, a lot of research-based targeting was done for different markets. Every year, we get a lot of research commissioned to see how the growth is taking place globally, which markets are critical, what is the pattern of airlines expansion, etc. and, based on that, we innovate and make strategies. Also, a lot of information and inputs comes from our foreign offices, which also forms the basis for our future planning. Going forward, what are some of the strategies to be implemented ? We are doing a lot of work in terms of improving the infrastructure on ground. We are not only doing marketing but we have also done a campaign as "Atithi Devo Bhava", which is actually based on capacity-building for the ground staff service providers, such as taxi drivers, immigration staff, etc. This year we are also doing a campaign on awareness against garbage, filth, etc., and we are using Shahrukh Khan for the campaign. It’s being backed by school-contact programmes. We have come to realize that social awareness campaigns are most successful. In capacity building, we have laid a lot of stress on infrastructure. Of course, the results would be seen in the coming 2-3 years, probably. A lot of work is being done at major tourist attractions like the Taj Mahal, Ajanta and Ellora, Hampi, Mahabalipuram... What is happening onground is critical, we feel. We are looking at direct flights getting into newer destinations. What are some of the critical areas that need to be addressed for a successful and vibrant growth of the tourism-sector? There are some critical issues that need to be addressed, starting with the issue of civic governance on-ground, in states. Tourism should become everybody’s business, to my
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India — is very unique and different. It is like the mother brand with a lot of sub-brands, i.e. the states. The ‘Incredible India’ campaign has tried to capture that uniqueness. mind, is the first aspect. Secondly, the issue of accommodation — we need to add about 150,000 rooms in the next coming years. So, truly, the focus is on infrastructure. Thirdly, the issues of capacity building, with people coming in and creating centres of excellence in academic-learning to keep pace with the growth in tourism, because, as we grow, rise, we’ll need better managers. The need would be for Indian managers who get to manage keeping in mind the Indian ethos and culture. And, lastly, we need to constantly innovate on the branding and communication aspects. What is the role that concepts of marketing and brandbuilding can play in building a destination successfully, taking the specific instance of India? I have always believed that India is a unique product with a unique civilization. The failure, in my mind, has been in poor communication. What we have tried to adopt here is a marketing-led strategy. When I joined this ministry, hotels were performing to 30 per cent occupancy. Then, September 11 bombing of the World Trade Centre in the US happened, and they dropped to 20-25 per cent occupancy. Tour operators were in a bad state and close to winding up. The condition was really bad. Something drastic needed to be done, and we used the crisis as an opportunity here. Marketing led and drove the growth. Marketing led to increased consumer demand. The challenge at that point of time was to convince the tour operators who were dropping India from their itinerary. There was an urgent need to create consumer awareness and we did it. We brought consumer demand back and that brought a huge boom in Indian tourism. So, it has been a marketing-led strategy. Now, the demand is so much at this point of time, that it is
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forcing people to create more and more infrastructure. A good marketing-led strategy really leads to enhanced and better infrastructure. How big a role can tourism play in a nation’s economy, especially India’s? It can play an immense role. We earned about $6.8 billion from tourism last year. In three years, the revenues have surged from Rs2.3bn to Rs6.8bn, which is more than the total direct foreign investment which came into India. And, the target now is to take it to Rs12 billion. And I am confident that it will happen. Though, I am not a great believer in numbers, but we are already 4.6 million and, if you add the NRIs and PIOs, that’s another 2.5 million, making it close to about eight million international tourists. What are some of the newer areas of growth that are being looked at? We definitely need to get into the newer markets like China, Korea, and Japan, and, that too, in a bigger way. Then, we are also looking at growth from newer products, like MICE (Meetings, Incentives, Conventions and Exhibitions) segment. Medical tourism and rural tourism are other potential growth areas. One thing which I am very sure about is that we need to drive Indian tourism up the value-chain rather than get into the numbers game. I am a great believer in value growth. It’s borne out of the realization that in India there is accommodation shortage and we have to drive India up the value chain. The campaign has definitely led to high unit value realization. India has the highest unit value realization in the world and the tourists who come here spend the highest number of days here. The profile of the travellers is also changing, and is becoming more upmarket. So things are changing for sure.
marketing
COLLAGE : J AIN K AMAL
Media sans Marketing It is time for the media category to be treated as a brand. T'S STRANGE. Almost impossible to believe. But in an industry which claims to have more than 300-400 "brands", most competing aggressively for their place in the sun or their survival, there is the conspicuous absence of the marketing guy in the media business. This is having its repercussions on the media industry — mostly, I dare say, unnoticed
I
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till date. And those who have understood the importance of this subject are the ones who are actually walking away with the glory, profits‌! Why exactly do you need a marketing person in a media company? Hasn't everyone said, ad nauseum, that "content is king"? What role does a marketing person have to play in the generation of content? None, whatsoever! Isn't
marketing
the job of the marketing person only to choose hoarding sites or select the media plan for a new program? So, why am I talking about the marketing role? In my mind, there is really no difference between the media business and any other business. In my company, where most people have come from a non-media background — FMCG, telecom, consulting, durables…this fact has become even more clear. We have treated the radio business pretty much like you would treat, say, the shampoo category! In the FMCG sector, which, actually, spawned modern marketing as we know it today, the role of the marketing person is central. Indeed, one would go so far as to say that it is the most important role in the organization, even more important than R&D or sales. Little surprise then, that most CEOs in FMCG companies are either from a marketing background or have spent a significant amount of time in marketing. The role of marketing is not advertising. The role of marketing begins with the identification of the segment in which the brand chooses to operate in. Instead of letting the programming or editorial team choose what they "believe" is a great segment to operate in, a marketing orientation actually attempts to ensure that the chosen segment is indeed the most "appropriate" one. At any point in time, there are literally dozens of segments that a brand may choose to operate in. The one that it eventually chosen would depend on several factors, such as: THE BUSINESS OBJECTIVES: Do you want to be the largest mass player, a smaller premium player, a very small niche player…businesses must realistically evaluate their objectives. All too often, businesses simply state that they want to be the No. 1 brand. In most cases, it is better to be a strong No.1 in a small segment, than a poor No.4 in a big segment, but not many find this palatable. THE STRUCTURE OF THE MARKET: How well is the market fragmented already. What are the "homogeneous" segments that exist in the market? Are those segments sizeable enough? Is the segment big enough to "focus" on and still make money? How strong is the numero uno in that market? Is the numero uno too thinly spread or is it tightly focused? Is there a role for another strong player — there usually is at least 2 or 3 strong players in each segment? Should one fight this No.1 player or is it better to side step and occupy a different segment altogether?
THE ROLE OF MARKETING is not advertising. The role of marketing begins with the identification of the segment in which the brand chooses to operate in. A marketing orientation actually attempts to ensure that the chosen segment is indeed the most "appropriate" one. What are the core strengths of the company? Or, of your group? If you are in the entertainment space, do you have great relationship with the film fraternity? Can you reach them first? In some cases, it is possible to build this expertise, but if there is already someone strongly entrenched in that space, it may be suicidal attempting to build a competency that is so core to the survival of that business, that you may simply not have the time to do so! And, that age-old favourite, positioning: How will you describe your brand to a layman in one simple sentence: "You should consume my brand because…..". I have found that most media brands find it almost impossible to answer this question. Once you have chosen your business segment, can you give your brand a simple personality? Not the USP. Describe it as a living being. How would it behave in any given situation? What would it do and, equally importantly, what would it not do? In my view, many popular media brands are hardly brands at all. Most of them are unable to answer the above questions. Most brand owners would say my segment is "AB 15-34". That's like saying the pope is catholic! Let's take some examples: What exactly is the difference between Sahara TV and Star Plus? Why is it that, in spite of spending several hundred crores (reportedly) on content, Sahara TV simply cannot lift itself into the top Three? Is ETC a music channel? Or, is it a film trade channel? Most people do not think ETC competes with MTV or Channel V, which is why it remains strong with the film crowd, but weak with viewers in general. What exactly is the difference between National Geographic, Discovery and Animal Planet? I would imagine Animal Planet would be easy to guess — it would have nothing but animals, but strangely, it has all kinds of programming! Likewise, the other two. Need for focus?
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marketing
And, talking of news channels, what exactly is the relevance of "aapko rakkhe aage", "sabse tez", or any number of innovative taglines? Is the channel that promises speed really the fastest? Or, how is the content different on the channel that keeps you in front? Aren't these taglines just that - taglines? Ridiculous! Look at the downsides of not having a strong media brand: The role of anchors in the news TV business: It would appear that most eyeballs are drawn to the English news category because of Arnab or Rajdeep. While these are strong brands in themselves, what about the main brands — Times Now and CNN IBN? Is CNBC a stronger brand that both of these - it has a few celebrities but has high stickiness? Internationally, while celebrity anchors are very much in place too, the fact remains that the media brands themselves are much, much, stronger. Implication: Almost all channel energies and monies are spent on promoting celebrities, thereby making channels vulnerable, too dependent on a few people, and too heavy on payroll costs. Result: poor EBITDAs. The emergence of the "K" serials: Such superstitions are kinky. And you would imagine that in a business where thousands of crores of money rides, one would not give it more thought than required. But, it would appear that the fortunes of the channel depend on how many "K" serials it has on air! Indeed the fortunes of most GEC are decided by Balaji not because of great content from them, but because they have somehow managed a monopoly on the "K" word! Ditto in the movie business. The entire culture of numerologists is so crazy that in many cases, the main entertainment comes from the names itself! I heard Anu Malik now writes his name as Aannu Maallik! The absence of brands also leads to high content costs. Cricket costs are soaring because there really are no TV brands in the sports genre. Maybe an ESPN has tried hard and given up too early. If "Kelloggs" can give itself 20 years to change the breakfast habits of Indians, why can't ESPN do the same with football, or tennis, or racing? Everyone pumps for cricket and costs soar. Likewise with movie channels. None of them have any focus. Are there any channels which show only new films? Old films? Romantics? Action? It is my bet that if there were, their content acquisition costs would go down. But, who wants to be a small channel? Each movie channel
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CAN YOU GIVE YOUR BRAND a simple personality? Not the USP. Describe it as a living being. How would it behave in any given situation? What would it do and, equally importantly, what would it not do? Many popular media brands are unable to answer the above questions. wants to cater to everyone and will bid for all movies available! Indeed media personalities are bigger brands than the media brands themselves! Shekhar Gupta, Vir Sanghvi, Rajdeep Sardesai, Arnab Goswami…these are far more consistent in behaviour and style, have distinct images and personalities, and never, ever try to clone each other! So does Ekta Kapoor. Now, you may love her or hate her, but she is a super brand! So, why can't their media brands try and do that? To my mind, there are a few strong media brands and they are the ones who have made it big. By virtue of the fact that there is not much competition in the print space, almost all No.1 papers are strong, but not all can be called strong brands. Brands, such as The Times of India, Midday, The Hindu are all strong and the content they provide gels well within their own brand definition. The same would not fit well under any other brand. India Today is a strong magazine brand (its problems start because that category is becoming increasingly irrelevant in the country), as is Filmfare, Competition Success Review and Business World. But the No.1 magazine — Saras Salil — would surely find it very difficult to explain itself! In the TV space, Star Plus is strong by mere size, Star One is well segmented, (Sony and Zee are a mere No.2 and No.3; they need to do something to identify themselves separately), MTV is iconic (Channel V is a follower). KEY TAKEOUT: Treat media as a regular FMCG business. Take some tips from the consumer marketing space. Content is certainly king, but don't put the horse before the cart! PRASHANT PANDAY The author is the deputy CEO, Radio Mirchi. The views expressed are purely personal in nature and do not reflect the views of his company, ENIL.
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C AU T I O N
AD BUDGET CUT AHEAD
You’ve been Warned!
As marketing redefines its role in a changed business environment, are advertising agencies geared up for the future? FEW YEARS AGO, it was reported that a Hindustan Lever chairman, in a speech to his staff, said, "I know what R&D, sales, purchase, finance, HR, and administration do, but I do now know what marketing does?" I have also heard a remark from a senior company executive who lamented, "When we want some funds for important capital expenditure, it needs the board's approval. The marketing group can spend as much as they like without adhering to any strict financial vigilance!" When the sales dipped, the advertising was not working. If a new product did not get off the dealers' shelves, the advertising agency was to blame.
A
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Now, the marketing function is under attack. Prof. Mahabir Sawhney of Kellogg School of Management said, "If marketing does not reform itself, it will die a slow death by a thousand budget cuts!" This statement set the cat among the pigeons, and is being endorsed by CEOs. Sooner or later, it is bound to resonate in India as well. The marketing heads of companies tell me that they are being increasingly under scrutiny by the top management. There is a greater demand for accountability and return on investments. This will naturally impact the entire communication and media companies, be it advertising, direct marketing, sales promotions or TV channels.
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There is also a nagging fear about the lack of sufficiently dependable data on viewership. Some advertisers feel it looks like "blind spends". Under a strict and direct scanner on delivering brand value, the advertisers are turning the heat on their partners and associates. This is bringing about a change over the old ways of working relationships. The marketer's involvement with their agencies is at an all-time high. Senior clients attend all important meetings that require decisions on expenditure. Across the board, clients are putting systems in place for checking the efficiencies of deliveries on every outsourced element of their marketing expenditure: be it film production or media buying. Also, a lot of other activities outside the purview of conventional media are already attracting larger budgets. The ushering of marketing accountability is a doubleedged sword. On the positive side, greater efforts are being made towards clearly define a target customer. This is also resulting in a more focused strategy. This should lead to clearer communication objectives. Marketing would have to define more carefully the role of each medium and justify its costs. The management is hammering into the marketing personnel the fact that marketing expenditure is the single largest expense head after raw material and man-power costs To my mind, all of this should seem as good news for the advertising industry. You will receive a clearer brief. This is the exact task cut-out for the marketing people. However, there is a down-side to all this. Marketing is bound to feel the need to reduce any risk coming from out-of-the-box thinking. Creative ideas will be scrutinized and researched. No risk-ideas are never great ideas. Today, the need is for creative thinking for "business ideas". Safety and cost-cutting will bound to be the new mantra. The first step has already been taken. Agencies are forced into accepting sales-linked remuneration. Added to the drive for cost-cutting, advertisers are exploring and experimenting with newer ways of advertising. The internet has allowed consumers to trade stocks without using high-priced brokers, or travelers to book flights directly from airlines. Now, it may free advertisers to make their own television commercials without going through a traditional advertising agency. Several companies are offering automated advertising creation over the internet and, in some cases, advertising placement services that all advertisers can use to a more
The ushering of marketing accountability is a double-edged sword. On the positive side, greater efforts are being made towards clearly define a target customer. This is also resulting in a more focused strategy. This should lead to clearer communication objectives. tightly focused marketing plan. Advertisers are beginning to use sites to select scenes from commercial films and customize campaign with a few clicks of the mouse, and with little human interaction, often for a low flat fee. "When people say you are commoditizing creative, well sure, we are," said Jordan Zimmerman, chairman of Zimmerman Advertising, at Florida. He calls the automated service, a virtual advertising agency. This new system threatens some of the role that advertising agencies have traditionally played. In the US, national advertisers, mainly in the retail, real estate, and auto industries, are using these systems to make their message more relevant on the local level. They can automatically add names of local dealers at the end of the commercial. Among the companies that have used these services are Wendy's and Ford Motor Car Company. Interestingly, Zimmerman is part of the Omnicom group: selling stocks on-line, buying for TV, the internet, print publications, radio, direct mail and instore ads. "Visible World", based in New York, introduced a product a few weeks ago that allows national advertisers to create many different customized versions of the TV commercial. And "Spot Runner", Online advertising agency, located in L.A, has been offering to make local TV commercial for $499 (just Rs21,956!). And, not surprisingly, WPP has invested in both these companies. The owners seem to stay ahead over the practitioners! All of this may not happen here overnight. But, it is giving a strong signal of warning for advertising and media agencies to look ahead courageously and do what it takes. Because, the future will shape itself without warning. RAM SEHGAL The author is a well-known advertising authority. email : ramrajsehgal@gmail.com
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www
TECH-TOOLS.COM
SIMPLIFY.NET
www.wikipedia.org
Net that customer!
It is easy to reach 'everyone' in Internet Planning - the generic user, one who checks his mail, chats, and surfs — by just going onto India's top sites. But, what happens when you want to reach a specific user with specialized tastes, for example, architects, fitness fanatics, artists, gamers, auto enthusiasts, students aspiring to go abroad, heart patients, music fans, travellers, fashion designers, programmers and techies? And, what if the audience you are trying to reach is not in India? There's only so much Indian sites can offer, and it falls short; the best of websites with specialized content may be outside India, in any one of a dozen countries. And, the user who wants information will not confine himself to his country alone. If he finds any website which has the information relevant to him, he will take it from there, regardless of where it is located. The very nature of the internet allows and encourages that. So, how can you ensure that your brand is visible to your valued customer? This is where a specialist group of media owners — Ad Networks — step in. These are global networks who purchase advertising
Ad networks will allow you to have a presence on over several thousand websites, specifically tailored according to the kind of user you are trying to reach. space on hundreds of thousands of websites all over the world, and keep records of each websites' content, its traffic, the type of people who visit them, where they come from, etc. An ad network can be briefed on your objectives; your TG can be defined and refined. The ad network will look at its list of websites and select those fitting with your goals, and run your ads there. And, don't worry about wastage — you can ensure that your ad is shown only to visitors to that website from your target country alone, while still sitting here in India! And, what's more, you won't be paying for the whole world seeing and ignoring your ad. In fact, it gets even more interesting. Ad networks, because they can also track unique visitors, can also track the same user as he travels to other sites in the same network. So, imagine you are selling Product X. You can tell the same person "Buy my X!" on one site, then "Go ahead and compare — my product X is till better!" on the next (tech review site), and "Don't waste money playing games here! Buy X and play to your heart's content!" on another site, probably a gaming site, all to the same person. Each user is exposed to customized messages depending on where he/she surfs. In short, Ad networks will allow you to have a presence on over several thousand websites, specifically tailored according to the kind of user you are trying to reach. Some popular ad networks are — www.tribalfusion.com, www.advertising.com, www.valueclick.com, www.ozonemedia.com, www.indiaads.com Ashish Tiwari
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If you ever run across a term you don't understand in real life, you reach for the dictionary. On the net, it's invariably google — to the extent that the term has now
become a verb - "just google it." But, often, Google, because of their sheer volume of results they generate, may not always be the best option, often confusing, sometimes misleading. A better option is Wikipedia (www.wikipedia.org), which is best understood as an online encyclopedia. It is bigger and more detailed than all the others put together. A search on any subject will give you not only an understanding of the subject but also its history, related articles, references and cross-references…the works. And, since all the data is being constantly updated and manually verified, it is pretty much the most accurate data source.
www.meebo.com This site is a godsend for all those who are in firewalled offices, where Instant Messengers like Yahoo!, Gtalk, or MSN are banned or don't work. Just type in the URL, and you get an interface where you can log
in with either your Yahoo, MSN or Gtalk ID. What you then get is a web-based interface that's nearly as fast as your regular messen ger application.
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BOOKENDS
BOOKS
MADHUKAR KAMATH MD & CEO, THE MUDRA GROUP
Dell Done!
Dell’s success and business strategy has been reviewed by several market analysts and observers. Undoubtedly, very few companies have altered the rules of business and rewritten new ones by proving their success. The book — How Dell Does It — portrays Dell as
one such company who redefined how computer manufacturing, and even manufacturing in general, can be done. The descriptions about Dell Inc., and business practices gives business professionals a clear, practical understanding of guiding principles underlying Dell’s phenomenal success. Dell is in the high-tech platform, but the core principles that have guided Dell Inc. from the start have made it a trend-setting business story based on its revolutionary business model. Going deep inside the company, exploring in exacting detail, every aspect of the company's processes, practices, and culture, and understanding how they function within the framework of Dell’s business model helps us distil powerful lessons that business leaders in every industry sector can use to create leaner, meaner, turn-on-a-dime enterprises and, ultimately, succeed the way Dell does. The core tenets of Dell’s business structure, such as marketing direct to the customer and following the zero tolerance approach for
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inventory, gives insights on how the longer you keep inventory, the faster it deteriorates. This is especially true in the computer industry, where the prices of components can depreciate to a point. Dell has taken the “Just-in-Time” inventory philosophy and pushed it to the extreme. The chapters in the book describe the success of this strategy and also justify the financial implication of keeping virtually no inventory. With their direct-to-customer approach and fanatical focus on their needs and requirements, Dell successfully understands customer needs. They concentrate on the large sweet spots that can be effectively covered with few variations, implementing Pareto’s 80:20 law. Dell sets examples of a superbly efficient execution machine. How they anticipate and adapt to market changes at short notices and streamline their operations by building a culture of execution and capitalize on corporate will. The book quotes the founder who propagates a culture of 'Choose what you want to excel at, and find great partners for the rest'. It teaches how to identify the skills that define the positive edges and sharpen the rest by inviting expertise from partners. Dell uses virtual integration to turn customers and suppliers into partners and makes the most from the expertise at each level of association. The book reports from 'Direct from Dell', authored by Michael Dell, websites and other publications to describe Dell's rise over the past two decades and explains what it is doing now to expand its market dominance. The descriptions go beyond the tech world, and has management lessons and innovative business models for everyone to learn from. Neha Taleja
BOOK How Dell does it — Using Speed and Innovation to achieve extraordinary results AUTHOR Steven Holzner PUBLISHER Tata McGraw Hill PAGES 216 PRICE Rs675
TO KEEP MYSELF abreast with times, I have read books like “The Monk Who Sold His Ferrari”, by Robin Sharma, which talked about limits that is set by oneself to keep in pace with their busy schedules. The other book
that is simple and truthful in its content and has influenced my business acumen is “Who Moved My Cheese”, by Dr Spenser Johnson, which spoke in detail about how to deal with changes in life and advises one to keep on searching for new sources when the cheese runs out.
BOOK NOOK The Starbucks Experience by Joseph A. Michelli The Inheritance of Loss by Kiran Desai Like the flowing river by Paulo Coelho Sacred Games by Vikram Chandra In the Line of Fire by Pervez Musharraf In Spite of the Gods by Edward Luce Bougainvillea House by Kalpana Swaminathan Bombay Art Deco Architecture by Navin Ramani Two Minute Rule by Robert Crais Winning: The Answers by Jack & Suzy Welch Source : Crossword
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GETAWAY
PONDICHERRY
The French connection
Pondicherry, a confluence of spiritual aura, French colonial heritage and Tamil culture, is one of the few surviving union territories with a pristine coastline. Fondly called Pondy, it is a charming Mediterranean town with cobbled streets, stylish houses and ornamental gardens, Pondy instantly transports the first-timer to a picturesque French town. All the roads and institutions have names in French, such as the Hotel de Ville, which is the Town Hall. Little wonder then that Pondy is often called the French Riviera of the East. The French first arrived and ruled the town for nearly 281 years. Today, it stands as a living and breathing monument of the French culture in India. A convenient way to see Pondicherry is at leisure, by a cycle rickshaw. And, if you really do want some pace, hire a motorcycle. They come for as little as Rs100 per day (fuel extra). It is easy to whizz about, zigzagging through the lanes, all over the town with no chance of ever getting lost. This French Boulevard town has everything planned down into a grid, much like New York City. Sights are manifold, from pastel-coloured churches to bright temple towers; Joan of Arc’s heavenward gaze vies with the tall carved pillars from Gingee at the seafront; cricket competes with pétanque. Apart from the monuments, there is the French Consulate and the Foyer du Soldat for war veterans of the French Army. The restaurants serve a rich variety of French, Indian, Asian and continental food, with the latest pizza for an American bite. A favourite with the tourists is Rendezvous, a quintessential French restaurant. For an avid shopper, Pondy had a lot to offer and is a favourite shopping destination. With taxes low or practically non-existent, Pondy is soft on your purse. It is known for
Sights are manifold, from pastel-coloured churches to bright temple towers; Joan of Arc’s heavenward gaze vies with the tall carved pillars from Gingee at the seafront; cricket competes with pétanque. its traditional doll making, textiles and silks. It is also the birthplace of several world-class brands in leather, pottery, aromatics, fashion and handmade paper. Scented candles, incense sticks, lamps and articles made with handmade paper and dry flowers are the flavour of Pondicherry. On the border of Tamil Nadu is the international city of Auroville, which has the Sri Aurobindo Ashram. Inspired by the teachings of Sri Aurobindo, Auroville has been largely realized through the vision of his French disciple, known as the ‘Mother’. The French have a saying — Plus ça change, plus c'est le même chose — which means, the more things change, the more they stay the same. And this could be somewhat the case for Pondicherry. At the crossroads of eastern and western culture, and of ancient and modern spiritual disciplines, Pondicherry truly is a heritage town. Frida Asher
FACT FILE AREA: 480 sq. km. LANGUAGE: Tamil, Telugu, Malayalam, English and French POPULATION: 9,73,829 WHEN TO GO: The climate is tropical, which means that it is hot and humid. Average temperatures are 24°C typical of January and 30°C for June. The monsoon is active from October through December.
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whats on
GOURMAND
WINE-N-DINE
DAVID A ROSS PRESIDENT ARTIST PENSION TRUST
My interests run from Italian cuisine and wines, primarily from the Piedmont region, to classic American comfort foods, and the cuisines of China, primarily from Hunan and Szechwan region. As a foodie, I am totally in for the fiery hot Indian cuisine and cuisines from the Chinese community known in NY as “Chinese Mirch”. But one should try the Mexican street food and haute cuisine, or the Greek and Middle-Eastern food that is simple but scrumptious in its content.
AHALA
Live in the Drama
It’s all about adding that little bit of drama to real life. With a unique theme and mesmerizing ambience, Ahala — The Drama Lounge, at Taj Krishna in Hyderabad, assigns you a character to play and live in the drama. Formerly known as Tunnel 2, the lounge, named after the Roman hero, Gaius Servilius Ahala, is just not to be missed. The drama unfolds at the signage at the entrance itself. The logo represents two masks — sun-moon, man-woman, yinyang — to symbolize the two states of a party animal — one reserved and the other liberated. The dramatic props, wooden stairs,
THE LOUNGE SHATBI BASU EXPERT BARTENDER
fragrance of rose and cozy lighting gives you a feeling of being in a drama studio. Water bodies with rose petals and floating and hanging candles grab your attention. The ancient dramatic art works on the wall speak about the moods and characters. There is a dance floor too near the DJ console. The lounge has three bar counters for quick access for service. Retro music is what pumps up the drama here. Drink with retro, dine with house and dance to the commercial numbers that are churned out by the local DJ. The music makes it worth partying here,
COSMO ON THE ROCKS : 30ml Smirnoff citrus 30ml Smirnoff orange A wedge of lime 45ml cranberry juice 10ml limejuice METHOD: Take the mixing tin filled with lots of ice. Add
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especially on weekends, as guest DJs take over the console. There is more exciting news for ladies — Friday is dedicated for them. Never miss on Mai Tai and The Wildberry Martini here. You can try some daiquiri cocktails or simply ask the barman's special for the day. Never miss on Mai Tai and The Wildberry Martini here. Strawberry Margarita too is got down to the perfection by the bar man. There is no need of telling about the Long Island Iced Tea here. Go for Crabmeat Rice Noodles, Spaghetti or Mini Falafel Kebabs served in contemporary stylish cutlery. For veggies, assorted vegetarian platter is the right choice. Naseer P Ahala, The Drama Lounge Tel: 040 6666 2323 Price (for couple) Rs.2000 - 2500
Orange Vodka, and Citrus Vodka. Then, squeeze a wedge of lime and add cranberry juice. Shake it well and pour in on the rocks in an old-fashioned glass. GARNISH: Orange slice
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ENTERTAINMENT
REVIEW MUSIC Live in Drama
ON SCREEN
Open Season
Boog (Martin Lawrence) is a domesticated grizzly bear, who is mothered by a forest officer (Debra Messing) like her own baby. He has no survival skills to save his own skin and has a perfect existence until Elliot (Ashton Kutcher), a scrawny, fast-talking mule deer, enters his life. Boogs’ life turns upside down when he is lured by Elliot to have some fun, which lands both of
them on the outskirts of Timberland. In the course of his adventure, Boog misses his mother and the good old days and is set to retrace his way back home with the not-sohelpful aid of Elliot. Artistically picturised, the movie brings out the pure essence of nature into focus. The movie is refreshingly innocent and is a must for the whole family. DIRECTED BY: Roger Allers, Jill Culton SONGS BY: Paul Westerberg STORY BY: Jill Culton and Anthony Stacchi
TECH-STORE MUSIC ON THE MOVE SONY SETS YOUR PULSE RACING WITH THE WALKMAN DIGITAL MUSIC PLAYER/RECORDER With a unique six-line EL display features and a built-in digital amplifier, the RH10 Hi-MD Walkman presents music for those who are always on the move. Its high-speed mechanisms for fast copying, and bright display allows easy viewing in all conditions day or night. This recorder comes equipped with skip-free G-Protection technology, which provides virtually uninterrupted playback of your music. Music on the go has never been better.
the
The brand new album from Billboardcharting artist Karunesh, a contemporary mystic and master multi-instrumentalist sets one to experience the smell of exotic spices that harks back to his ‘Global Spirit’ days. Here, he has evolved a sound that is both vintage and contemporary in content and is accompanied by celebrated instrumentalist, Govi, on the oud and sitar. Some of the soul-stirring musical numbers presented in this album are “Longing for the Unknown”, “Evening reflections”, “Return of the Rains”, and “Sahara Sunset” that will sway the listener to a blissful groove. Price: CD - Rs 360
SANDSTORM The Loudest, Party Ever!
Biggest
Specially-compiled with the party season in mind, Sandstorm is undoubtedly the best dance compile you will have heard this year. It features some of the loudest bass lines and most powerful, high-energy dance grooves that have been put together on one album. Some of the all-time favourites featured in this album are “Substitute” (Sidel & Muff Mix) by Bombay Rockers, “Rip It Up” by RIP Family (r-H Remix), “Desert Rose”, “Lost in a Moment” (Strange Worlds Mix) by Shrift and the popular theme from Mission Impossible. Price: 2 - CDs @ Rs 225
Price: $339.95
MARCH 2007 USP AGE 81
editor’s notebook
BY
CD RAMCHANDRAN
Paan habits are unique to India. Nowhere else in the world is paan allowed to be chewed and spat out.
SPIT RIGHT .... THE LEGENDARY CHINESE DRAGON, it is believed, spits fire when it is angry. Dragon fire, it is believed, destroys. Indian spitfire — paan — goes beyond that. It dirties up and pollutes the atmosphere worse. You can find people spitting paan with gay abandon. It happens on your promenades, serene gardens, plush building entrances and even before the places of worship! It is not just the taxi-wallahs or other labour class who do it. You can also find the rich gentry doing it from their Mercs, or even strollers who walk across…almost everyone who chews paan, does it. The question is, will they do it in their living rooms? Or, in social surroundings? Paan habits are unique to India. Nowhere else in the world is paan allowed to be chewed and spat out on the street. Singapore fines even those who throw cigarette butts on the streets. You don't find paan-wallahs in developed countries. To eliminate, or reduce, the incidence of “paan throwing” in public places, perhaps, there is scope for a public service campaign. If the fines are made heavy, if the habit of “throwing-in-thestreet” is made a shameful act, and if media too gives adequate publicity for instances where people are caught spewing paan on the street, this dirty habit could die a natural death. It is a great PR opportunity for any mouth-freshener or beverage manufacturer. Any takers here?
Public Service campaigns That brings me back to what enlightened corporates can do consistently. Besides earning the goodwill of authorities, like-minded citizens, customers and others, they will also be serving
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social causes. Every advertiser, whichever hue he belongs to, PR outfits and ad agencies can take up causes as a part of good governance. Good governance is also a part of the social responsibility. Hats off to entrepreneurs and NGOs who continuously contribute to the society through actual planned efforts or public service campaigns.
Social Awareness campaigns There is social awareness in most of us. Only that they are hidden. Excepting that, we do not get enough opportunities to express ourselves creatively. USP Age, identifying this immense potential that communication professionals can unleash to change the society around them, is pleased to announce free space for anyone who can create interesting social awareness campaigns. The campaigns could be on any topic: anti-tobacco, anti-alcohol, the demand for cleaner roads, better healthcare facilities, antipollution, traffic discipline, environment protection, conservation of water, energy savings, eternal vigilance…the choice is endless. Each accepted entry will find place in this magazine. Due credit will be given to the creative team and the advertiser. There will be a cash reward of Rs10,000 for each chosen entry. All these entries will be adjudged annually for PUBLIC SERVICE CAMPAIGN OF THE YEAR AWARD. The entire process will be handled by an independent panel of jurists. It’s time you take up this challenge. The deadline for each issue is 20th for the ensuing issue. So, don your thinking caps and set the ball rolling. cdramachandran@usp-age.com