The fabric of relationships

Narayan Devanathan / Jan 23, 2012, 00:56 IST

Unlike clothes, brands don’t come with care instructions. There are no labels for brand managers that say “Manage with care. Do not treat customers coldly. Use warmth inside out. Do not behave like machines. Use kid gloves instead of iron hands to handle criticism. Do not ever wash your hands off even your worst customers.” Sometimes though, you wish they did come with an instruction label. Maybe then we’d realise that our jobs are not remotely over as we soon as the consumer buys our brand. That’s only the beginning.

This analogy with clothes probably brings home the care and concern that need to be demonstrated in the long term in order for brand relationships to thrive. Without the proper care, colours on clothes will fade very quickly. Prints will start to smudge. Sometimes patches will get stretched until they fray. But the most telling signs will be when the garment starts to unravel, thread by thread.

The thing is, you can be fooled into thinking your garment is looking as good as new after the first couple of washes. But think about it. Unless it looks as good as new even after some time, you’ll tend to pick up and wear something that looks newer, sharper, better. Once the garment starts to fade, fray, wear, and tear, you’ll discard it in favour of something newer.

The thing about all of these occurrences is not just that they will happen without the proper care. It is that they happen almost imperceptibly over time, with neglect. And that is probably the most telling metaphor for what happens to relationships—among people, and as relevantly, between brands and people.

Your brand may be loved when it’s newly purchased and shiny, sharp and good-looking. But how many brands pay attention to the colour fading, the unraveled stitch, the shiny under arm patch that will soon result in a tear, the dirty collar of brand relationships? We talk about brand loyalty as if it is one cohesive entity that shifts visibly. But like a frequently-washed and worn garment, it loses shape and wears away, one tiny patch at a time. We talk about rewards programs as if they were a cure-all for all relationship ills with customers. But what people actually want are constant care.

So what is the best way to keep the fabric of brand relationships looking new and wearable for a long time? It’s to understand that there is a need to care for every warp, every weft of the fabric.

And when you stop to think of the one person who intuitively knows and cares for fabrics to look and be good in the long run, without an instructions label, its mom. Perhaps what we need is for brand managers to become moms to their brands. (The author is National Planning Head, Dentsu Marcom)

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Single engineering entrance examination likely from 2013

Single engineering entrance examination likely from 2013A formal notification on the matter will be issued next month Kalpana Pathak / Mumbai Jan 26, 2012, 00:04 IST

Come February, and the cloud over the issue of conducting a single entrance examination for admissions to engineering institutes may finally be cleared. Directors of Indian Institutes of Technology (IITs), National Institutes of Technology (NITs) and Indian Institutes of Information Technology (IIITs) that Business Standard spoke to said that by the end of February 2012, there may be a consensus on whether to hold a single entrance examination in 2013 and thereon.

The Joint Entrance Examination (JEE) held for admissions to the IITs and the All India Engineering Entrance Examination (AIEEE) for admission to Centrally-funded technical institutes may be merged to create a single entrance test.

"Directors of the IITs, NITs, IIITs and Indian Institutes of Science Education & Research (IISERs) have been asked to give their feedback. A formal notification on this will be issued next month. Mostly, we are all on the same page," said an IIT director on the condition of anonymity.

In September 2011, the IIT council had accepted the recommendations of the T Ramaswami committee report on JEE reforms and proposed a single entrance test for all engineering colleges, including IITs, NITs and other engineering institutions.

Key reforms that the committee was looking at include reduction in the number of examinations to one; testing knowledge intensity; alignment to the 12th class syllabus; reduction of dependency on coaching and pressure on students and emphasis on aptitude among other things.

IITs say a formal notification will be issued with details of the examination format to be followed by IITs. That is, while considering a student for a seat — whether to give 50 per cent or 60 per cent weightage to the board exams and the rest to IIT-JEE scores.

Centrally-funded technical institutes along with other Deemed Universities and Technical Institutions offer admissions to students through AIEEE.

Last year, 10,53,807 candidates took the AIEEE exam out of 11,14,541 registered candidates. Approximately 34,311 seats are there for BE and BTech and 1,070 seats for Bachelor of Architecture and Bachelor of Planning in various institutions. The institutes located in West Bengal, Himachal Pradesh, Haryana, Uttarakhand, Punjab, Chandigarh and Delhi accepted AIEEE scores to admit students.

There are four IIITs at Allahabad, Gwalior, Jabalpur and Kanchipuram. Total number of NITs at present is 20. Also, 10 new NITs are proposed to be set up during Eleventh Five Year Plan. NITs are expected to be at par with other national level technical institutes.

IIT-JEE, say IIT directors, has become a craze among students, largely because of the high-paying jobs one lands after an IIT degree.

"Entrance examination is a big racket in our country. And if you want to reduce the number of examinations, then different systems should not be asked to hold different examinations," said another IIT director.

Last year around 4.85 lakh students — an increase of 6.5 per cent or 30,000 — appeared for the joint entrance examination to seek admission to 9,600 seats on offer in 15 IITs.

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Indian brands warming up to Facebook ads in news feeds

Indian brands warming up to Facebook ads in news feedsSome are still circumspect, but most think it?s a smart platform for promotions Shivani Shinde / Mumbai Jan 25, 2012, 00:53 IST

Facebook, the world’s largest social networking site, has just launched a new initiative under which advertisements will appear in the form of ‘stories’ or posts about a product in its news feed labelled as ‘featured’. Marketers can only pay for these adverts to appear in a user’s feed if the user has already ‘liked’ the page. And the advertiser does not have the option to add its own additional message once the post is live.

Though the ads have generated a huge controversy abroad and are yet to be rolled out in India, many Indian companies using the social media platform as their marketing strategy are keenly watching.

The advertisements are displayed based on what users have ‘liked’ and actions made by their friends.

“I think ‘featured’ advertisement will make an impact if they are saying something significant. If a brand is just trying to give information, it won’t work well. For MTV, I do not see us using it till we have something to talk about. With every other advertisement medium, it’s how you make use of the platform is what matters in the long-run,” says Aditya Swamy, EVP and Business Head, MTV India.

Others have a different take. “I think it’s a very smart move from Facebook, but more importantly an amazing opportunity for brands. One has to move beyond creating a base of ‘likes’ or ‘fans’. I think this will allow brands to grow organically and create communities that connect with people who share similar passions,” says Sunil Chandarana, CTO, EBS Interactive.

Hareesh Tibrewala, Joint CEO, Social Wavelength, a social media agency, believes since these featured ads will sit within the news feed, visibility for this communication should be a lot higher. “However since FB intends to show only a limited number of sponsored stories to a consumer in a given time frame, available inventory will be limited,” he added.

For Facebook, this would mean further opening up its revenue from advertisement, but brands are not looking at this in seclusion. “We do not evaluate one avenue in competition with another. For us, all kinds of media have a role to play and we believe that sponsored stories as a part of news feed will have its own utility in furthering brand messages. We believe that content and messaging has to spread into four parts – Paid, Owned, Earned and Shared media. Any one of these cannot take the brands too far. One cannot pay one’s way to greatness anymore,” says the spokesperson of Coca-Cola India.

Jet Airways, that recently crossed a milestone of 300,000 fans on Facebook, believes that if used smartly, ‘featured ads’ can enhance brand visibility and achieve higher impact and click through rates with a higher engagement with their guests.

The airline started utilising social media platforms starting January, 2010 and is currently present on six social media platforms i.e. Facebook, Twitter, YouTube, Flickr, LinkedIn and Foursquare. But each of these are used differently.

“Over 80 per cent of Jet Airways’ marketing spends are in the digital space and social media share is substantial,” adds a company spokesperson.

Zafar Rais, Founder and CEO of MindShift Interactive, says that of the top 50 brands in India, over 32 are using the social media platform actively, and it is estimated that the budgets for social media spend in India is expected to touch Rs 1200 crore. But going ahead only those brands that have a content that can engage with users will optimise their presence on these platforms.

One of the successful campaigns run on Facebook recently was PepsiCo India’s ‘Change the Game’ around 2011 Cricket World Cup. PepsiCo India decided to run a Reach Block on February 11 this year to guarantee that it would reach 100 per cent of its target audience over a 24-hour period. Reach block had open targeting.

The campaign was run in three parts. The first part featured a video plus poll engagement format that included a TV commercial featuring cricketer-turned-umpire Billy Bowden. This asked people to vote for their favourite game changing plays. The second was a premium video Like Ad that encouraged people to watch another of PepsiCo India’s TV spots and to connect to the Pepsi India Page. The third ad drove people to ‘The Biggest Wave” application on PepsiCo India’s microsite. The impact was that the reach block was viewed by 19 million times, topping PepsiCo India’s target by 145 per cent .

PepsiCo India says it was impressed by how viral the campaign went on Facebook. “Quite simply put, one out of two impressions a user saw carried the names of his friends who had liked or engaged with the ad,” says the company. PepsiCo India says it has learnt that it is important to focus on how to engage fans than simply acquiring them.

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Tech firms score with offline ads

Tech firms score with offline adsMicrosoft, Google have seen their market share moving up rapidly after promotions on television Priyanka Joshi & Sarmistha Neogy / Mumbai Jan 23, 2012, 00:54 IST

When technology bellwethers take to TV promotion, you know they are targetting more than just the online crowd. Microsoft and Google have been flashing TV ads in India, where each company is trying to humanise its technology products and services.

Microsoft has chosen TV advertising to emphasise how families can sync and share data across devices, while Google’s 90-second advertisements show the story of a South India-based artist, G Rajendran who uses the web to keep the dying art form ‘Tanjore’ alive. The ad shows how the artist’s decision to launch an online shop for his paintings helps him in his business.

The ad focuses on the use of Google Search and AdWords. “Chrome is designed to help you make the most of the modern web. ‘The Web Is What You Make It’ campaign is all about inspiring more people to get online and change their lives,” says Nikhil Rungta, head marketing, Google India.

Earlier Google commercials, “Letters from Dad”, etc were meant to showcase how parents can take advantage of technology and web services to capture and document the lives of their children. Its second TVC, “Archana’s Kitchen” tells the story of Archana who grew up in Tamil Nadu and took forward her childhood passion of cooking to the web through Blooking (Blog Cooking). Rungta gives credit to the extensive TV campaigns for Google’s market share moving from 13 per cent to 37 per cent by the end of 2011.

TV ads have delivered a similar success story for Microsoft, which rolled out several new commercials in 2011 and more are expected in 2012. “The idea was to introduce to the family how Microsoft products can improve their daily lives,” says Amrish Goyal, Director (Windows Business Group), Microsoft. The technology company drives home the point that Microsoft Office products are easy-to-use in a commercial when a father and son swap their Windows 7 laptops, with the son surprising the father by adding a few visual additions to his office presentation.

Microsoft claims that since it began running the TV commercials in India, it has seen more than 7 per cent increase in “intent of purchase” at the stores. “We have seen an increase in sales of Windows products and that gives us confidence to push more TV commercials focused on other Microsoft products and services in 2012,” says Goyal.

While Microsoft got the ads commissioned and executed by international agency Crispin Porter+Bogusky, Google India signed on Bartle Bogle Hegarty’s India (BBH) to show how the internet has changed people’s life for the better.

“It took more than eight weeks to develop the advertisement and a lot of attention was given to minute details. We flew around 50 paintings from Chennai to create a proper background which was the backbone of the commercial. It has been depicted without a single use of any computer in the commercial. Instead, several windows resonating different sections of his website are shown in a physical state,” points out Rungta. The search giant already runs billboard adverts and extensive online campaigning on its web properties. With the new TV ads, it hopes to convert general consumers to use its services.

Microsoft, on other hand, will continue to launch TV commercials targeted at the family in 2012. “For the younger consumers, we have an active social media and online campaign strategy in place. In fact, we have two people from India dedicated to monitor the social web and manage the Microsoft campaigns while a team of 15 people manage the India marketing side,” says Goyal.

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A recipe for success

Sarmistha Neogy / Mumbai Jan 23, 2012, 00:51 IST

Del Monte has found an unusual spokesperson in Chhota Bheem, an animated character from the eponymous series on Pogo.

Who takes the all-important decision regarding what to buy and which food or beverage brand to pick up at retail in a typical Indian household? Of course, it’s the lady of the house. But Del Monte seems to think it’s a better idea to target the children to drive home its message.

And the company has found an unusual spokesperson in Chhota Bheem. Chhota Bheem is a courageous and fun loving nine-year-old animated boy, who is gifted with extraordinary strength and is seen as a protector of the poor and weak. The eponymous series is telecast on Pogo, Turner’s only-for-India kids’ entertainment channel. This fun-loving character, created by Rajiv Chilaka, CEO, Green Gold Animation, has won hearts with his adventures and is well known for his love for food, making him a perfect spokesperson for the brand in its new television commercial (TVC) of Del Monte, according to the company.

The TVC, created by Pogo, opens with Chhota Bheem playing a prank on his aunt, Tun Tun Mausi. Mausi is shown frying hot samosas in her kitchen and she is suddenly confronted with two ghost-like creatures. She is understandably scared but is relieved to see Chhota Bheem appearing quickly and fighting off these ghastly creatures. She rewards him with a plateful of samosas and also hands him the bottle of easy-to-squeeze Del Monte ketchup. The commercial ends with the two ghost-like creature unravelling their identities-they are none other than Chutki and Raju, two of Chhota Bheem’s friends. The three boys then enjoy the snack, made even more tasty with a generous dollops of the ketchup, and have a hearty laugh over the good-humoured prank.

“Through our commercial, we are targeting children in the age band of four to 14 years,” says Yogesh Bellani, business head, Del Monte food business, FieldFresh Foods, a joint venture between Bharti Enterprises and Del Monte Pacific Ltd. “After a lot of research we found that kids are usually the end users and purchase influencers in this category and so we felt the need to tap this area.” Bellani adds that in order to gain attention of children and also as part of the promotion, the company is giving a free Snapper Band with one of the Chhota Bheem series characters imprinted upon it with every pack of the re-usable plastic ketchup bottle.

“The brief given by Del Monte to our channel was to make a ketchup commercial that attracts the attention of a child easily,” says Juhi Ravindranath, network head, ad sales, South Asia, Turner. “As kids were the core target group, we decided to use the Del Monte squeezy format as the pivot which is very child friendly and saves mothers the worry about the kids making a mess or breaking bottles. The activity was meant to engage with kids (and thereby moms), the key theme being the taste of Del Monte ketchup, which is summed up in the tagline, ‘The taste you will fall in love with’.”

In sum, the creative rendition was meant to highlight the easy of use and the fun element of the Squeezy packaging along with the product’s core proposition-taste-in a seamless and memorable way. Memorable because this is a heavily advertised category and the company figured it will take some amount of ingenuity to stand out.

While analysts say India is a sauces and condiments country, the market for ketchups here is highly fragmented with a major portion of the pie gobbled up by local players. Changes in the consumption pattern of the youth-where they seem to be enjoying pizzas, burgers, fries, pastas quite regularly these days-have led to an uptick in ketchup and sauces sales. Various easy ways of packaging like the flexible plastic packaging, or the use of Tetra Pak and aseptic Brick packing have made it possible to distribute tomato products to remote areas and store them at room temperature for a longish period of time.

According to Euromonitor International data, the ketchup market in India is valued at Rs 638 crore in 2011. It projects the ketchup market will be worth Rs 806 crore in 2012. According to various estimates, Maggi (Nestle) tops the market share chart, followed by Kissan (HUL) and Heinz (Heinz Co, HJ).

Bellani says, “The growth of out of home consumption is terrific, which is around 25 per cent while the in-home consumption is around 12-14 per cent. The high rate of inflation and the proliferation of regional brands are some of the major challenges which the food and beverage industry is facing now.”

Ravindranath recalls some challenges faced by the team while it was working on the ad: “First, the storyboard went through several changes till the final cut was approved. Then the Chhota Bheem slap-bands were enroute from China and the product to market deadline was around the corner; hence the turnaround time was critical for the success of this project. However, Turner Sponsorship & Promotion and the sales department ensured that the production time-lines were adhered to without compromising on quality of the original animation used in the commercial.”

For the records, Del Monte was brought to India in 2008, through a JV, Field Fresh Foods, between Bharti Enterprise and Del Monte Pacific Ltd. In order to break the already clustered market at that time, it came out with two innovative variants in tomato sauces-Zingo and Twango. Zingo offers a sweet and spicy taste, capturing the essence of far eastern cuisine, and is a mixture of red chillies, red bell pepper, garlic and ginger creating an alluring Asian taste. Twango is a tangy and fruity sauce that brings an unusual twist to regular tomato-based sauces. A mustard flavour is the most recent variant added to Del Monte’s sauce portfolio. The inaugural commercial from the Del Monte stable, “Oye Ruk”, targeted women as its primary audience with theatre and television actor Shefali Shah as the protagonist, who was seen flying across television screens chasing bottles of Del Monte sauces.

From the looks of it, like many marketers before it, Del Monte has decided it is high time it cottoned on to children’s influence on their parents’ spending.

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Answers to last week's quiz (#236)

Answers to last week's quiz (#236)Strategist Team / New Delhi Jan 23, 2012, 00:05 IST

With whom is the phrase “No Free Hunch” connected?
No Free Hunch is the official Kaggle blog. Kaggle is an innovative solution company for statistical/analytics outsourcing, that harnesses the power of crowd sourcing. 
What system was introduced into the rest of Europe and the world by émigré Venetian glass-blowers to protect their skills against those of local workers?
The system of patenting. It is claimed to have been first introduced in Venice Italy during the late 1400s. 
This person exchanged his French citizenship for American in the 40s, saying that it was thanks to the US that he had a wonderful wife, a good job and the ability to do something for them. Name the person and one the first’s linked to him.
General Georges Doriot is considered as the person to have started the first Venture Capital Company. 
What was priced at USD 666.66 as the mark of the beast when it was introduced for the first time?
The first Apple Computer designed by Steve Wozniak co founder of Apple. The pricing was Wozniak’s prank. 
Who own the brands A+ and a+? One of them is accused of infringing the other.
A+ is Amul’s dairy brand and it is claiming damages from Nestle for infringing on its brand by launching a yoghurt brand a+. 
What is the term that describes people working in a shared work environment alongside with others normally not from the same organisation? It was coined by a Game designer, writer and humorist. Name him also.
Term ‘co working’ was coined by Bernie DeKoven in 1999. 
Founder of this brand held a variety of jobs including: farm hand, streetcar conductor, an army private in Cuba, rail yard fireman, blacksmith’s helper, insurance salesman, tire salesman and service station operator. His brand is the main sponsor of a cricketing event called the Big bash. Name him and the brand. 
Colonel Harland Sanders founder of KFC. KFC is sponsoring the T20 Big bash cricket tournament currently being played in Australia. 
This chocolate brand was named after a young boy who frequented the candy shop, flirting with the girls who were working there. The owner on hearing his name often while being beseeched by the girls, named the product after him. Name this brand now owned by Nestle.
The chocolate bar Oh Henry. 
Who had launched a brand called Pingo?
Parle’s pineapple flavoured fruit drink which did not take off. 
The logos below represent companies that have the same name. Identify them. 

The first logo represents Merck of Darmstadt, Germany, the oldest pharmaceutical and chemical company in the world. The second one belongs to the US corporation Merck which merged with Schering Plough in 2009.There were 18 all-correct entries for The Strategist quiz #236.The winners who will receive a copy of Smart Hiring At The Next Level are Achhey Lal, New Delhi; Ranjit Kamat, Mumbai; G S Dhillon, Jammu; Seema Ahmad, Madhepura; Gazala Shaikh, New Delhi; Indira Sudha, New Delhi; Syed Nausherwan, Patna; Pradeep Sarkar, Kolkata; U K Mishra, Faridabad; Arputha Samy, New Delhi. Achhey Lal also wins Rs 2,000.

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IIT B-schools to have single online portal for MBA applications

IIT B-schools to have single online portal for MBA applicationsPlan a host of measures to make their MBA programmes more attractive and sought after Disha Kanwar / New Delhi Jan 29, 2012, 00:09 IST

After doing away with the Joint Management Entrance Test (JMET) last year and embracing the Common Admission Test (CAT), the Indian Institutes of Technology (IITs) are now planning a slew of measures to make their management programmes more attractive and sought after.

Foremost on the list is to merge their application process and adopt a common online portal for admissions in MBA programmes.

“It would be ideal to have a single portal for inviting applications and coordination among all IITs to conduct group discussion and personal interview so that duplication of efforts is avoided and the entire process of admissions is simplified. As 70-80 per cent of the candidate pool is common among the IIT B-schools, it will be in a relief for both the institutes and the students. The IITs will end up utilising their efforts and resources in an optimum manner. Also, the candidates will not have to juggle at multiple places, saving time and expenses,” said M P Gupta, admissions coordinator at IIT Delhi’s Department of Management Studies.

Currently, candidates apply separately to each management programme of IITs, supplying almost the same data to all, with each application costing Rs 1,500.

The IIT B-schools which are planning to merge and have common application portals are Sailesh J Mehta School of Management (IIT-Bombay), Department of Management Studies (IIT-Delhi), Department of Management Studies (IIT-Roorkee), Vinod Gupta School of Management (IIT-Kharagpur) and Department of Management Studies (IIT-Madras). The common portal will be handled by IITs in rotation and in coordination with the IIM organising CAT. In the common process, candidates will be required to mention their preference order for IIT B-schools, probably similar to the B Tech admission process of IITs. With these plans, the next five years will be a period to watch out for these big-league management schools as the IITs.

These schools are also contemplating the launch of a new dual degree: a five-year course combining their B Tech and MBA programmes. The proposal is at an advanced stage of planning and is likely to be launched in July 2013.

IIT students will be given an option to enter the dual degree programme in their second or third year, as most will take time to get the necessary exposure for such a decision. Interested students will be required to go through an internal group discussion and personal interview process, before qualifying for the dual degree.

“Since many IIT students are already going on to do an MBA subsequently after passing out of IITs, why not give them an option to do so here? Also, IITs have the entire wherewithal to efficiently deliver MBA education, making it an easy process to implement,” added Gupta.

These B-schools are also revamping their curriculum. The B-schools want to make their curriculum more contemporary, with a heavy emphasis on global exposure. Another important change for candidates will be review of the admission criteria, with aim to simplify it and give chance to any graduate, not only engineers.

Discussions are also on for offering MBAs with focus on emerging areas such as infrastructure, healthcare, public sector, international business, real estate, media etc. Executive MBA, a common feature of the programmes of major B-schools, is also on the table.

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Maharaja's premium play

Surajeet Das Gupta / New Delhi Jan 27, 2012, 00:33 IST

Maharaja, the kitchen appliances brand, has always been known as a low-priced mass market player. So why did one of the world’s largest appliances company, the $5.2 billion Groupe SEB having such premium brands like Moulinex, Tefal and the top of the line Rowenta, pick up a 55 per cent stake in Maharaja Whiteline Industries, a mid-sized Delhi based company?

Harish Kumar, the 50-something promoter of Maharaja, gives you the answer. He says Groupe SEB wants to straddle the entire Indian kitchen appliances market — products under the Maharaja brand name will continue to be for the mass market and the international brands for the premium segment. Kumar, who is now the CEO and managing director of the company, says “Our aim is to be the largest kitchen appliances company in the country. And our strategy is to straddle every segment of the market”.

Kumar says that the French appliances giant has over 20 product categories. In the initial stages, the plan is to bring at least three of its key brands and segment the market based on price related to design and quality. Maharaja will also add new products such as induction cookers, water heaters, and gas stoves, amongst others.

The company will launch select products such as electric kettles, heating appliances, electric irons, juicers and blenders under the Moulinex and Tefal brands. These will be sold at a premium of at least 15 to 20 per cent of that of Maharaja products. Rowenta products will be even more top of the with a premium of up to 20 per cent over the Moulinex brands.

The new strategy also includes a more aggressive distribution system as the same dealers who sell Maharaja products would not be able to sell the premium brands. So the company will push the premium products through modern trade and large retail outlets. For Maharaja products, Kumar is talking to partners to double the distribution line from 600 to 1200 in the next few months.

Kumar will also appoint about 100-odd dealers initially who will push the premium brands and at a later date may also look at exclusive stores in select outlets. These 100-odd dealers will be located mostly in the metros and the big cities, while the Maharaja dealers will go to smaller towns.

Yet there are some key challenges for Maharaja, and Kumar is clearly aware of them. The home and kitchen appliances industry operates in an overcrowded market with a host of national, regional and even local brands. And there is a flourishing unbranded market which offers products at rock bottom prices. Analysts agree that the entry barriers are limited as the technology is often available off the shelf.

Kumar says he will be able get over the problem by bringing in premium international brands where technology is key and where there is hardly any Indian competitor. It will also be able to get technology which will help him in improving his mass products too.

But Maharaja is conscious of the fact that the market for premium appliances is limited – so, of the Rs 2,000 crore turnover target over the next five years, only a quarter is expected to come from premium products. It is also aware that manufacturing rather than importing the premium international brands will reduce costs and of course expand the market. So Kumar says that the decision on local manufacturing will entirely depend on the kind of volumes that it sells. The thumb rule, he says, is local manufacture is viable only for products that sell more than 10,000 pieces a month.

Maharaja will spend Rs 50 crore for promoting the new products – that is 5-7 per cent of its turnover.

For a young man who started his business from a small office in West Delhi many decades ago, (he had earlier sold one of his companies to Electrolux), the SEB deal is covering a long distance indeed. Whether it will make him the country’s appliances king is of course a different story.

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Student's corner

Business Standard / Mumbai Jan 26, 2012, 00:25 IST

Dear Students,

LAST WEEK WE ASKED: Do you think finance sector may not be a favourite with students this placement season?

BEST RESPONSE

The lure of finance sector has lost its dominance with undergraduate engineers who are recruited for their analytical skills while it continues to be favourite with the management graduates. With the glooming economic atmosphere, undergraduates prefer to hold on to their core engineering stable jobs.  Last few years have seen job opportunities gradually declining in finance sector; management graduates with finance interest have to rather scout jobs in other sectors. It would be however incorrect to perceive that finance sector has lost its flavour altogether with the students this placement season.

-- Ankit Bhansali, SJMSOM, IIT Bombay.

OTHER RESPONSES

Among all the verticals, the finance sector has been under pressure since some quarters. Add to that, news like rupee depreciation, various scams, fiscal deficit, GDP growth and euro zone crises leads to added pressure on the financial sector of the economy. Considering this, for a good start in career, students are looking at sectors like FMCG, IT, power and engineering sector instead of finance. Here, news like 100 per cent FDI in single brand in retail sector may add support to students' decisions.

-- Gayasree R Behra, Vidyasagar University, Midnapur.

Despite whatever gloomy scenario being put up globally, finance sector is still the favourite among students for placements this season. On one hand, our government is also launching many good financial schemes day-by-day. On the other, there are reportedly 350,000-400,000 employees who are seeking retirement during 2012-13 in nationalised banks. This provides good impetus to students who are seeking jobs in the finance sector this season.

-- Nirav Dave, Amrut Mody School of Management (AMSoM), Ahmedabad.

There may be gloomy scenario prevailing in the finance sector, be it the Euro crises or political turmoil in Middle East. But for an MBA student, choosing a sector depends on his/her personal abilities and the education institute from which one graduates. If one is good at number-crunching, have a flair for juggling numbers and think one can manage the party well, then finance is the job for him. If one is creative and have a zeal to sell, then there's no doubt one should be in marketing.

-- Nilaya Mitash Shanker, Shri Ram Swaroop Memorial College Of Engineering And Management, (SRMCEM), Lucknow.

The finance sector is going to be less attractive this season but still in our country, there's a huge scope in finance. There is, apparently, huge requirement for professionals in the finance sector.

-- Javed Hussain, University of Pune.

Finance sector will be partially favourite with students this placement season. Sector like IT, textiles, pharmaceuticals, gems and jewellery are export oriented as the net foreign exchange earnings are very robust and total exports earnings from these sectors are in billion terms which sounds good for placement opportunities. Other sectors like banking and insurance which are already crushed under high RBI monetary policies and European Debt Crisis offer less job opportunities in these sectors.

-- Manav Badhwar, Amity Business School, Noida.

With the changing scenario of markets and instability in the financial sectors, students this placement season are more preferring to go for core sector jobs. For instance, at our institute, many UG and PG students are waiting for opportunities from core engineering companies and not opting for financial banks and related jobs. This trend has come to fore because of changing mindset of students who want to go and utilise their engineering skills in companies and learn from work. More and more students want to work in R&D sector of core companies which are also offering good packages.

-- Anand Kumar, IIT Kharagpur.

The recent mood of hiring-and-firing that has built up in the finance sector is possibly the reason of the recent disillusionment of students from it. There has been a shift in the students' mindset of late. They now acknowledge job security to be equally important, if not more, than the pay package. Resultantly, core-engineering jobs are back in demand and are being viewed as a respectable, more secure option than plum financing jobs. So, students are bucking the recent trends and opting for engineering jobs.

-- Rahul Gautam, IIIT-Delhi

The global slowdown in economies is expected to cast a dark shadow on placements overall and the financial sector in particular. With layoffs in sectors within finance like investment banking, wealth management and equity research, expecting high volume of offers from these areas would be foolhardy. Profiles in retail banking offer little hope; however, financial consulting could logically be viewed as a need of the hour. Traditional profiles in corporate finance could also be a good option.

-- Helga Cardoza, Welingkar Institute of Management Development and Research.

As the placement season is on, the fresh pass out post graduates are eager to get placed in the top corporates. However, news of European Debt Crisis and financial instability around the world are making headlines. However, as we all know, finance, marketing and HR are interrelated and interdependent. As a result, slow down in one sector will ultimately affect other sectors too in the near future. The wise thing for post graduate is to give his best shot in all the task he /she performs irrespective of a sector.

-- Harsh Mehta, St. Kabir Institute Of Professional Studies, Ahmedabad.

Finance sector is obviously one of the favorite sectors for students especially when we see the trend with the banking preferences. Most of the students are seen preparing for competitive exams to work with the nationalised banks. This sector requires huge amount of operational capacity in the area of portfolio management, regular operation, credit management, debt analysis, loan sections, insurance, sales and marketing, among others. Hence, a student even with a finance background can identify a positive or negative trend and mould himself accordingly.

-- Sarman Goraniya, Charusat University, Anand.

As such finance is a one of the core activities of any business. Also, when it comes to placements, organisation look for finance people to carry out these activities. Starting from the establishment of a firm, day-to-day running and also for selling out or shutting down finance plays a vital role. Moreover, in order to grow an existing business, the organisation needs a strong financial support with optimum use of resources and no one can do better than a finance guy.

-- Nirav N. Choksi, S. V. Institute of Management, Kadi.

Your responses should reach us at edu@businessstandard.com by Monday evening every week. Please ensure that your responses do not exceed 100 words. Avoid attachments and email your full name, institute's name, batch and complete mailing address. The student who gives the 'Best Response' will be awarded Rs 500.

THIS WEEK'S QUESTION: In a bad job market, do you think B-schools should approach placement agencies to place students?

Sonata takes on small boys

The Tata firm wants to fight unorganised players with India?s cheapest watch brand Preeti Khicha & Mahesh Kulkarni / Bangalore Jan 27, 2012, 00:31 IST

Sonata, the mass-market watch brand contributing to roughly half of Titan watch division’s turnover, has launched a watch priced at Rs 225. Targeted at the ‘bottom of the pyramid’, it is touted as the cheapest branded watch in the country. Designed with cost-effective polyurethane material, the watch has a youthful appeal and comes loaded with features like a stop watch, light, alarm, day-date among others.

The Tata Group’s focus on the ‘value’ segment doesn’t come as a surprise. Across its different businesses, it has tried to unlock value at the bottom of the pyramid, be it through the Nano, Swach water purifier or the Ginger budget hotels.

The watch will be retailed under the ‘Super-fibre’ sub-brand which Sonata introduced in 2008, and for the first time allowed the company to experiment with materials like polyurethane. Explains Titan Industries, managing director, Bhaskar Bhat, “Materials like polyurethane are more acceptable than in the past. We had launched a watch made with a similar material under the Timex brand in 1992. The product flopped as people associated such material with lesser quality. Today, youngsters prefer this material as it is good for the outdoors, since it is waterproof and will not fade in sunlight,” exclaims Bhat. As a senior official who heads marketing for Sonata explains, “Until two years ago, the ‘steel’ and ‘super-fibre’ range contributed to only 10 percent of sales with the bulk coming from the gold collection, but in the last two years this has gone up to 40 percent.
Move away from product based communication and focus on thematic communicationRevamp the look and feel of Sonata counters at multi-brand outlets which bring in 90 percent of brand salesFocus on driving volumes through super-fibre collection and strengthen the steel collection, as it becomes the material of choice among young consumers

But what’s the logic behind a low cost watch? The move is driven to contest the teeming unorganised watch market in India which sells watches in all shapes and sizes. As a Technopak 2010 report on the India time wear industry reveals, in the Rs 4200 crore industry, the organised sector makes up 40 per cent of volume sales. The balance 60 per cent is dominated by the unorganised market which consists of smuggled watches, cheap imported watches, watches assembled by small unorganised players and watch wholesalers. And, it is in the sub Rs 500 price point where the bulk of the unorganised market operates, selling their wares through small watch retailers and repairers. “The trade gets higher margins and discounts from the grey market and hence they encourage this for short term gain,” says Govind Mishra, senior manager (marketing), PA Time Industries which retails the Maxima brand, the second largest selling mass watch brand after Sonata.

Sonata sees enough opportunity in this segment. “There are 16 million watches sold below the Rs 250 price point, and with the new launch even if we capture 10 percent of the market, it is enough to keep us happy,” says Harish Bhat, chief operating officer, Titan Industries.

Bhat is proud that such pricing has been made possible even after paying multiple taxes which include excise duty, central sales tax, Octroi and VAT (value added tax), which the unorganised sector evades. “Typically, a European or Japanese watch with similar features would be priced upwards of Rs 2000, but Sonata has made this possible through efficient sourcing,” says Bhat. The ‘uni-sex’ watch is being manufactured according to the company specifications, by a contract manufacturer in China. The margins from the new range will be much lower than the 8 percent profit before tax margins from the Sonata brand, but that does not worry the company which is in hunt for volumes.

The new launch will piggyback on the brand’s existing distribution network. The 10 exclusive Sonata stores and the World of Titan stores will showcase the new range, but of larger importance are the small watch dealers where bulk of the watch sales in this price point takes place. “Sonata reaches 9000 outlets in the country, and in these outlets, we have 60 percent share of the business,” claims Bhat. Value driven multi-brand stores like Megamart and Big Bazaar will retail the new range as these stores feature on the list of aspirational buyers from small towns who visit such stores in the cities. The company is also exploring another unique channel: non-traditional stores like saree shops or gift shops. “Many of these stores do not have the capability of selling expensive watches. Also, through these stores we can reach out to consumers who come to the city to purchase gifts for occasions like weddings and festivals,” notes Bhat.

While Bhat hopes government intervention will help simplify the duties and taxation structure, to help curb sales in the grey market, the company is targeting one million units of sales for the new launch. This is in addition to the six million units of Sonata watches the company sells every year.

Will the new launch help the Titan Group become the third largest watch seller in the world?

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