Strategist 2

THE STRATEGIST
>
www.business-standard.com
C O N T E N T S
GLOBAL LESSONS MADE IN INDIA
EDELWEISS LOOKS FOR A ROLE MODEL
55
WHEN SPEED IS OF THE ESSENCE
MAKING THE MOST OF RETURNS
57
LOOKING BEYOND NUMBERS
DAWN OF THE HYPER LOCALS
59
THE RISE OF ALPHA CONSUMER
HOUSING.COMS TEACHABLE MOMENTS
61
COPYCATS PLAY UNDER AMUL FIRE
64
PERFORMANCE INCENTIVES:CAN THEY DRIVE EXCELLENCE 11

A DILEMMA FOR OBEROI, NEW DELHI
14
CONNECTING BETTER
66
ROUND THE CLOCK PERFORMANCE REVIEW
17
A NEW SOCIAL ORDER
69
CELEBRITY OR HOT POTATO
19
AN UPHILL CLIMB
71
MAPRO SPREADS THE JAM
21
TWO SUSPENSIONS & A SLEIGHT OF HAND
73
NATIVE ADVERTISING: FLOP OR FUTURE?
23
THE FOUNDERS DILEMMA
75
GOING REVERSE IS JUST FINE
26
SAINT GOBAINS INDIA'S MARCH
77
BRINGING ORDER TO CHAOS
28
ON A SECURE FOOTING
79
THE MOTHER OF ALL BRANDS
30
ADS THAT CROSSED THE LINE
80
PROMISING A SEAAMLESS USER EXPERIENCE
32
PEPSI MTV INDIES HELPED BY ITS BRANDED CONTENT
82
BAJAJ FLEXES PULSAR'S MUSCLES
35
SMALL PROVES BIG FOR MERC
84
FOR A BIGGER SHARE OF THE PIE
37
BARC: STABILITY COULD EASE FIRST SET OF HICCUPS
86
THE NEW ADVERTISING ORDER
39
WINNING THE PEOPLE WARS
88
STRATEGY & PERFORMANCE
41
COST CUTTING IN ACTION
91
FROM THE SELLER TO THE BUYER
43
WIN BACK LOST CUSTOMERS
94
RECREATING THE OLD MAGIC
44
THE DEMISE OF A STAR BRAND
97
PIAGGIO SWITCHES LANES
47
CHASING THE LONG TAIL
100
GES INDIAN ODYSSEY
49
MAKING A DIFFERENCE
103
GROWING SHARE OF WALLET
51
WINNING IN THE AFTERMARKET
106
THE BATTLE OF RETAIL BRANDS
53
>
THE STRATEGIST
Global lessons,
made in India
What can managing in India teach expatriates
about managing globally?
KANIKA DATTA
erome Golaszewski, programs and

innovation director of Altran India, the
Indian subsidiary of the $2 billion Parisheadquartered technology consulting company, had this story to tell about sitting in on
a recruitment interview for a mid-level manager.
One candidate spent 10 to 15 minutes
telling us about his parents health. I was
puzzled; what did this have to do with the job
at hand? HR later explained that that was the
candidates way of indicating that he cares
about the people with whom he works
and I had totally misunderstood!
Cross-connections like this are par for
the course as expatriate managers seek to
establish western best practices and management concepts in India's developing corporate culture. But as many have discovered, there is scope for reverse engineering
embedded in these small cultural lessons
that is, applying management lessons
from one of the worlds fastest-growing markets to a global corporate environment.
For Golaszewski, who has quotations from
Gandhi, Swami Vivekananda and the motivational speaker Jim Rohn pinned up in his
cabin, that interview was among several experiences that taught him the importance of
seeing things from different viewpoints, especially when it comes to problem-solving.
There is never only one solution to a problem
sometimes we should think back to see
things from a different perspective, he said.
If he learnt another lesson from his fouryear experience in India so far it is to improve
his self-control, because, he discovered,
Anger is perceived as a lack of wisdom.
Daizo Ito, president of Panasonic India,
THE STRATEGIST
>
Discoveries of India
If imbibing global lessons from
managing in India is one issue
for expatriate managers,
learning how to manage
within Indian companies is
another. Here are some
thoughts:
This can do approach can

have a downside. The most
difficult thing is that our
engineers have difficulty saying
no to something. As I
discovered when they say yes,
its sometimes a polite way of
saying Ill listen to
you but
JEROME GOLASZEWSKI,
LAURENT MARCEL, managing
programs and innovation

director, Altran India: My first
learning in India is that you
have to face bigger challenges
here and do things faster.
Thats because Indians have a
lot of ambition and are more
willing to move forward and
they do things with great
national enthusiasm. As a
result, you never get bored.
director, Danone Nutricia: I find

Indian managers tend to be
assertive but they also tend to
look to their bosses more than
their peers which make
working through lateral crossfunctional teams something of
a challenge.
Indians innate ambition also
plays into their communication
skills, particularly when it
called this imbibing life skills that can help

create a self-motivated and dedicated team.
One of the things that I have learnt while
working in India is the virtue of being patient
and having a sense of humility, he said.
As Golaszewski and Itos experiences
show, coming to grips with cultural issues in
the workplace is undoubtedly one of the
biggest challenges for expatriate managers.
Another common discovery, for instance, is
the relatively high personal element in professional relations. Saiid Laurent Marcel,
managing director of Danone Nutricia. In
India, you have to pay attention to small
things, such as attending a colleagues wedding, he said. Marcel is in a good position to
judge. Before joining Danone Nutricia, the
Indian subsidiary of the global food company that acquired Wockhardt Indias nutrition business in 2011, he had worked in
emerging markets as diverse as Indonesia,
Russia, Ukraine and Kazakhstan.
This characteristic of overlapping the
personal and the professional can, however,
have its uses in developed markets. There
are things around sociability in India that
have taught us some useful things, said
Nigel Eastwood, CEO of British telecommunication provider New Call Telecom. For
instance, he noticed that there is a lot of
collective socialising outside of work such as
comes to recruitment
interviews. I discovered that
candidates in India tend to
oversell themselves, so you
require a filter to decode what
he or she is really saying.
And finally, there is the issue of
systems and processes.
Implementing systems and
processes like ERP is not very
difficult. The challenge comes
in consistency of execution.
NIGEL EASTWOOD, CEO, New
Call: I have been travelling to
India for over a decade and
whats struck me is the
entrepreneurial spirit I think
every Indian is born with it.
This could be because there is
no benefits system here unlike
in the UK where the benefits
playing cricket matches. Rather than being

something that calls for good-natured tolerance, Eastwood said its a lesson he has taken on board in the UK outfit because we discovered it has a massive impact on morale.
For companies like New Call, imbibing
lessons from India are critical because the
company has aggressive growth plans here.
In 2009, it acquired high-end app developer
Nimbuzz, which recently launched a free
caller ID app for Android called Holaa!, and
is awaiting government approval for another acquisition. India, says Eastwood, will
soon be New Calls largest geography.
Work ethic is another discovery that
taught expatriate managers how to raise the
bar on the art of the possible. Eastwood, for
example, said there is a complete contrast
between the Indian and the UK employee.
Indians, he added, had a superb work ethic. They did not mind working long hours
and six days a week and have this rich vein
of creativity and innovation. In Europe,
Golaszewski added, someone will always
say something is not possible. In India,an
engineer who would be asked to travel to, say,
Germany next week will promptly say yes. In
Europe, you will hear yes, but. Marcel
ascribed this can-do approach to the fact
that Indians are not shy about being aggressive a quality that in France may be con-
system allows people not to

work. As for systems and
processes, the average
employee has the capability to
work by a checklist or replicate
a function but its the thinking
outside the box thats
sometimes lacking.
DAIZO ITO, President,
Panasonic India: I have been

part of Panasonics India
operations for over seven
years. One major lesson that I
have learnt here is that in a
country that has undergone
much more social and
economic change in the last
generation than any other
country, innovation holds the
key for success.
sidered the stretch version of ambition.

Golaszewski discovered that this stretch
principle can translate into real gains: Altran
India received five accreditations within 11
months, a world record for the Most
Company Quality Accreditations, according
to the World Record Academy. His experience is that though everything is bigger in
terms of challenges, you always have this
feeling that everything is possible.
There are, of course, some discoveries
that are uniquely Indian such as hierarchy-prone managers, the struggles with consistent execution and the difficulty Indian
executives have in saying no. But one of
Indias most unique characteristics its
enormous diversity has also been an
important source of learning. As Marcel
pointed out, One thing which I have found
particularly rich in India is the cultural diversity between different regions, and at the
same time the possibility to build diverse
and high-performing teams in one organisation. While a Tamil manager and a Punjabi
manager would behave very differently at
work, they are absolutely capable of working
together, and it proves very valuable to have
both in a leadership team. The day I come
back to Europe, I am sure I will keep this
with me, this richness of building multi-cultural teams.
>
THE STRATEGIST
When speed is
of the essence
A cookie-cutter
approach doesnt
cut anymore. In a
hyper-competitive
world, leaders need to
find ways to speed
up decisionmaking, time
to market and
shorten reaction
time to consumer
feedback
SANGEETA TANWAR
How fast can you tweak a product and bring
an upgrade into the market?
How fast do you react to consumer feedback
and change?
How quickly can you sift through data and
take a decision?
ets get this straight first: No one

likes to do things or take a decision
in a jiffy. You need data and information and space to roll things
over in your mind, consider the pros and
cons and then proceed. The great thing
about the world today is that you can do all
of that without delay. You have all the tools
at your disposal to collect data, slice and
dice them and turn them into actionable
insights in no time.
In other words, there are no excuses for
being late. Speed is hygiene if you wish to
compete and win in a hyper-competitive
marketplace. Pallavi Jha, managing director
(MD), Dale Carnegie Training India, puts
the dilemma before leaders succinctly: The
new business reality is: do more in less time
with fewer resources. Given this, the ability

to allocate scarce resources is a key responsibility for a leader today.
If one were to really break it down, speed
is of the essence in decision-making, in reacting to consumer feedback or demand and
speed in getting things off the drawing board
and into the market. How do you stay in
constant contact with your customers and
get your products in their hands as quickly as
possible all of which can make or break a
business?
So how are leaders reacting to this need
for speed?
For Vivek Gambhir, MD, Godrej
Consumer Products, Now every aspect
of life as well as business calls for higher
ambidexterity. And from a leadership point
of view, this starts with a clear view of the
companys vision. Next comes clarity regarding decision-making what decisions have
to be made and at what level of the organisation. If decision-making is clear then the
speed of response automatically becomes
fast, says Gambhir. This also has a bearing
on how agile the organisation can be. Agility,
once again, is a consequence of a leader
being clear about the company strategy,

adds Gambhir.
So if in the past, it took 18 months for
Godrej to come up with a product innovation, the window now is down to six months.
The organisation has achieved this level of
speed by changing a lot of internal processes. For one, it has simplified the procedure of
potential business acquisitions by putting
together a clear merger and acquisition
(M&A) playbook in place. This way the company can identify interesting transaction
opportunities quickly.
Linking agility to time to market, Sumit
Bhattacharya, executive president, strategic
businesses
and
marketing,
HCL
Infosystems, says, Time to market (speed)
is a function of multiple factors such as the
structure of an organisation and the level of
empowerment of people. A flat decisionmaking structure within the organisation
with clear decision-making responsibilities
accelerates time-to-market ability of an
organisation.
On the shortening product cycle, Abhijit
Nimgaonkar, principal, ZS Associates, cites
an examples from the pharma industry, a
>
THE STRATEGIST
sector he has followed closely. Earlier, pharma companies followed a 10-year cycle covering functions such as research, product
formulation, market testing etc. before a
product launch. Today, all these processes
have to run simultaneously. The entire
process now is lean, mean, faster from
testing to commercialisation.
While it is important for a leader to be
aware and in sync with the organisations
vision to take relevant decisions quickly, it is
equally important to nurture the ability to
sift through varied data sets to see what is relevant. Capturing the challenges that the deluge of data presents, Puneet Kaura, MD and
CEO, Samtel Avionics, says, In todays
highly volatile and connected world, while
information aggregation is not a challenge,
information segregation is. One has to constantly filter out and retain valuable information from the plethora of stimuli targeted
at us all the time. Kaura also cautions
against glossing over networking. If you are
well-connected, information finds a way to
you rather than the other way round. I and
my team grab every chance that we can get
to gain knowledge and to be mentored by
those who have an in-depth knowledge of
the business.
Staying abreast of whats going on around
you is unavoidable when planning the
launch of a product. This poses three challenges generating continuous and genuine insights, empowering an organisation
and balancing data-driven approaches with
intuition, underlines Nitin Prasad, MD,
Shell Lubricants India. He says a smart
organisation will keep a finger on the pulse
of the market via social media, pressing into
service insight generation experts who can
quickly identify a growing trend. On the
empowerment front, it is a good idea to give
local teams the freedom and authority to
make the decisions they need to, to speed up
execution.
The challenge in balancing data-driven
processes with intuition can daunt many
leaders, says Prasad. The deluge of data has
led to sophisticated data management techniques, but it can lead to what he describes
as analysis paralysis. And that is the space
where experts and mentors can step in.
Vivekanand Venugopal, vice-president
and general manager, Hitachi Data
Systems, India, suggests an easy way to
break out of that paralysis: listening to ones
EXPERT TAKE
Dont waste time

KIRAN
KOTESHWAR
CFO, SpiceJet
Four leadership mantras that can help
leaders stay at the top of their game by
keeping pace with time, carrying out
innovation in real time and handling
feedback effectively
Take time out:Leaders need to have
time and make time. Administrative
tasks take a lot of mental space; hence
delegation becomes important. If I see
an opportunity or an area of
improvement, I take an unconventional
route and engage directly with the ones
I feel are apt for implementation. I then
inform their seniors this is where
relationship equity places a key role.
Stayinformed:Staying abreast of
situations and having a finger on the
pulse is the key to effective decisionmaking. We have management by
exception work culture where
exceptions are discussed face to face at
all levels. We also have live reports to
look at trends, weakness, opportunities.
Be proactive:In any crisis, big or small,
we proactively keep our consumers
informed through social media updates,
and as required keep adding latest
updates frequently and periodically.
Innovation matters:Innovations are
best implemented with the ones who
thought about it. Creating situational
leaders helps foster talent and most
importantly implementation is easier.
gut feeling whenever in doubt. Venugopal

says no amount of innovation or speed will
work if a company fails to find relevance
among customers and partners. To accelerate the relevance and adoption of solutions, you have to behave like an entrepre-
neur by collaborating with different stakeholders and forming alliances to provide the
best platform for customers. Hitachi Data
Systems leverages its big data and social
innovation labs to generate a fair idea of
what the customer wants.
Learnings from international markets
has helped Godrej cut time and cost to develop new products. Good Knight Fast Card is
a case in point. Initial research by the company revealed that India alone sees 24 million cases of malaria each year and 90 per
cent of the population resides in malariaprone areas. Also, in rural India, the penetration of household insecticides is very low.
Lastly, the products available were either
expensive or needed electricity. Godrej
responded to the challenge and moved
quickly to introduce the Good Knight Fast
Card, a product that broke the price barrier,
worked instantly and did not require electricity. The idea for this product came from
a similar product we had launched in
Indonesia, says Gambhir.
Having a wide footprint also makes the
task of soft launch easy. We test market
response to new products by introducing
them in a select geography. This helps us to
quickly understand acceptance levels and
make adjustments before a full-fledged
product launch, says Sanjay Bhutani, MD,
India and SAARC, Bausch + Lomb India.
Remarkably, companies today are not
only looking to amplify positive feedback;
they are keen on discovering negative feedback as well and channelising it into positive
learnings for the brand. For instance, Shell
Lubricants has a senior management review
on all negative feedback it receives through
its Hot Alerts. The company challenges
itself on what can be done to address the
cause of the comments. All Hot Alerts are
rigorously followed up with the specific individual or company who raised them.
Similarly, at Bausch & Lomb, each complaint
is addressed within 24 working hours. Any
product-related feedback on social media is
received by brand custodians. Once the team
understands the nature of the complaint, a
dedicated team of experts takes appropriate action. The company also has an internal
MIS wherein all feedback is recorded and
shared at the national and international levels. This helps it identify areas of improvement and also serves as a quality check dashboard.
>
THE STRATEGIST
Looking beyond
numbers
With adman Piyush Pandey expressing his distrust for
armchair research in his book Pandeymonium, the
spotlight is back on the relevance of research in planning
breakthrough campaigns. Over to the experts:
Black-box
research
is useless
M.G. PARAMESWARAN
Advisor,
FCB Ulka Advertising
here is some new heat around the

subject of advertising research
and while Im not a worshipper of
black-box research icons, I do believe
marketing research has a very
meaningful role in helping us
understand consumers better and craft
more meaningful and
effective advertising. It is apt to recall
the words of David Ogilvy who said
Advertising people who ignore research
are as dangerous as generals who ignore
decodes of
enemy signals.
Avoid blind belief
When advertising creative directors

make scathing comments about
advertising research and that gets blown
up in media, it does disservice to both
advertising and consumer research
professionals. If we were to read
between the lines it becomes clear that
what creative directors object to are
what could be called black box copy
tests. The blind belief of brand
managers to use these copy tests as
crutches is what often gets criticised.
Consumer research plays a very useful
role in helping understand consumer
dynamics. Large scale quantitative
studies help us fix benchmarks on brand
scores against competition and help
plan advertising strategies and set
advertising goals.
and brands get to listen in to these

conversations.
Finally, to create effective
advertising that will engage with
consumers you need good consumer
knowledge and insights. Consumer
research is a critical cog in the wheel of
advertising and communication. No
wonder marketing research was
incubated in the advertising agencies of
yore.
Never abandon
common sense
Listening posts
In the last decade we have also seen the
rise of new ways of interpreting and
understanding consumer behaviour.
Ethnographic, anthropological and
semiotic studies have grown in stature
and use. Cultural nuances that affect
consumer behaviour have also been
studied. The other development is the
rise of social media analytics and social
media listening. Large brands are well
advised to set up listening posts to keep
track of consumer discussions in open
forums about their brands, the
competition and the category in general.
This is in fact free market research.
Consumers are sharing their
experiences, often more bad than good,
SAMAR SINGH SHEIKHAWAT

Senior VP, Marketing
United Breweries
ifferent organisations at
different points of time in their
lives across different industries
and categories treat research differently.
The organisational focus on research is determined
>
THE STRATEGIST
first by the sophistication of a category

and second by the cultural philosophy
of a company. Most importantly,
research plays a big role in cluttered and
highly fragmented markets as it helps
marketers understand consumer
behaviour and choices.
As far as we are concerned, we have
to pursue research under a lot of
constraints which typical FMCG
businesses dont face. For instance, we
cannot undertake a days research at a
gathering without a research licence.
Awareness and knowledge around beer
among people here is low. They largely
drink to get a high so the brand
replaceability is quite high.
Reach out and

ask the right
questions
Benchmarking
PREETHI SANJEEVI
Customers are barely able to articulate

what they want in a beer. To overcome
these challenges, United Breweries has
developed a fairly robust research
ecosystem. As part of Brew Tracks the
company researches its products
against competitors. Further, as part of
Brand Tracks, we measure consumer
health scores for major brands versus
competition. The typical traditional
ways of research including consumer
dipstick and interviews is very much
alive. Certainly there are new research
methods including whats called
listening post where in-depth expertise
is required to decode behavioural
communication pattern of consumers.
We are supporting the traditional ways
of research through new research tools
including mobile and digital.
Trust your gut feeling
Research, if done well with the right
target audience and the right objectives
in mind, is at best an approximation of
reality. Very often research does not
tell you what consumers want. At best
it validates what you already know.
Sometimes research holds out against
what you know. In such times,
managers have to step in and trust their
gut feelings as they weigh the pros and
cons of the action to be taken. Most
importantly, marketers have to learn
not to become slaves to research and
never abandon their common sense
while taking decisions.
Refining the idea
Head, Consumer Insights

VML South Asia
very great campaign idea sits at

that perfect juncture of brand
truth meets consumer insight. So,
the first step to a great idea is intimate
knowledge of both the brand and the
consumer. I see research playing
alongside communication development
around three pillarsexploration,
crafting, validating.
Uncovering hidden truths
The job of exploration allows for
research to influence and uncover the
main idea. For example, uncovering the
new definition of friendship as being
about a phone book full of friends rather
than BFFs as the key insight around
which to develop the new proposition
for Airtel would be an apt example of
meaningful exploratory research. An
equally important job of research is
crafting and validation. This is where
my perspective differs from
conventional advertising and the
Pandeymonium wisdom; which bases
its argument on the fact that consumers
are either forced to or are incapable of
sharing honest opinions on advertising
shown, and hence such research is
meaningless. The truth is consumers are
people and people have opinions on
everything and seeking their opinion on
communication meant to influence
them cannot be a bad thing.
Gaining consumer perspective on

unfinished work will only help make it
sharper and more effective in getting
them to buy it six months later. Surf
Excel is a great example. The global
Dirt is Good idea in its pure form
bombed in India but when it was given
the context of social good (brother
fighting a puddle for his sister, cleaning
the streets), it became the iconic piece of
communication.
This role of research, doesnt see a
dramatic change even when we narrow
it into digital communication. In fact,
research has an even more important
role to play when we start using it to
refine user experience for consumers
across digital properties. From using
models of research, which lead product
development in the physical world to
help define website/app functionality to
prototype task and flow testing,
research still works well in the crafting
process of digital properties and
content.
Consumer
research
is foundational
AMIT KEKRE
National Strategic Planning Head, DDB Mudra
Group
n advertising agency business

banks on breakthrough ideas for
its bread and butter.Needless to
say, creativity is its most potent force.
But with a difference. A breakthrough
idea is deliberate design. It is like a
guided missile, designed to deliver the
>
THE STRATEGIST
desired result on the target. What fires

that missile is insights, what fuels
insights, is research. Research is
fundamental. It is foundational.
Interpreting it right
Research does come with a resident risk.
As intentional as its effect might be,
coming up with an idea asks for
combining four key ingredients
information, intuition, inspiration and
imagination. The beauty of research is
in its interpretation. A great researcher
interprets the information with
intuition and serves it as fodder for
inspiration and imagination. Taken
literally, research paralyses; interpreted
laterally, it pays handsomely. Left as
information, it is a waste; translated into
inspiration, a wonder. From casual
consumer conversations to deep
cultural investigation, from the
exploratory expanse of qualitative
research, to the relatively conclusive
nature of quantitative techniques, the
modes of research may be ubiquitous,
its merit unquestionable.
Capturing nuances
In recent times, just as advertising has
seen improvements with technological
innovation, so has research. Although,
most of this advancement has taken
place in the area of idea testing.
Neuroresearch, for instance, is nascent
yet fascinating in the way it captures
nuances of consumer response to
stimuli. Ethnography and semiotics are
relatively newer techniques compared
to traditional and often tiresome focus
groups. In creativity, ethnography and
semiotics could often be more powerful
as they rely on observation and
interpretation. Not just documenting
what people say, but unearthing the
unsaid. Sadly, neither is practiced nor
understood widely. The best research
technique in coming up with a
breakthrough idea
is less a science, more a practice of
nursing ones natural abilities of
listening and observing.
>
THE STRATEGIST
The rise of the

Alpha Consumer
More and more brands are cultivating a close group of early
adopters to get products to move off the shelves
SANGEETA TANWAR
hances are that in our day to day

lives, many of us would have come
across a humdrum home utility
productthe ironing mat.
However, there is a high probability that
unlike other big ticket products occupying
space in our homes, not many of us would
have sought out the brand name of that

product. A close look at the ironing mat
would reveal that it is a creation of a home
utility product manufacturer Bonita. The
company has christened the product Alpha
ironing mat, doffing its hat to the crucial
role played by a group of dedicated homemakers in determining the final product
and its design.
It was the alpha consumers in the age

group of 25 to 45 years who gave us insights
to come up with this product. Traditionally,
the commodity market has lacked the much
needed focus on product design and form.
Our close engagement with the educated and
working homemakers helped us discover two
important consumer truths. The first, the
lack of space in the Indian homes for an ironing board, and second, that a lot of ironing in
our homes happen on bed. says Umang
Srivastava, JMD, Bonita India. Based on these
insights, Bonita came up with the concept of
an ironing mat which could be laid out on
bed, is foldable and does not occupy much
space. Like Bonita, a number of companies
are turning to alpha consumers to conjure up
invincible products by marrying their inhouse research with feedback from consumer on their tastes and preferences. To
successfully leverage the concept of alpha
marketing, it is crucial for companies to create and build a relevant profile of such consumers. For example, for Aqua Mobiles
alpha consumers are technology enthusiasts
and it seeks out bloggers, active Pinterest
users and online product reviewers. Aqua
Mobiles has a marketing team that identifies alpha consumers and activate them.
Identifying the right set of alpha consumers is a complex process. Kali Charan
Shukla, VP, marketing, Helpchat, explains,
One way of finding alpha consumer is to
dissect the primary target of the brand in
terms of age, lifestyle, location, SEC and social
influence. Also, theyre often opinion leaders,
and can be powerful allies in spreading the
word about new products. Aliasger
Motiwala, co-founder, Plobal Apps, admits
that in most industries, particularly in the
app business, the consumer demography for
each product is different. For one of its clients
that was in the business of home food delivery, it created a group of alpha users by reaching out to students living away from parents
THE STRATEGIST
>
EXPERT TAKE
Nurturing early adopters
AMIT DAMANI
Co Founder, Vista Rooms
At Vista Rooms, alpha

customers are considered
as early adopters. These
customers not only shape
our product but are also,
our ambassadors. They
help us in initial marketing
and testing of our product.
Points that make an
ordinary customer an alpha
customer are repeat
customers, social media
evangelists and customers
who refer our service
actively.
We communicate with
alpha users both offline
and online. Our offline
efforts include, attending

and hosting meet-ups to
attract our target group.
Other programs include
college connect programs,
etc. Our online efforts
include managing
community groups on
Facebook, blogging about
relevant topics, hosting
AMAs on different forums.
Alpha users take help of
more modern mediums
like quora, reddit,
medium, etc to motivate
potential customers to try
our service and product. We
constantly stay in touch
with our community on
personal mediums like
Whatsapp and Twitter. We
take their feedback
constructively and act on it
with them in mind. Every
time, we solve an issue we
ask for a third eye view on
it. This makes our members
feel more welcomed and
involved in the process and
and working men and women.

Besides identifying the alpha consumers
its equally important for companies to keep
them motivated and active. A large number
of companies provide incentives to such
groups. Incentives vary. For instance, some
people are enthusiastic and technologically
inclined and therefore take the lead in testing
a tech product before its launch. We also give
a free handset or put their links in our blog
and Facebook page so that they also get more
traffic. A few are given monetary incentives
as well, says Gavind Banal, co-founder, Aqua
Mobiles. Toonz Retail, which is into retailing
kidswear, too incentivises alpha consumers.
We use customer analysis and internal intelligence mechanisms to identify our alpha
customers. Such consumers gain monetarily through the loyalty reward mechanism
and also get discounts, says Sharad Venkta,
this helps us gain their

trust. Potential customer
can apply to our program
by signing up as a Vista
Ambassador on our web
page or they can write to
us. We help our
ambassadors in developing
logical reasoning by
involving them in core
decision processes, we also
encourage them to do
audits and host events on
our behalf. This helps in
building a sense of
leadership.
We provide monetary
as well non-monetary
incentives to our
ambassadors . Monetary
gains include a steady pay
per month and nonmonetary benefits include
premium access to our
alliances, discounts and
exclusive free trial for our
new initiatives.
MD, Toonz Retail.

Keeping the alpha consumers engaged
and staying in touch with them through relevant platforms is another focus area for companies. Nitin Agarwal, head, marketing,
ShopClues, says that the company uses
online platforms DP review and Team Bhp
to reach out to customers. Darshan Patodi,
co-founder, yellowfashion.in,points out As
our alpha consumers are digitally and socially active, we use Facebook and Whatsapp to
converse with them. These platforms have
the potential to help news go viral and therefore best suited to spread positive word about
a product. Pau Abell Pellicer, managing
director, bathroom products, Roca, says, We
engage designers and architects by sharing
new product updates, new technologies,
inviting them to forums, and providing samples at reasonable rates for their projects.
10
Todays alpha consumer is technology

savvy, well read and travelled. She is ambitious and always on the lookout for better
opportunities. Therefore the relationship
with alpha customers calls for careful handling and nurturing to ensure that its a win
for both the company as well as the alpha
consumers. Alpha consumers want transparency, honesty and very focused attention
backed with complete logic. They love to hear
about innovative ideas and products. Serve to
their satisfaction and they will spread your
good name through social media and reverse
is also true, says Rohit Aggarwal, CEO,
Koenig Solutions. He adds, Servicing to
alpha consumers is exciting as their demand
for good quality in product inspire the companies to work harder. Companies are treating them as influencers for their products.
With all the advantages that alpha consumers offer brands, at times the brand may
have to resort to serious course correction to
truly align with customer preferences.
Jewellery manufacturer Voyllas experience
reflects this. Based on alpha consumer feedback, the company launched an exclusive
range of earrings. Despite making the right
noises the product failed to register impressive sales. In-depth analysis revealed that
while the earrings were an impressive piece
of art, it was too big and bold to be carried by
Indian women of average built and height.
Taking clues from these revelations, Voylla
relaunched the product in smaller size and
reduced the price significantly. Jagrati
Shringi, co-founder, Voylla, claims, The
experience taught us that one needs to keep
the group of alpha users close to brands mass
consumer base. This is so because people do
get impressed by influencers but will not
patronise the product if it does not fit their
requirements.
To get the best from ones group of alpha
users its very important for companies to
build trust among them. Helpchats Shukla,
says, Alpha consumers are risk takers as
purchasing or trying something new
requires time and financial investment.
Alpha consumers like the personal entertainment that they get by using a new product and this reflects a quest for novelty.
Brand needs to provide them a special status
by offering them exclusive preview of products, create an incentive system and most
importantly keep them engaged and motivated by listening to them.
>
THE STRATEGIST
PERFORMANCE INCENTIVES:
Can they drive excellence?

Motivating employees is a purposeful challenge that requires more than an annual
review or a promise of incredible perks. Various studies have shown that managers see
motivation in terms of the size of the compensation. With profitability returning to some
sectors and geographies, experts see signs of big bonuses making a comeback this year.
But how effective are performance incentives in driving excellence? Over to the experts...
11
>
THE STRATEGIST
It is best to avoid
individual incentives
RICHARD LOBO
Senior Vice-President & Head, HR, Infosys
It is important to differentiate between
reward based-performance and an organizational culture of excellence. While a
majority of companies have some programme or another to incentivise
employees, the best companies use them
as a mechanism to recognise brilliant performance and not to incentivise behaviour. The assumption that money drives
performance is dated. At best, it will drive temporary behaviour and not build a
performance culture. However, a welldesigned rewards programme is a different matter altogether.
A reward programme creates positivism and encourages others to emulate
the best performers. What we have learnt
at Infosys is that recognition of excellence
is a far greater motivator than incentives.
Excellence is one of the core values at
Infosys, and therefore, great work and
even contributions made to the company
outside the scope of ones prescribed role
are recognised through forums at the
individual, team, business unit, location
and organisation level. Each location and
unit run their own awards/recognition
programmes according to a calendar. At
the organisation level, the Annual
Awards for Excellence is a very prestigious
rewards
and
recognition
initiative that draws hundreds of nominations each year across multiple categories. It was launched many years ago to
recognise excellence and has grown
in scope to cover all fields of work - from
account management and innovation
to sustainability and internal customer

delight.
In terms of target based incentives,
these work well when teams are
recognised over individuals and the overall number is a small component of the
overall compensation. For example,
when a team is rewarded for a before target project completion, there is a sense of
shared achievement and celebration that
builds team spirit. Hence, it is best to
avoid individual incentives and build
them around recognising team performances.
Creating and maintaining a high performance culture goes beyond rewards
and incentives. It is a continued focus on
client needs as well as a deep sense of
pride at work and innovation at ground
level that make a difference. Rewards and
incentives help meet tactical objectives in
what otherwise is a long-term journey.
One cannot be
socialistic about
incentives
SANDYP BHATTACHARYA
Senior Vice-President & Head, HR
Mahindra Comviva
Incentives are a great way to get focus,
create stretch and drive excellence where
it matters most. When we put some cash
or kind incentives to management
speak, people understand this is serious;
know we mean business. One cannot be a
cowboy about it. Worst one can do is give
a knee-jerk incentive reaction to a prevailing challenge. Incentives alone cannot
solve issues without vision, engagement
and close monitoring. Care must be taken to cover for unintended consequences
12
that may emerge knowingly or unknowingly to push something up while neglecting something else. Like focusing on closure timelines may lead to abrupt closure
of issues, leading to drop in quality and
thus satisfaction.
We must know five core elements
clearly: what you want to measure; who
will you give; what will you give; when
will you give; and how you measure and
share (transparency). Knowing who to
reward is the tricky part. Know who are
the real value creators. One cannot be
socialistic about it. If it is socialistic, it
stops being a differentiator and is not an
incentive but a given. On the other hand,
if you motivate a few, but leave out some
core contributors, then it engages few but
could disengage many.
How much will you give out matters a
lot. Not spending enough to excite people
or putting up targets that are impractical
will only get a programme on paper, with
people mentally checking out before the
programme checks-in. To demonstrate
this, imagine two people with salaries of
Rs 10 lakh per annum, the so-called welloff if we go by the gas cylinder subsidy
programme. For people outside sales,
assume an industry average of 10 per cent
incentive. They will make ~1 lakh for
achieving the stretch target. The average
person with moderate all-in-a-days effort
achieves 70 per cent target and 70 per
cent money; and the other colleague
stretches, works late and constantly goes
after her goals with a lot of effort to
achieve 100 per cent of target and 100 per
cent of the money. In the end she will get
an extra ~55 of post-tax money per day.
For someone earning ~10 lakh per annum,
is that ~55 enough to get her focus, and
energy every day? Now, if you put too
many parameters or items that form the
target, say four goals, that difference is
just about ~15 per day.
Incentivise as close to the event being
measured as feasible. If you are focusing
on operational excellence like quality,
delivery, timelines, process compliance,
satisfaction in the programme or if you
are implementing a tactical plan, they
should be governed by shorter term
incentives ranging from a week to a year.
These are direct cash or kind focused. If
you are looking at strategic goals like
>
THE STRATEGIST
opening new lines of business, creating a

new scale of business revenues or penetration or market positioning or retention of critical people. long-term incentive plans have to come into play. These
can be one or mix of cash, stock options or
any other high value asset.
Appreciation delayed
is appreciation
denied
SHIKHA TANEJA
Senior Director,
Human Resources, ShopClues
Individual and organisational performance is a joint responsibility. The onus
lies both with the employee as well as the
company to manage peoples performance and their career objectives. The
organisations role is to create clarity
around goals and build an environment
where employees feel safe to fall, adapt,
and rise. We believe in the adage you get
what you measure; but we have also
realised that finding the right things to
measure is easier said than done.
Incorrect or ambiguous articulation of
goals often results in a mismatch of
employee expectations with the
organisation.
We ensure that there is a fair, objective
and transparent process to assign and
measure organisational goals. Once goal
setting has been achieved, organisations
role is to create an environment where
individuals and functions have the
autonomy to choose their tasks, teams,
time and techniques (collectively, the
4Ts). This results in intrinsic motivation
for employees and teams without
any need for managerial supervision
all the time.
We have seen that appreciation

delayed is appreciation denied and hence,
we practice timely appreciation of good
job done. Teams have budgets in the form
of money and resources to acknowledge
good work, without being bogged down
by organisational committees and
policies. Also a more formal and public
recognition of good work is needed to set
an example of who the heroes
are and what constitutes great
performance etc.
We understand that if these incentives
and recognition are not implemented
in the right environment, they have a
high probability to backfire and
become a bigger de-motivator, where a
companys culture may deteriorate into a
my-success-is-your-failure sort of
situation.
Think of them as
'behavioural'
incentives rather
than 'performance'
incentives
DEBABRAT MISHRA
Director, Hay Group India
Performance incentives are Pavlovian
conditioning for achievement and nothing more. Rarely do organisations measure how well the incentive has improved
performance in the long run.
In essence, incentive designs are
flawed. Most managers in India use generous performance ratings as a means to
reward their subordinates. And most
organisations spend substantially large
amounts of time normalising the ratings
given by managers when compared to
13
spending time on giving feedback to performers. In such a scenario incentives

provide further motivation to managers
to be more generous and subsequently
more time spent by the leadership teams
normalising. True performance is the
first victim here.
Where do most organisations go
wrong with incentives?
If you know about Pavlovian conditioning (its the one about the salivating
dog of Pavlov) you can easily understand
this. When we give incentives it should
condition some behaviour right? What is
that behavior? If you do not design incentive schemes with a clear end behavior
shift in mind you are wasting money,
time and slipping into a worse nightmare
than not giving incentives at all. Most of
us think that linking incentive payouts
to performance is the only thing that matters. What we do in reality is just leave
the linkage at performance rating and
incentive payouts. Just like Pavlovs dog
we have conditioned a desire for a better
performance rating. Now the manager is
under even greater pressure to be generous and the organisation performance is
further undermined.
At the core of incentives is the science
of psychology. Think of it as behavioural incentives rather than performance
incentives and you can make it work.
>
THE STRATEGIST
PHOTO: DALIP KUMAR
A dilemma for The

Oberoi, New Delhi
BSE-listed hotel company EIH has decided to close down its 51-year-old iconic
property, The Oberoi, New Delhi, for a two-year period beginning April 1, 2016, for
renovation. For the Oberoi group, this property is its only top-class revenue earner and
closing it down for two years is a big gamble: In two years, it runs the risk of losing
many of its die-hard customers to rivals. Are there any precedents? What should the
management be wary about while taking this risk? Can it woo customers back when it
is ready to open again? Our panel of experts discusses the pitfalls of the move and offers
some tips to manage the transition.
14
THE STRATEGIST
>
An iconic brand can

afford to take a break
he Oberoi chain
of hotels is loved
the world over for
what they provide
their clients status,
style and a discerning wealth. To refer
to it as a hotel chain is
a disservice. The
TISTA SEN
National creative
Oberoi stands for the
director, J Walter
epitome of the very
Thompson India
best in hospitality in
the luxury business.
The beauty of an iconic brand is that it is
iconic. The Oberoi group across its properties has carved a niche in the hospitality
sector. The Delhi property is a symbol of
luxury and grandeur.
An iconic brand like The Oberoi can
afford to take a break and take the knock.
Like other iconic brands such as The Taj
and Nike, The Oberoi is a brand that people
will not forget in a hurry. As it takes a twoyear break it needs to communicate smartly with loyalists. From advertising and
branding perspective, it needs to give the
news a positive flip. It has to be loud and
clear and tell people that they are sorry for
not being available but will be back with a
bang. They have to impress upon customers
that the brand that they patronise so lovingly will reward them handsomely for their
patience.
In any business, two years of hiatus is a
long time. Having said that, the loyalists
would surely come back to The Oberoi.
However, they may lose a few customers in
the process those who, having experienced other hotels, may like the experience
and decide not to come back.
The Oberoi will have to take this gamble.
It will be worthwhile for The Oberoi to tell
people that work is in progress and the
brand will be back with an improved version. The Raffles in Singapore is a good
example. A truly iconic residence, they shut
down for two years while they went
through extensive renovation. Their
patrons were not disappointed. They
opened their doors to their loyal clientele
and gained many more followers. Luxury
brands do not need to keep re-inventing.
They create imagery and an equity that is

impossible to erase.
For The Oberoi, New Delhi, to take a
hiatus for two years only to come back after
the refurbishment adds to its mystique and
allure. Loyal patrons are brand loyal and
while you may flirt with a similar brand,
eventually your heart beats for just one.
A bold move with eye on

future growth
enovations, rebuilding,
redesigning are a natural part of the life
cycle of a hotel. Hotel
brands, like any other, need to refurbish
to cater to the changing demands and
SUDEEP JAIN
VP, acquisitions
tastes of travellers.
and development,
The Oberoi groups
South Asia,
decision to renovate
Starwood Hotels
their iconic property
and Resorts
in Delhi is a bold one
and shows their commitment to excellence. The Oberoi, New Delhi, is an iconic
landmark of the city. Refurbishment will
allow them to celebrate its long-lived history and culture while demonstrating that
they are sensitive to contemporary trends
and tastes. These changes are vital for
ensuring future growth. A well thought out
decision like this perfectly suits the challenge of catering to the needs of newer
generation guests, which every hotel faces
today. I am sure the industry is looking
forward to the new The Oberoi in the next
couple of years.
Many iconic properties around the
world have embarked upon renovations
and have come back as modern icons
from The Plaza Hotel in New York, which
renovated in 2005 and took about three
years, to The Palace Hotel, a Luxury
Collection hotel in San Francisco which
opened last year after extensive refurbishment. Hotels have to and should re-invent
themselves, just as brands do, to make
themselves relevant and contemporary,
meeting the changing needs of modern
travellers.
15
Take the customer along

as you change
here is reasonable risk given

the shutting down,
while a examination
of the upside perhaps
opens a larger opportunity. The Oberoi,
New Delhi, has its
own unique heritage,
V NARAYANAN
Chief growth
being the first luxury
officer, Motivator
hotel in Delhi. It is
the Taj Mahal Palace
for Mumbai and The Oberoi for Delhi.
Being in existence for a long period, the
property needs to be refurbished to provide a contemporary feel while maintaining the old charm and heritage values. In
any case, The Oberoi has some distinct
qualities that gives it an advantage.
The location is its biggest advantage.
Central Delhi does not have many refined
luxury hotels... you can count them: The
Leela Palace, The Imperial while the Taj
Palace and some others are quite early in the
city. The proximity to Lutyens Delhi and its
history is a definite advantage. There is a
lack of such international standard luxury
hotels in and around central Delhi, which
makes it an eminent choice. Besides, refined
F&B is another opportunity, which can help
build monetisable occasions including
Delhi elites appetite for marriages.
The immediate relaunch task would be
to regain the old and current loyal customers, while communicating its luxury
quotient. We would recommend to apply a
learning, which many modern service
brands have successfully implemented:
consumer participation in modernisation
and revival of a brand. This would instill
pride and inspire the current customers to
get involved in recreating the brand with a
modern luxury touch. Ideally, social listening and identifying the culture and luxury
influencers would help it identify the gaps
and opportunities to re-engineer the
appraisal of this regal luxury hotel.
The Oberoi should significantly invest
on a market-specific loyalty programme
and embrace exclusive customer relationship management.
THE STRATEGIST
>
Managing employees and

vendors are key challenges
VRUSHANK SHAH
Senior lecturer
for strategic
management,
ITM IHM
ospitality is a
highly competitive and volatile
industry. The industry has witnessed
drastic changes over
the last couple of
years. With the
changing industry
trends and consumer preferences, a
number of players
including
The
Oberoi need to
chological needs of customers. For that, the

hotel will have to stay alive to local competition as well as to the changing economic
and social environment.
Compiled by Sangeeta Tanwar
change.
The Oberois move to close its property
for two years is a bold move and speaks of
its unflinching commitment to offering
superior customer experience. The move
signifies the hotels focus on improving its
business as well as clientele in one of the
most important business hubs, Delhi, in
the face of growing competition.
Even though the firm stands to lose significant revenue, the move will give it an
opportunity to realign itself to changing
market realities. The management must
have drawn a contingency plan to deal with
the loss of revenue possibly by boosting
business from other cities. Besides dealing
with revenue loss, the organisation runs
several other risks as it prepares for renovation. The first risk is associated with employee management. For two long years, the
management has to engage and compensate employees suitably. The second challenge is to do with logistics. In hospitality,
strong logistics supply and strong vendor
relationships are crucial to business operations. Once The Oberoi closes down for two
years, it will be difficult for the management to hold on to these two sets of stakeholders.
From a brand perspective, it will be challenging for The Oberoi to come back to the
market because two years is a long time in
any brands history. The management will
have to treat its comeback on the lines of a
product launch. Post-renovation, it will be a
fresh start for the brand. For a brand to be
successful in a customer-service-led industry like hospitality, it has to satisfy the psy-
16
>
THE STRATEGIST
Round-the-clock
performance review
Why some companies are saying goodbye to annual performance reviews
SANGEETA TANWAR
ow do you separate the high

performers in an organisation
from the average Joes? How
do you ensure the high performers continue to perform better and
the non-performers do not end up becoming a drag on the bottom line?
Traditionally, companies have used the
annual performance review system to keep
employees accountable, rewarding those
that excel, and tracking performance over
time. But many companies are realising
that performance reviews cause as many
problems as they try to solve. Instead of
guiding managers to offer honest feedback
to their teams and coach employees, companies are actually training them to make
the most of available resources or cover
their bases. Some have discovered that
traditional incentive systems are failing to
propel the best employees forward. A survey report by Deloitte says, Todays widespread ranking- and ratings-based perfor-
mance management is damaging employee engagement, alienating high performers, and costing managers valuable time...
Leading organisations are scrapping the
annual evaluation cycle and replacing it
with ongoing feedback and coaching
designed to promote continuous employee development.
Organisations such as Accenture,
Delloite and Cisco are among a handful of
companies that have jettisoned the bell
curve-based annual appraisal system and
have opted for an always-on appraisal sys-
17
tem which is ongoing and real time. These

companies would be joining the likes of
Microsoft and Adobe, which have also
realised that the traditional way of conducting
performance
reviews
is ineffective.
But is the new system any better? What
are the new tools the human resources
department has at its disposal to review
peoples performances? More importantly, how are organisations linking performance to rewards?
Take Infosys, which has created a new
system for performance evaluation and
goal management that stresses on continuous feedback culminating in the
annual rating. The iCount process
helps the company in identifying the
best performers against standards of
performance as opposed to relative
comparison of individuals. Under
the new process, evaluation is done
against well-defined goals and it is transparent to the employee. This has eliminated some of the angst associated with the
THE STRATEGIST
>
EXPERT TAKE
Prepare the ground

SURESH RAINA
Managing partner,
Hunt Partners
ive things to watch out for as
organisations move away from the
traditional bell curve-based annual
appraisal systems to continuous
performance evaluation
Constant communication: The regularity
of the review is paramount; ideally there
should be at least four face-to-face
discussions for accomplishing the
requirement of continuous feedback and
open conversation and managing
confrontation, if required
Accountability: The continuous
performance review needs a much higher
degree of accountability and ownership,
where managers hold full responsibility.
Training: The new system of constant
communication will need a systematic
change-management for the managerial
cadre. Managers will need coaching and
other interventions to help them have
difficult conversations. Without these
interventions, the quality of feedback from
manager to employee risks is likely to
become sub-optimal.
Acceptability: After decades of using the
bell curve, there is a need for countering
the initial resistance to this change, as
sceptics question the process, such as how
to make pay decisions without rankings.
People need to be convinced that the new
system will actually work
Setting up the employee forsuccess:
How does the corporation ensure that the
employee is in a role that plays to their
strengths? Most job roles get identified with
the hard, that is, functional skills. However,
employers will need to now tag
individual roles with the specific
competencies required to succeed in that
role. Therefore, it is incumbent upon the
employer to use various interventions to
ensure employees are in job roles where
the competencies match their profile
forced ranking under the bell-curve system, says Richard Lobo, senior vice-president and head, HR, Infosys. The company
has baked into it a mechanism to keep goals
and tasks relevant at all times with a focus
on continuous feedback and a review once
the goals are achieved.
According to Sanjay Vats, general manager, HR, Insecticides India Limited, the
formal yearly performance assessment system is time-consuming, involves a lot of
paperwork and creates friction between
employees and managers. The system is
often rigid and doesnt involve timely feedback. It is precisely for these reasons that
the company moved away from the annual review and now does weekly evaluation
of employee performance. The HR team
has developed a feedback network comprising online-offline and casual-formal
meetings for managers which allow timely
feedback on goals set for their teams. Equal
emphasis is laid on self-assessment by
employees to avoid any unpleasant surprises at the end of the year. Rohan Gupta,
chief operating officer, Attero, says, To
achieve and sustain fast-paced growth,
organisations need to measure good and
bad performance instantly, instead of waiting for the year to end. Quick feedback is
important for helping an individual
improve her performance on a regular
basis.
Now companies are trying to get more
accountability in place for employee rating.
That means individual contribution is relevant rather than just relative performance, adds Sagar Das, co-founder,
Autoportal. The need to attract and keep
talent is also pushing organisations to
remove the annual ratings system.
There is a need for organisations to get
managers talk to each employee about their
development more than once or twice a
year. This is truer in the case of a millennial workforce that craves for learning and
career growth, explains Das.
Frequent communication helps
improve engagement, and makes the whole
process fairer and transparent, as managers
better understand how their people are
doing.
Heres a note of caution. Kamalika
Mitra, engagement manager, TATA
Strategic Management Group, says
organisations eager to sound the death
18
knell for the annual review should analyse

if the new alternatives are able to assess
and differentiate performance objectively.
Most importantly, doing away with the bell
curve may lead to reward neutralisation.
For instance, if the rewards budget is prefixed, it may be spread too thin among
employees.
Richard Cowley, founder, WorkAmmo,
stresses on the importance of getting the
rewards and recognition right as part of
any new HR process. At the end of the day
you need a way to share. Either all get the
same or you find a process to reward different levels of contribution. Any comparison or calibration demands that you do
similar actions to similar people. This can,
of course, really demotivate high performers.
Cowley believes that as organisations
replace the traditional systems they need to
be clear on the evaluation metrics that will
drive individual, team, and company success. Dont miss the collective calibration
element. Leaders are human, and come
with their own set of biases. These biases
will need to be challenged to ensure a consistent way of looking at performance.
Even as organisations gradually move
away from traditional assessment and customise it, the basic principles of fair pay
for performance and objectivity need to be
respected.
Das of Autoportal suggests that with the
disappearance of the bell curve system,
identification of critical positions for future
leaders through workforce projection or
demographic analysis will be critical. With
continuous evaluation of performance, HR
managers will have to develop skills and
expertise to spot and nurture future leaders
by identifying relevant qualifications and
behavioural and technical competencies
required to perform particular tasks.
The success of any new idea lies in its
effective execution and implementation.
As organisations do away with the traditional systems of assessment, HR heads
will face the challenge of quantitatively and
qualitatively measuring the impact of the
newly introduced processes. It will also be
critical for the HR teams to communicate
effectively within the organisation to
explain why established or familiar
processes are being overhauled and how
the new processes could help.
>
THE STRATEGIST
Celebrity or hot potato?

Many brands have learnt the hard way that they risk losing equity and mindshare with
controversies arising from the actions of their celebrity endorsers
There have been incidents of

companies dropping celebrities
either because the brand was in
trouble or the celebrity landed in a
controversy or outlived her purpose
RITWIK SHARMA
t wasnt a first for Nike, but Maria

Sharapovas shocking revelation just
over a week ago of failing a doping test
purportedly dealt another blow to its haloed
brand image. The sports brand, eager not to
be seen committing a double fault, was
prompt in suspending ties with the tennis
superstar just as it had once done with Tiger
Woods after the iconic golfer admitted to
adultery. The shapes of the market or the
media may be changing, but brands continue to necessarily rely on celebrity endorsements knowing well that their public personalities forever subject to scrutiny
can come back to haunt them with proven or
perceived lapses.
The question is, have brands learnt any
lessons from the recent experiences of the
likes of Maggi and Nike? How much do they
stand to gain or lose without leaning on
celebrity endorsers? Is social media, which
has widened the net of word of mouth for
consumers, affecting the relationship
between brands and celebrities in any way?
Samit Sinha, founder and managing partner, Alchemist Brand Consulting, points
out that there have been many incidents of
late where celebrities were dropped. He

referred to two incidents one where the
brand was in trouble (Maggi Noodles, which
was banned last year in India, while its
endorsers were threatened with prosecution), and the other where the celebrity was
in trouble (Aamir Khan, whose contract with
e-tailer Snapdeal was not renewed after his
comments on intolerance in India angered
customers). Sometimes, you begin to see
the celebrity more as a liability than as an
asset, if the celebrity is going through some
sort of a negative public opinion. Sometimes,
the celebrity outlives her purpose. And
sometimes, you change the positioning of
the brand itself, when you have to change the
ambassador, he explains.
Celebrity endorsers, he says, are primarily used to add a certain stature to the brand,
especially if the brand is new or unknown, or
the brand tries to borrow certain character-
19
istics that she represents to lend personality to it. He admits, Theres always a tradeoff between the impact you think that you
are going to get by using a celebrity versus
the reach that youll get from buying more
media. According to him, these factors are
independent of the emergence of social
media. Definitely, social media has facilitated more engagement with customers, but
that doesnt necessarily diminish the role of
the celebrity endorsers, because their purposes are different.
Although he identifies the internet as a
huge enabler and a force multiplier, Sinha
senses a flip side to it because its become so
easy to put an opinion out there, the opinion
has become less credible than before. Also,
despite the fair amount of money being ferried away from traditional or mass media to
the digital channels, a different set of communication rules apply in the latter with its
THE STRATEGIST
>
EXPERT TAKE
Endorsements should be anchored in strategy
FALGUNI
VASAVADA-OZA
Associate professor,
marketing, and
chairperson, online
programmes, MICA
There are many examples from across

the world that show the negative
impact on brands arising out of the
personal lives and actions of
celebrities. So, what is the lesson here
for brands? Do they stop using
celebrities as endorsers and play safe?
Probably not the best thing to do. Here
are some key lessons for brands:
Strategyfirst, celebritynext:All
communication efforts around the
brand should be guided by a strategy
scope for dialogue, interactivity and more

engaging content. Anything that is very
patently hammy which looks like advertising doesnt work online, Sinha says.
Pranesh Misra, chairman and managing
director, Brandscapes Worldwide, agrees
that in the first place the target audience is
one of the determinants for the choice of
the celebrity. If your target audience is small
town and rural men then someone like
Sunny Deol or Ranveer Singh might be the
best choice. However, if your target audience is more upmarket and metro consumers then celebrities like Deepika
Padukone might work better. But whether to
rope in a brand ambassador or not is a decision that is more dependent on the marketing situation involved, rather than the target
audience, he adds.
For brands, the choice of a celebrity also
decides whether or not you can prolong an
association. One of the reasons, as Misra
points out, as to why brands decide to discontinue with an endorser is the fading
charm or fan following of the celebrity. He
adds, In my view celebrity advertising
pays off more when your brand is the only
one using a celebrity and there is a good
reason for using the celebrity. Also, the payoff is better when the celebrity is used
appropriately.
For Anand Halve, co-founder of brand
consultancy chlorophyll, with increasing
product parity there is little difference
between one brand and the other brand in
most categories. When brands have nothing
different to say they lean on celebrities to
stand out. What has happened today, not
and the celebrity endorser should be

brought on board only if the strategy
demands it. If not for strategy, a celebrity
merely remains a glamour feature and
gets overlooked.
Be in sync: A brand should tie up with a
celebrity whose personal branding is in
sync with what it stands for. There has
to be a match between the values of the
brand and those of the celebrity, to
increase the probability of a successful
association.
only in India but everywhere, is that celebrities have become mandatory in advertising.
There is very little difference in brands and
very little consumer loyalties. So how do I
create any kind of differentiation? I do it by
connecting with some celebrity.
Sometimes, the celebrity has a genuine
product link such as in case of Nikes associations with American basketball legend
Kobe Bryant or other sportspersons. But
why is somebody using Jennifer Lawrence?
The assumption is that if people are liked,
such as singers and actors, at least I have
some basis for the consumer or prospective
consumer to stop and notice. So, there are no
models left anymore, Halve says, adding
that the lack of differentiation was the primary reason for celebrities to be picked up in
the decade preceding the Facebook era. Now,
social media has magnified the phenomenon, he feels, because now I am not only
paying the celebrities to appear in commercials, but also for every tweet and Facebook
comment on their page.
Halve believes a brands decision to dissociate with an ambassador is tactical. Citing
an example, he says, Once, Airtel had Shah
Rukh Khan and Kareena Kapoor, but got
away from them. From the Har Ek Friend
Zaruri Hota Hai campaign onwards, they
have used social media to make celebrities
out of ordinary characters. This is tactics;
strategy is the smartphone network.
Indranil Das Blah, founding partner of
entertainment marketing solutions firm
CAA KWAN, says that when contracts terminate, both parties stand to loseYou may
save monetarily, but the brand will still take
20
Ensure digital connect: Brands today

live in the digital world where
consumers need to be served 24x7. It is a
potent platform for establishing a
strong connection with consumers.
Focus on content to pull consumers/fans
and create a strong community of
people who believe in the brand and
stand rock solid in support in case of
adversities. The golden rule nothing
comes closer to having the right strategy
in place.
some hit. So I dont think brands will look at

it as a monetary escape.
Social media has also emerged as a image
builder in the last few years. Anything that
a celebrity does is amplified on social media,
so it has a huge impact on the way brands
would see celebrities, he says.
If celebrities are used strategically, they
may help the brand to ride the tide, says
Dr Falguni Vasavada-Oza, associate professor, marketing, and chairperson of
online programmes, Mudra Institute of
Communications, Ahmedabad. But
the celebrities have a personal life and
that is where the brand walks a tightrope.
She cites the example of Aamir and
Snapdeal: The outrage was so massive
that in a day not only hate messages were
posted but hundreds of people uninstalled
the app.
Manish Kalra, chief business officer of
Craftsvilla.com, says that if the celebrity
endorser lands in a controversy, it has the
possibility of a negative rub-off on the brand
which may or may not come true. What companies widely do in such a scenario is to discard the celebrity. Or, as Kalra says, If one
wants to wait and watch, I could wait for six
months or a year as a cool-off period, which
ideally is not the recommended option for
the brand because you should move on and
find either a newer association or positioning or a communication that will help take
the brand to the next level.
For marketing heads, the key factor
remains knowing exactly what they are getting into before embracing a celebrity and
signing on the dotted line.
>
THE STRATEGIST
Mapro spreads the jam

The 56-year old regional brand is going national with its jams, syrups, candies
and chocolates, hoping to stand its own against Hindustan Unilever, Nestle,
Perfetti and Parle Agro
SHIVANI SHINDE NADHE
Mumbai, 27 March
apro Foods, Maharashtras

homegrown jams, syrups and
chocolates brand, is stepping
out of its comfort zone. It has instituted a
team of professionals to guide the company on to the national stage, has set up
an office in Mumbai and is talking to
Barry Callebaut, the worlds largest B2B
chocolate and cocoa maker, to launch its
own brand of premium chocolates.
One of the first big shifts according to
Mayur Vohra, managing director of
Mapro Foods, is that the family will not be
involved in the day-to-day operations
anymore. We are setting in place a new
team of seven members. From this we
will choose a CEO. If the business has to
grow, it has to be run by professionals,
said Vohra. The team is expected to help
increase its revenue from ~250 crore at
present to ~500 crore by 2020 and ~1,000
crore by 2025.
Mapro has also moved its sales and
purchase department in Mumbai, stepping out of its home in Panchgani, one of
Maharashtras picturesque hill stations,
for the first time and has beefed up its
sales team to 300. Vohra said that the
company has not been too ambitious and,
hence, is present only in western India,
but that is going to change.
Chocolates, a premium play
Mapro Foods is currently organised into
three main categories jams, squashes
and syrups fruity chews; and, chocolates.
Vohra says the company would have been
content with its leisurely pace of growth
had it not been for the remarkable success
Falero created in the fruity chew segment.
Launched in 2008, with a major marketing push in 2012, Falero, a combination of
21
>
THE STRATEGIST
fruit and sugar in pectin jelly, did

well. But our eyes opened when
Nestle, Perffeti and Parle copied our
product. It created a new category, said Vohra. Today, Falero is the
largest revenue contributor to the
companys sales.
Mapro also sells branded chocolates, which the company believes
are tomorrows mithai. But, we
feel that the Indian consumer is
not being served well. Today, a lot
of products are chocolate compounds rather than cocoa butter,
Vohra said. The chocolate industry in India, valued at ~5,800 crore
in FY 2014, has been growing at a
CAGR of 15 per cent over the past
three years. A report from ValueNotes
estimates that the industry will be worth
nearly ~12,200 crore by FY 2019, growing
at a CAGR of 16 per cent.
We started with coated dates and pan
flavoured sweet. It has had a good
response.
We are increasing capacity ten times.
Indian flavoured centres should take off
by next year in upmarket segments, said
Vohra. He is clear that he will not get into
the mass-segment. Chocolates will be a
premium play for Mapro.
Like many other homegrown brands
such as Keventers in Delhi, Boroline in
Kolkata, Mapros reach is not confined to
the borders of its constituency. Started
in 1959 by Kishore Vohra in Panchgani,
the first factory was set up in 1983, on a
10-acre plot which has now expanded to
35 acres with the capacity going up from
150 tonnes a month to 150 tonnes a day.
Being located in a tourist town has
helped Mapro Foods build its brand without spending too heavily on advertising.
In Panchgani, the brand is an unmissable
presence. All its properties are in prime
locations, linking Mapro indelibly in public memory with the town. There are
enough people passing by, you just had to
get them inside. We were the first one to
showcase our factory. Once people saw
the factory they would also want to buy
products, so we created shop centres outside of the factory, Vohra added.
To leverage the brands popularity, the
company set up Mapro Caf and Mapro
Gardens; places where it could interact
Nearly 50,000 people visit Mapro

Gardens every year where the company
offers strawberries for free, which has
turned out to be an effective branding
exercise
closely with the visiting population. It

helped get to know the consumers better
and develop product lines that were more
closely aligned to their tastes. For
instance, in 1989 they ventured into making ice-creams. We were supplying fresh
strawberry syrup for Cornetto ice-creams
and every time we had to test a batch we
would get ice-cream from market. Also, a
lot of people started asking us, why dont
you add something to eat, so we started
with sandwiches and pizza in 1993 and
1998 respectively, Vohra said.
The company introduces at least
three-four variants of Falero and fruit
beverages concentrates every year and
Vohra added that only if people come
back for the same product next year, will
it be launched in the market. Last year,
(CY2015) 2.4 million people walked into
Mapro Gardens, up from 450,000 around
10 years back.
Not only did the company leverage the
towns tourist population to endear itself
to a large base of customers
and launch new products, it did so without spending too much. What a
Paperboat (competing brand of fruitbased beverages) may have to do to
get people to try their product we
didnt have to bother about it. Our sur-
22
vival and growth happened because we did

not have to spend on
first trial, added Vohra.
So far, Mapro is wellentrenched in western
India, the next major
expansion will be in the
South, followed by
North. We need a different mindset for entering
these markets. It will
also have to adopt more
traditional forms of
advertising and marketing and Vohra said that
they would be focusing
largely on digital platforms. Just four years shy
of its 60th birthday, the
jam maker is finally leaving home.
>
THE STRATEGIST
Native advertising:
Flop or future?
Native ads dont have to rub audiences the wrong way.
Heres how to do it with integrity
SANGEETA TANWAR
dvertisers and publishers are not

new to ad blocking it has been
in existence since the time of
desktop publishing. Over the last
couple of years they have rushed to
native advertising primarily because
of the sharp rise in ad-blocking
working with the theory that if an ad is
harder to identify as an ad, it would
perform better against ad blockers. A
recent study by IPG Media Lab and
Sharethrough shows that consumers
look at native ads 53 per cent more
often than they look at traditional display ads. .
But heres a problem: The ability of
an ad to fool blockers relies on how well it
is able to camouflage itself as soon as
the telltale sponsored content message
appears alongside the native ad content,
blocking that becomes easy. So what are
brands doing to get around ad-blockers?
And what are the dos and donts in pushing
creative and editorial boundaries with paid
content? Here are few lessons from what
some smart brands are doing.
Take fashion brand Lifestyles promotional campaign that highlighted its end of
season sale. For the announcement ad, the
company tied up with a popular content
site, and created a fun and engaging article
on the types of people an average shopper
would meet during a sale. Lifestyle got over
20,000 social shares for the campaign.
Native advertising is about being highly
contextual and more audience centric than
brand centric, says Srinivasa Rao, vice-president (VP), marketing, Lifestyle. It keeps
the sanctity of the platform intact and does
not intrude audiences span of attention.

That the secret sauce really: dont try to
deceive the consumer try giving him relevant content instead.
Consumer PC and laptop vendor Dell
India has just started experimenting with
native advertising. The company recently
concluded its PC Literacy Days campaign in
23
which the key message was that personal computers were indispensable
to content creation. It also talked
about Dells special EMI offer highlighting its affordability among first
time buyers. To reach the tier 1 and
metro audiences, Dell looked at
bumper ad formats, missed call and
article promotion that was native in
format. The company claims that it witnessed a better engagement rate compared
to its regular campaigns.
Weddingz.in spends 80 to 90 per cent
of its marketing budget on online marketing through native content and ads. Sharing
the key to getting the native ad experience
right for the brand as well as the consumer,
Sandeep Lodha, CEO, Weddingz.in, says,
>
THE STRATEGIST
Readers will outright reject content that

sounds like a sales pitch. This is especially
true in case of blogs and content marketing.
Its also important to know where not to
advertise as it can lead to brand dilution.
For Shamik Banerjee, chief marketing
officer, Aegon Life Insurance, the biggest
test for native ads lies in the creativity of the
marketer. He says, It boils down to how
well you know your customer. Emotive
communication may not be effective; the
communication should add value and it
should never... repeat... never disrupt an
users online experience.
Thats also what Pratik Shah, vice-president marketing, Craftsvilla.com, would
recommend: Successful integration and
relevance makes native advertising stand
out. If the native ad experience does not
offer that, users are quick to push back, he
says. Zafar Rais, chief executive officer,
MindShift Interactive, suggests that
brands such as BuzzFeed focus on creating
content that is shareable. Successful native
advertising conveys a sponsored message
through storytelling.
In all this, the advertiser has to remember that he needs to track the result to be
able to modify its ad and improve. Ritu
Gupta, director, marketing, consumer and
small business, Dell India, says, Currently,
most publishers have their own ad formats
and hence an advertiser has far too many
sets of rules to adhere to. Also, tracking the
overall result becomes difficult for media
platforms that are not using specialised
software to help them track their results
across channels.
BBC, for instance, asks brands to look
beyond clicks. John Williams, VP, South
East Asia and South Asia, BBC advertising
sales, says, While these do work well, we
recognise that the role of native content
isnt just to drive clicks etc, but rather to create and nurture an emotional and engaged
response between reader, publisher and
advertising partner. The traditional metrics dont measure the emotional aspects of
native content and as such measurement of
native is effectively being under reported.
Much depends on changing the advertisers mindset. Sapna Desai, head, marketing and communication, Cigna TTK
Health Insurance, says, Over the years,
marketers have been moulded into direct
response-first thinkers: drive traffic,
EXPERT TAKE
Six things to remember while

using native ads
Add value forusers:If users find the branded content informative
and in line with their interests, theyll read and share it.
GURMIT SINGH
VP & MD,
Yahoo! India
Be transparent:Native content that is identified as sponsored and

has a clear call to action performs the best. Being transparent is
important to retaining the users trust and leading to engagement. At
Yahoo, we make sure that all native ads are clearly marked as
sponsored.
Create compelling content:Since native ads look and behave like the
content around it, strive for quality content thats as good as the
editorial content.
Design forcross-platform and cross-device: While consumers transition between devices
they expect the content to be consistent whether on desktop or mobile and that goes for
advertising too. Native ads are especially effective for cross-platform campaigns, from PC to
mobile. Yahoo Stream Ads, for example, are seamlessly integrated with the content of a page,
without disrupting the user experience,
across all devices.
Focus on visual quality: The look and feel of the native ad should be in line with the content
on the page. Native ads work by not distracting, or demanding attention. They flow in with
the users content experience. It is imperative that native campaigns take this into view.
Experiment with content and formats:With digital video consumption on the rise, and the
users love for short, snacky content brands need to explore native video as well as stretch
the creative boundaries on content genres. At Yahoo we have seen it work when we
conducted a test with an advertiser, we found viewing native video ads on Yahoo increased
brand favourability up to 50 per cent, and purchase intent up to 28 per cent.
increase conversions, and then increase

sales. At a time when consumers are
bombarded with offers and deals daily,
companies should focus on using native
ads to connect with consumers on a deeper level, rather than scout for short-term
benefits.
The good thing is publishers are actively handholding advertisers to get around
entry hurdles. Twitter India, for instance,
offers brands the know-how to leverage
native advertising through a host of products such as Promoted Tweet, Promoted
Trend, and Native Video, that surface in the
form of content that the user is familiar
with. Brands need to be where their customers are, but that is increasingly a challenge as consumers' consumption of con-
24
tent today takes place across multiple platforms, from TV to online to mobile apps.
Not every brand has the capacity to develop
campaigns for multiple platforms, says
Taranjeet Singh, business head, Twitter
India.
Just as brands are struggling to get the
content format right, publishers are facing
their own set of challenges. Going by our
experience, we recommend that native ad
slots shouldnt be fixed, says Sumit Kumar,
director global sales and strategy and commerce, Tyroo Technologies. Fixed slots
leave an empty area in between the news
feeds in case there is no response on the
native ads. Therefore, native ads should be
created dynamically based on user interaction like scroll etc. and the ad response
>
THE STRATEGIST
from server. Meanwhile, Aloke Bajpai,

CEO, ixigo.com, believes that publishers
face a double-edged sword, as they have to
ensure that there is a premium on native
advertising and at the same time the inventory does not go underutilised.
For Nitin Agarwal, assistant VP, marketing, ShopClues, buying native inventory over an exchange continues to be a
challenge. He adds, A majority of the
inventory is with publishers and direct talks
with their sales team reduces advertisers
ability of negotiating.
Theres a sheer real estate problem to
start with, says Suparna Singh, CEO, NDTV
Convergence. For one, we have strict rules
about how much advertiser-driven content
we will allow on our platforms. That said,
she asserts, if handled carefully and chosen
selectively, native advertising with clear
and full disclosure that it is paid content
can help compensate for a serious loss of
revenue caused by ad blocking. A key concern for publishers is maintaining editorial
integrity as they partner advertisers for
branded content. Arnav Ghosh, CEO,
Blippar India, emphasises, Content mismatch needs to be taken care of which
means that the editorial veracity plays a crucial role.
To fix this missing piece of the jigsaw,
BBC StoryWorks new Science of
Engagement (SoE) research project, has
been exploring facial coding techniques
and it suggests the maxim that your face
never lies holds true. The SoE facial coding
measured an individuals unconscious
response to partnered content, looking at
both branded and unbranded pieces.
According to the research well executed
and clearly labelled content-led marketing
is considered trusted and persuasive when
seen in quality environments, and has a
powerful emotional impact for the brands
involved.
Most importantly, says, Williams,
Native advertising requires a client that
is committed to the project and who is willing to work collaboratively and dedicate
time, effort and resource. In addition there
is often a longer production process than
that which is associated with branded partnerships, so these expectations need to be
managed. It also needs to be supported by
a strong social media campaign because
promoting and amplifying the content is
crucial this needs to be hard baked into

the proposal from the outset.
25
>
THE STRATEGIST
Going reverse
is just fine
Why more and more companies are warming up to the
idea of reverse mentoring
RITWIK SHARMA
t might be un-Indian to flip the traditional roles of mentor and mentee, but
with reverse mentoring, companies in
India are learning to do just that as
young executives in their twenties tutor
senior executives and department heads in
workplace technology and social media.

Though not exactly a new trend, reverse
mentoring took time to catch on in India Inc.
So what gains have companies made from it
and what challenges do they face in India?
More importantly, how significant is reverse
mentoring as a strategy that puts the onus on
millennials, who form the young workforce
26
today but will be at the helm in a couple of

decades?
Peyush Bansal, founder and CEO at
Lenskart, feels younger workers may not
have the professional experience of their
potential mentees, but their understanding
of new media and technology is vast, native
and adaptive. On lessons from this practice, he says: Reverse mentoring provides
senior executives with the opportunity to
assimilate knowledge from a different generation. One outcome is that the organisation becomes a self-learning organisation,
but the biggest outcome is that we have a
very engaged workforce across levels.
Tackling challenges, Bansal believes,
depend on processes and methodologies
that an organisation adopts. Taking time to
determine which team members are best
suited to work with each other is also important mentors should not be chosen just
because theyre young and mentees should
be vetted for their openness to learning. The
>
THE STRATEGIST
meetings between mentors and mentees

should be structured, with ground rules (for
instance, is communication through Skype
allowed or should all meetings be in person?) and parameters (determining whether
learning how to use a particular platform,
such as Wikipedia, is a constructive use of
time and valuable skill for the mentee) in
place from the outset.
He adds reverse mentoring in a structured manner is strategically advantageous.
It means an organisation has confidence in
the younger workforce, it generates crosslearning
and
there
is
a
free
flow
of
innovative
ideas
and thoughts.
Christopher Abraham, head of Dubai
campus, SP Jain School of Global
Management, says, Reverse mentoring
can be included within existing mentorship
programmes. The key focus should be on
matching employees of different generations and to encourage all involved to regularly exchange ideas and challenge each other.
DP Singh, vice-president and HR headIndia/South Asia at IBM, says, The power of
mentoring and reverse mentoring is an
essential cog in the learning wheel of a senior
executive. I have been personally mentored
by very young people. Recent examples
include social media and understanding the
LGBT community. This has been a win-win
situation where senior executives become
well-informed and young employees get a
wider exposure through interactions.
Singh cites an example where reverse
mentoring allows a team of handpicked
young people to be part of a shadow board.
As a part of this programme, a similar situation is given to the young employees and
the senior leaders to analyse how differently they would deal with it. It helps bring out
the innovative approach taken by youngsters to solve a problem, and aims to cause
better understanding between the top leaders and young employees.
IBM has a large millennial workforce and
it has taken initiatives to endure this group
reverse mentors executives to become more
socially networked and digitally skilled.
Singh says an inclusive culture at IBM has
helped it adapt to reverse mentoring. Time
invested in any mentoring relationship is a
key to success and with the busy schedules
of senior executives, this becomes a chal-
GROUND RULES
Reverse mentoring is slowlybecoming hygiene after a quietentry. As you embrace it,
here is a list ofdos and donts thatyou need to followto reap the benefits from this
initiative
Dos
| Work together to come up with new
ideas: Reverse mentoring makes you
more creative, especially about ways to
reach younger consumers or market a
product online
| Make it a two-way street: Engaging
with a younger mentor enriches your
daily experience on the job and
increases the sense of a shared
dialogue in office
| Connect to technology faster:
Broadening your sources of
information to include online
databases and social media
applications lets you stay in the loop
| Look beyond the ordinary, regular: A
younger person can introduce you to
newer audiences, trendy thinkers and
ideas that you might have missed
lenge. We understand that skills are the new

currency, and IBMers leverage self-development opportunities such as reverse mentoring to continually acquire new skills.
Employers need robust, nuanced talent
strategies and analytics to better understand
employees as individuals to make the most
of their skills, Singh says. On the strategic
impact of reverse mentoring, he therefore
feels that a present-day millennial who has
worked with a leader who is open to learning
and feedback would inevitably take on that
competency and act as a catalyst for change.
They, too, would inculcate the same behaviour in their teams.
But there are hindrances and much of
that comes from who we are as a society. HR
and business strategy professional Jappreet
Sethi, points out that in India, we have a
strictly hierarchical society. We are the only
country in the world that has a concept of the
Hindu undivided family, where you have a
karta (manager) of the house. That has psychologically remained in our society. We are
not very open as a country to learning anything from anybody junior.
He explains that the number of years of
experience is valued in traditional compa-
27
Donts
| Dont let the tail wag the dog: Get as
much tactical feedback as possible
from your young advisor, but be wary
about letting a reverse mentor dictate
work strategies
| Stay within the parameter of work:
The under-30 crowd might be hip to
tech trends, but they don't always
understand how to use social media
in a business context
| Don't ignore privacy and
confidentiality issues: If you dont,
your mentor might end up blurting
out to the world some of your personal
information, pictures or even trade
secrets
| Dont let your mentor persuade you to
take unnecessary risks: in this postLehman Brothers world, sometimes
you need to say no
nies while curricula in schools and colleges
remained largely the same for years before
the advent of the internet. People who had
read more books and attended more conferences were generally considered more literate. But today, kids are seen as being
smarter because they are using new technology and know new things better. Smart
leaders, even those who are more than 50,
want summer interns because they can look
at things without polished eyeballs, points
out Sethi.
He says that in India traditional industries have been slow to adopt the idea of
reverse mentoring, though they are slowly
waking up to its potential. Even in start-ups,
which are primarily young ventures, a lot of
co-founders are learning from their juniors,
notes Sethi, who is a co-founder of
YoStartups.
Going by his experience, Abraham
concludeS that reverse mentoring may not
replace traditional programmes entirely, but
senior executives will certainly get disruptive thinking and fresh ideas from an organisations rising stars and increase connectivity, communication and collaboration to
enhance organisational success.
>
THE STRATEGIST
Bringing order to chaos

Over the last few years, large swathes of unorganised markets have been organised. A
look at the factors that facilitated that transition
RETAIL INDUSTRY IN INDIA
Marketsize over the pastfewyears
(in $ bn)
Year
2010
2012
2013
2015
2020E
Size
424
518
490
600
1,300
SIGNIFICANT SCOPE FOR EXPANSION

IN ORGANISED RETAIL
(in %)
Unorganised trade
Organised trade
92
8
2015
76
24
2020E*
*Estimated
Sources: BCG,KPMG-indiaretailing.com, Deloitte report
SANGEETA TANWAR
etail in India is one of the largest

sectors of the economy today. In
2015, the total market size was estimated at $600 billion, registering
a CAGR of 7.45 per cent since 2000, according to a report, Retail 2020: Retrospect,
Reinvent, Rewrite, published by the Boston
Consulting Group and Retailers Association
of India. Indias retail market, the report says,
is expected to nearly double to $1 trillion by
2020, driven by income growth, urbanisation
and attitudinal shifts. It is interesting to note
that 92 per cent of the market in 2015 comprised unorganised trade and this segment
is expected to decline to 76 per cent in 2020.
The opportunity to organise retail is obvious. Taking advantage of this, a large number
of branded players have stepped into unexplored markets and have successfully organised large swathes of unorganised segments.
Technology has been a key enabler. And having a strong omni-channel presence has
helped branding in these segments pick up
speed.
Take online travel. When Yatra.com
entered the travel industry in 2006, the market was totally unorganised, managed largely by local travel agents and tour operators,
besides a handful of branded players that
largely dealt with overseas travel. The market for international travel has widened, so
has the number of options for consumers.
Seeing the immense potential to organise
travel and booking, players like Yatra and
Makemytrip entered the market offering the
facility to choose and compare. Now, there
28
are a dozen-odd players and over 40 per cent

of all tour and activity bookings are made
online.
What online booking and comparison
sites have done is bring transparency and
choices. It applies to both flight prices as
well as hotels. When OTAs stepped in consumers had more choices. Second, with the
entry of players like us the level of customer
servicing improved drastically, Sharat Dhall,
president, Yatra.com. Even as travellers
embraced online travel, Yatra.com had to
work hard to earn consumer trust. For
instance, being a pure-play online company
in its early days, it gave enough reason to the
Doubting Thomas to wonder if the company
actually existed or not! To help customers
overcome such doubts the company opened
brick-and-mortar booking offices in leading
cities.
Now come to Indias $2.2 billion diagnostics market. It is going through a visible
>
THE STRATEGIST
EXPERT TAKE
Create demand
What are the key
triggers that help
organise a market or
industry and lead to
higher brand affinity?
The basic objective of
marketing is to
PRADEEP K
generate demand
CHINTAGUNTA and that is where
Professor of
companies focus on
marketing,
fine-tuning their
Chicago Booth
School of Business marketing strategy
and marketing mix to
better cater to consumer needs so they end
up buying more; perhaps even creating
longer-term relationships. The second
objective is to build brands essentially
the marketer wants to create an associative
network of benefits, emotions, images
that are unique to her product or service.
This helps sustain the relationships the
marketer is trying to engender. The third
objective is to create completely new
categories of products where none existed
before this way the brand becomes
synonymous with a category like Xerox.
And finally, the role of marketing is to aid
shift from unorganised and non-branded

service providers to organised and branded
chains that provide higher quality and reliable services. This, experts reckon, will help
double the market by 2018. Players like Dr.
Lal Path Labs with more than 150 labs, SRL
Diagnostics with close to 300 labs, and
Metropolis Healthcare with close to 200 centres, stand in place of dingy, hole-in-the-wall
testing laboratories not just in big cities but
in tier-2 and tier-3 towns as well.
Now consider a market that began getting organised more than 25 years ago but
picked up pace only recently jewellery.
When Tanishq entered the market in the
eighties, it faced the challenge of breaching
a well-entrenched network of family jewellers. C K Venkataraman, CEO, jewellery,
Titan Company Ltd, says, The relationship between customer and family jewellers
went back to a couple of generations. The
habit of buying from the family jeweller was
strong and the trust was intrinsic. One also
society by not only accomplishing the first

three objectives but also benefitting the
larger society at the same time.
So, branding fits into this larger rubric of
marketing.
So what leads to brand affinity?
Differentiation: First and foremost, it is a
means of differentiating your product from
other unbranded products.
Q
Quality assurance: A second reason for
creating brand affinity is that of quality
assurance. In a fragmented market that is
based on a strong relationship between
the firm and the customer (as in traditional
jewellery), the relationship servers as the
basis for quality assurance.
Q
Status symbol: Brands can signal status
in some cases like automobiles, the signals
can be overt. Driving a Mercedes-Benz
conveys to the bystander something about
the passengers in that car.
Q
Primary demand generator: When
markets are fragmented, there is less of an
ability for firms to stimulate primary
demand.
Q
had the option of returning old jewellery to

the family jeweller. Tanishq broke down
those early barriers and consolidated its lead
as very few national or branded players
threw their hats in the ring. Now, chains like
Kalyan, Joyalukkas and Senco besides online
jewellery stores such as CaratLane with their
promise of quality, transparent pricing and
easy returns, have queered the pitch for the
neighbourhood jewellers.
So what is common in all these categories? Pops KV Sridhar, chief creative officer, SapientNitro India, says a lot of commodities find it difficult to break into
categories. For example, salt was salt until
Captain Cook debuted, came with a proposition of free flowing salt and over time a
commodity became a brand. So, differentiation is the key to cracking an existing market or for carving out a new product category.
With product categories like food and
jewellery, branded players can also create a
29
strong emotional bond between consumers

and their products via advertising something the players in the fragmented market
may not be able to afford other than in a
very localised manner, points out Pradeep
K. Chintagunta, professor of marketing at
Chicago Booth School of Business.
Further in the commodity market, differentiation is another means to stand out. The
case in point being ITCs entry into atta market. We differentiated our product by creating special blends and granulations for
specific markets, says, Nazeeb Arif, executive VP, corporate communications, ITC
The other key ingredient is trust, says
Sanjeev Vashishta, CEO, SRL Diagnostics.
He says the brands emphasis from the start
was on fostering trust among consumers
and offering a solution rather than just
another lab a one-stop shop to handle all
routine, specialised and esoteric tests. Of
course, technology played a vital role in
organising the industry, which today has
moved from mere diagnosis to screening to
monitoring of diseases in chronic cases to
predictive markers.
Trust has also opened up another market
for new players to move in: m-wallet. Nitin
Misra, VP, business, Paytm, says the growth
has been facilitated by primary use case,
convenience and security associated with
payments. To make someone park his
money with you or have the consumer trust
you to make crucial payment like utilities,
one needs to build trust right through the
product offering, payment modules and customer service.
Just as latent consumer demand can lead
to effective branding, the very process of
branding can spike demand. When markets
are fragmented, there is less of an ability for
firms to stimulate primary demand. Consider
the Indian consumer interest in desi clothes,
that is, ethnic wear. For the small ethnic retailers in a given urban area, it would be difficult
to get consumers to switch their wardrobes.
They lacked resources to convey the value
proposition to potential customers. Secondly,
it would have been hard for the customer to
come across these retailers due to their small
footprint. Enter a brand like Fabindia that
shifted its business model from an export
focus to one of India-based retail. Now you
have a national brand with considerable retail
footprint and access that could enter a consumers consideration set while buying.
>
THE STRATEGIST
The mother of all brands

Amma is more than a political force; from canteens and medicine shops to
laptops and bottled water, she is the most visible brand in Tamil Nadu
ONE BRAND, MANY FORMS

| 530 Amma Unavagams (canteens) in
cities and municipal areas
| 106 Amma Marundhagams
(pharmacies) retail medicines at
reasonable cost
| 71 Farm Fresh consumer outlets are

operational
| Amma Thittam, under which over 50
lakh petitions have been addressed
T E NARASIMHAN
of politics and business for the past four

years, many politicians may just take a
leaf out of her book.
Numerous political leaders have tried
to market themselves as brands in recent
years, the most recent elections in India
being a case in point. Also there have
been attempts by political leaders to
name popular schemes after them or to
distribute laptops and cycles with their
image plastered on these. But not many
get it right, confusing their image with
their political brand. According to a paper
presented at the annual meeting of the
Canadian Communication Association
and the Canadian Political Science
Association under the aegis of the
University of Victoria, British Columbia
(2013) on Justin Trudeau (current Prime
Chennai, 28 February
othing, it seems, can deter the

rise of J Jayalalithaas Amma
brand; neither the protests over
the seemingly odious labelling of food
packets during the Chennai floods nor,
the criticism over the insensitively displayed portrait at the Siachen martyrs
funeral service. The Tamil Nadu chief
ministers eponymous brand is both
omniscient and omnipresent in the state.
Amma is the moniker that was given to
her by her followers. The brand which is
believed to be her brainchild was meant
to keep her engaged with her fan base.
And given the remarkable ease with
which the brand has straddled the worlds
30
| Amma mineral water, Amma salt and

Amma cement are operational
| Amma drinking water scheme to be
implemented, RO plants being installed
in 100 locations
Minister of Canada) and political branding, An image is the evoked impression

of an entity formed from the recall of all
communication impressions; a brand is
an evoked image that resonates on an
emotional level and which stimulates customer loyalty.
Brand Amma was launched in 2011
after she took over as CM for the fourth
time. It flies in the face of conventional
marketing logic it does not follow a set
marketing plan, does not have a single
team managing it and extends into seemingly disconnected products and services
(cement, bottled water and grievance
redressal schemes). Revenues and expenditure numbers are impossible to untangle from the maze of state finances and no
profit and loss statements are available.
>
THE STRATEGIST
However there is an underlying philosophy that the brand adheres to. Tamil Nadu
Finance
Minister
O Panneerselvam said that "the people are
assured that our chief minister will ensure
that they do not suffer the pain of high
inflation". Thus the 530 canteens sell subsidised food, 71 vegetable outlets sell produce at 40 per cent of the market price, a
one-litre bottle of Amma mineral water
retails at ~10 against ~20-22 by private players and a bag (50 kg) of Amma Cement is
sold to the poor and needy at ~190, almost
half the market price of ~300-350 a sack.
Besides,
there
are
106
Amma
Marundhagams
(pharmacies)
that
sell medicine at affordable prices. Harish
Bijoor, CEO of Harish Bijoor Consults said
that the brand name is a clever one because
it has four letters, two syllables and is quick
on the tongue and essentially means mother in many languages.
The brand came into being with the
Amma Unavagams or low cost canteens.
Run by women self-help groups these can-
teens are clean sit-down places that sell

idlis at a rupee, a plate of curd rice for ~ 3
and sambar rice for ~5. According to the
Chennai Corporation, the canteen model is
being studied by other states and even other countries. It was reported that the Delhi
government is looking to set up subsidised
Aam Aadmi canteens.
The canteens serve over 2 lakh people a
day and were incurring losses of ~5 lakh a
day according to unofficial estimates, a few
months ago. Each canteen costs around ~56 lakh to set up and over the past year and
more, earnings have crossed ~15 crore said
a member of the management team. A government official said the state wants corporate houses to join hands with them to
set up canteens as part of their CSR programme.
Also popular is the state revenue departments grievance redressal platform Amma
(Assured maximum service to marginal
people in all villages) Thittam. The state
claims that over 50 lakh petitions have been
heard over three years under the scheme. A
31
senior AIADMK member said that idea is to

touch peoples lives in as many ways as possible and to accelerate governance delivery and speed up growth and development
activities in the state.
J Jayalalithaa, definitely no novice in
the political arena, is said to keep a close
watch over the brand which, many believe
helped AIADMK sweep the 2014 assembly
elections. She is not put off by criticism
because even that helps build a brand.
Bijoor says that the Amma brand could be
a wake-up call for big companies. However
he strikes a warning note, The cadres (who
manage the brand) dont know their ankles
from their elbows and they make mistakes
and these mistakes will be costly. Perhaps
that is why when criticism over the alleged
callousness of labelling disaster relief material with the Amma brand and such other
practices flooded the media, the cadres
were held responsible and the chief minister swiftly distanced herself from their
actions. Even the most astute brand strategist would approve.
>
THE STRATEGIST
www.business-standard.com.
Promising a seamless
user experience
In their bid to attract consumers, e-commerce players are
focusing on improving user interfaces
SANGEETA TANWAR
ith e-commerce players in

India wooing buyers by offering heavy discounts, delivering a superlative consumer
experience to time strapped and low on loyalty consumers is becoming all the more
critical from the word go. Also, chances are
higher that unlike a brick and mortar store

where an unsatisfied customer tends to
move on to a different store to pick up the
brand that she desires, the same customer
facing
glitches
on
an
e-commerce website will not think twice
before hopping on to a competitors website.
Recognising, this key behavioural pattern of
consumers, e-commerce players are invest-
32
ing heavily in improving the user interface

(UI) and user experience (UX) for consumers.
For instance, Jabong launched a new
user-centric and responsive-designed
app/website in August 2015. It launched the
user-centric new design across front-ends,
be it web, mobile web or apps. The base
architecture of separate front-end and service-oriented architecture helps it in
launching apps for new form factors like
mobile and tablet, and all kinds of internet
of things devices. The move has seen the
THE STRATEGIST
>
EXPERT TAKE
Hitting the refresh button

wo factors are extremely critical in establishing a
great user experience for an online commerce
platform. First, a seamless and consistent discovery and
navigation experience across multiple platforms
web, wap and app that allows users to access
products and services through a channel of their
choice. Secondly, intuitive and quick technology
solutions that deliver a glitch-free experience,
ANAND
CHANDRASEKARAN factoring in issues like network strengths, traffic loads,
amongst others.
Chief Product Officer
Another critical element of a delightful user
Snapdeal
experience is ease of transaction and payments. In our
case, the introduction of the Freecharge wallet and
solutions like On the Go Pin which make online and
offline transactions faster and error-free are some of
online fashion retailers conversion rate

going up by 12 per cent, meanwhile its
bounce rate has gone down by almost 16
per cent.
Emphasising the importance of providing a seamless experience to the consumers
through a website or app, Jabong spokesperson, says, The technology architecture
should be built in a way that it enables quick
and relevant responses to the requests. Time
is of great essence here. The performance
metrics, download speed of the page, screen
and objects associated need to be optimised
for a smooth and satisfying experience to
the user.
According to Arun Goel, vice-president
(VP) Products, ShopClues, While designing a website or an app, it is important to
understand customer intent and offer relevant product discovery and selection
options. Also, it is equally important to
make a website or an app language independent so that even if a customer does
not understand a particular language say
English or Hindi, she can still complete
the buying process by relying on images
and easy navigation.
Players like Flipkart and Snapdeal
are investing significant time and money
in enchancing UI and UX for website as
well as mobile users for delivering a seamless consumer experience. For instance, in
Flipkarts case, one of the key area or element which contributes greatly to consumer is the recently introduced option of
the exciting developments in this space.

The merit of a platform lies in its strength and
smartness, which leaves the user with a great
experience. Hence, it is crucial for online commerce
platform to invest in regular debugging, stress-testing
and feedback exercises to refresh the platform.
Customer experience involves understanding what
customers want and knowing when they want it.
Therefore, it is imperative to provide fast site
performance, easy navigation and search, mobile-first
experience and innovative delivery services for
seamless, hassle free shopping experience in digital
marketplace. Snapdeal provides its users with a flexible
and customisable platform that lends itself to
everything from discovery to transaction, logistics to
analytics.
image search. In our user research we

found that people who were buying
clothes, shoes, accessories etc. often found
it difficult to describe what they were looking for. Different people also described the
same t-shirt or sneakers differently. To
solve the problem, we allowed users to
upload pictures of a product they wanted
to buy and discover similar such products
on our platform, says Surojit Chatterjee,
senior VP and head of consumer experience and growth, Flipkart. In addition, the
company significantly improved conversions by streamlining the checkout experience in its mobile app. It moved to a single page checkout experience, ensuring
the page loads fast by reducing overall
numbere of steps involved in the buying
process.
Another major e-commerce player,
Snapdeal too refreshed its UI/UX earlier
this year across web, wap and app, thereby
enhancing navigation, browsing and purchase. The company claims that post the
move Snapdeals app crash rate has come
down to less than one per cent as compared to the industry average of less than
four per cent. The page load speed on desktop has also increased by 25 per cent. The
company launched Snapdeal Lite, a faster
version of its mobile platform. Snapdeal
Lite also integrates smart solutions in a
faster interface. For example, if a customer
comes on the mobile platform through a
slower connection, this information is cap-
33
tured for reference and they are taken to

Snapdeal Lite by default the subsequent
time they access the platform. Snapdeal
has also introduced a host of product discovery features like Findmystyle.in and
Snapdeal Search for cluster and imagebased searches for an enhanced browsing
and search experience.
As is the case with the entertainment
industry, e-commerce too faces the challenge of building a dynamic and flexible UI
which is capable of supporting and delivering rich media content to users in different
formats and multiple devices. For example,
online fashion store, KOOVS.COM serves
rich media content to users as per their
device capability, network (provider)
strength and geo-location. Mary Turner,
chief executive officer, KOOVS GROUP, says,
Due to extensive usage of graphic media,
we are using content delivery networks so
that images and videos load faster. UI is network optimised so that lighter content is
used when network speed is low such as
when a customer is using 2G. And last but
not the least, page load times should be
minimised to within a few seconds. If pages
take too much time to load, users lose interest in the site.
Outlining the key challenge before ecommerce players as they go about making
UI and UX experience dynamic, Kartik
Chandrayana, CEO, Twin Prime a leading
technology solution provider says, There
are two items that impact user experience
>
THE STRATEGIST
one, what you do on the device/app

(keep the UX clean, pick the right image
size, cache content locally, understand your
user funnel etc.) and the other is performance, i.e. delivering the content over the
wireless network. While players do all the
right things when it comes to device/app
related strategies, however, their inability to
control the volatility and variability in
mobile networks is what fails them.
Flipkarts Chatterjee, says each media
delivery vehicle comes with its own set of
strengths and challenges. For example, on
mobile, the screen size is limited, typing is
error prone and difficult, interruptions are
high, network connections are flaky and
patience is low. On the plus side, mobile
also allows you to be more intelligent with
users as it provides unique set of capabilities
including camera, sensors such as GPS for
location, gyroscope/accelerometer for

movement detection, vibration for haptic
and feedback etc. Therefore, while working
on UI and UX, it is important for the players
to design experiences for multiple delivery
platforms by keeping the user environment
and context in mind.
Even as e-commerce players leverage
fast evolving technology to deliver superlative consumer experience, there are certain
dos and donts that need to be taken care
of while designing UI and UX interfaces.
For Turner at KOOVS.COM, no matter how
logical any enhancement may look, it
needs to be validated through consumer
testing and A-B testing before the formal
launch. Ditto for Flipkart as Chatterjee
says, User feedback is critical. It trumps all
always test your solution with actual
users. Use data to make choices in design.
34
Use technology to solve them at scale. Simplify choices the user has to make at every
step in their journey. Most importantly,
stay clear of focusing on short-term revenue opportunity at the cost of user experience.
>
THE STRATEGIST
Bajaj flexes Pulsars muscles

The auto majors bestselling brand has the largest range of models under its
name; the company hopes to stretch it even further
SWARAJ BAGGONKAR
Mumbai, 17 January
or the Pune-based two-wheeler

major Bajaj Auto, Pulsar is proving
to be quite an exceptional brand
story. Not only is it the brand with the
most extensions in the Bajaj family, it also
carries more models under its name than
the
countrys
highest selling motorcycle Splendor.
Pulsar accounted for 36 per cent of
domestic sales and exports grew at 10 per
cent in FY2015 and; last year, after a three
year hiatus three new models were

launched under the brand, in quick succession.
With more than half a dozen models
Pulsar, many would say, is the most hard
working motorcycle brand in the country
today. While the Pulsar 150 and 180 generate majority of the volumes, recent
additions such as the RS200, AS200 and
AS150 have expanded the horizon further
for brand Pulsar.
The three new models have also dramatically altered the positioning of the
bike. Traditionally the Pulsar brand strad-
35
dles what the company calls the S1 category, which serves the youthful segment. Within that the 150 and 180 are
power commuter bikes suited for highway riding. The new generation bikes,
like the RS200 are meant for racers and
the AS200/150, for inter-city or long city
rides. The company is looking to get the
different groups within the biking community under the Pulsar fold.
Through our market research we
have understood that the brand is never
a barrier to purchase, only the product
is. The RS200 is a prime example of that.
>
THE STRATEGIST
It has become the one model which outsells every other model in its class despite
being the only model under the Bajaj
portfolio to be priced above ~1 lakh, said
Eric Vas, president (motorcycle business)
Bajaj Auto. The company believes that
the profile of a Pulsar customer is such
that the purchase decision is tied in to
the product and therefore, the brand can
include more models at different price
points without any dilution in its positioning. So far, Pulsar has managed to do
that. But the big question is, will its luck
hold?
The companys experience with brand
extensions and Discover is not encouraging. It was once its second most promising brand and just as it is doing with
Pulsar, a string of models were built
around Discover. Each was targeted at
different customer and price categories.
However, bikers did not bite and today,
from more than five models under its
fold, Discover has just two. What gives
Bajaj Auto the confidence that Pulsar
whose offering starts at 135cc and goes
up till 220cc will not go the Discover way?
Vas said, Pulsar is one brand in our

portfolio which stands stretched because
one of the good things about Pulsar is
that it has always been in the youthful
space. It has never been a mature brand;
its never been a brand thats trying to get
into the commuter (space). It is this
aspect of the brand that gives us the possibility of stretching it in the youthful
space significantly.
Bajaj has been careful with its advertising and communication strategies
around Pulsar too. It never advertised the
cheaper Pulsar models such as the 135
and 150, as doing so could have diluted
the essence of the brand. The company
instead focused its campaigns on the
more expensive and powerful Pulsars like
180, 200NS, AS200 and the RS200. In fact,
in the 15 years of Pulsars existence with
the exception of one print campaign,
Bajaj has never advertised
36
the 150. It has always been Pulsar 180.

Here Bajaj may have taken a leaf out of the
marketing book of German heavyweight
Mercedes-Benz which promotes the E
Class more than the more affordable A
Class.
Apart from a concerted attempt to
keep the brands positioning intact, it
could also have been a way to maintain a
distance with other two-wheeler brands.
The Hero Honda CBZ (since 1997) and
TVS Fiero (since 1999) are in the same
category and existed before Bajaj brought
in the Pulsar 150.
The Pulsar 150 is the largest volumes
generator for Bajaj followed by the Pulsar
180. The company does not disclose model-wise sales, however. Pulsar 150 is
priced at ~73,152 while Pulsar 180 is priced
at ~76,687, (both prices ex-showroom,
Mumbai). I dont think there is that big a
customer profile difference between a
customer paying ~70,000-75,000 and a
customer paying ~1.5 lakh for a bike today.
I think the brand (Pulsar) can stretch to
that level much like I think the Avenger
brand can also stretch from its current
price point to may be right up to ~2 lakh,
added Vas.
Bajaj will keep up the pace of launches in the ~1-2 lakh segment under the
Pulsar brand as it believes there is still
a lot of headroom for growth under a
single brand. It had showcased a Pulsar
with a 400cc engine at the 2014 Auto
Expo. However, there is no clarity about
its launch. We are planning to launch
one more Pulsar in the S2 space
which is the ~1-2 lakh
price segment. The
launch will happen
next
financial
year, added Vas.
>
THE STRATEGIST
For a bigger share of the pie

Online food and
hyper-local grocery
businesses are learning
that scaling up from a
few neighbourhoods to
many cities and from
hundreds to thousands of
orders requires a process
approach
4 STEPS TO GETTING IT RIGHT

BE PREDICTABLE AND RELIABLE
Stick to the promise you make and that
includes delivery time
DONT COMPROMISE ON
CUSTOMER EXPERIENCE
Keep them coming back with curated
menus, varied and quality fare and
best-in-class site navigation
SANGEETA TANWAR
he online food and hyperlocal grocery business in India seems to be

going through some exciting yet
turbulent times. Exciting because
following fashion, food and grocery has
emerged as the next big thing in the e-commerce space. This space is already crowded.
Take plain vanilla online food: there are fullstack players (such as Yumist, Faasos and
Eatfresh.com), aggregators (Zomato, foodpanda) and home cooked or chef-curated
meal providers (the likes of Holachef). In
the online grocery space you have the likes
of Grofers, which is grappling with some
serious operation issues, and Localbanya
and Dazo that have all but closed down.
Many others are struggling to get the right
mix of people, processes and product in
place to ensure sustainable growth.
So, what are the lessons one can learn
from the travails of those that are seriously
cutting flab? More importantly, what could
the survivors do to thrive?
We have realised that consumers expect
a food tech player to address variety, ontime delivery and convenience, says
Jaydeep Barman, co-founder and chief executive officer (CEO), Faasos. The biggest issue
most players are grappling with is last-mile
delivery, Barman says. Managing logistics is
tedious and complicated. Most players in
the industry are hesitant to control this area
and end up getting a third party on board,
which has its own set of complications.
Getting the last-mile delivery right is key to
BE OBSESSIVE ABOUT TECHNOLOGY

INFRASTRUCTURE
Leverage technology at various touchpoints
for differentiation and customer loyalty
KEEP A HAWKS EYE ON FINANCES

Strike a balance between growth and
profitability
controlling consumer experience, he

explains.
Faasos, a full-stack player with its own
fleet of delivery agents, uses third party
logistics only during peak hours. That gives
it better control over end-user experience.
For foodpanda, the biggest lesson was to
recognise the challenge that the offline market presented. About 99 per cent of the
food ordering market in India is still offline,
only a small fraction is online. Were constantly working to get the offline restaurants on to our tech-enabled online platform, says Saurabh Kochhar, CEO,
foodpanda India.
To this end, the company has built a proprietary data warehouse that provides indepth analysis and automated reporting
and has introduced a point-of-sale system
for restaurants that automates order transmission and menu scanning. We have
37
introduced a number of proprietary tools to

ensure better management of food discovery, order processing and making the delivery experience better, he adds.
These factors are hygiene in ensuring
customer loyalty. Says Swiggy co-founder
Nandan Reddy, The entry-level barriers are
low and hence, the industry has seen the
entry of a lot of players, but most have found
it difficult to differentiate themselves. We
have learnt that customers are willing to pay
for quality and discounting is not the only
way to drive loyalty. Prateek Agarwal, CEO,
BiteClub agrees. He says, Spending money
on customer acquisition is fine, but if you
have to do the same to even retain them,
then there is a fundamental flaw with the
product where customers fail to see value
you are adding to their lives. This brings us
to the question, how does one drive loyalty.
Pushpinder Singh, co-founder and CEO,
>
THE STRATEGIST
TravelKhana.com, believes the two most

important things for an average consumer is
the quality of food and timely delivery. He
says a majority of online food aggregators
have suffered as they have failed to exercise
control over the quality of food. Taking a
cue from international quick service restaurants such as McDonalds and Dominos,
Singh has put in place a quality department
to ensure the food on offer doesnt compromise on quality. Our team trains and educates restaurant owners on the quality aspect
of food. We also put our partners through
regular audits to maintain a certain quality
standard.
For Grofers, which has had to suspend
delivery in certain locations, a good product
backed by unmatchable customer service
are key to building a successful business.
Albinder Dhindsa, co-founder, Grofers,
says, Ensuring the shortest possible turnaround time (TAT) for our consumers is our
goal. The challenge is to set up robust operations and get TAT under an hour. Also, most
merchants are not tech-savvy. As we expand
operations and add newer categories, we
also have to educate our partner merchants.
Grofers has integrated merchants with technology-enabled point of sales. It gives the
company live feed of the supply and helps
plug gaps on a real-time basis.
For Kishore Ganji, founder and CEO,
Zip.in, that offers 8,500 products including
perishables such as vegetables and fruits,
the consumer experience ends at the customer doorstep. So, it is essential that the
product delivered is of high quality. To
ensure perishables remain fresh, Zip.in uses
trucks with temperature-controlled boxes to
limit damage.
Zip.in, like scores of other players, is
leveraging technology to improve customer
experience at every touch point. Ganji says,
Since our experience is also measured by
the fill rate (number of products delivered
from an order), we need to be tightly integrated with our suppliers and have clear
communication on unavailable products.
For Eatfresh, which boasts a food menu
that changes daily, scaling up responsibly is
one of the key learnings drawn from competitors. Founder Rajiv Subramanian
believes that scaling up from a few neighbourhoods to many cities and from hundreds to thousands of orders requires a
process approach. We are building process-
EXPERT TAKE
How we are
addressing the
pain points
NANDAN
REDDY
Co-founder,
Swiggy
We are trying to solve a key problem of
logistics in the food delivery space by
forming a delivery layer on top of
restaurants. Weve empowered our
delivery executives with smartphones
and assign orders to them through a
routing algorithm. We are using
technology as a key enabler to build a
strong service backbone and are
deepening the integration with our
restaurant partners for more
predictability.
We are customer-focused. We are
venturing into different service lines
understanding the user needs for faster
deliveries, curated menu, getting the
right restaurants on board, etc. We offer
features like live tracking and have a nominimum-order policy. Differentiation
and customer loyalty are key parameters
for survival. We have worked on our
service quality and app experience to
ensure high retention and repeat users.
es into all facets of the business through a

technology platform that drives A/B taste
testing, recipe database-driven procurement and production, health and safety
monitoring (temperature sensors and
expiry control), production technology and
demand prediction analytics.
P Rajan Mathews, vice-president, marketing and sales, Desai Brothers Food
Division, which has recently ventured into
the online grocery space with Mothers
Recipe, also underlines that serious players need to guard against spreading too thin
and fast. Successful food aggregator
Zomato.com picked up as a popular food
restaurant listing, later ventured into online
38
food ordering and then to restaurant table

booking. This fast and thin spread without
establishing a strong base in any aspect has
resulted in them winding up operations
from many cities and laying off employees.
On the other hand, a player like foodpanda.com has only concentrated on the food
ordering business and proved more successful at that.
Samarjit
Choudhry,
director,
Vertebrand Management Consulting,
cautions brands against reckless expansion.
Players need to take a hard look at this
hyper growth. Grow, but at a rate which
allows one to build a stable base.
Besides investments to scale up, the cost
of delivery is an industry-wide challenge.
Subramanian of Eatfresh.com says the company has managed to crack the problem with
a simple solution: We have mitigated this
with a full-stack approach where gross margins range between 50-75 per cent. On an
order value of ~300, a gross margin of ~150 is
sufficient to pay for delivery costs of ~60 per
delivery and all other overheads.
That said, Yumists Abhimanyu
Maheshwari, founder and chief operating
officer, warns against applying the learnings
of other hyper-local services to food delivery,
or force-fit other validated hyper-local business models in the food business. Food,
unlike other consumable goods, requires
completely different handling and safety
standards. Speaking from his own experience, he identifies three key elements or
areas that need close attention for any player to ensure long-term growth. Rushing into
the food delivery business without getting a
temperature-optimised supply chain in
place is, at best, blatantly wrong, and at
worst, blatantly dishonest, he says. Second,
hustle engineering does not work: This sort
of customised, perfectly-suited-to-yourmodel supply chain isnt available over-thecounter, especially in a country like India.
One has to build one from scratch while
keeping the principles of food-handling
intact, he adds. Third, one needs to be conscious of the delivery executives idle time
during the day. Thats the single biggest
determinant of delivery cost, that is where
one makes or breaks the unit economics of
the delivery model, he sums up. Sure, all of
that requires innovation and oodles of creativity and innovation, but there is no shortage of that in start-up land.
>
THE STRATEGIST
The new advertising order

Is your specialised ad agency just a relic of the past?
SANGEETA TANWAR
n a not-so-distant past, the advertising agency had a very clear role:

Conjure up a communication idea
and offer a creative team that could
execute that idea at a cost that was less
than what it would cost the
company/brand to have a permanent
staff on that job under its roof.
How things have changed! If five years
ago the agencys job was to interrupt the
consumer when she is consuming television or print and pass on the brands message, today they are required to engage
with consumers, co-create products and
messages, and entertain them at the time
and place of their preference. The rise of
digital channels of communication has
made it imperative that traditional agencies change.
It is not that clients are spending
less, Tarun Rai, chief executive officer,
JWT, told Business Standard in a recent
interview. They are in fact spending
more. But the paradox is that the spending on or through the traditional agency
channel has shrunk. Thats the challenge

for us: finding ways to ensure more of the
clients money come to us. How can we
stay relevant? Indeed, there are now so
many touchpoints for consumers that
channel-centric planning makes little
sense. So the need is to better understand
the consumer journey and the consumer
experienceand break down silos for better customer experience and product
innovation.
Some agencies are responding to the
challenge through mergers and acquisitions; others by reorganising themselves,
pulling down the walls between departments, scrapping the silos alltogether.
Publicis, for instance, announced earlier this month that it will reorganise the
structure to bust silos with cross-agency
leads while simultaneously creating separate hubs by discipline. The most
important aspect of all this new organizing is the fact that we are bringing to our
clients, under one single P&L with one
single leader, all the resources with no
fences and with no administrative work
loads and none of the nitty gritty having
39
an impact on morale
of people, Publicis
CEO Maurice Levy
told Ad Age.
So where does traditional advertising
agency go from here?
How can they secure
their future by being
able to help brands
build stronger loyalty
and sell more in a disrupted world, where
people are blasted
with messages from
multiple channels?
Agnello
Dias,
chairman and cofounder
Taproot
India, sums up the
challenges
before
agencies
today:
Traditional agencies have too many
mandates today. They have to be cutting
edge enough to win international awards,
come up with popular local work and
deliver results in the market place. They
have to become an extended marketing
arm for their clients. And they also have
to manage PR and be buzzy.
Some suggest consolidation and
rebundling of services might go some way
in solving the problem. But that has its
own set of challenges. Says Raghu Bhatt,
founder, Scarecrow Communications,
Creative and media agencies are in the
brand advisory business. One of the big
challenges for the industry is paucity of
great thinking talent. If every brand is
going to have an integrated team, will this
mean that the best people of an agency
will be working on fewer brands compared to what they do now? Second, great
work happens where there is ownership
and a clearly designated leader driving
the account. Will integration lead to ego
clashes and collective abdication of
responsibility? The third challenge is to
create the perfect ideation and brain-
>
THE STRATEGIST
storm process as the team size could be

really mammoth. Fourth, will this lead
to even slower response times?
When did the challenges before agencies really turn serious? Were they caught
totally unawares? Dias says traditional
advertising agencies were built around
the long-term structure of media platformsnewspaper, magazine, outdoor,
point of sale, radio, cinema and finally
TV. Until TV came along, the traditional advertising agency structures were able
to refit the jigsaw with the pieces they
had. But after that, the pieces started getting too big to fit into the old jigsaw and
started breaking out of their departmental boundaries to warrant first verticals,
then business units and finally even networks of their own. As the pie grows bigger, this will result in further segmentation.
Dias says that specialised set-ups are
able to offer better value to clients, though
integrated agencies offer greater control
over the results.
So bundle or unbundle? Which way
do brands lean?
B Krishna Rao, deputy marketing
manager, Parle Products, says, Cost
savings turn out to be a very small fraction of the business while engaging a single agency as against the benefits of
injecting fresh doses of ideas in your
brand communication. From the media
agency perspective, cost effectiveness
kicks in only when a client consolidates
all the brands with one media agency.
Meanwhile, Isamu Kawaguchi, head,
corporate communications group,
Hitachi India, believes that a single
agency is the best way forward to achieve
your brand objectives. The agency conceptualising a key campaign is the best
partner to offer a 360 degree perspective
for all our brand endeavours. If agencies
can effectively offer specialised and
focused services, this would lead the
future of advertising. This complements
the agencys business since it gains expertise across fields. The key here is to not
compromise on quality and ensure that
all departments run smoothly in sync
with each other. The other aspect is creating a robust team, rich in skills across all
departments within an agency.
Santosh Padhi, chief creative officer
EXPERT TAKE
Ideas supersede everything!

in the revenue pie they
f we go back in time, there
needed great ideas. And
were five to six departments
therefore media agencies
including servicing, planning,
once again started from the
media and creative within
backend and began hiring
agencies. This meant that
creative people. For
when creative agency went in
example, look at Havas
for a brief it had every
Media which now has a
dimension of the idea flushed
PRATHAP
creative agency as well. With
out and never really had to
SUTHAN
Managing Partner,
media getting more and
depend on outside help. This
BangInTheMiddle
more splintered, clients want
was a time when nobody ate
all the solutions under one
from anybodys pocket.
roof they do not look at fractured
Nobody attempted one upmanship over
solutions.
other since everyone worked for the same
In advertising, ideas supersede
client.
everything so Publicis is doing the right
Then came along the media split lead
thing. Thats the way how agencies
by the fact that media guys realised that
should be and more importantly clients
there was a lot of money in media and as
should go to a single agency for its
a result they left the creative agencies in
communications requirement instead of
lurch. With the exit of media, the
going around waste their time dealing
commission which came to creative
with multiple agencies. Clients should
agencies too stopped and agencies
reach out to agencies which understand
struggled to even pay salaries and thats
new media context. In case the agency
how the retainership system started.
does not specialise in a given discipline,
Now with time and splintering of
the client should be wiling to pay the
media itself, media realised that even
agency so that it can go ahead and
though its good to buy media in bulk and
acquire required expertise.
then sell it off in order to get a larger share
and co-founder, Taproot India, has a different take on the matter. He says, I dont
think the traditional agency with great
minds and the right vision are suffering.
So many of them are growing at over 30
per cent year on year, the industry itself
has been growing in double digits on an
average for the past three years. Take the
top 20 big brands of the country and you
will realise 88 per cent of their spends are
on traditional mediabe it TV, outdoor,
print or retail/activation. And they take
the traditional route of advertising and
pay the agencies the traditional way. So
what is this hullabaloo all about, Padhi
fails to understand.
He adds that every single brand--be it
big or smallis looking for a big brand
idea, not mediums. Bhatt agrees.
Traditional agencies have not become
irrelevant. The biggest opportunity for
40
traditional agencies is the Indian economywhere new ideas are getting conceptualised, new brands are being
launched all the time.
All said, having an integrated agency
might be cheaper vis--vis having many
specialist agencies, but what everyone
agrees on is that traditional silos need to
break down. Going forward, the advertising industry will move towards craft
agnostic think tanks where pure communication strategy, devoid of where execution comes from, will be the first port of
call. Craft and execution in the form of
long copy, viral scripts, design, activation
etc will then be outsourced as and when
required, sums up Dias.
>
THE STRATEGIST
Strategy and
performance
Clarity is that elusive leadership attribute that makes
behaviours and brands desirable and aspirational
BY DEBASHIS CHATTERJEE
rands lead by delivering consistency of value in an inconsistent

world. If you are
looking for consistency in
searching for information, you
cannot look beyond Google. If
you are looking at consistency
of innovative design and customer experience in mobile devices, you would instantly think of Apple. In case you are looking for
consistency in online retail experience,
Amazon would still be your best

bet.
Consistency in brand performance comes from commitment to three deeply help values that define the deep
structure of customer experience. These values are:
Purpose, performance, possibility.
A brand that wishes to succeed in
India has to integrate its growth path with
the collective purpose and the cultural
aspiration in India. HDFC Bank was one
41
of India's top three brands this year.

HDFC Bank started operations in 1995
with its mission of becoming a world
class bank in India. It did so by providing
strategic consistency in product quality
and service excellence. The bank
responded to a deeply held value system
that is characteristically Indian in its
nuances. HDFC grew through selective
lending, diversified exposure and focus
on low-cost savings deposits. Unlike
many other banks HDFC consistently
kept away from risk-prone and outlandish products and was conservative
about who it would lend money to.
Contrast this with the strategic fog that
led to the demise of the Kingfisher
Airlines brand. Kingfisher Airlines lost
its way and its brand integrity by mindless acquisitions and its flamboyant high
risk ventures.
>
THE STRATEGIST
Whatever is good for India is good for

an Indian bank. This was the path that
purpose driven leadership of State Bank
of India has followed. The State Bank
emerged as one of the top brands of India
in 2015. SBIs strategic approach to mobile
banking in a country where mobile is fast
becoming a significant force in retail
banking was one critical success factor.
An estimated 12.5 million customers
transacted through the SBIs mobile platform in 2014, compared with 8.57 million
the previous year.
Strategy clarity is important for brand
performance. Clarity is that elusive,
exclusive leadership attribute that makes
behaviours and brands so specifically
desirable and aspirational. Brands have to
perform consistently and clearly in the
market place. They have to deliver value
based on implicit and explicit promises
they make. The Tata Group has held on its
core values of trust and authenticity that
make it India's most valuable brand.
Remember the widely advertised Tata
Steel campaign, We also make Steel? What
did that tell us about the Tata Group? It
told us that Tatas are clear about what
they do well as well as what they do not do
well. As long as the Tatas remain alert
and
agile
to
what
their consumers expect at every touch
point, they will continue to lead in the
years to come.
Finally, great brands lead by evoking
possibilities. A recent research study at
Harvard University says, it is possible that
India will grow at 7 per cent annually until
2024, while neighbouring Chinas economy will stumble to a growth rate of just 4.2
per cent. What will account for the possibility of sustaining Indias growth story? If
you look at Brand India in 2015, you would
recognise that India has done well on two
of the three commitments: purpose and
possibility. In terms of performance there
is still a lot to be desired. India is currently rated the seventh most valuable national brand behind France. The top three
national brands continue to be USA, China
and Germany. We moved just one notch
above our current position last year. In
2014 we aspired for a political leadership
with a difference. Now, by the end of 2015,
it seems that a leadership of differences
rather one that can make a difference is
threatening to tarnish brand India. A

paralysed parliament devoid of purpose is
thwarting performance and diminishing
possibility of our growing dream. A high
performing Brand India has to hold onto
the dream of a poverty and pollution free
nation even as its scripts its unique, equitable and sustainable growth story. The
dream still lingers. I wonder when the
dreamers will show up.
Debashis Chatterjee is former director of IIMKozhikode and currently professor, IIM-Lucknow
42
>
THE STRATEGIST
From the seller to the buyer

OLXs new campaign aims to remove the stigma attached to buying used goods
SANGEETA TANWAR
ollowing a recent campaign featuring

actor Kapil Sharma rooting for the
brand with the exhortation Bech de,
OLX is back to featuring common people in
its new campaign. The message this time:
Dont dither over purchase decisions.
This is the first buyer-focused campaign from OLX, an online marketplace
for used goods. The campaign has two
television commercials (TVCs), Start up
nahi, start ab and Friends ke saath life set
kar. The first TVC features an young
entrepreneurial duo calculating the initial
investment required to set up their business. One of them is disheartened thinking that it would be near impossible for
them to organise a huge amount that
would be needed to put together all the
things they need to start the business.
However, his friend cheers him up by saying that they can start off their business
with limited resources if they bought
used goods at affordable prices from OLX.
The TVC concludes with the punchline,
Kal kare so aaj kar, OLX pe khareed kar,
aage badh.
A second TVC titled, Friends ke saath
life set kar shows how a newly married
couple is supported by friends who step in
to furnish their home. When the couple
expresses concern regarding the cost of
the things needed in the new home, their
friends reassure them that they have
bought those off OLX without running a
huge bill.
In its earlier campaigns, OLXs focus
was on getting people to list their goods to
be sold on the platform; so campaigns such
as Pati Parmeshwar Not and Sushil

Bachcha featured the prospective buyer
as the protagonist. But all these campaigns
had a seller-centric communication. Pati
Parmeshwar Not and Sushil Bachcha ended with a seller-focussed message Aise
bahot se log intezar kar rahe hain aapki
cheezon kaAb toh OLX pe Bech De.
Talking about OLXs focus shifting from
seller to buyer in the new campaign,
Amarjit Singh Batra, CEO, OLX India, says,
As a consumer-to-consumer (C2C) platform, OLX believes in bringing people
together for win-win exchanges, and
improving their lives. In the last three to
four years we have focused more on the
sell-side communication as OLX was creating the market, and fulfilling the latent
demand for a C2C marketplace in the
country. He adds, We have made significant inroads in a short period of time,
making Bech De a household term. While
we have solved the sellers problems, helping them declutter and liquidate the value
hidden in their used goods, we have also
realised that the Indians are very aspirational, and OLX has the power to fulfill
their dreams.
The idea behind the new campaign is
to get non-users to buy from OLX for the
first time. Batra is confident that the campaign will help improve the already high
levels of engagement among buyers on
the platform. At present, mobile phones,
cars, motorcycles, furniture, white goods
are some of the highest selling categories
on OLX. Batra claims that the online marketplace for used goods registered 2.5 billion page-views on an average per month
(till September 2015). The responses to
43
ads by potential buyers have increased

by approximately 400 per cent year-onyear, demonstrating the potential of the
platform.
Conceptualised by Mullen Lowe
Lintas, the campaign is pegged at ~20-25
crore. Talking about the challenge before
the agency, Shayondeep Pal, executive
creative director, Lowe Lintas, says, Being
OLXs first buyer focused campaign the
task was to remove the stigma around buying second-hand goods without being
preachy about it. He adds, The campaigns proposition (Kal kare so aaj kar)
stands for the smartness of todays youth
when it comes to making life choices.
Whether it is going ahead with an unconventional wedding or starting their own
business, we used this practicality aspect
to blend in the brand message that buying
on OLX can help young pupil follow their
pursuits.
How is OLX standing up to the competition? We are the most liquid platform in
the country for buyers. We have 70 per
cent unique content on OLX implying that
70 per cent of the products listed on our
platform will be found only on OLX, and
no other platform. In addition to this, 100
per cent of the ad content on OLX is usergenerated, and 90 per cent of the users
coming to OLX are posting in (C2C) categories, ensuring superior quality of listings. Together all these factors make OLX
the most valuable marketplace for a buyer
making it appropriate for us to introduce
OLXs first-ever buyer-focused communication at this point of time, contends
Batra.
>
THE STRATEGIST
Recreating
the old magic
Five months after it was banned, Maggi noodles is back on shop
shelves. As Nestle India prepares for a nationwide launch of the
32-year-old brand with some changes in packaging, The
Strategist tries to identify the key challenges and what the
company could do to win back consumer trust. Four brand
experts lay down the dos and donts for Maggi as it seeks to
regain lost ground
The reason to buy the

same product needs to
change in its
articulation
lover. The challenge is about those whose

half open window has closed even further.
For Nestle it is going to be about what
relationships it needs to strike, it has to find
a new scripture not just another ad
script. Much like an election campaign, the
reason to buy the same product needs to
change in its articulation. In effect, same
mom, but a different love story has to be
written for her.
Convey what makes the brand
trustworthy
SUPRIYO GUPTA
CEO, Torque Communications
he key challenge for the brand today

is not to return to the shelves and
kitchens (thats easy) but to whittle
down the missing, currently unseen,
missing moms. What Nestle needs to
understand is that, at its core, a tectonic
shift has occurred deep in the minds of the
consumer. Its comeback has not been
scripted by any compelling piece of
advertising (what has been done has been
more hygiene than excellence) but by the
pre-existing, abiding affection of the Maggi
There is one temptation that brands with

a loyal base tend to have while returning
from a crisis: showcasing the love of its
customers and trying to put the brand
and the customer on the same side of the
fence. What Nestle and Maggi need to do
a lot of it is to show what goes
behind making the brand trustworthy.
While the first embrace has to be warm
and fuzzy, over time the best defence is to
deeply imprint in the minds of the
customers the infallibility of its
technology, processes and people.
The other aspect of reviving trust is
about getting fresh brand ambassadors in.
While that is a simple road to the market,
there are two interesting aspects that
Nestle surely grappled with. First, getting
back their old ambassadors, who were also
targeted with possible legal action. Old
44
ambassadors returning to represent the

brand would deliver an underlying
message that I believe, so I risk. This time,
with the full knowledge that I may get
targeted again. Second, its time to hear
from people at Nestle. Not in ads but in
simple relatable stories. Tell me how you
were taught to swear by quality, how you
manage risk and how do you take part in
ensuring that not a single untested morsel
passes through. Tell consumers some of
those stories because, eventually, it is about
how the brand deals with people.
So, the message is you may be selling
Maggi, but the relationship has to go
beyond just selling Maggi. Especially now.
Distribution and point

of sale communication
will be critical
RAMANUJAM SRIDHAR
Founder & CEO, Brand-comm
o Maggi is back, if not with a bang,

in 100 towns if the newspapers are
to be believed. In the fast moving
consumer goods world, we are all
familiar with tags like new, improved as
brands do minor cosmetic changes to
their product or packaging. But this is a
>
THE STRATEGIST
completely new kettle of fish! What

should Nestle do? Lets get one thing
straight, Nestle is one of the best
marketing companies in India and I am
sure they will leave no stone unturned in
their effort to make the relaunch an even
bigger success than in
1982 when the brand
was launched first.
Be straightforward and
let the product do the
talking
Initial messaging
very crucial
Maggi is not only a great marketer but
works with some of the best advertising
talent in the country. I am sure they are
equally aware of the need to ensure that
their relaunch advertising is bang on
strategy, understated and in line with
consumer expectations.
The brand may have been on top for
as long as people can remember but the
latest memory is that of a brand unable
to meet the legal requirements. It is
important not to be bitter or tongue in
cheek but be matter of fact. It should be
focussed only on the consumer and not
on its own once-glorious past.
That said, advertising is only half the
story everything will depend on
execution at the point of sale and so
distribution will be even more critical.
Do celebrities help?
Cadbury Dairy Milk and Pepsi are classic
cases of brands that have used the
celebrity route to demonstrate to the
world that the products, which had
problems earlier, are completely safe
now. I am sure the creative minds that
are helping the brand will come up with
something even more authentic today.
Social media, which had amplified
the problem and accelerated the
negative side of the ban, will also have an
important role to play this time around.
Learning from the past
The brand is smart enough to realise that
the consumer is always right and needs
to be closely monitored with taste tests
and instant feedback.
In todays dynamic internet-driven
world, Maggi cannot merely be an
instant noodle but a brand that instantly
responds to consumers.
SAURABH UBOWEJA
CEO & Chief Brand Strategist, Brands of Desire
ommunication around a crisis-laden

brand is a double-edged sword as it
may involve justifying your position
like in the case of Maggi. While on the one
side you intend to quell the fears of millions
of customers around food safety, on the
other, you are reminding them of the wrong
that happened, which can lead to
deepening of doubts. The question is how
much is enough communication and when
should you halt it. Nestle should talk about
safety because its coming back, but it must
just stop short of making that the brands
positioning statement. Its safe plus the 2minute comfort snack that still tastes
awesome should be a good communication
strategy for Maggi. Second, going overboard
with emotional campaigns may also result
in cynicism among consumer groups. It is
better to be straightforward and let the
product do the talking.
that is consumed in a social media powered

environment where bad news spreads like
wildfire. One useful method is to rely on
poor consumer memory to get rid of
negative associations with the brand. This
can be achieved by not over-reacting to
negative situations. In the internet age, the
consumers memory is even weaker as
there are way too many issues to be
digested at the same time.
Finally, redemption stories inspire. Will
Maggi be able to write an inspirational and
believable one is a good question to ask. The
spell in rehab would have given the makers
a chance to reflect on the future of the brand
Maggi.
While it is tempting to follow the tried
and tested recipe of success, history shows
that however loved you are as a brand,
eventually you get irrelevant. Is Maggi
ready for this looming crisis, which would
definitely be of larger proportions than the
current one as consumers experiment with
other alternatives?
A comeback strategy
must be proactive and
not reactive
MANASWINI ACHARYA
Re-enter the market with cautious
optimism
Professor, Marketing, Dean, IMI
The number one challenge before the

brand would be tackling competition as
most other brands in this segment got a
chance to build their market share in the
absence of Maggi.
For Maggi, a big respite is that there is
no evidence of damage to the health of its
consumers or adulteration of the product.
This gives it a better chance than worm
infested chocolates or the famous J&J
Tylenol deaths. Being humble and honest
in a crisis linked to trust and quality is
paramount, especially when it is product
45
he most successful of brands can

run into trouble due to a plethora
of reasons. Be it political pressure,
regulatory issues, lack of an innovative
mindset or dilution of profits. Even
brands like Apple, J&J, Marvel, Old Spice
and Burberry have had to revive
themselves after floundering. Even
though every situation demands a
specific set of actions, here are some
basic guidelines that cater to all
situations:
Gaining confidence of all stakeholders
>
THE STRATEGIST
is important right from suppliers to

internal stakeholders (employees),
everyone must be on the same page.
It must be ensured that the company
has a specific action plan that takes into
account all foreseeable hurdles. A
comeback strategy must be proactive
and not reactive.
The communication across all media
must be uniform and empathetic. This is
important in todays world where
anything and everything has the
potential to go viral. Agility is as
important as brand ownership. The
company must invest in content
creation.
The equity of any brand, however old,
is directly proportional to the connection
with its customers. The brand must
always try to revitalise this bond.
Nothing is more important.
While the salience of the brand must
be intact, the truth is that the customers
needs evolve with time. The brand must
ensure that it can match up to changing
needs and expectations to remain
relevant over time.
However, there are a few blunders that
should be avoided. A comeback strategy
without a specific digital strategy may
turn out to be futile. The communication
should be consistent and simple.
When a brand has been away for a
long time, competitors may gain the
resultant share of wallet. It is again
important that even in face of new
competition, the brand remains true to
its core identity. Marvel is a good
example. Also, immediate shareholder
pressure is less important than longterm health of the brand. In trying to
appease shareholders in the short term,
one might end up damaging the brand,
including diluting its equity. Blackberry
is a good example.
Compiled by Sangeeta Tanwar
& Ankita Rai
46
>
THE STRATEGIST
Piaggio switches lanes

Sliding sales of its flagship brand, Vespa, drives the Italian auto major
to rethink its pricing strategy for India
SWARAJ BAGGONKAR
Mumbai, 22 November
talian auto company Piaggio is changing gears in India. After bringing back
the Vespa four years ago as a niche
product, Piaggio seems to be keen to step
into the mass market scooter segment,
currently controlled by Honda.
The Pune-headquartered Piaggio
India, the local subsidiary of the Italian
company, is considering targeting the
sub-125cc segment presently dominated
by Honda Activa. Besides Honda, Piaggio
will compete against Hero MotoCorp, TVS
Motors, Suzuki, Mahindra Two Wheelers
and Yamaha in this market. For this
Piaggio plans to introduce a new brand
called Fly in a few months (the brand was
launched globally in 2013), its fourth in
India apart from Vespa, Aprilla and
Piaggio. Though exact details will be
shared at the time of launch but Fly 125 is
expected to be priced at around ~58,00062,000. Fly will likely have disc brakes,
analogue speedometer, a digital watch
and an engine kill switch. While declining to talk specifically about future
products, Stefano Pelle, managing
director, Piaggio India said, We are
testing the Fly 125 scooter for the
Indian market. Pelle was talking on the sidelines of opening
a concept store for the companys brands in Pune, called
Motoplex.
Piaggios new launch when
it does happen will reflect a
shift in its pricing strategies.
Fly is priced closer to the rest
of the market instead of
Vespa, which was introduced
as a premium lifestyle product and priced at ~69,000 (exshowroom, Mumbai), significantly higher than other mass
selling scooters in its segment. The

Honda Activa for instance sells at ~53,300.
But over the last three years, despite
Piaggio working hard to position Vespa as
an aspirational product, the brand has
not really taken off.
47
Vespa volumes have in fact tumbled

over the past two years. Its average
monthly sales dipped to 2,655 units in
2013-14 and 2,338 units in 2014-15 after
the initial drive fizzled out. At the time of
the launch Piaggio officials were confident of
clocking sales of 20,000
units a month in a
phased manner.
There were also several
cases of discounts being
given by Vespa dealers to
spruce sales. Analysts say
that the reason behind the fall
>
THE STRATEGIST
could be attributed to overall contraction

in vehicle demand, low brand activity
and limited reach. Its plant in western
Maharashtras Baramati having a capacity of 300,000 units a year remains under
utilised.
Vespa started off on a promising note
however. Despite its premium price tag
(30 per cent higher
than Activa) and
limited distribution outlets Vespa
clocked an average
of 3,200 units a
month in the first year of its launch.
The company aimed at
exploring the white space
in the premium segment
of scooters which no other
brand has been able to achieve.
After introducing the LX125 Piaggio
went a step further to launch the SLX150
which is positioned at an even higher
category of consumers and priced at
~85,000. The SLX150 has a bigger and
more powerful engine and is known for
its retro styling, even more than the
LX125 with its rectangular headlamps
and side mirrors.
With Fly, Piaggio seems to be recognising the price conscious Indian consumer. And instead of introducing
products at prices way above the average levels, it appears to be willing to
move down the price ladder. This may
mean more mass market brands from
the company which could help generate additional volumes. By doing so,
Piaggio would be looking to leverage
the robust growth in the domestic scooter segment which remains unabated.
The Fly 125 is aimed at the five million units a year scooter segment. The
overall slowdown in demand notwithstanding, scooters have grown by 14 per
cent in the April-October period clocking 2.92 million units. Scooter growth
comes at a time when the total domestic
two wheeler market has grown by 2 per
cent at 9.77 million units even as the
motorcycle segment fell by 3 per cent 6.43
million units during the same period.
Honda leads the category with a 57 per
cent share of the scooter market followed
by TVS with 15 per cent and Hero
MotoCorp with 14 per cent.
A ROUGH RIDE
Piaggio has seen volumes dip for
Vespa and Piaggio, its three-wheeler
brand in India
Brand
2012-13 2013-14 2014-15
Vespa
38,718 31,865 28,062
Piaggio three
wheelers
183,408 166,775 171,649
Total
222,126 198,640 199,711
Source - SIAM, Note: Figures for third brand Aprilla
were not available
Vespa is no stranger to the mass market segment however. In the European

region and outside the company sells
scooters under Gilera, Scarabeo and
Piaggio brands of which brand Piaggio
caters to the volume segment. In India
too, the company has been toying with
the idea of launching such
a product for a few
years now. Two years
ago, Ravi Chopra,
Piaggios India head
had announced that the
company was considering a mass
market product as no company
would want to miss the
opportunity presented by
the Indian scooter market.
The company is also trying
to build its brand among the growing biking community in the country and
Motoplex, a concept store, is meant to
provide auto enthusiasts with a flavour of
the Piaggio brands. Such Motoplexs, the
first of three stores which was opened in
Pune a few days ago, are in line with the
other 90 stores the group has opened in
cities like New York, Shanghai, Beijing,
Singapore.
With inputs from Shivani Shinde Nadhe
48
>
THE STRATEGIST
GEs Indian odyssey

The multinational is using eCube, its design studio in India, to align its brand
more closely with emerging economies around the world
ALNOOR PEERMOHAMED
Bengaluru, 29 November
ut of its design studio in

Bengaluru, GE India for the past
several years has been building a
suite of innovative solutions. Affordable
equipment in healthcare and in power,
engineering solutions in infrastructure
development and innovative features in
entertainment devices these are just a
few examples of the work emerging from
the studio. Of late however, eCube, the
name the studio goes by has turned out to
be more than an outpost that makes in
India, for Indian customers. It has become
a giant backroom for the American com-
panys innovations and is fast becoming

one of the many engines powering the
companys global brand.
The products developed and designed
and, in some cases, also made in India
are being marketed all over the world.
Thus what started out as an initiative to
align itself more closely with the Indian
markets is now helping the company
build its identity as a company that is not
just an American icon but also one that is
in step with the needs of new age
economies.
Consider for instance ACT, a computed tomography system (it is like a CT scanner) developed at eCube. It is 40 per cent
more affordable than older systems and
49
uses 47 per cent less energy. GE said it is

taking its made-in-India ACTs to other
countries in S.E. Asia and as it says on its
website, co-creating relevant technologies in India for India can lead to
increased affordability and adoption to
deliver quality healthcare everywhere.
It is a similar logic that has led to the
marketing of a wind turbine, developed in
India that generates power at low wind
speeds and Lullaby infant warmers that
have helped save lives of infants, in
remote corners of the world. We have
adapted ourselves to a changing world
where emerging economies are playing a
larger role in innovation, says Munesh
Makhija, Vice President, GE India
>
THE STRATEGIST
Technology Centre.
center. The solution enables the estabFor years GE built products such as
lishment of a hub-and-spoke model
wind turbines or an ultrasound machine
where the central command centre acts as
for developed markets or, as it is known in
the hub and the peripheral ICUs are the
marketing parlance, for the first billion
spokes. Philips did have an eICU solucustomers. Thus its solutions and prodtion in the US which wasnt relevant to
ucts were aimed at the problems of the
India. The team at PIC has developed the
first world and priced accordingly. Today,
solution from bottom up with 70 per cent
GE is letting emerging markets lead it into
functionality of the US product that was
the newer developing regions of the world
required by Indian customers, said
by helping identify problems that are
Srinivas Prasad, CEO Philips Innovation
unique to their stage of growth and offerCampus.
ing solutions that are more affordable. In
For organisations such as Philips and
the healthcare devices space, GE has a
GE, keeping their brands relevant in a
portfolio of 26 affordable products that
digitally empowered and globalised
are developed and manufactured in India
world which is centred on the needs of
and
now
Asian
and
African
sold in over 100 countries. Like GEs ACT,
countries is going to be a big challenge.
the device is the result of four years of
And it is here that their operations in
research and development efforts by a
India could come in handy, providing
team of 75 researchers and engineers who
innovative, affordable products and
worked with over 500 healthcare
solutions that are more relevant to the
providers in urban as well as rural regions.
growing tribe of consumers in Asia and
GE is among the pioneers of
Africa and even in the US.
reverse innovation in technolo- We have adapted
gy solutions and processes, says ourselves to a
Makhija. Like the baby warmers changing world
from the Lullaby suite of infant where emerging
care products; 70 per cent more economies are
affordable than conventional playing a larger role
machines, these warmers con- in innovation
sume half the power that regu- MUNESH MAKHIJA
lar machines do. GEs wind tur- President, GE India
bine is another example; it can Technology Centre
work at low wind speeds of
around 27km per hour, developed at the design studio it is made in
Pune and sold in US, Brazil, EU and China,
apart from India.
GE is not the only multinational in the
health space which is taking designed for
India products globally. Global rival
Philips has a team in India that builds
products for local use, which is now
exploring taking it globally. Philips, a consumer electronics company that also has
a health tech unit runs its Innovation
Campus in Bengaluru; it is the largest site
for software solutions in the company.
Philips has identified India as the global
surgery hub, building products for local
market as well as taking it globally.
The
companys
IntelliSpace
Consultative Critical Care (ICCC) system
allows the monitoring of multiple intensive care units from a central command
50
>
THE STRATEGIST
Growing share of wallet

Will cash-backs and
discounts help m-wallet
service providers build
customer loyalty?
SANGEETA TANWAR
ith the number of smartphone

users increasing by leaps and
bounds and the growing popularity of e-commerce, the digital payments
industry in India was bound to take off. Mwallets (mobile-based cardless mode of
payment) have emerged as one of the
biggest beneficiaries of a fast maturing digital payment industry in the country.
According to research firm RNCOS, the mwallet market will grow four times in as
many years. It stands at ~350 crore currently and by 2019, it is expected to grow to
~1,210 crore. These numbers clearly indicate that m-wallets are giving other modes
of payment--including credit card, direct
debit and bank transfers a run for their
money.
Little wonder m-wallet players such as
Paytm, Citrus Pay, MobiKwik, Oxigen,
Airtel Money, M-Pesa and m-Rupee among
others are moving aggressively to scale up.
For a majority of these players, the key to
scaling up lies in creating more use cases
for m-wallet services and cultivating a highly engaged digital customer base. In this
Paytm, which had a head start over most
others appears to have cornered a huge
share of the wallet market. Nitin Misra,
vice-president, - products, Paytm, says, We
have managed to attract most of the high
intensity traffic use cases including
recharges and utility payments. For us the
first step was to earn the consumers trust.
Once consumers began trusting us with
their payments the next logical step for us
was to launch our own marketplace. And
with the company receiving the payments
bank licence we are asking our consumers
to park their savings with us simply because
they trust us.
Having started out with a strong trans-
action model, Misra, points out that Paytm

has succeeded in changing consumer habit
in favour of making digital payments
through m-wallets. This will facilitate the
growth of its marketplace as well as the
payments bank business. Paytm has a subscriber base of about 100 million. Compare
this with Citrus Pay, which has a considerably smaller subscriber base of 17.5 million.
It is looking at the issue of scaling up its
business and commanding customer loyalty through a different prism altogether.
For Jitendra Gupta, managing director,
Citrus Pay, there are two ways of commanding customer loyalty. The first is
51
through driving adoption by educating

users about the benefits of an m-wallet service particularly the ease of use and security that it offers through cashless transaction. The second part relates to product
experience. To illustrate his point, Gupta
puts forward the example of two mobile
phone brands, Apple and Nokia. He says
these two players started off by offering
products at similar price points. But over a
period of time, Apple zoomed past Nokia in
commanding a higher price based on its
premium imagery. Thus, loyalty is also
about price versus product experience.
Our objective is to have 30 to 40 million
>
THE STRATEGIST
users who are highly engaged with the digital platform. We want to become a premium brand in the m-wallet space, says
Gupta.
Most m-wallet players are using incentives such as cash-backs and coupons to
encourage consumers to come back for a
repeat transaction on their platforms. With
a huge amount of consumer data at their
disposal, m-wallet service providers are
using analytics to firm up their business
strategy and to reach out to consumers with
customised offers and incentives. At Citrus
Pay, for instance, data analysis has helped
the company identify hyper local grocery
and food delivery as the two leading repeat
categories for consumer purchases. The
ticket value of these purchases is in the
range of ~300 to ~400. Based on these
insights, the wallet service provider is
focusing on providing incentives to buyers in these two categories to increase stickiness. Citrus Pays Gupta believes that analytics will become more important for the
m-wallet industry as it helps slice and dice
consumer data and then turn that data into
actionable insights for merchants. While
talking about promoting loyalty, it is equally important to ensure that one brings more
traffic to merchants. The real question, as
a payment platform, is how can you help
merchants drive more conversions.
Meanwhile, Paytms Misra points out
that to maximise the impact of cash-back
offers Paytm invests significant time in
bucketing its consumers. For instance,
using available data, Paytm can figure out
whether a consumer who is availing of the
mobile recharge facility using its m-wallet
product is also going in for a DTH recharge
or not. If not, there would be targeted offers
and discounts for that consumer so that
she uses the same facility for other
recharges also--basically increasing the
usage occasions and opportunities.
Over a period of time, Paytm plans to
take the consumer data bucketing process
a step forward by coming up with a framework to help provide concrete incentives.
Misra emphasises that loyalty is not just
about rewards. "Its also about customer
segmentation," he says. We are going to
use data captured to eventually build a loyalty programme. Using data inputs such as
the amount of time a consumer spends on
our platform and her buying preferences,
EXPERT TAKE
Create more use cases for m-wallets

Talking from the customer loyalty perspective and
differentiation of services, the key considerations for
m-wallet players is going to be how to create customer
stickiness and use cases for m-wallets. Over a period of
time players will look at different merchant categories to
explore how these cash rich purchase categories can be
SHASHWAT
converted to
SHARMA
Partner, Management
m-wallet use cases. A few such promising high cash
purchase categories include grocery, pharmaceuticals and Consulting,
KPMG India
education among others. We may witness a spurt in
m-wallet offerings in these categories and products
promising more stickiness are going to do well.
Further, m-wallet players will have to create an ecosystem around these new
categories because it is going to be very difficult for the players to sustain longterm advantage in existing crowded categories including e-commerce, cab
service, online recharge, bus ticket bookings and online food payments etc.
Therefore, in order to make an impact in a highly competitive market, m-wallet
players will have to create brand connect and discover more use cases for their
product.
As regards consumer loyalty, players will have to identify well-defined
spend categories for different users (including urban and rural). For creating
product stickiness, players will have to take into account different needs of
consumers. Since every consumer will have different requirements, m-wallet
players have to ensure that their loyalty programme provide consumers ease
of earning as well as redeeming these earned points. Players will have to
think in terms of long-term incentives to encourage consumers to spend
more time on their platform.
Going forward, while partnering with various merchants players need to bring
in some element of inter-operability to encourage greater product usage.
we are going to build consumer profiles.

Going forward, on the basis of such profiles we will look at waiving off a few additional checks and balances for select consumers, thereby making their product
experience hassle-free and more rewarding, says Misra.
With every player in the space wooing
consumers with huge cash-backs and discounts, the moot question is, how long can
players sustain such offers and how effective are these in promoting product stickiness and customer loyalty. Simple cash
backs and discounts alone do not contribute to customer stickiness. Customer
loyalty can only be guaranteed when they
have a positive experience with your brand
and service, says Sunil Kulkarni, deputy
managing director, Oxigen Services
(India), which owns m-wallet product,
52
Oxigen. He adds, The way out is to get

customers to experience your service;
therefore customer engagement is what we
are looking at. Customer engagement is the
crux of all our efforts, be it service delivery
or information dissemination. Over the
past six months we have moved aggressively on this front and have launched various campaigns like the 'Give Selfishly'
campaign and the ongoing 'Playthehost'
campaign. We also have cricketing legend
Sachin Tendulkar on board as our brand
ambassador and are hoping to make the
right impact.''
Kulkarni says that in the final analysis,
what will be make or break for m-wallet
players would be their ability to bridge the
gap between online and offline channels of
commerce.
>
THE STRATEGIST
The battle of retail brands

Stung by the unrelenting onslaught of e-commerce giants, consumer durables
retail chains are matching them on deals and discounts this festive season
K RAGHAVENDRA KAMATH
Mumbai, 25 October
lose to three years since the festive

season in India was rocked by the
emergence of e-commerce, a clutch
of multi-brand consumer durables retail
chains are fighting back. Several, including

the Tata group-owned Croma, Future
Brands EZone, Mumbai-based Kohinoor
and Bengaluru-based Sangeetha Mobiles,
are offering hefty discounts, innovative
schemes and personalised shopping experiences this season; the flip side is
53
that margins are likely to dip amidst lower

volumes.
Subhash Chandra of Sangeetha Mobiles,
(340 stores across South India) says that
the industry has been impacted significantly and his chain is holding on despite
competition from online players. But this
THE STRATEGIST
>
ON THE DISCOUNTS TRAIL

Chain
City
Croma
Pan India
Blockbuster deal
5+5+5 where the customers get 5% cash back, 5% off on second purchase and
5% value back in the form of a Croma Gift card
Kohinoor
Mumbai Free microwave oven worth ~5,990 on puchase of ACs, washing machines and
machines and refrigerators; discount upto ~12,000 on exchange offers for
new appliances
Sangeetha
Bengaluru Will bear the entire interest cost of mobile phones paid for in instalments,
protection against price drop
Reliance Digital Pan India Assured cashback upto ~15,000 on specific purchases
Ezone
Pan India Assured gift on every purchase and 23 per cent additional cash back
year, he hopes will be different, given that
most retail chains have learnt from the
experience of being mowed down by the ecommerce juggernaut. We (mobile phone
retailers) are used to it (the impact of ecommerce players on them), says Subhash
Chandra, managing director of Sangeetha
Mobiles.
The festive season which brings in close
to 20 per cent of the total sales of his store,
is the mainstay of most brick and mortar
retail chains and hence they are rushing in
to reclaim their space in festival sales.
Sangeetha has offered to bear the entire
interest cost of mobile phones that have
been paid for in instalments. It has also
come out with a scheme that protects customers from loss if the price of a phone
falls within a month of its purchase.
Chandra is hopeful. Online retailers are
incurring heavy losses and we believe
things will settle down and sanity will prevail. (Also) Online cannot provide you
touch, feel, personal attention and so on,

he adds.
The Tata groups, Croma is banking on
a similar sentiment. It believes that shoppers look for a special experience from the
stores every festive season and, People
who do not have stores have to pretend
there is nothing more to shopping than
closing the deal at the lowest possible price.
However, if one just pauses for a moment
and reflects how we as individuals behave
as shoppers, one will realise that there is
much more to the act of shopping than just
haggling over prices, said Ritesh Ghosal,
chief marketing officer, Infiniti Retail which
runs Croma.
While Croma is creating what it believes
is a unique shopping experience it is also
playing the discount game. It has launched
a 5+5+5 scheme where shoppers get five
per cent cash back on select debit and credit cards, five per cent off on the second purchase and a five per cent value back which
54
is the amount given back as a gift card. It

also has the #MyWishAtCroma programme, which aims at fulfilling more than
two million customer wishes with specially curated offers, pre-approved loans and
pre-viewed catalogues the company says.
Ghosal says that, last Diwali Croma did better than the previous one, and from all indications, this year will follow a similar trend.
What works in our favour is that in our
category, the consumer really wants to shop
at a physical store, especially in the festive season when they are buying for their
home, he says. Besides Croma has an
omnichannel presence its 100 odd stores
serve as landing pages for their digital catalogue. He is clear that the e-world has to
co-exist with the physical world and says,
Our website does not compete to sell versus e-tailers it actually exists to drive traffic
to our stores. Consequently, more than half
our e-commerce sales are actually omnichannel sales which either initiates on
the web and closes at the store or the
reverse, he adds.
The Chennai based electronic and
durable chain Viveks has a similar strategy. It plans to launch an online portal
and is focusing more on expanding its
reach, increasing size of its stores and
launching new offers to compete with
online players. The 50-year-old chain
opened three stores between December
2014 and October 2015,. We are innovating, expanding, and refurbishing
our stores besides launching our
promotions and campaigns, said
B A Kodandaraman, chairman and managing director of Viveks.
Interestingly, even as the retail chains
build a stronger physical presence and
offer huge discounts, the large e-commerce brands are changing tack. Recent
advertising campaigns have focused on
bringing happiness, efficiency and on thelarge choice of goods on offer; discounts
are on, but online shopping is more than
deals, the companies seem to say.
Pinakiranjan Mishra, national leader,
retail and consumer products, at consultancy EY India says, Online deals and
discounts have come down compared to
last year. It is a respite for offline retailers.
This festive season could well mark a new
turn in the war between the online and
offline retail brands.
>
THE STRATEGIST
Chairman and CEO, Edelweiss Group, Rashesh Shah and Brand Ambassador Saina Nehwal at a press conference
Edelweiss looks
for a role model
With Nehwal as its new face, the financial services
company hopes to strike a chord with the young and
financially astute
ANITA BABU
Bengaluru, 13 September
randing, for service providers, is

always a complicated affair; even
more so for financial services companies. Trust, confidence, safety how
does one communicate these? Such was
the dilemma at Edelweiss Group for the
past several months, as it chalked out its
expansion plans and debated about
branding strategies.
Enter Saina Nehwal. At the outset
there seems to be little in common
between the badminton star and the
financial group named after a white

flower found in the Alps and an iconic
song from the film Sound of Music. So
what is the connection?
Edelweiss today is expanding its presence pan India with the insurance, housing finance and credit businesses. Saina
(Nehwal) is an inspirational icon, which is
one of the compelling reasons to associate
with her, said Rashesh Shah, chairman
and chief executive officer, Edelweiss
Group.
The company is tightlipped about the
size
of
the
deal,
although
industry buzz is that, IOS Sports &
55
Entertainment, the sports management

group that Nehwal is associated with, has
negotiated a multi-crore contract.
Edelweiss believes that the association with Saina is perfectly timed. The
company has clocked profit after tax at
compounded annual growth rate of about
37 per cent for the past three years and 30
per cent for the past 10 years. This is the
time to establish itself as a pan-Indian
brand the group feels.
What does the deal entail? For one,
the Edelweiss brand logo will appear on
Sainas jersey across domestic and international tournaments. And Saina will be
part of the multimedia campaign that the
company plans to launch. The team
behind the branding deal sees a close
association between the badminton star
and the 18-year old Edelweiss Group,
which has grown from a mere three people with ~1 crore capital to about 6,000
people over 200 offices all over India,
managing about ~27,000 crore of assets.
Shah said, She has risen to become
an iconic figure with a huge fan-following, something which is hard in India
unless he/she is a cricketer. This is the
THE STRATEGIST
>
PLAYERS IN THE TRUST LEAGUE

Personality
Banking/
Insurance/Finance
Endorsement
per brand (approx)
Deal
signed (yr)
Rahul Dravid
Bank of Baroda
~ 4 crore*
2005
Sachin Tendulkar Aviva Life Insurance

Royal Bank of
Scotland
~ 6-7 crore per

endorsement
pre-retirement
2007
2008
Yuvraj Singh
Birla Sun Life
~ 1-1.5 crore
2011
Shikhar Dhawan Canara Bank
~ 75-80 lakh
2014
Saina Nehwal
~ 1.5-2 crore
2015
Edelweiss Group
*for three years; Source: Industry reports
hallmark of a dedicated and committed

sportsperson, just the qualities that
Edelweiss would like to associate with.
Brand consultant Harish Bijoor said,
Whenever you pick a sporting star, it is
for excellence, precision and finesse.
Saina fits into all these qualities. Besides,
sports stars and financial companies have
a long standing relationship. The best
example is cricketer Sachin Tendulkar
endorsing Aviva Life Insurance or Yuvaraj
Singh who was retained by Birla Sun Life
for their cancer insurance products. (see
table)
Saina is also seen as the face of a
young and confident India. Edelweiss,
given that it has grown at a steady clip the
past few years, places itself in the same
league. Both have a proven track record

and are looking to rise to greater heights.
We look to continue growing at 20-30
per cent in the next eight to 10 years and
focus on customer experience. We want to
build our retail financial services too,
said Shah. Edelweiss looks to double the
number of branches to 400 in two-three
years. It pocketed ~3,912 crore in revenue
in 2014-15 and is looking to carve a separate identity for itself in an industry
which has players such as HDFC, L&T
Finance, Religare, and Franklin
Templeton.
Edelweiss is also targeting the young
Indian it is estimated that by 2020,
India will have about 65 per cent of its
population in the 21-35 years age bracket.
56
In the next 10-20 years

because the people who are born after
1990 will take centre stage, that is where
a lot of demand for advice will start coming from, Shah said. With Saina on board,
Edelweiss expects to connect with this
group and as it looks to invest more in
brand building, it is also making strategic
investments in fintech (financial technology) startups. As a financial services
company, there are a lot of opportunities
in fintech companies. So we make sure we
get involved in wherever possible as
clients or advisor in such companies,
Shah said. With its technological deals
signed up and, now, an iconic ambassador, the company is hoping it has its
future all tied up.
>
THE STRATEGIST
Making the most of returns

E-commerce companies are partnering with brands to bring returned
products back into the market
and improve sales
ANKITA RAI
igh return rates in the e-commerce space are making a dent

in the margins of e-retailers.
Given their lenient return policies, the
return rate in the sector is in the range of 15
to 20 per cent and can be as high as 40 per
cent in case of cash on delivery. On an average $20 billion (~1,20,000 crore) worth of
products are returned annually in the country. Inventory is the biggest pain point for
brands, retailers and merchants. Selling
refurbished products can help cut down the
inventory levels of retailers, says Amit
Gupta, co-founder and director at
Surpluss.in.
In a sense, getting returned goods back
into the market can help e-retailers cut costs
related to the return of a new sold item.
These as-good-as-new products, if not handled properly, could land up in the unorganised/grey market. Holistic supply chain
management is a key building block of the ecommerce ecosystem. So far in India less
than $100 million investment has gone into
return management while it should be much
more. In developed countries, 10-15 per cent
of the money invested in the e-commerce
ecosystem goes into the back-end, warehousing and logistics infrastructure. The
back-end is as important as last mile delivery, says Hitendra Chaturvedi, CEO,
GreenDust.
Unlike the grey market, refurbished products sold by organised refurbished-goods
players such as GreenDust and ValueCart
come with a bill and a warranty. eBay India,
which took a plunge into the refurbished
goods market in August, has so far tied up
with 15 organised refurbishers such as
GreenDust, ValueCart, Budli, My Return
Solutions. These organised players add value to our platform. They have a quality check
facility in place and validate every product
before bringing them to the platform. They

also provide seller warranty, Pankaj Ukey,
director, seller service and category, eBay
India.
The organised refurbished goods market in India is close to around $500 million
(~3,000 crore). Going by the 15 per cent average return rate in the industry, this market is
set to reach $17 billion (~1,02,000 crore) by
2020.
While the opportunity is huge, so far, a
majority of the sellers in the refurbished
goods space fall in the CDIT (consumer
durable information technology) space. And
rightly so. The category already comprises
more than 40 per cent of e-commerce business. There are two types of products being
sold under the refurbished category. One,
unboxed, where the product had been
returned to the manufacturer without being
used. Two, products with minor damages
caused during shipment or products that
were used but returned within the return
period of 15 to 30 days due to customer
remorse. It also includes products used for
little less than a year. The smartphone market is becoming mature and consumers are
exchanging their phones within 12 months.
These phones, which are perfectly new and
still selling in the market, also find their way
into the refurbished goods market, says
57
Anshul gupta, research director, Gartner.

The challenge, however, is that the market for refurbished goods is unorganised in
India. In the case of exchange offers, sometimes, old phones that are exchanged are
not reprocessed but are circulated back into
the market, says Gupta.
The early movers
The refurbished and unboxed category has
a multi billion-dollar potential, especially in
a price sensitive market like India because
the discounts offered are in the range of 20
per cent to 30 per cent and products are as
good as new. Selling refurbished products is
a win-win for both OEMs and e-retailers. On
one hand it helps OEMs clear up the inventory faster, on the other, it enables e-commerce platforms offer more choices at lower costs. This drives conversions, says
Praveen Bhadada, partner and practice head,
Zinnov.
Even as brands like Xiaomi and Samsung
are refurbishing their own products and giving brand warranty on the same, not many
OEMs find this sustainable. As return is a
very small percentage of their forward business, it does not make economic sense for
OEMs to repair and refurbish themselves.
Some also have authorised vendors for refur-
THE STRATEGIST
>
EXPERT TAKE
Consumer protection is key
DAVID ABIKZIR
Chairman, Nymex Consulting
Covering the refurbished goods market will
be important for every serious e-commerce
player. Selling of refurbished products is a
customer conquest strategy to meet the
growing demand of shoppers for variety
and product availability at various price
points. E-commerce players, which sell
bishing. GreenDust is working with many

brands on this front, says Chaturvedi of
GreenDust. GreenDust has a backward supply-chain agreement with marketplace players Flipkart, Amazon and Snapdeal to handle their returned goods. Returns are
sourced (at discounted rates) and brought
into the market at around 30 to 35 per cent
discount to the fresh stock with one-year
extended warranty by GreenDust. We are
becoming channel agnostic and are also selling refurbished products on other e-commerce sites, thus saving money on marketing. The company crossed $250 million in
revenues last financial year.
Another player, Overcart.com, which
sells products refurbished only by OEMs,
sources the products from manufacturers
like Xiaomi, One Plus, Acer and from both
offline and online retailers. There is a problem of return both in the online and in the
offline space. On an average, 8 per cent of the
products are returned across categories but
in the case of online, the return rate is higher. Overcart sources products directly from
retailers, run quality checks before listing
them on the site. It sells both unboxed, endof-life and refurbished products. Our
strength lies in quality checking. Products
that need refurbishing are sent back to the
OEMs, says Alex Souter, co-founder,
such products,
communicate on the platform of their
brands involvement with social and
environmental challenges.
However, given the number of
consumers looking to purchase high-end
products at lower prices, the phenomena of
sales cannibalisation by refurbished
products is set to accelerate with time. It
will be coupled with a drift behaviour. Look
what happened to JD.com in China. Many
customers accused the e-commerce player
of selling refurbished iPhones with
fake/defective components. We see the
same phenomena with counterfeit
products in the luxury market. With the
growing market of refurbished products,
this trend will be accentuated. Thus ecommerce players serious about selling
Overcart.com. Generally retailers, both

online and offline, dont have the core
process to handle returns and unsold inventory. We make it profitable by helping them
get maximum realisation on their returned
and unsold stock, says Souter.
A majority of Overcart customers are
from tier-II and tier-III cities. Our USP lies in
our ability to do quality checks and liquidate products fast, adds Souter.
ShopClues, which added a category of
unboxed products on its website in August,
has witnessed 2X growth in a month. Its
unboxed category includes brands like
Samsung, Asus, Lenovo, Xiaomi and One
Plus, among others. Says Nitin Kochhar,
AVP, categories, ShopClues, We have tied up
with merchants who have quality check
facilities and partnerships with brands. We
offer six months brand warranty on refurbished products.
Evidently, refurbished products require
an additional layer of quality control by merchants. At ShopClues, returned goods go
back directly to merchants. If the merchant
has the infrastructure to repair the product
they do it or else the product goes to the service centre of the brand and the merchant
later lists it as refurbished on the site.
Marketplace player Surpluss.in, which
operates in the end-of-life, unboxed and
58
refurbished products first need to address

two major challenges:
Consumer protection. The
e-retailers that sell refurbished products
must ensure that their supply channel is
trustworthy.
E-ventures selling refurbished products
should be accountable for product quality
no matter where the goods come from.
They would face fraud accusations if they
cannot prove that the products were
purchased from authorised resellers.
Selection policy. E-ventures cannot
escape from setting up a selection policy for
refurbished products they offer to their
consumers. In a growing market, the right
selection policy will build trust among
consumers.
pure refurbished categories, has tied up with

brands such as Samsung, LG and Xiomi to
sell their refurbished products with six
months warranty. It also recently entered
into a tie up with Amazon, which is running
a pilot in the refurbished space. About 99
per cent of the defects in the smartphone
segment are software related. All the products sold by Surpluss.in are refurbished by
the brands themselves and come with brand
warranty, says Amit Gupta, co-founder and
director at Surpluss.in.
While the market opportunity is huge,
consumers are still wary about the quality of
such products, which is an important decision-making criterion. The quality testing
process along with the service assurance
offered by OEMs/organised refurbishing
players and e-commerce vendors could
change the perception in a positive way,
says Ukey of eBay India.
So what does the future look like? While
products refurbished by brands themselves
carry a lot of credibility, experts say, going
forward more OEMs will authorise partners
to refurbish their products on their behalf
and sell them. Market players need to build
relationships with OEMs and work with
credible suppliers. Getting consumer trust is
important, so is creating awareness, sums
up Pragya Singh, associate VP, Technopak.
>
THE STRATEGIST
Dawn of the hyper-locals

A recent IMRB study drives home the growing influence of local brands and how
they are threatening national brands in a big way, notably, in food
Local brands dominate the biscuits and milk category
VIVEAT SUSAN PINTO

Mumbai, 2 August
o names such as Sudha, Arokya,

Sakthi, Thirumala, Aavin or
Nandini strike a bell at all? They
don't, right? But these products figure
prominently in the recently released
IMRB-Kantar Brand Footprint report.
Unlike conventional brand valuation
studies, this report looks at where a brand
stands based on how many times a consumer chooses it over another. And the
percentage of homes out of the total
household universe that bought the
brand at least once a year. IMRB calls this
PHOTO: BS FILE
consumer reach point (CRP).

In the 2015 list of top 50, there are 10
local brands that make the cut two
more than the number last year. The
highest-ranked among the local brands
Aavin, a milk brand, which comes at
number eight has a CRP of 1.63 billion
just below Colgate (number 7), which
has a CRP of 1.67 billion. To acquire the
eighth spot, Aavin has edged out incumbent Wheel Hindustan Unilevers
mass-market detergent brand which
has been pushed to 10th position this
year. This is not all. At ninth position
comes another local milk brand called
Nandini, which has moved up from 10th
59
place last year.

The fact that 20 per cent of this years
list is dominated by local brands four
percentage points more than last year
indicates how these products are gaining
traction, say market experts. Most of
these (local) brands are in milk and biscuits, categories that are consumed by
households on a regular basis, says
Varun Sinha, group business director,
IMRB Kantar Worldpanel. But so are categories such as shampoos, detergents,
soaps, creams, hair oils, tea and toothpastes that have also marked their presence on the list. In the case of these segments, it is the national and top regional
THE STRATEGIST
>
IN THE FAST LANE

Five brands thatgrewthe
fastest in 2015
Brand
(Rise in CRP* in %)
Anmol
Sakthi
36
24
Dove
24
Thirumala
24
Arokya
20
* Consumer Reach Point
MOVERS AND SHAKERS

Local brands are giving global brands a run for their rankings. Availability, access and
the rise in e-marketplaces are helping them edge past the older brands
Rank
+/-
Brand CRP* (in billion)
PARLE
4.22
2
3
4
5
6
7
8
9
10
Clinic Plus
Amul
Ghadi
Britannia
Tata
Colgate
Aavin
Nandini
Wheel
3.35
2.65
2.15
1.84
1.71
1.67
1.63
1.60
1.52
* Consumer Reach Point, Source: IMRB-Kantar Brand Footprint 2015,
names that are more visible. They include

brands such as Clinic Plus (shampoo),
Head & Shoulders (shampoo), Ghadi
(detergent), Chik (shampoo), Lifebuoy
(soap), Colgate (toothpaste), Nirma
(detergent), Fair & Lovely (cream), Brooke
Bond (tea), Lux (soap) and Parachute (hair
oil), among others. Even segments such
as mosquito repellents and coffee, not
very highly penetrated in India, find a
place on the list, but through big names
such as Good Knight and Bru, respectively.
While some of the top names in milk

and biscuits do figure on the list too such as Parle (biscuits) at number one,
Amul (milk) at number three and
Britannia (biscuits) at number five, there
is no way one can miss the local brands
(from the two categories). Five of the top
20 in the current report are local food
brands. They include Milma (milk),
Anmol (biscuits) and Vijaya (milk) apart
from Aavin and Nandini. National food
brands in the top 20 are just a notch higher at six. They include names such as
60
Maggi, Mother Dairy and Brooke Bond

besides Parle, Amul and Britannia. And
four of the five brands that have seen the
sharpest rise in CRP in 2015 are regional
milk and biscuit brands.
Experts pin the trend down to the local
nature of food and its easy proliferation
and acceptance. While local brands are
not uncommon in other consumer staples such as soaps, detergents or hair oils,
brand building (at the national level) is a
little easier in these categories as opposed
to food, says Harish Bijoor, CEO, Harish
Bijoor Consults.
Ease of availability is also a key reason
for the rampant growth of local brands
in milk and biscuits - something that
national brands such as Amul and Mother
Dairy (the latter has retained its fourteenth spot in the current report) - have
been looking to counter by improving
their reach. Amul, for instance, is available across Gujarat, Maharashtra, Goa,
Madhya Pradesh, Uttar Pradesh, National
Capital Region (NCR) and New Delhi.
Rival Mother Dairy has been making
inroads in the west beyond its comfort
zone of Delhi/NCR.
The local brands also owe a huge debt
to the mobile penetration in the country
and the rise of mobile payment mechanisms. In fact the report talks about how
fast-moving consumer goods 3.0 is going
to be a lot about the growth of mobile
it says, phone based money transfer services are set to change the way people
buy, thereby offering brands a whole new
way to go where no brand has gone
before. More power to the local brands.
>
THE STRATEGIST
Housing.coms
teachable moments
The controversy may have represented an extreme example but
disagreements between investors and founders are a reality in the
world of start-ups. Whats the best way to handle them?
KANIKA DATTA & NIVEDITA MOOKERJI
everberations from the spat

between Rahul Yadav and
investors in Housing.com, the real
estate portal he co-founded in 2012, have
only just settled. But the range of reaction
on social media suggests that issue at the
centre of the controversy relations
between founders and investors in the
start-up universe remains as tricky as
ever.
Yadavs case may have been extreme
but both venture capitalists and entrepreneurs admit that making the relationships work demands considerable emotional capital from both sides.
Disagreements happen all the time,
admits Vishal Gupta, managing director,
Bessemer Venture Partners (BVP)
India. Thats because of the overlapping
nature of the roles. When its issues related to shareholders such as the company
going public, selling a stake or making
investments, both investors and entrepreneurs have an equal say. Its a conversation before coming to a decision. In all
other business matters, entrepreneurs
call the shots but since its a long-term
relationship, even investors could have a
say in any matter, he explains.
How can this equation be managed
without getting to the point of no return?
The issue is likely to gain even more traction given the unique and heady combination of the invariable youth of the
entrepreneurs Yadav is just 26 and
the unprecedented sums of money pouring into e-commerce something like
61
>
THE STRATEGIST
Its important not to be overbearing

because the reality is that we could
sometimes be wrong too
The interest of the two should be

aligned to increase shareholder
wealth
TARUN DAVDA
SANDEEP AGGARWAL
Director, Matrix Partners India
Co-founder, ShopClues
Disagreements happen
all the time because of the
overlapping nature
of the roles
VISHAL GUPTA
MD, BVP India
$725 million of venture capital has flowed

into start-ups in the second quarter of
2015, up from $424 million in the same
period last year.
At one level the answer is easy. Just
dont do the kind of things Yadav did:
engage in a very public online argument
with a leading venture capital firm over
alleged poaching, attract court cases and,
finally, take significant unilateral decisions like donating his shareholding to
employees. Its not possible to work in an
environment where a founder is showing
investors the finger, said one venture
capitalist requesting anonymity.
Equally, however, there are those who
say housing.coms investors treated Yadav
like a tourist once they came on board,
such as sinking money in an expensive
advertising campaign without a commensurate increase in traffic to the website and that became a source of tension.
Whatever the merits of this particular
controversy, it is clear that many of these
issues go beyond the very human problems of ego management and involve a
fundamental understanding of the roles
each group plays in the start-up.
First, agree to disagree
It starts with acknowledging the basic
truth that, as Sandeep Aggarwal points
out, The interest of the two should be
aligned to increase shareholder wealth.
Aggarwal is in a good position to understand this. A founder and largest share-
holder in ShopClues, an online marketplace, he is now an investor in an antiecommerce site shopsity, besides founding automobile start-up Droom. As he
points outs, Someone has given you the
money and is watching your interest. The
least you can do is collaborate. And one
can always agree to disagree.
Critical to these conversations is an
understanding that investor-founder relationships are for the long-term Like a
marriage, there should be a comfort level with each other and even after the exit,
an investor should be able to look the
entrepreneur in the eye and have dinner
together, Bessemer Capitals Gupta adds.
There are no hard and fast rules to
developing this comfort level but as
Gupta points out, both sides get multiple opportunities to do so. Nobody writes
the cheque after one meeting. You meet
many times, have honest conversations,
meet the team. But things can still go
wrong. There are no ideal questions that
can guarantee a smooth sail.
Though it is obvious that personal rapport is key to the success of a founderinvestor relationship achieving this can
be tougher than it sounds. After all, as
Aggarwal points out, For the investor to
give money is like kanyadaan. At least
the daughter is an adult and knows what
to do. If money goes into the wrong
hands, it will never come back.
That is why the temptation for
investors to call the shots is often hard to
62
resist. The pressures to keep valuations

high may tempt venture capitalists to take
short cuts in ways that could harm the
business.
Enter, the mentor
So what role should the investor play?
My ideal is for a venture capitalist to play
the role of a coach, not a big boss who
seeks a monthly report, says a Mumbaibased venture capitalist whose firm specialises in funding pre-revenue early
stage companies. This role not only
makes it easier to develop a rapport but,
importantly, provides the start-up with
sounding board.
Tarun Davda, director in investment
firm Matrix Partners India, sees the
investors role as a two-fold responsibility. Essentially, an entrepreneur needs
us to help with teething issues, and
among the biggest areas here is creating
a core leadership team since founders are
typically young graduates just out of IIT
with little experience of building an
organisation, he says.
The second role involves keeping the
founder from becoming inward-looking.
When you are building an organisation
anything in a start-up that isnt urgent
doesnt get done even though it is important! We need to keep the founder aware
of the competitive landscape, Davda
explains. The objective is to act as an early warning system for the entrepreneur.
He points to the regulatory work Matrix
>
THE STRATEGIST
did with Ola Cabs in the early stages so

that when the crisis over licensing of the
online tax-hailing business arose, the
company was hit less than its competitors.
Mentoring, adds Davda, also means
backing off occasionally and allowing
entrepreneurs to make mistakes from
which they can learn. Its important not
to be overbearing because the reality is
that we could sometimes be wrong too,
he says.
Pitch report
Most obviously the success of the
investor-entrepreneur relationship starts
with the nature of the pitch. Aggarwal of
Shopclues speaks from experience when
he says, No preparation is enough. The
investor hears 200 pitches in a month, so
he knows whos genuine and whos not.
He should not be under-estimated at any
point.
His tips for a start-up entrepreneur
meeting an investor: The entrepreneur
should bring out his full personality and
articulate his business strategy early on.
He should present the big picture of the
business hes proposing with all the data
points such as market size, eco system,
competition, money required, with a
three- to five-year view. Once you are
ready with the metrics, you have an edge.
Making the pitch, however, should
never involve hard-selling yourself,
Aggarwal adds. Never pat yourself on
the back even if the investor keeps a poker face.
Many messages, in fact, can be conveyed effectively through sub-liminal
clues. Aggarwal recalls his first meeting
with investors for ShopClues. I was
employed with Wall Street and since I had
travelled from San Francisco to Mumbai
I had little time to prepare. I wanted the
investors to see my ShopClues logo, rather
than give them my Wall Street card. So I
got the printer to have the ShopClues logo
on my laptop bag and on the laptop and I
got compliments from the investors for
that.
If I had given my Wall Street card,
they would have thought that I may not
be willing to leave that job. With the
Shopclues logo, I made my intent clear
and half my battle was won. (Disclosure:
In 2013, Aggarwal pleaded guilty to insider trading in his Wall Street firm, a case
that is still being heard.)
The pitch is also a good way for the
entrepreneur to check out the investor
too. Davda says he tells prospective entrepreneurs to consider three parameters
when they make their pitch. First, assess
partner quality. Second, gauge the time
and speed required to close the round of
funding. Third, weigh the valuation.
My advice to entrepreneurs is: please
be clear which of these is a priority and
make sure your partners are completely
aligned with it. I mean, its fine to say that
your priority is to optimise valuation
upfront it will save an unbelievable
amount of conflict later.
In fact, he suggests that if the partners priorities dont match, it would be
safer for the entrepreneur to walk away
from the investor than head into a relationship that ends in bitterness.
63
>
THE STRATEGIST
Copycats come under Amul fire

A well-known tag will help the brand crack down on those riding on its name
SOHINI DAS
Ahmedabad, 16 August
here is little that one does not know

about Amul. Its co-operative traditions, mass appeal and of course,
the punchy advertising the brand not
only has instant recall but is also associated with all things Indian. But success
breeds copycats and today we have everything from innerwear to auto component
companies naming themselves Amul.
Now, with the Intellectual Property
Appellate Board (IPAB) giving Amul a
well-known trademark the co-operative
expects things to change.
Gujarat Co-operative Milk Marketing
Federations (GCMMF) managing director
R S Sodhi welcomes the well known
trademark. It will stop other companies
that were cashing in on the brands popularity and Amuls pan-India presence,
he says.
The new status provides a brand with
requisite legal muscle to come down on
such companies. Will this lead to litiga-
tions in the future as Amul goes after other manufacturers using its name? Sodhi
feels it might. For a brand that has worked
hard to become the third most chosen
brand in the country after Parle and Clinic
Plus (IMRB-Kantor Brand Footprint survey), it would want to come down hard on
those misusing the name.
The Controller-General of Patents
Design & Trademarks, Department of
Industrial Policy and Promotion (DIPP),
Union Ministry of Commerce and
Industry, in a notification, approved and
categorised Amul as a well-known brand
in a list of 68 brands which includes Coca
Cola, Kodak, Wimbledon, Yahoo and
Indian ones like Bata, Bajaj, Bisleri, Nirma
and Infosys. As a result, Amul is now part
of a special category that is protected
from copycats even outside the country of
origin. Also these names cannot be used
by anyone else, even for dissimilar products.
It may be time therefore for entities
like the Amul Group of Companies based
out of Rajkot, which makes auto-compo-
64
nents, to take heed. Founded in 1988, the

company makes connecting rods, crank
shafts, cylinder blocks, cylinder heads
and camshafts and is a vendor to several
leading original equipment manufacturers (OEMs). Then there is Kolkata-based
JG Hosiery that makes Amul branded
innerwear. Despite several attempts, both
companies could not be contacted.
Harish Bijoor, brand expert and CEO of
Harish Bijoor Consults says, Any company which copies a popular brand name
basically wants to ride on the brand equity of that already popular brand. It gives
them a quick awareness and recall. They,
however, know that this is short-lived.
Bijoor feels that despite the hosiery company
or
for
that matter any other firm that
has copied Amuls brand name having to
rework their branding strategy, no significant impact on consumer preference is
expected. When they ride on another
brands recall, they want to quickly ride
the popularity wave. But end of the day,
the consumer would evaluate the product
>
THE STRATEGIST
they offer. Also, these companies may

already have achieved what they sought
to do. Having used the Amul brand to
connect with the customer, even if they
were to stop using the name, the consumer may still buy their products, provided, of course, their quality is not an
issue. Bijoor says, The window of time
that these companies buy before they are
stopped legally from using a popular
brand name does the trick for them.
It is the power and history of a brand
that copycat companies like these hope to
cash in on. Amul has dollops of both.
When it was first created, the legendary
Verghese Kurien looked for a name that
was Indian. He deliberately ignored the
advice of consultants who suggested that
they use a name with foreign ring given
that they were looking to wrest market
share from Polson, the then top selling
brand which was allegedly exploiting farmers by procuring milk at
very low rates. Amul is the short
form for Anand Milk Union Ltd.
Soon Amul became more than
just a milk and butter brand and
is today used as an umbrella for
all the products that GCMMF
markets.
Sodhi recollects, In those
days, India was a milk-deficit
country. Milk powder was imported. From a per capita consumption
of 110 grams per person to over 300
grams per person, the countrys dairy
industry
has
come
a
long
way, and Gujarats Amul has
indeed had a big role to play in
that. Sodhi also highlights
another milestone. In
the 1990s we came up
with the tagline of
Taste of India, and
it basically captures
the brands panIndia presence and
the
essence
of
nationalism
that
Kurien wanted to be
a part of the dairy
movement.
As a brand Amul has
not changed its mascot and
communication, sticking
with the original look and
keeping its focus on topical issues

over the years. According to Rahul
daCunha, managing director and creative
head, daCunha Communications, many
brands try something new even when it is
not required. We have not changed the
Amul Girl, and the topicals around it. And
it has worked for so many years, and not
65
just that, it is one of those homegrown

brands that have been able to carve a
niche and hold its own amidst a flurry of
foreign brands. For the ~21,000 crore
GCMMF, now selling across 50 countries,
being well-known is nothing new; but it
does feel good to have the world know
that.
>
THE STRATEGIST
Connecting better
Why geo-targeted
mobile advertising is no
longer a nice-to-have
strategy; its a must have
ANKITA RAI
onsider this: ~60,000 crore of instore retail purchases in India are

influenced by digital and for
mobile the figure is ~50,000 crore.
This number is estimated to grow significantly, with increasing penetration of
smartphones (140 million-plus, and estimated to grow to 500 million by 2020) and
growing internet users (300 million internet users, estimated to grow to 600 million
by 2020). Conversion rates of these mobile
enabled, digital-savvy shoppers are 40 per
cent higher (as per Deloitte) than the nondigitally influenced shoppers. This explosive growth of smartphones is making
mobile location-based services and marketing a big business opportunity, with an
estimated $4.5 billion of mobile advertising
in the US being location-based (rising to
over $10 billion by 2017, as per Cisco). Such
is the potential of location based advertising that Google has extended its geo-location ads, so far restricted to mobile adverting, to desktops.
Cut to India. Retailers are working overtime to tap the potential of this medium.
Take Madura Garments, which is using
location-based marketing to bring together
its stores and connect them with its online
portal Trendin for a seamless consumer
experience. At present consumers who purchase online can return products and claim
free alteration at any store in the vicinity
and can also shop online and pick the purchase at any nearby store. Says Shivanandan
Pare, head, e-commerce, Trendin.com, For
any location marketing to work, you need to
first recognise the customer, whether it is
the same customer that browsed the product
online and which stores she mostly visits
and at which location. You need a reference
point (previous shopping history, email id,

mobile number etc). For example, offers
provided to Trendin mobile app users and
push notifications through SMSes, have considerably bolstered our store traffic.
Now look at what Cafe Coffee Day is
doing. It collects data from stores and
reviews it periodically to understand which
store is getting how what sort of walk-in at
a particular time of the day and marries
that insight with consumer demographic
and personas. Each promotion is designed
for a particular cluster of consumers with a
specific persona, such as the way they
dress, their food preferences and so on.
Accordingly, boost-up activities are
planned. We use mobile for hyperlocal
activities more than the web as it enables us
to track down the location of the consumers
before triggering off a promotion. We have
our own customer data and also collect
data through Caf Moments programme.
We also work with mobile agencies, where
66
we reach out to consumers based on the

apps they have downloaded and provide
promotions at the app-notification level,
says Bidisha Nagaraj, group president, marketing, Coffee Day.
Experts say location specific advertising
works best in spontaneous categories. No
wonder Cafe Coffee Day has seen high clickthrough rates for most of its hyper local
offers on mobile phones. Evidently, location marketing is de rigueur for retailers
today. Says Kumar Rajagopalan, chief executive officer, Retailers Association of
India, For retailers, it is has become
extremely important to attract consumers
from their targeted trading catchment.
Gone are the days when retailers would
ensure that they were visible in various
newspapers, publications, maps or other
marketing mediums available and that
would be enough to reach their preferred
catchment in the particular location. Now,
thanks to mobile technology, retailers can
THE STRATEGIST
>
EXPERT TAKE
Make it contextual
leveraging geo-targeting and
mediums like mobile display while
taking advantage of dynamic
creative. Examples of this could be
geofencing gyms, parks and
basketball courts, The North Face
geofencing ski resorts, or a luggage
brand geofencing airports.
ANIL KAUL
Co-founder & CEO,
Absolutdata Analytics
Offers and coupons: Relevant

mobile coupons are very helpful to
engage shoppers in real time and
drive them to a nearby store to make
a purchase. In a survey conducted
recently, 51 per cent of shoppers said
that they are more likely to enter a
store and purchase something if they
receive a coupon on their mobile
device while they are near that
store.
In the past two years, the share of

search through mobile has gone up
and so have the social media
advertising revenues. Customers are
shopping on-the-go and omnichannel has redefined the digital
buyer journey. Here are the
following ways in which a smart
retailer can combine digital with
location based marketing
to increase revenue:
A retailer can track nearby
consumers through geo-tracking
and accordingly give them directions
to its closest stores. Thus, making
their offers locally relevant and
acquire an audience that is most
likely to convert. In other words, by
running ads showing where to view,
touch, and purchase their products,
retailers can close the gap between
brand engagement and product
purchase. Weve seen 10 per cent to
50 per cent improvements in clickthrough rates simply based on
adding something of local relevance,
even if it isnt driving in-store
traffic.
Location-based marketing (LBM) is

a great opportunity for consumer
products brands to connect with
their consumers wherever their
products are sold, either working
with their distribution
channel/retailers (co-marketing) or
independently from them. Using LBM
methods enables them to
communicate special offers or
discounts, with a call-to-action on
where the consumer can purchase
nearby. They can also communicate
about nearby events organised at by
the retailer for specific product
launches, demos, or free samples
and raise awareness through
associating a brand with a place,
time and context such as weather.
Retailers can also use location

marketing for creating brand
awareness by claiming a place with
broad reach and using display units
or SMS, with no call to action. Brands
can claim a place by associating
their messages with physical
locations in proximity through geofencing. This allows them to reach a
large number of people by
Location tools play a key role in

market research. Consumer products
companies can use location to better
understand where, how and when
their customers shop offline to
market more smartly to these
audiences whether thats with
out-of-home advertising, point of
purchase displays or identifying new
partnership opportunities.
enable product discovery and provide real

time offers to customers, when
they are in the shops proximity.
Some of the advertisements even
allow customers to click and discover offerings of the retailer via video, catalogues and
other rich content forms.
In short, the idea is not just to bring the
footfall to the store, but also to take the
store to the customer. Nagraj says data connectivity has today become hygiene as
opposed to five years back when a marketing programme had to be designed in a way
that it addressed a particular set of consumers who used smartphones. Some fear
cannibalisation from digital but that fear
could be unfounded. Pare of Madura
Garments says, We have not seen more
than 5 per cent overlap. We are using customer data through our mobile app, CRM
data and loyalty cards to provide locationspecific instant notifications to consumers
through mails and messages.
Getting it right
67
Remember, location-based marketing is

not simply about a richer and more personalised consumer experience, it also
about context. Marketers need to combine
consumer interactions with context, blending preferences and location. Says Vinay A
Bhoopatkar, chief operating officer, Van
Heusen India, While we have been using
GPS and bluetooth-enabled technology to
provide customers in the vicinity with realtime promotions, it is more tactical in
nature. The whole idea behind locationbased marketing is to attract footfalls to
the stores. Van Heusen has digital listening
centres where it collects customer data
from CRM, store, social data, loyalty cards
to understand what trends and the problems that plague the retail end. It also targets messaging through select kiosks activities in malls.
For the Future Group, location-based
marketing is about aggregating demand
locally and directing consumers to nearby
stores with contextual offers. Says Akshay
Mehrotra, chief marketing officer at Big
Bazaar, At Future Group, we are using location-based marketing to aggregate demand
of consumers. So if a consumer is looking
for a specific products online, we serve her
a location-specfic ad to direct her to the
nearest store. To enable such offers one not
>
THE STRATEGIST
only needs to digitise the inventory but also

target it on a geo-position basis. Both your
store and your ad words need to be connected.
So far traditional retailers have managed
print advertising on a local basis. Every city
and catchment area have a separate print
ad. We have been using the Google Lightbox
feature which digitises our ad to location
and have been doing so for our properties
like Wednesday offers etc, says Mehrotra.
With the growing dependence on
mobile, almost every social site such as
Facebook, LinkedIn and Twitter have integrated location-based services. Earlier,
while the consumer had to check in into a
particular place, now it has become more
passive as location services are perpetually on. That has given a lot of momentum to
location-based marketing. The third-party apps used by consumers are churning
out a lot of location-based data for advertisers. So if you tweet from a particular location, you may get offers relevant to that.
Sula Vineyard, for instance, gives discounts/offers to consumers if they check in
from its property. Similarly, Starbucks gives
incentives to consumers who tweet about it
from the caf, says Zafar Rais, CEO at
MindShift Interactive.
But all that marketing effort can go for a
toss if mobile data is switched off, says Rais.
Thus, offering free WiFi at a store can bring
with it some big pluses for marketers.
That said, no matter how smart customer engagement gets, it make business
senses only if it boosts conversion rates.
When working on a geo-targeted advertising, therefore, remember to build in a conversion matrix customers coming
though such offers versus customers coming naturally. This will help in identifying
the right context and the right content for
your deals.
68
>
THE STRATEGIST
A new social order

As digital marketing takes root, communication start-ups come of age
DEVINA JOSHI
he past two months stand witness

to a rush of start-ups in the digital
and mobile marketing arena,
whether we talk of Whats Your Problem,
a full service digital agency founded by
ex-Grey national creative director Amit
Akali, or former DDB Mudra hand Pratap
Boses digitally driven conglomerate,
The Social Street. Niche mobile marketing agencies are in vogue too Mogae
Medias venture, Mobocracy, and The
Mob, founded by Chraneeta Mann and
Nitin Suri (former NCDs at Rediffusion
and Dentsu, respectively), being cases in

point.
As eyeballs shift to the digital world,
ad spends seem to be following suit, albeit
at a slow pace. The growth in advertising
comes after a medium matures, says
Rohit Dadwal, managing director, Mobile
Marketing Association (MMA), Asia
Pacific. And this is just a seven-year old
market. To its credit, the digital advertising industry grew from ~3,010 crore in
2013 to ~4,350 crore in 2014, a growth of
around 45 per cent (source: FICCI-KPMG
Indian Media and Entertainment
Industry Report 2015). Mobile marketing
69
currently forms around 15-20 per cent of

that figure.
So what makes this industry exciting?
There are more than 300 million internet
users in India and around 173 million
mobile internet users (as of end-2014).
India is the fastest growing smartphones
market. Different formats of real-time,
engaging digital advertising and the constant evolution of measurement metrics
are making the medium a hard one to
miss for marketers.
So has digital marketing inched
beyond being an afterthought in the
media plan? What is its potential,
>
THE STRATEGIST
going forward?
EXPERT TAKE
A change in conversation
Work in progress
Three years back, mobile marketing stood

at ~180 crore, and it has increased threefold now. MMA predicts it will grow 150
per cent in three years time, while digital
growth will be 50-60 per cent. And were
mistaken if we think that rural India is far
behind, says Chraneeta Mann, cofounder of The Mob. Twenty-three per
cent of rural India and 27 per cent of
urban India use mobile internet. Those in
the hinterland are as addicted to
Facebook and WhatsApp as we are.
When the industry started out, the
main obstacles included lack of awareness, metrics and content. Using learnings from traditional media to benchmark
new media and expecting it to work
was another fallacy for advertisers. Now
lets put the changing landscape in
perspective. Bandwidth is improving
as 2G has given way to 3G and 4G.
The consumer loves the world of the
internet, watching videos and getting the
best deals, but data charges and the newness of smartphones technology are barriers. But these are temporary.
Approximately, 10 million new smartphone users are entering the market
every month.
It is hard to ignore, though, that an
average marketers comfort zone is still
traditional media. Nobody seems to be
making a return on investment (RoI) comparison between traditional and digital
media, says Leena Sharma, COO,
Mobocracy. A brand manager may
expect 10,000 clicks in one day to convert
to x number of sales but at the same
time, be comfortable spending crores of
rupees on TV and print and just track the
increase in call volumes or brand recall
scores. Where does this leave the digital
marketing industry then?
The potential
Ads for the mobile and digital space are
slowly being shot and edited differently.
There are mobile apparel catalogues that
are shot to be interactive in nature.
Today you can queue up for sales online,
pay by tweets, grab stuff for free from billboards by Bluetooth and create bite-sized
branded content for mobile, says Suri of
Despite significant
value and fast
growth, digital
advertising has a
long way to go.
Most of the
spending comes
from search; a
majority of the investment is made by
e-commerce companies, telecom and
real estate brands. The display
advertising business is almost a
reflection of what the brand does
offline, and social is a smaller part
of this pie.
India is still a market where
penetration is key and nothing delivers it
like a sharply-targeted television
campaign. The lack of measurement
system for digital advertising is another
factor for lower investments. Digital
communication is about content,
participation and dialogue. Mobilebased advertising is even more complex.
For growth, it has to break the existing
banner-SMS-app cycle. Mobile-based
agencies are not really low-hanging
fruits. The work coming out of these
shops may transform the mobile space if
they find ways to engage with mobile
subscribers. My hunch is that the gamechangers are coming, but not from these
new agencies, but from some outlier
start-ups.
The Mob.
Advertisers recognise that dual-screen
viewing (stacking and meshing) has been
on the rise for a few years, but India is yet
to catch up. Real-time advertising can
happen in many ways, including image
recognition and real-time bidding. Image
recognition involves getting input from
the consumer whether its a code or an
image and informing him immediately where it is available and at what price.
Real-time bidding is an automated way of
buying and selling customised ads, and
buying ad space individually and instantaneously. In the US, real-time bidding is
estimated to be a $9 billion business by
70
end-2015. In India, were still getting started.

Or take formats like content marketing, where India is catching up with the
West. Although expensive and not exactly RoI-driven, it can do wonders for brand
recall. Native advertising in its crudest
form, the advertorial, is moulding itself in
the realm of mobile advertising, says
Mann. As performance of banner ads
worsens, it is content marketing and
native ads that will expand the mobile
advertising market.
Agencies like Mobocracy are forging
partnerships with telcos, which allow
them access to real-time contextual
behaviour of consumers engaging with
brands on the mobile. Our content teams
shoot, direct, edit and animate in-house,
giving digital video content at competitive rates 50-100 videos (a whole years
plan) can be produced and created at the
price of one TVC, says Amit Akali, managing partner and creative head, Whats
Your Problem.
A deeper understanding
Consumers are digital natives, but most
companies are not, says Pratap Bose, and
this reflects in the media plan. To up the
understanding of digital marketing, startups claim to be creating ecosystems that
are younger and more nimble than
network agencies. The Social Street has
a youth marketing team headed by a
25 year-old, which caters to 18-25
year-olds only.
But clients are still stuck on either creating traditional handles on Twitter, or
pages on Facebook. We are still in the
like stages, says Bose. What do 20 million likes mean to a brand, really?
The time, therefore, is to conceive content as specific as WhatsApp films, or
interactive Instagram films, or mobilefirst entertainment. Businesses like ecommerce require nimble agency structures that react faster, says Mann, and
that is where start-ups can add value.
>
THE STRATEGIST
An uphill climb
There are no shortcuts for mass-segment brands looking to go
premium. Here are a few handy rules of thumb
Clockwise from left: Maruti Suzuki Nexa

dealership in New Delhi; VIP Lounge,
Mumbai; The Square, Bengaluru
ANKITA RAI
o take advantage of the growing

demand in the entry-level premium
car segment, Maruti Suzuki India
(MSIL) has just unveiled a new chain of dealership under the Nexa brand to showcase its
premium offerings. MSILs desire to serve
the premium end of the market is not new
over the years it has launched two products, the Grand Vitara SUV and premium
sedan Kizashi, to woo this market segment.
Unfortunately, these brands have not been
able to make the kind of impact the countrys largest carmaker had hoped for. In a
renewed push, MSIL has launched a new
brand, S-Cross, and is now overhauling its
distribution network.
MSIL is not the first one to try this.
Globally, carmakers Nissan, Toyota and
Honda have similar distribution models,
wherein they sell their luxury cars under
Infiniti, Lexus and Acura brands respectively.
And why single out automotive compa-
nies? Closer home, players like VIP

Industries and Cafe Coffee Day (CCD) have
treaded a similar path matching the premium quotient of a product with the manner in which it is presented to the customer.
VIP Industries has a separate chain for its
premium brand Carlton, while CCD currently has three different formats for three
different customer segments. Says Samit
Sinha, managing partner, Alchemist
Brand Consulting, A big part of the experience is, who else is in the showroom. We
don't want to rub shoulders with people
whom we don't think are like us.
Distribution, therefore, becomes crucial
for a volume brand trying to climb the ladder
to premiumness. So how can a brand gear its
distribution to successfully climb the value
chain?
Premium is what
premium does
Maruti has been in the business of selling
cars for almost 31 years. The market has
evolved and consumer expectations are
71
changing, says RS Kalsi, executive director,

marketing and sales, MSIL. Many of them
are third-generation buyers young achievers who are looking to upgrade to bigger
cars.
To woo this customer, the countrys
largest car maker will drop the Maruti name
from the bootlids of its premium products.
So the Ciaz and the S-Cross and the forthcoming YBA compact SUV will only see the
Suzuki part of the badge. The Maruti badge
doesn't command enough brand value in
the premium (~10 lakh-plus) segment, say
experts, and that is where the "Suzuki" or
S tag will bring in some pulling power.
The company also understands that having a handful of new brands will not serve
the purpose. The way they are showcased
and the manner in which consumer queries
are handled will be make or break. It is looking two sort this issue with a two-pronged
approach. First, as we have mentioned, the
new products will be retailed through a
chain distinct from its earlier one. Second,
the company will train a new set of people
>
THE STRATEGIST
to cater to the needs of the premium consumer.

To begin with, MSIL has hired people
from service sectors like hospitality, aviation and financial services and has roped in
Dale Carnegie to coach relationship managers on soft skills. These managers are
being given product and experiential training, which includes travel by air and luxury
hotel stays, so as to acclimatise them with the
way the new consumer thinks and acts. So
far, MSIL has trained 700 people and plans
to train 2,000 more. This financial year, MSIL
will roll out 100 showrooms. Around 70 to 75
per cent of the sales come from top 30 cities
and we are targeting them with our new
offerings, says Kalsi.
The Nexa showrooms boast of separate lounge areas for customers, a personal relationship manager for the entire
lifecycle of the product, paperless interaction and so on. We want to make the
customer feel pampered, says Kalsi.
A sound strategy, going by auto experts.
The maximum growth is at the entry level
premium segment, which MSIL has targeted. In this segment, one must note that the
brand makes more difference than the
product, says Abdul Majeed, partner, Price
waterhouseCoopers.
In a way, MSIL will take the route VIP
Industries has taken earlier with its Carlton
range, targeted at the premium segment of
business travelers. Indeed, VIP doesn't offer
all its products across all channels. It has
five luggage brands in its portfolio: Caprese,
Carlton, Skybags, Alfa, Aristocrat and
Footloose. The premium brand Carlton is
available at only at 350 touchpoints, while
VIP brands are available at 4,500 touch
points. The reason is the same: premium
brands demand a premium atmosphere.
We offer Carlton only at our VIP premium
lounges. Even at these lounges, there is a
separate section for Carlton. We are also
opening exclusive stores for Carlton, says
Sudip Ghose, vice-president, marketing, VIP
Industries. Currently, there is one exclusive
Carlton store at the Mumbai Airport and the
company will launch another one at the
Delhi Airport soon. Carlton contributes 5 to
6 per cent of VIPs sales and is growing at 40
per cent annually.
VIP also realises that training the sales
staff at showrooms is important. You have
to have SEC A, serving SEC A, says Ghose.
EXPERT TAKE
Not everyones cup of tea

For mass-segment
businesses desiring to
move up the price
curve, it is important
to create new
channels that can
stand apart from the
previous offerings
DEVANGSHU
and, if feasible, to
DUTTA
create entirely
different
Chief executive,
brands as well.
Third Eyesight
From the
consumers point of
view, the expected purchase experience
and service levels at the higher price point
need to be better. So merely allocating a
segment of the existing distribution
network will not be enough. The store for
the new premium product needs to feel
complete in itself. Separate channels are
also vital to achieve a service-cost
balance and to have consistency within
any specific outlet.
However, the biggest challenge to a
premiumisation attempt by a mass brand
is outside its control whether
consumers will accept that the new
offering.
Having a critical mass is another
significant challenge, as the investments
in creating and maintaining a premium
offering would be significant. The third
challenge is creating a culture and
processes, at least for a premiumdedicated team that will be alien to the
rest of the organisation. This requires
willingness to invest, patience and
sponsorship at the highest levels of the
organisations leadership.
The sales managers at premium stores need
to be groomed for retail so that he/she asks
the right questions when interacting with
consumers. For instance, when selling a
premium brand, you don't ask the customer
her budget.
Ghose admits it is difficult to turn a volume brand into a premium one. It is better
to start afresh without any baggage, adds
Ghose, no pun intended.
Coffee chain Cafe Coffee Day (CCD),
72
which has developed multiple formats to

differentiate customer segments (such as
CCD targeting the value-conscious youth,
The Lounge targeting affluent customers
and The Square catering to coffee connoisseurs), believes focusing on the uniqueness
of the offering and experience are the pillars
on which one ought to position a premium
brand. The most important consideration
before a brand gets into a premium slot is to
evaluate the brand stretch-ability, says
Bidisha Nagaraj, group president, marketing,
CCD.
CCDs The Square sets itself apart on service and ambience. The outlet design is minimalist and the furniture contemporary.
There are seven Square outlets currently.
Two sides to the coin
Given the high stakes, some experts warn
brands from being dazzled by the lure of
premiumness. Most Indian brands fail to
recognise that you dont necessarily have to
serve the whole spectrum of the market
because it looks attractive, says Saurabh
Uboweja, brand strategist and CEO, Brands
of Desire.
If you are true to your definition and keep
upgrading brand experiences around your
core, you will succeed in the long-term.
In any case, changing consumer perception about a brand is a tough call. In case of
MSIL, the biggest challenge would be how
successfully it is able to change the perception of being a budget, family car manufacturer, says Amit Kaushik, principal analyst,
IHS Automotive.
Yes, there is a way to do it like VIP has
done by having a different brand altogether. Samsonite, on its part, acquired luxury US brand Hartmann after it failed to create its own luxury brand Black Label. If Tata
Motors created a luxury buying experience
in a new dealer format and put the Jaguars
to sell underneath, you can imagine the kind
of brand dilution it would cause to Jaguar,
muses Uboweja. The secret to long-term
sustainable equity creation is let your
brands be, make them strong, make them
relevant but dont change them.
That perhaps is the reason for calling the
S-Cross just that and reserving the MarutiSuzuki tag for the range spanning Alto 800
to the Swift DZire.
>
THE STRATEGIST
Two suspensions &

sleight of hand
The recent verdict on the IPL has sent two teams packing and set tongues wagging
about the future of some of their players and, of course, the game in this format.
But it all seems like a storm in a teacup, writes Ambi Parameswaran
Chennai Super Kings M S Dhoni and Rajasthan Royals Shane Watson find themselves without teams
he dust is yet to settle on the verdict by retired Supreme Court

Chief Justice of India, R M Lodha,
and there is speculation about what will
be the fate of Chennai Super Kings (CSK)
and Rajasthan Royals (RR). Will they have
to be in hiding for two years? Should IPL

induct two new teams for just two years
and resurrect CSK and RR after the suspension period is over? What happens to
the cricketers who are with the CSK and
RR teams? What happens to their brand
73
equity,
their
multi-million-dollar
endorsements?
For a start, this is not the first time a
sports league has been embroiled in controversy, and this will not be the last time.
In the book on advertising legend Albert
>
THE STRATEGIST
Lasker The Man Who Sold America, there

is a whole chapter on how an independent commission had to investigate the
shenanigans of teams, owners and players
of the Baseball League as far back as in the
1920s.
Coming to the questions I have raised,
let me start with the last one. The cricketers brand equity will not get tarnished
one wee bit. If, however, they are not
going to be playing the next Indian
Premier League (IPL) due to the ban on
their teams, they will suffer a bit of brand
erosion, up until the next big tournament.
If at all they need to consider any change
in their approach in the wake of the verdict, they need to see if they can make a
small adjustment in their endorsement
fees. One idea that I am sure many would
explore is to extend the contract that the
players have with the brands they endorse
by 45 days, to compensate for the loss of
IPL visibility.
What then would be the fate of the
CSK and RR teams? There is some news
that the Board of Control for Cricket in
India (BCCI) may run these teams almost
like a governor-ruled state administered
from the Centre, without an active legislature. That is a possible solution which
What if CSK becomes Coimbatore

Super Kings and RR becomes
Rajputana Royals? The team
composition stays the same. The
ownership moves to a co-operative
body owned by the players
themselves and supported by BCCI
may keep everyone happy. Now let us

examine some interesting creative solutions that may also provide some new
twists to this tale.
First, a bit about cities and their
changing names.
When Bombay became Mumbai many
companies and undertakings that worked
with the citys administration and allied
services faced a problem. They were very
well known as acronyms starting with the
alphabet B. With the change in the citys
name, they were faced with the prospect
of having to rethink their names and the
acronyms. What would happen if they
were all forced to change from B to M?
But some wise brand guru, not me,
thought of an elegant solution. What if
the organisations could work out a way of
retaining B and yet take into account
the citys new name Mumbai. The word
74
Brihan is derived from the Sanskrit word

Brihat which means big/major, so
BrihanMumbai essentially means Bigger
or Greater Mumbai. This solution managed to save the brands that used B an
enormous amount of headache. And this
also saved their acronym brands. So BMC
can remain BMC [unfortunately as some
would say]. And BEST could remain
BEST. What an elegant solution!
Unfortunately, when Madras became
Chennai they did not think the change
through. So, instead of going from Madras
to say MahaChennai, they moved from
M to C. So MMC became CMC [the municipal corporation had to change its name;
the private institutions continued in their
old avatar, Madras Christian College
stayed MCC]. The Madras Refineries Ltd
became Chennai Petroleum Corporation
Ltd. What a loss of brand recognition for
the entities involved!
Taking a cue from this, here is, therefore, an elegant solution to handle the
CSK and RR vanvaas problem. What if
CSK becomes Coimbatore Super Kings
and RR becomes the Rajputana Royals?
The team composition stays the same.
The ownership moves to a co-operative
body owned by the players themselves
and supported by BCCI. And two years
later, the teams revert to their old names
Chennai and Rajasthan resurrected in all
their glory.
I know that you are reading this article
and wondering why he is making fun of
such a serious happening to my favourite
team, CSK or/and RR. But then isnt IPL
all about fun and games anyway?
The author is Executive Director at FCB Ulka
Advertising
>
THE STRATEGIST
The founders dilemma

Do founders always make the best leaders? Recent developments at
Housing.com show a founders passion and his ability to inspire
people are no measure of his management prowess
DEVINA JOSHI
n recent weeks, Housing.com cofounder and CEO Rahul Yadav has

made news headlines for his public
outbursts on his differences with the ventures investors. While it is not unusual for
entrepreneurs to clash with their venture
capital backers, such instances raise an
important question: do founders always
make the best leaders?
History is replete with examples that
show that the founders ability to inspire
people and passion may not be enough to
enable their ventures to capitalise fully on
the opportunities ahead of them. Many
founders believe that if they have successfully launched an enterprise, that is
ample proof of their management
prowess, but that is clearly not how it
works. So what are the qualities founders
need to transition into great leaders as
their enterprises grow? What other qualities and skills apart from passion and
the ability to inspire people do they
need to deal with challenges that accompany scale?
Right-brain thinking
I never took a day off in my twenties.
Not one. This famous declaration by
Microsoft co-founder Bill Gates probably
rings
a
bell
with
every
entrepreneur/founder, echoing the sheer
effort, ideation and sacrifice that go into
a new venture. But it takes more than just
hard work to get the show on the road.
Many entrepreneurs come to believe
that their enterprise is their baby. A
founder doesnt work for wages, says TV
Mohandas Pai, Infosys veteran and Aarin
Capital co-founder. Emotion and selfbelief also carry founders through bleak
moments in business. Only a certain
cussedness can keep an entrepreneur
going when all evidence points to a

depressing future, says afaqs.com cofounder
and
director
Sreekant
Khandekar.
Clearly, a lot of emotion is involved,
which enables the founder to work much
75
harder than professional managers,

sometimes compromising on health, private life etc. In many cases, founders are
known to initially work without high
compensation, often less than some of
their professional managers. Such emo-
THE STRATEGIST
>
EXPERT
TAKE
From boys to men
KAVIL RAMACHANDRAN,
EXECUTIVE DIRECTOR,
THOMAS SCHMIDHEINY
CENTRE FOR FAMILY
ENTERPRISE, ISB
A good founder spots an

untapped opportunity,
passionately pursues it, show
willingness to bear hardship and
work hard while plunging into
the unknown. He has to be
persistent in raising
complementary resources, often
financial, and pursue the goal
vigorously. It is a lonely journey.
The key qualities required to
build a venture are not all the
same. One has to be a visionary
with strategic thinking and
tional attachment begets its own set of

problems, the presence of ego being one
of them. The quality of your ego matters, adds Alok Kejriwal, founder,
games2win, and creator of entrepreneurial social network, TheRodinhoods.
Take a Steve Jobs, who was egoistic
about himself leading to a dislike for him
in the organisation, versus a Tim Cook
who is the picture of humility personally,
but is egoistic about Apple.
It is like this: one needs different
mindsets while designing a car and while
driving it. What sets a successful founder
apart is realising which part of the journey he is at and whether he wishes to
transcend from there. This leads to the
next point: when does a founder realise
he cannot run a one-man show? How best
should he handle the transition?
Delegate, delegate, delegate
While entrepreneur-founders are
very decisive and hands-on, corporate
leaders are generally better people managers, admits Rajesh Magow, co-founder
and CEO, MakeMyTrip India. In cases
where founders dont scale quickly or if
their vision is limiting the companys
potential, the professional manager can
step in to improve execution. At
Housing, initially I manned the sales
team, and all department heads reported
in to me. Now I have made clusters of
departments and layered the reporting
structure, says Housing.coms Yadav. If
capabilities to scale up through

successful execution. This will
demand building a team with
excellent communication and
influential skills.
In such a transition, a
founder will have to realise that
not everyone would agree with
the approaches and solutions
identified by him/her. One
should be able to listen to others
and work with detached
passion. Flexibility has to be a
fundamental value as
assumptions and realities could
you are slow at delegation, you will hit

your limit as workload increases.
A founder needs to create a team with
exclusive skills, allowing room for a
leader to emerge to whom the founder
can eventually hand over the reins of the
organisation. People skills are, therefore,
key. A founder too needs to play different
roles at different points of the organisations life cycle. One of the challenges
that a founder faces includes knowing
when to let go, muses Anil Sachdev,
founder and CEO, School of Inspired
Leadership.
Escalations to the founder are very
common initially, which means he also
needs to possess negotiation and conflict resolution skills. Take Uber as an
example, says Vijay Shekhar Sharma,
founder, Paytm. The company shoulders legal blame in virtually every market, but the founders have been successful in training management teams or else
it would not have expanded so much so
soon.
Furthermore, being too experimental
later on may backfire. The startup style,
useful when a company was small, flexible and agile cannot be applied later as
it takes a long time to implement decisions. If I have a 10-member team, I can
change my mind every two days, but if I
am running a 30,000-strong organisation, I cannot do that. Founders must
accept this reality, says Praveen Sinha,
co-founder, Jabong.
76
be quite different in a turbulent

environment. This is particularly
so when entrepreneurs have to
work with outside investors who
may have different views of the
situation.
In essence, founders have to
hit the ground running. Boys will
have to grow up to become
men. They can no longer be
driven by impulses, but will have
to show wisdom. Only then will
they leave the founders phase
and become entrepreneurial
leaders.
Connecting the dots

Because an entrepreneur has been
working at the company from day one,
he knows every nuance of his business
rather well. Take media mogul and News
Corporation founder Rupert Murdoch.
On acquiring The Sun (London) in 1969,
his proposal to convert the newspaper
from a broadsheet to a tabloid, faced
opposition from printers who said the
printing machine couldnt be accordingly adjusted. In one meeting, Murdoch
reportedly climbed atop one of the
machines, opened a cabinet, and pulled
out a bar that, when placed in a certain
way, converted the machine to a printer of
tabloids. An important lesson: being in
control of the finer aspects of a business
ensures you are never out of the game.
One great advantage founders have is
that they move keeping in mind the big
picture. Infosys NR Narayana Murthy
was very clear about what he wanted to do
with the company to build it into a global business, says Pai.
One could argue that some of these
qualities of a founder can also be found in
a professional manager, but one must
understand that leadership is the superset here. A few elements of leadership
can make a founder, but all founders may
not be great organisational leaders.
The question, really, should be about
when should an organisation move from
the energy of the founder-creator to that
of a leader-manager.
THE STRATEGIST
>
Saint-Gobains
India march
The 350-year-old French glassmaker is
stepping into the Tier-III and -IV cities
B Santhanam (pictured), president (flat glass), South Asia, Malaysia and Egypt of Saint-Gobain, says the company brought the promise
of clarity through very high technological process and took a simple idea which the consumer had and owned it
T E NARASIMHAN
Chennai, 14 June
hen Saint-Gobain entered the

market two decades ago it knew
that it had a tough trek ahead.
India was never going to be an easy market
to break into. But, nothing had prepared
the French glassmaker for this: Being mistaken
for
an education conglomerate! Everywhere it
went, Saint was shortened to St and people,
more familiar with missionary-run educational institutions, assumed that it was
another school in the making. It took years
for the company to reclaim its identity and
establish its base in the glass business. No
surprise then that it considers the instant

recall that the name now has, to be a
greater achievement than the ~5,000-crore
business that it has built in India.
It wasnt an easy journey, recalls B
Santhanam, president, (flat glass) South
Asia,
Malaysia
and
Egypt.
It
was a very big challenge to create a brand
in India. Especially since the company
has existed for nearly three centuries and
in many parts of the world is a household
name, he said. Not only was it struggling
with an identity crisis, the company was
also trapped in a market dominated by
unorganised players.
It came to India in 1996, by acquiring a
majority stake in Grindwell Norton.
77
Despite the initial difficulties, the company persisted, and in 2000, it started its own
glass
manufacturing
unit
at
Sriperumbudur, near Chennai. In June
2011, it acquired the Gujarat-based Sezal
Glass Floatline and last year it
inaugurated a ~1,000 crore plant at
Rajasthan. The company expects to
increase its total turnover by ~1,000-crore
this year.
The industry is expected to touch ~340
billion(~34,000 crore) in 2015-16, up from
~225 billion(~22,500 crore) in the current
year, according to an Assocham study but
even today, over 70 per cent is in the unorganised sector. The use of glass is rising
and slowly large glassmakers such as Saint-
>
THE STRATEGIST
Gobain, ASAHI Glass India, Hindustan

National Glass & Industries, Piramal Glass,
Owen Corning, Triveni Glass and others
are gaining prominence. The industry is
expected to grow at compound annual
growth rate (CAGR) of 15 per cent over the
next three years.
Saint-Gobain believes that the work
that it has put in, in building its brand,
will help make the most of emerging
opportunities. Continuous innovation and
product development activities have
helped incorporate some of the latest techniques and designs in its glass says
the
company.
It
has
spent
extensively
on
marketing
and communication initiatives too. Its
brand line says The future of Glass, since
1665 to convey the message that the company brings in reliability and heritage,
along with quality and innovation says
Santhanam.
It is also focusing on developing the
most modern product. Market research
shows that the world over, the quality of
glass is measured by its transparency. Glass
is good if it is invisible. The company incorporated this into their product development process and also effectively communicated this to its buyers. We brought
the promise of clarity through very high
technological process. We took a simple
idea which the consumer had and owned
it, said Santhanam.
The company believes that it was able
to build a connection with the buyers for
two reasons: One, is of course, the product
was being tailored to meet the need of the
times and delivering on the promise of
quality. But an equally important part was
played by the humour-laced brand campaign that it launched. Sophistication,
humour and simplicity that is really
what brand building is about, said
Santhanam.
How does the company know its brand
building efforts are paying off? Well they
conducted
a
survey
and 50 per cent of them spontaneously
said Saint Gobain is what they thought of
when they saw glass, said Santhanam,
adding that all of them know the company
as a building material company, not just a
glass company. Globally, flat glass brings in
22 per cent of the total revenue, 26 per cent
is from construction products, 46 per cent
GLASS WALK
Saint-Gobain is in 64 countries,
41 billions. It
turnover in 2014 was $4
has 1,90,000 employees .
IN INDIA:
5,000 crore
| Turnover in 2014: ~5
| Nearly 4-5 per cent of the
revenue is invested in
developing and creating
innovative materials
| Tied up with IIT- Hyderabad on
cool roofing and day lighting
solutions;
with IIT-Madras for affordable
housing solutions, with
IIT-Delhi for energy efficient
materials
| 4,000 patents in the last 10 years
and one
in four products sold today has
been developed in the last five
years
Source: Company reports
from building materials and six per cent

from packaging. In India, 70 per cent of the
revenue comes from architects for construction and building purposes. And so,
he says, To accomplish this in a country
like India in 15 years was a tremendous
effort, said Santhanam.
The company is now moving into tierIII and -IV cities. We actually stopped
working hard on the metros, because in
the
metros
we
have
a
strong position and also in tier-II cities,
said Santhanam. For that the company
is going back to the drawing board to
make their glass not only the best in technology and most relevant to modern day
building needs but also to make it affordable. Now, that is a tough combination to
crack.
78
>
THE STRATEGIST
On a secure footing
CP Plus new campaign marks its foray into the home segment, breaking the
perception that video surveillance is meant for large establishments
ANKITA RAI
n the list of odd categories to take to

advertising, CCTVs (Closed-circuit television) would probably top the list. Often
considered expensive, CCTVs are associated with government establishments, enterprises and public places. However, newgeneration HD CCTVs are now available
with wireless, plug-in facilities and activities
can be viewed real-time on a smartphone
from a remote location. As such security
solutions become more affordable and userfriendly, players are increasingly looking to
cater to the day-to-day security needs of
consumers. It is to capture this growing B2C
(home/residential market) video surveillance that a player in this space, CP Plus,
launched a marketing campaign titled
Uparwala sab dekh raha hai.
"The campaign aims to break the myth
that CCTV cameras are expensive and only
meant for large establishments a major
deterrent for players like us looking to
expand in home and B2C segments, says
Yogesh Dutta, COO, CP Plus.
It is perhaps the first cohesive campaign
in a category largely dominated by local players who mostly sell products sourced from
China with no assurance on quality and service. There is no big brand in the video surveillance industry that people are aware of.
The major banes in the segment have been
quality and performance. Those who have
installed CCTVs are not satisfied with the
quality, says Dutta. Clearly, here is an unorganised market dominated by local players.
To break the clutter, we decided to come up
with a price-point which a local company
cannot match both in terms of quality and
service, says Dutta. The security cameras
from CP Plus start at ~1,999.
Consider these industry numbers:
Indias video surveillance market is expected to reach $615.5 million in 2018 (source:
IHS). Though analogue based surveillance
systems accounts for a majority of the share
(67.8 per cent) in the overall market, IP based

surveillance systems are expected to grow
with a relatively higher CAGR of 41.78 per
cent from 2011-2016 ( 6W research). The
market is witnessing a shift towards IP surveillance cameras on account of declining
prices. The category is highly fragmented
very few companies manufacture CCTV
and video surveillance equipment in India
and the vast majority of them import products from other Asian countries. So there is
hardly any brand recall in the category.
The category has been focused on B2B.
There is a need gap that exist in the home
segment. We saw huge opportunity for the
brand to play in this space. The campaign
addresses all aspects of security, both institutional and social, says Abhinav Kaushik,
vice-president, Dentsu Marcom, the creative agency for the campaign.
The campaign comprises three-films
each depicting a day-to-day situation where
the security camera can act as a deterrent.
The first TVC revolves around ragging, second on eve-teasing and third is about a
house-maid. The communication has gone
beyond the usual product narrative to cap-
79
ture the emotional need of security to

build reassurance beyond a mere rational
and clinical product promise. This led to
the brand sign-off, upar wala sabh dekh
raha hai, a common colloquial Hindi phrase
to signify you are watched, says Vishal
Mittal, senior creative director, Dentsu
Marcom.
The category has matured from being
purely B2B to B2C. We decided the communication has to be homogeneous," says
Dutta. The target audience for the campaign
comprises influencers and decision-makers. The task is as much about awareness as
it is about creating a market segment. The
campaign is further supported by print,
packaging, radio and outdoor. Also the
brand has tied-up with e-commerce sites
for a wider reach. The company has a panIndia presence and covers 900 towns.
The video feed from CP Plus IP CCTV
cameras (HD) can be watched on the company's mobile app installed on a smartphone and live streaming of the feed can be
checked at any time," says Dutta.
Since the launch of campaign in May,
the company claims to have registered a
manifold increase in queries. When a new
brand enters into the consumer space, there
is lot of apprehension as to how it will be
recognised in the marketplace. You dont
want to get lost. There was a discussion
whether we should go for celebrity endorsement. However, most of the celebrities at
this juncture are endorsing multiple brands.
So we decided against it, says Yogesh. CP
Plus launched with IPL and tied up with
Rajasthan Royals as their security partner
and lead sponsor. It also did outdoor communication. Thereafter, the TV commercials were launched along with tie-ups with
FM (Radio Mirchi) and PVR Cinemas. In the
third phase of the campaign, starting July,
the company will focus on digital activities.
According to industry estimates, the
total budget of the campaign is around ~
30-60 crore.
>
THE STRATEGIST
Ads that crossed the line

The print ad featuring actress Aishwarya Rai Bachchan being waited upon by a child
slave is not the only piece of work that courted controversy recently.
VIVEAT SUSAN PINTO
Mumbai, 3 May
ollywood
star
Aishwarya
Rai
Bachchans brush
with controversy recently
for an ad she shot for Kalyan
Jewellers is not the only
instance of brands courting
controversy. Examples are
galore of how advertisers and
their agencies in their quest
to be different have gone
overboard
with
their
advertising.
Consider
this:
On
Saturday, when Nepal was
rocked by a devastating
earthquake, online eyewear
site Lenskart used the calamity to promote an offer on
Facebook asking users to
Shake it off like this
Earthquake.
Predictably,
there was a furore on social
media over the promotion,
prompting the e-tailer to come
out with an immediate
apology.
Consider another one: The
soup that Ford Figo and its agency landed themselves into when they released a
controversial poster campaign two years
ago. Uploaded on the web, it attracted
worldwide criticism for projecting popular figures Paris Hilton, Silvio Berlusconi
and the Kardashian sisters in poor light.
The campaign, more importantly, put the
spotlight firmly on the phenomenon of
scamming (where ads are created purely
to win awards) in Indian advertising, cost
JWT Indias chief creative officer Bobby
Pawar his job (JWTs specialist unit Blue
Hive had created the ads) and saw some
heads roll at Ford India too.
Of course, there was the unpopular
paign, first apologised for the

Kurl-On ads last year that In some cases,
series, then changed its stand,
were in the same vein as Ford brands have gone
when executive chairman
Figo. An illustration of beyond issuing
Piyush Pandey said that it was
Pakistani
activist mere apologies
and Nobel laureate Malala and rallied around a campaign for which his
Yousufzai was shown bounc- a cause when their agency had received a legitiing back to life after being communication has mate go-ahead from the advertiser.
shot in the head in one such come under attack
One more example of a conad in the series. One more
troversial ad roundly criticised
showed the late Steve Jobs
for its content was the one for Titans
bouncing back after being shown the door
Fastrack brand featuring a female model
(an allusion to his ouster at Apple before
coming back to take it to glory). The third wrapped in a ribbon titled Sale. Released
both in print and outdoor early last year,
ad in the series showed Mahatma Gandhi
Titan had to quickly issue an apology
as a young lawyer thrown out of the train
only to return as the Father of the Nation. when protests grew both online and
offline for objectifying women.
O&M, the creator of the above cam-
80
>
THE STRATEGIST
Globally, there have been some glaring

examples of brands crossing the line
Italian apparel maker Benetton three
years ago came up with its Unhate campaign featuring among others former
pope Benedict XVI kissing the Imam of
the Al-Azhar mosque in Cairo. US
President Barack Obama was seen kissing
the late Venezuelan President Hugo
Chavez and so was former French
President Nicholas Sarkozy kissing
German Chancellor Angela Merkel.
The question is why do brands leap
into controversy when it could invite
nothing but trouble? KV Sridhar, chief
creative officer, SapientNitro, says,
Sometimes it could be the DNA of a
brand like it is in the case of Benetton or
even Fastrack, which has addressed
issues such as homosexuality in previous
campaigns (Fastracks Coming out of the
Closet series two years ago). A brands
DNA could goad it to pick up subjects
others wouldnt dare touch. Sometimes, it
is also the category that could give you the
creative licence to explore themes and
subjects you would otherwise be wary
about. In the Kalyan case, the above doesnt apply. I think, it was plain oversight
and ignorance that did them in.
Something that was acceptable centuries
ago will not be appreciated now. Child
labour and discrimination based on skin
colour are two such issues, which the ad
projects. They should have known that.
In some cases, brands have gone
beyond issuing mere apologies and rallied around a cause when their communication has come under attack. Like
what American retailer Gap did two years
ago when one of its ads featuring a Sikh
model was defaced in a subway. To show
solidarity with the model and the cause of
fighting racism, Gap changed its display
image on its twitter handle to feature the
same ad that was defaced by vandals. Gap
was lauded for its effort both in mainline
and social media.
In many respects, social media has
become a watchdog of sorts, says Manish
Bhatt, founder-director, Scarecrow
Communications. This means both
advertisers and agencies have to be cautious with their advertising. Even if you
choose to walk the tightrope between
what is acceptable and what is not with
your communication, you need to do it

tastefully and with clear understanding
and purpose of what you wish to communicate, he says.
81
>
THE STRATEGIST
Pepsi MTV Indies helped

by its branded content
The channels first year has seen it reach 25 million households and make a profit
An indie band performing at the MTV Indies Spiro, a four-day festival that the channel hopes can be held through the year
URVI MALVANIA
Mumbai, 5 April
hen Viacom18 launched PepsiMTV Indies in 2014, it

was a largely new concept,
geared to target the subculture of independent (indie) music among the youth.
Even though Indian bands have been
around for decades, independent music
started getting commercial viability only
in the last few years. Music festivals such
as NH7 Weekender and shows like Sound
Trekking on Fox Traveller gave it further
credence.
A year later, Indies seems to have done
well for itself, going by Viacom18s claims.
The channel co-branded with another
youth icon, Pepsi, has reached 25 million
households (18 per cent of the 139 million paid C&S households) in a 2014. As a
niche youth channel, it has averaged
around 10 million viewers a week, comparable to niche English general entertainment channels (crime, comedy, etc).
Not just viewership, officials at the
channel, say that it has turned in profits
in the first year itself.
Of course, it has helped that independent music is cheaper to acquire than
Hindi film music that carries hefty price
tags as only a handful of players own most
of the inventory.
Moreover, MTV had existing content
and programmes to get started such as
MTV Unplugged, Roots and Sound Trippin
that highlight new independent artistes
and live performances.
82
Besides the coup of getting a brand

like PepsiCos flagship cola as a platinum
sponsor, to co-brand the channel,
Viacom18 has ensured a steady flow of
branded content to keep the cash register
ringing. Indies has so far partnered with
Ray-Ban (for Never Hide Sound) and Blue
Frog (the pub-music venue). A very popular music collaboration show, The
Dewarists, that was earlier on Star World,
too, came on board, sponsored by Dewars
(brand by Bacardi).
While the channel is niche, it has
found traction among a very targeted
audience which has a prominent urban
presence. This makes the channel attractive to advertisers with such needs. Also,
they offer content like indie movies and
stand-up comedy shows, which provide a
>
THE STRATEGIST
variety that advertisers look for, says a

media planner.
Viacom18 is now ramping up Indies
live-events quotient which will boost revenues and also create fresh content for
the channel to show, as most of indie
music is often in audio form, given the
artistes limited resources.
Live performance being a veritable
part of independent music, the channel
along with Viacom18s events subsidiary,
INS, organised a four-day event spanning
cinema, art, comedy besides music, called
Spiro.
The best way to enjoy the independent subculture is through live experiences. Through the emergence of Spiro,
we are bringing the indie side of life closer to where our audiences are. We are
looking forward to collaborating with the
artists, celebrate new talent. Until now,
we have supported events in the indie
music space but this is the first time we
are executing one from start to finish,
says Aditya Swamy, business head, MTV
India and Pepsi MTV Indies.
Of course, Spiro would weave its way
to other cities as well, with the plan of
making the event sustainable through the
year. Indies is also increasingly looking to
tap
non-music
content
in
the indie scene through co-creation and
revenue-share models.
In keeping with the profile of its audience, the channel has also used the
mobile and social media platforms heavily. While we have broadcast as one of the
main pillars, we are heavily invested in
the social platform and the mobile platform to keep the viewers engaged. From
the start we have been aggressive with
our mobile app, and we launched the
revamped version to coincide with the
first year anniversary, says Swamy.
The recently-released Ficci-KPMG
India media and entertainment industry,
2015 report says that the shift of ad money from TV to digital has been faster
among advertisers targeting the youth
than the industry average, which would
help channels investing in their digital
presence and across screens.
Indies would have to look at ways
around the sectoral challenges for music
channels. As the Ficci-KPMG report notes
that while all the large players have
apps and online channels, YouTube and

other services like Gaana and Saavn are
looming threats (more Indians consume
music on YouTube than the three leading
music channels that air Bollywood music,
combined).
YouTube, says Swamy, has played an
important role in generating content for
Indies. In this space, there is no scope for
competition. It is a growing genre and
everyone realises that there is need to collaborate in the eco-system. So, instead of
versus, the attitude is about and.
YouTube, instead of eating into our consumption, acts like a feeding pipe for content. There are many artistes who have
had hits on the video-streaming platform,
and Indies has helped them reach a wider
audience through its app, broadcast and
social presence, says Swamy.
83
>
THE STRATEGIST
Small proves big for Merc

But the German giant has a tough task ahead to ensure that its lead over Audi
isnt limited to the January-March quarter alone
SWARAJ BAGGONKAR
Mumbai, 12 April
he launch of compact luxury cars,

the size of which are slightly larger
than Maruti Swift Dzire but priced
four times higher, was a calculated risk
Mercedes-Benz took in India when its back
was against the wall in 2012.
Apart from a possible conflict with ultra
luxe image, the launch of the two smallest
cars in its portfolio also meant competing
against Honda Accord, Toyota Camry and
Nissan Teana which operate in that price
band.
But the small step meant a giant leap
for Merc in India. The company, which had
slipped to number three position while its

fellow German rivals BMW and Audi stole
the show, got back in the numbers game
only in 2013 when the A-Class and B-Class
(launched in 2012) went on sale. At ~21.49
lakh, the hatchbacks targeted at the youth
segment became the entry cars for the luxury brand whose entry price otherwise was
over ~30 lakh with the C-Class.
Demand for the two compact cars hit
such a level that Mercedes-Benz exhausted its India quota faster than anticipated.
Repeated requests were made to Stuttgart
(Mercedes headquarters in Germany) to
increase the allotment for India even as
the two models remained totally imported products.
84
As of today the company has added

two more models on the same platform
GLA-Class, a compact sports utility vehicle and CLA-Class, a compact sedan
while adding several variants to the AClass and B-Class to keep the excitement
alive.
Compact luxury products today account
for nearly a third of Mercedes-Benzs total
India volumes and stretches from ~25 lakh to
~35 lakh. Riding high on these four compact
models and aided by warhorses C-Class and
E-Class, Mercedes has now dethroned Audi
to claim the top spot in the luxury car ranking in India in the January-March quarter.
The last time it was number one was six
years ago.
THE STRATEGIST
>
SALES IN INDIA
Company
Audi
Mercedes
BMW
JLR
Total
2011
2012
2013
2014
Q1 Jan-Mar 2015
5,511
7,430
9,379
1,813
24,133
9,003
7,138
9,375
2,393
27,909
10,002
9,003
7,327
2,913
29,245
10,851
10,201
6,812
2,859
30,723
3,181
3,556
NA
NA
6,737
Source- Companies
With sales of 3,556 units, Mercedes bettered sales of Audi which sold 3,181 units
during the same period. The former reported a growth of 40 per cent while the latter
witnessed a growth of 16 per cent during the
quarter as compared to the same quarter
last year.
BMW, which is now in the third spot
among German luxury car makers, had
overtaken Mercedes in 2009 when it
stormed
the
market
with
its stylish 3 Series and 5 Series sedans. It
took less than three years for BMW to topple Mercedes after it set foot in India.
However, Audi was hot on its heels.
With new launches including Q3, A4 and
Q5, Audi eventually overtook BMW in 2013,
a full year before its original targets. Audi
also became the first luxury car maker in
India to crack the 10,000 per year sales
milestone. But 2015 saw Mercedes come
back with a vengeance.
On the back of 10 new launches last
year and five in the last quarter, Mercedes
powered its way ahead of Audi in the first
quarter of this year. The company has been
closing the sales gap with Audi with difference reducing to 650 units in 2014 from
999 units in 2013. Demand for the new CClass and E-Class have outstripped
demand and the two models currently carry a waiting period.
Eberhard Kern, managing director and
CEO, Mercedes-Benz India said, The EClass and C-Class remains the main volume
drivers and together they contribute about
40 per cent to our volumes. Mercedes-Benz
only sells the top-end variant of these sedans
in India, which are highly feature rich. This
is a key factor, as we have seen MercedesBenz customers prefer only top-end variants, even if they are at a price premium
than the competing models, which are available at a stripped-down version with a sticker price.
MODELS ASSEMBLED IN INDIA

| AUDI :A3, A4, A6, Q3, Q5, Q7
| BMW :1 Series, 3 Series, 3 Series GT, 5
Series, 7 Series, X1, X3, X5
| JLR :Evoque, Freelander, XF, XJ
| MERCEDES :S-Class, E-Class, C-Class,
ML-Class, GL-Class
With as many as 15 products lined up for

launch in 2015 as compared to 10 products of
Audi, Mercedes is confident about retaining its lead for the rest of the three quarters
as well. The share of new generation cars
(like the A, B, CLA, GLA) to our total volume
has increased from earlier 20 per cent to
almost 30 per cent currently. We expect an
increase of 50 per cent in the new generation
cars in 2015 compared to the previous year,
added Kern.
But Merc has some serious competition.
Audi will more than double product launches this year to 10 from a mere four launched
last year. With the exception of the A3 sedan,
Audi did not have any high volume product
last year. However, this year the German
company promises at least two products
aimed at driving volumes. Though it lost the
crown in the first quarter, Audi remained
the largest luxury car seller for the financial
year 2014-15.
Joe King, Head, Audi India said, We are
very happy to retain the leadership position
in the luxury car market for two consecutive
years despite having only one major launch
(Audi A3) in the last fiscal year. We are now
looking forward to an exciting 2015 with 10
new models including the Audi TT and new
Audi Q3 coming up.
In terms of reach too, the two rivals are
stretching themselves as much as possible.
While Mercedes will inaugurate 15 new deal-
85
erships this year, Audi had recently opened

showrooms in Guwahati, Ranchi and
Bengaluru along with a service facility in
Kolkata.
>
THE STRATEGIST
Barc: Stability could ease

first set of hiccups
In its launch run-up, the new ratings system, rivalling TAM, has seen the telecasters
divided on the higher pricing and lower-than-promised sample size
URVI MALVANIA & VIVEAT SUSAN PINTO

Mumbai, 19 April
ven as the joint body, Broadcaster

Audience Research Council (Barc),
oversees Indian television sectors
shift to a new ratings system, it has to
reckon with some teething problems
from pricing to sample size.
The Barc service is priced at one per
cent of broadcaster revenue. Some users
or broadcasters claim it is a 20 per cent

increase in cost for large broadcasters and
200-300 per cent for smaller ones.
Partho Dasgupta, chief executive officer (CEO), Barc, says, The percentage is
on advertising revenues. It distinguishes
between large and small broadcasters.
The ones with higher advertising revenue
pay more. A small regional broadcaster
will have substantially less ad revenue
than a national one, and, hence will pay
86
less.
He says geographic spread and genre
preferences of the audience are also factored in. Noting, Being promoted by a
joint industry body, our pricing mechanism is transparent, giving an equitable
distribution to stakeholders. It is a marginal increase over the incumbent systems cost, though we are providing a larger sample size and cutting-edge
technology.
>
THE STRATEGIST
The gross annual billings of TAM and

Barc are not very different. While the former made around ~140 crore a year, the
latter would make around ~150 crore,
reveals a source working closely with
Barc.
Sources reveal that under TAM, the
fees came to ~15 lakh a year (for subscription and various reports) for a single
channel. For bigger networks, the rate
was customised.
While a faction in the sector is wary of
the escalated costs, there is another
which
begs
to
differ.
At
least we now know it is a level playing
field. The fee is a flat one. Earlier,
no one knew who was paying what. There
is more transparency, says a media professional with a broadcast network.
Eric Salama, CEO, Kantar Media, a 50
per cent owner of rival TAM, expresses
doubts. TAM, a JV between Nielsen and
Kantar Media, has been operating for 15
years. It was the sole ratings provider so
far. Its stint, however, did not go unchallenged by customers, as some having
raised issues over the sample size, representation, accuracy and veracity of its
ratings.
We have lost a bunch of subs (subscribers) for the TV ratings part of our
business but have maintained all our subs
for other parts. I believe there was a shortfall in funding (for Barc) and that, as part
of the deal to fill that gap, agencies and
advertisers were asked to cancel their
subs to TAM, Salama says.
The small broadcasters are being
squeezed out and will suffer, and the
agencies and advertisers are getting an
inferior service to what they were getting
before. It would seem more sensible, from
an industry point of view, for clients to
continue to subscribe to TAM until Barc
can offer a comparable or better service,
Salama adds.
He refers to the characteristics of
Barcs ratings, presented last week. They
were at a household level, not individual
viewer, and had included data from a
sample size of 12,000 households.
Barc always claimed that its ratings
would
launch
with
a
sample
size of 20,000 households, the solution
for Nielsens alleged under-representation, and which would give deeper cover-
pen by the end of April. The Barc system

is driven by superior technology that
uniquely picks up the channel-viewing
in households. Globally, such a system
takes more than three years to set up,
with a 5,000-6,000 households sample,
says Dasgupta.
Differences in the data of Barc and
TAM would emerge in the coming
months. The official launch of
Barc is expected to be the last week of
April, when the data would be released to
broadcasters.
Meantime, the sector continues to go
through a ratings dark period. From April
1, most broadcasters have stopped taking
data from TAM, to prepare for the shift to
Barc.
PRICE WARS
| Barc ratings priced at 1% of
broadcaster revenue
| It is a 20% cost increase for large
broadcasters and 200% for
smaller ones
| Barc says percentage method
transparent and equitable
| Some users say flat fee lends
transparency
| Starts with 12,000 households for
100,000-plus markets but
promises to ramp up soon, after
system stabilises
age of the TV audience in the country.

A source close to the development
says, It (Barc) covers 250 channels and
will get to 300 by the end of April. It does
not cover DD (Doordarshan). TAM covers 700 channels. With Barc at 12,000
households, there are no big surprises in
the data. The only big one is that it has
released only household-level data. TAM
releases individual level data, which is
what the agencies and broadcasters need
to trade. The absence of individual-level
data could be due to panel instability and
lower ratings for the big broadcasters.
The CEO of a media agency, privy to
developments at Barc, confirms it had
indicated in its presentations that the
sample size would start at 12,000 households, but media agencies were assured
that this would increase.
Dasgupta says, We are rolling out the
first service of 100,000-plus households
this month. We have many more meters
seeded, in thousands but the 100,000plus market needs only 12,000 sample
households. The sample individual data
needs to stabilise and thats what we are
ensuring. All this happened in only 20
months. The next phase will see us
release the sub-100,000 urban and rural
market numbers, as well as individual
ratings, which should be in three-six
months. The focus is not just on when
but on robust data.
Broadcasters are waiting for the installation of the Barc ratings software with
their research teams. This should hap-
87
>
THE STRATEGIST
Winning the people wars

How the smartest direct selling corporations are recruiting, rewarding and
retaining talent
DEVINA JOSHI
ear, whatever youre selling, Ive

already got two of them. These
words, from the Ashley Juddstarrer Double Jeopardy, uttered by a
woman who mistakes an approaching Judd
to be a door-to-door seller, are an apt reflection of the predicament of the direct selling
industry. Considered a last resort for people
unable to find employment otherwise, or for
those looking to make a quick buck, the
only qualification direct selling needed, it
was widely assumed, was nonchalance and
persistence when doors were slammed on

ones face with a thunderous no.
It gets worse in emerging markets like
India where modern direct selling, which
proliferated in the mid-90s, has suffered
from an acute lack of regulatory clarity,
because of which it has often been equated
with fraudulent pyramid/ponzi schemes.
For a long time, products sold by such firms
were viewed with scepticism, while recruitment processes lacked the professionalism
present globally.
But over the last few years, the sands
seem to be shifting in the Indian direct sell-
88
ing market, estimated at ~7,200 crore and

set to touch ~64,500 crore by 2025 (according to a FICCI-KPMG report). Some of the
newer multinationals in India have brought
with them global best practices. With a
greater emphasis on recruitment and training, we now hear terms like career development, succession planning, work-life
balance and diversity in hallways of the
rather plush offices of direct selling companies. The business environment now
also supports the spirit of entrepreneurship more, which has worked in attracting
educated people to the sector. It is like
>
THE STRATEGIST
doing business without worrying about the

business investment.
Consider this: the 1982-founded Eureka
Forbes India chooses to employ its own
sales staff as opposed to having a network
of dealers. Its service network enters 20,000
kitchens daily, and 90 per cent of its customers are present within a 5 km radius of
a company service station. Or take consumer products company Amway India,
where 50 per cent of the employees have
worked in the company for over five years;
25 per cent for more than 10 years, and
globally, the average tenure at Amway is
over 20 years. The attrition rate at Amway
India is 10 per cent. What seems to be working in its favour is a sharp and deliberate
focus on human capital.
So, how are direct selling companies
managing to hold their own in the battle for
talent? How do they make sure they are
developing the right skills at every level?
More importantly, are they prepared to
identify and aggressively develop high
potentials as part of a proactive succession
management process?
The people story

Of the 11,000 employees at Eureka Forbes,
8,000 are sales employees (called
Eurochamps) who meet 60 million people
every year by knocking on their doors. Over
65 per cent of the recruits come through the
friend-get-a-friend scheme, while the rest
are recruited from colleges, through job
melas, job portals, recruitment consultants,
ads, employment exchanges etc. In the case
of beauty companies Avon and Oriflame,
even social media is a hunting ground. We
look for people who are not typical city
boys they should be hungry to prove
themselves. They may come for money,
but they dont stay for money, says Marzin
Shroff, CEO, direct sales and senior vicepresident, marketing, Eureka Forbes,
adding, the maximum attrition in the company happens in the first six months itself,
post which it is 6-8 per cent.
Avon hires sales representatives following two models: cold (involving cold calls in
a neighbourhood or participating in closed
group events), and warm (backed by a
strong network of friends and family and
helping them join Avon). On its part,
Oriflame recruits through pamphlets, referrals, Oriflame opportunities meetings
EXPERT TAKE
Finally, some takers

he contribution of
direct selling
industry to the Indian
economy and our
society cannot be
ignored. Apart from
MOORTHY K
promoting microUPPALURI
CEO, RANDSTAD entrepreneurship
INDIA AND
and financial
SRI LANKA
independence
especially for women,
it is also generating direct employment
opportunities across the value chain by
outsourcing production, packaging and
distribution of products, thereby helping
the SME sector and positioning India as a
manufacturing hub. Taking note of these
benefits, the government has instituted
an inter-ministerial committee to create a
framework to regulate the industry.
These developments are encouraging
for the industry as it increases its credibility,
helping the players to recruit better talent.
(forums where new catalogues are

launched) etc. Users of Oriflame products
are known to turn into its consultants.
Now consider how every meeting at
Eureka Forbes starts with the corporate
anthem an attempt to build pride among
employees. Once a Eurochamp joins, he
goes through a structured training programme a 14-day module called NEO
(new eurochamp orientation) where he is
imparted selling skills, product know-how,
English skills and field-training. There is
one trainer per 100 people. After a month of
joining, these Eurochamps undergo
refresher training, which integrates the first
month of field experience with 11 key objection-handling and relationship-building
skills.
At Amway, the distributor is first made
an effective salesperson, then an enthusiastic product advocate, then a team
leader and finally, a supervisor/leader.
Amway has seven lakh distributors
89
And unlike many other businesses, the

success of direct selling also depends on a
persons skill as well as his cultural fit with
the company, making HR best practices
from across the globe relevant and critical.
Today, companies offer professional and
personal development programmes to
hone individual talents. And to maximise
performance, companies establish specific
and meaningful goals in addition
to consolidating careers through
certified diplomas.
Interestingly, technology, which was
perceived to be a threat with shifting
demographics, has now been turned into an
advantage by inducting passionate
youngsters into the industry through social
media platforms. Companies have also
realised the criticality of succession
plans grooming motivated
youngsters will go a long way
in ensuring sustained growth
in the future.
attending 18,000 training sessions (conducted in 11 languages) in a year. The

company also has high-tech e-learning
portals in four languages (Hindi, English,
Tamil, Bengali), which had four lakh registrations in 2014. Product booklets are
present in 11 languages. Furthermore,
Amway provides its distributors with
health and beauty assessment centres
experiential and advisory zones in its 155
offices where distributors can not only
learn about products but also bring select
customers with them for tips and product
experiences.
More than 60 per cent of our distributor base is women, which is why training
time is flexible so that housewives or parttimers can attend as per their convenience,
says Anshu Budhraja, general manager,
Amway India.
At Oriflame, consultants undergo a
monthly Set One training, which highlights
the products/benefits and imparts effective
>
THE STRATEGIST
sales skills to maximise earning. Set Two

training teaches networking and managerial skills and business know-how. Further,
beauty and wellness training is held every
quarter for all consultants. Depending on
skill sets, there are 30 annual trainings that
its 2.5 lakh consultants can avail of. There are
beauty and wellness and leadership academies (teaching time management, teamwork etc). Then there are director seminars,
including train-the-trainer programmes etc.
For advanced level training for network leaders, Oriflame offers leadership academy 2.
Avon is equipped with a structured talent model where annually, pipelines of
internal talent and succession plans for
each position across various levels are
reviewed and mapped out.
From trainings to order placements, IT
plays a very prominent role in facilitating
the operations of direct selling companies.
Virtually all companies have e-learning
modules and with an increasing number of
educated, IT or managerial people entering the business, online training is crucial.
Avon, for example, has an e-learning portal
equipped with modules on leadership, onthe-job effectiveness etc. There are sophisticated IT systems for performance management, compensation modelling and HR
dashboards.
At Eureka Forbes, reviews take place at
the end of the month where a Eurochamp
is assessed on the number of doors
knocked, demos given, and sales achieved.
This is fed onto a SAP server, and through
algorithms of the demo-to-sales ratio, the
supervisor figures out his weaknesses,
highlighting where he needs more training. A leader can know a champs scores on
his phone through the touch of a button.
Sales people fill their reports on tablets
every day. IT helps HR function like clockwork. There is also a special hotline number
for Eurochamps to use when stuck with a
customer query.
Diversity and inclusion

Incentives, gifts and holidays abroad
standard fixtures in a direct sellers HR
strategy arent enough to retain employees. To go beyond this, high performers at
Amway become part of its global talent pool
and some choose to take up assignments
overseas. The company also has virtual
reporting structures across the EIA (Europe
India Africa) region. Recently, Amway sent

a batch of 120 local recruits from Madurai
for training to China on Amways upcoming manufacturing plant in India.
Avon and Oriflame also send executives
overseas for assignments, projects and conferences. Expat movements/postings are
assisted by training on the nuances of different countries, functions etc. At Avon, the
concerned person is sent on a familiarisation trip to that market; theres a lot of handholding to facilitate the move and convey
internal and external communication
guidelines for that market. Whether you
cut it by gender, experience, job description, locality/country of origin, we have a
different mix of people in the organisation,
says Ruchira Gupta, HR director, Avon
India.
Oriflame has international sponsorships in the 60 countries it is present in,
and over 500 people go out of India every
year for conferences and projects. We
float opportunities and people who want
to go maybe for the opportunity or
because their husbands are there are
encouraged to do so, says Pradnya
Deshpande, sales director, Oriflame
India.
Eureka Forbes has recently launched a
women-only direct selling line for its
Euroviva range of products. It has 500
women as nutri-consultants and through
a four-day seminar the company gives
them a career plan, compensation structure, and learning roadmap. The companys call centre, EuroAble, is managed by
90 differently-abled people. As part of the
selection process, candidates have to
undergo a written examination and group
discussions, followed by personal interviews. Most of the employees recruited
come from the lower income strata, with
limited or no fluency in English.
The management provides threemonth training right from English proficiency to product training and handling
consumer calls. Infrastructure too has been
specially designed for the team. The workstations are a foot longer than the standard, three-feet call centre desks, and have
enough space all around to allow easy
access, both by wheelchair and crutches.
Desktop computers have all controls on
top, so employees dont have to bend low.
In the good old days, Eureka Forbes fol-
90
lowed the model of having large offices in

important areas in a city, but now, the company has smaller offices at short distances.
This fiscal, over 250 Eurochamps under
the age of 30 were promoted to the level
where they can run their own offices. The
promoted champ and his wife sit in the
office puja, for instance, to allow them a
sense of ownership. Any young leader who
wants to take up a challenge can become an
entrepreneur of sorts and run his own
office, while still being an employee of the
organisation.
EuroSenate is another initiative to
empower employees under which some HR
functions have been decentralised. In all
SBUs, Eurochamps with over two years
tenure stand for elections from their constituencies (around 10 offices) every year,
from which four counsellors are elected, and
these four make up a senator. The senator is
given power to sanction money on the spot
for champs in case of family/health emergencies, without waiting for approvals from
the head office.
An ecosystem of micro-entrepreneurship is a by-product of direct selling, concludes Amways Budhraja, with resources,
investment, physical infrastructure and a
business model all taken care of.
>
THE STRATEGIST
Cost cutting in action

Everybody is doing it but what works on the ground and what doesnt? Lessons
from leaders and managers
KANIKA DATTA
ill 2008, when the world economy

was booming, growth was the
favoured strategy in C-suites. After
Lehman Brothers collapsed and global
growth contracted, cost-cutting became
the mantra, and it has stayed that way
since. The takeaway for corporations in this
long slowdown has been that a cost-cutting exercise is much more than a sum of
sharp cutbacks. How can cost-cutting be
made a constructive exercise? Here are
some lessons from the field as experienced
by leaders, entrepreneurs and experts.
Many of these may appear obvious, yet
executives and experts say they are often
overlooked in the urgency of the mission.
From the PMO

The most apparent of these is the close
involvement of the companys top leadership. As Subroto Bagchi, chairman of
Mindtree, one of Indias pioneer IT services firms, points out, Irrespective of how
necessary cost-cutting may be, and how
mindful the decision maker, it causes collateral damage. These need to be understood and, if inevitable, budgeted for.
And budgeting entails close monitoring. As Deming said, whats measured

gets done and an effective cost-cutting
exercise involves day-to-day, week-byweek monitoring. This requires sustained
energy and organisational time and that
only happens if the top management is
fully on board, says Devinder Chawla,
partner, advisory services in consultancy
firm EY.
Full involvement entails what Bagchi
calls the programmatic approach with a
PMO in place. This is what Pune-based
Deepak
Fertilisers
and
Petrochemicals, maker of industrial
chemicals and fertilisers, did when it
went in for a massive cost-cutting programme in 2012.
The exercise began when profits
shrank in FY13 to `147 crore from `213
crore the year before for multiple reasons
(drought, higher raw material costs and so
on) even as the top line grew steadily.
Lower profits suggested a need to relook
cost structures so that the company
became more resilient. One of the first
things chairman and managing director
Sailesh C. Mehta did was set up a team
under him to monitor the exercise.
91
We have a strong Internal Board that

takes all decisions so there was a buy-in
for the big vision from day one, explains
Sanjay Gupta, associate vice-president,
who headed the monitoring team. The
importance of this was evident when, as
he points out, the drilling into each area
starts so a very healthy discussion at
each level ensured we had very high
degree of commitment.
The top-down approach also sets the
agenda. In Deepak Fertilisers case, the
vision was to sustain the best of the last
three years performance and ensure full
capacity utilisation of all assets. This
helped us identify the areas we needed to
tackle, Gupta explains. We had a feeling
that we needed structural changes in both
management staff and workers to align to
the new strategy, so we took help of external consultants in many of these areas
which brought in an outsiders perspective and industry benchmarking. To
implement these broad goals, the company put cross-functional teams in
charge of each project and these were
monitored on an almost daily and sometimes weekly frequency.
By the next financial year, the compa-
>
THE STRATEGIST
In the long run, a

sound cost-cutting
strategy is a mix of
good expenditure and
spending reductions
of a diversified company
that was looking to save
~100 crore announced a
reward for executives that
matched the consultants
success fee. Although the
CEO attained his target, he
DEVINDER CHAWLA
did so in an atmosphere
PARTNER, ADVISORY
vitiated by us versus
SERVICES, EY
them
competition
between internal staff and
the consultants.
This mindset is often a product of
organisational resentment to consultants,
who are associated with job cuts. This is
less of a problem in manufacturing firms
where manpower costs tend to be lower
than raw material costs (even well-run
firms can have 15-18 per cent of poor quality). But what about firms in the service
industry? Mindtree showed how creatively involving executives in hard decisions can help.
When 9/11 hit and business dried up,
ny saw profits rise to `244 crore a
the company was barely a year old and
caveat: Deepak Fertilisers is suffering
losses now owing to a specific problem cutbacks were inevitable. Bagchi recalls,
We huddled with our middle managewith supplies of gas, the basic feedstock
ment and asked them to let go of poor
for its products, which is administered
performers. The entire team came back
by the government.
and told then chairman Ashok Soota that
Though metrics and measurement lie
a crisis is the worst time to let go of the
at the heart of a successful cost-cutting
bottom 5 per cent because, unlike high
exercise, communication is vital for executives down the line to participate and performers, they wouldnt land on their
feet. Accordingly, the middle managecome up with the critical small ideas
ment said they would take an additional
that accumulate into big gains. As Bagchi
cut themselves but keep the bottom perputs it, The war must be a peoples war
formers for another six months.
and not a CEO war. Indeed, consultants
say teams often know the problem 60 to
Being human
70 per cent of the time, so involving them
Mindtrees middle management highin the exercise rather than making them
lighted a basic truth: that it is vital for
defensive helps.
the management not to lose its humaniTo minimise the defensive mind-set,
ty. This was something Bagchi learnt
recognition is important. This was somefrom a near-death experience when the
thing Deepak Fertilisers Internal Board
company had to pull out of the R&D unit
instituted from the start. While each sucof a smartphone company it had
cess was celebrated, we made sure no failacquired. Acquiring it was a big mistake
ure was criticised, Gupta says. Rewards
because the business plans of the leadand incentivisation matter too, since
ers of the acquired business were off the
organisations are essentially asking people to do something outside their regular
Cost cutting must be a peoples war
work description. Some consultants link
and not a CEOs war
their fees to the benefits that accrue (the
success fee), to create positive enerSUBROTO BAGCHI
gy and companies often do the same for
their executives.
CHAIRMAN, MINDTREE
This strategy can backfire. The CEO
92
mark and there were unfolding culture

and value issues. A time came when we
had to make a tough call and close that
business and that meant 500 people had
to be let go of.
In doing so, Bagchi says the management made a clear mental difference
between shutting a business and shutting out people. We shut the business
rapidly but we made sure we provided as
much safe passage as we could and staggered the separations. Importantly, the
company exhausted all other forms of
intervention before doing so.
Attitudes begin from the manner in
which the message is conveyed. Thus,
tonality and transparency are critical.
Says Bagchi, Executive bravado and email urgency are a no-no. If there is a
rapid environmental downside that calls
for urgent intervention and tactical costcutting is a must, the top team must show
up at ground zero and speak and answer
hard questions however hurtful.
Salami tactics
The latest global slowdown has demonstrated that the era of plain vanilla costcutting is over. Many companies now
talk about end-to-end transformation,
says EYs Chawla in which process
improvements are essentially funded by
cost reductions.
This is especially true of companies
in acutely competitive businesses like fast
>
THE STRATEGIST
moving consumer goods. Cost-cutting

is a 365-day, 24x7 concern for finance,
says R Subramanian, vice president,
Finance,
India
sub
continent,
GlaxoSmithKline
Consumer
Healthcare (GSKCH), and we approach
it from two ends of the value-chain the
shareholder and the consumer. In practice this means the finance guys are
involved in each of the five or six buckets
marketing, sales, supply chain, administration and so on. Each of these departments meet once a month on a fixed day
and scrutinise ideas and innovations to
enhance value.
The critical issue is to examine ways of
value engineering, or what Subramanian
calls salami tactics. This, drawing from
his vast experience across many organisations, could range from changing the
way, say, tea sachets are transported to
the distributor it is possible to replace
space-occupying cardboard boxes with
gunny bags to minimise transport and
packaging costs. Or by focusing on a creative, it is possible to reduce the length of
a TV commercial from 30 to 20 seconds,
with concomitant savings.
No one understands salami tactics
better than car makers. For them, as
Jagdish Khattar, former managing director of Suzukis India subsidiary Maruti
puts it, the selling price is determined by
the market but costs are in our control.
This is a lesson Maruti Suzuki imbibed
after its strike in 2001, when it introduced
the Baleno, WagonR and the Alto.
Recalls Khattar, We were in a hurry to
introduce these models after the strike
but the import content was very high,
and we were losing money, sometimes by
as much `1.5 lakh per car. So we launched
a vigorous localisation programme, setting out an engineering plan monitored
by the management committee.
Eventually, the differential between
Marutis Alto and its best-selling 800, for
example, was reduced from about ` 1 lakh
to `10,000 over a year and a half.
The exercise began, Khattar says,
with a target price from which they
worked backwards, disaggregating
the major systems engine,
transmission, and so on. The next
step was to assign it a weight in
the total cost. This, then,
became the target price of each component which was conveyed to the vendor
who had to sign an MoU with a specific
localisation schedule.
How are vendors motivated to comply? Messaging, Khattar says. We didnt
go for cost reduction by the danda; we
never told the vendor to reduce price but
cost. Second, the benefits of the cost cut
were calibrated so that vendors received
a larger share of revenue for every reduction with each year. That way, its a winwin for both we were able to sell more
so they got more business and our credibility went up.
Good expenditure
Not all costs are wasteful, however.
Indeed, one common error companies
make when markets are growing but
profits are under pressure is to cut costs
that are considered discretionary:
advertising and promotion or the sales
function. Cutting back on anything
connected with growth is like putting a
rope around your neck, says GSKCHs
Subramanian.
External consultants bring an

outsiders perspective and
industry benchmarking during
hard times
SANJAY GUPTA
ASSOCIATE VICE PRESIDENT,
DEEPAK FERTILISERS & PETROCHEMICALS
93
The same rule would apply to companies that cut back on quality parameters
in such circumstances. One example is
when Hindustan Unilever cut the total
fatty matter (TFM) in its soaps some years
ago. TFM determines the softness and
lather of a soap and when it was cut in
several popular brands like Lifebuoy market shares dipped.
Not postponing critical investments
that create efficiencies is another
counter-intuitive lesson. For instance, a
fast-growing chemicals company needed larger trucks to transport its products
but could not deploy them for lack of sufficient space to turn such large vehicles in
the factory. Although the company was in
the middle of a cost-cutting programme,
it invested in widening the roads and other infrastructure to accommodate bigger
trucks so that it was in a position to ship
greater volumes in the future.
Similarly, a fertiliser company was
advised to replace the manual loading of
fertiliser bags with a boom conveyor;
although contract manual labour is
cheaper, they are unlikely to be able to
handle the volumes envisaged in the
companys growth plans in the long run.
Its a question of considering what is
strategic and what is non-strategic, says
Chawla of EY, so not all cost-cutting exercises involve spending reductions
theres also a case for good expenditure.
>
THE STRATEGIST
Win back lost customers

With a cross-channel retargeting strategy, brands can improve customer
conversion rates
SONALI CHOWDHURY
id you know nearly 98 per cent of the

first-time visitors on your website
leave without purchasing anything?
While some visitors browse the site for a
short while and then move on, others add
items to their cart but abandon it without
going through the purchase process. If window shopping is a problem for brick-andmortar retailers, shopping cart abandonment is one metric that keeps a large
number of e-commerce bosses awake at
night.
So what does one do? The first option
would be to make the shopping experience
so compelling for consumers that they complete the purchase loop. Second, if they do
indeed exit, you need to find ways to bring
them back to the site. Over 90 per cent of
marketers responding to a recent survey by
global retargeting company, AdRoll, said
that retargeted ads are as good as or even

better than the gold standard in digital marketing, search ads, to do the job.
What is retargeting? In simple terms, in
retargeting, e-tailers try to bring back lapsed
customers by showing relevant ads on other websites so that they come back to the
original e-store for their next purchase.
Today retargeting forms part of the monthly digital budget of most e-tailers and run
throughout the year just like search marketing. Retargeting helps convert users at
one-and-a-half to two-and-a-half times the
websites standard conversion rate.
Typically the budgets for retargeting is 1015 per cent of the total digital spend but it
could be more, says Subra Krishnan, VP,
products, Vizury. Adds Praveen Sinha,
founder and MD, Jabong, Retargeting is a
high return-on-investment campaign,
hence, budget expansion is easier on this.
Traditionally, retargeting had been
94
strongly associated with performance marketing and the return on investment. But
the concept is being redefined today. It has
become a customer value management programme. Retargeting helps in extracting
the value of the data generated and ploughing it back into the system to engage dormant or active customers, says Narayan
Murthy, VP, global sales and strategy, Vserv.
A retargeting strategy would vary
depending on the category and sector you
operate in. Heres how you can retarget
effectively and then figure out when to pull
the plug.
Cracking down on the problem

Like everything else, the starting point
would be the consumer understanding
her needs and why she was on the said website in the first place.
The interest of the user could be defined
in a variety of ways during the customers
THE STRATEGIST
>
journey. Some parameters to look at are: how

many times the user has visited the site,
which products and how many products did
she see, how deep did she go into the website
process and over a period of time you
nsuring that
(cart versus home page), buying history and
consumers return will know which audiences are more
so on. If a customer has shown a greater
propensity to convert then you can target
to a brand or third- likely to convert. To work out optimal
her more aggressively. The key to retargetparty website to buy re-targeting frequency, find out those
ing lies in creating a customised message,
a product or service
consumers within a target audience
says Krishnan. For example, you may show
of interest is the
segment who dont buy and marry
a static ad of a product, a semi dynamic ad,
focal point of rethem with those who take a longer
which will include price, discount etc, or a
targeting. The
time to be persuaded to buy. This way
TRIPTI LOCHAN reason re-targeting
fully dynamic ad where other relevant prodyou can work out the optimal
CEO, VML
ucts with their prices are shown.
re-targeting frequency.
works for the
Mostly e-tailers segment the audience
marketer is fairly easy
Ensure that you retarget with the right
under heads such as abandoned users,
to fathom. First, it is about building a
product viewers, category viewers, checkout
message. If you target consumers with a
funnel of consumers who have
users, and so on. By doing that they can use
interacted with your brand already and generic messages, you are likely to
different communication plans for each
waste marketing money. Also, if you are
shown interest in a product/service.
segment to target them better. For instance,
far too specific in retargeting, you risk
Second, it ushers these consumers
Lenskarts first-frame-free offer was not
being seen as a quasi-stalker.
through the conversion funnel by
shown to visitors who have already made a
bringing the message back in their
In e-commerce, it is easier
purchase from the site. Such repeat visitors
view. So re-targeting is integral to the
were rather shown the latest collection of its
for e-retailers to define their RoI
marketing mix. If we can create
eyewear.
additional sales at no or little cost, then because any retargeting activity can be
The next question is, which medium
seamlessly linked back to online sales.
we are achieving the best possible
should a brand use to retarget. Ideally,
return on investment (RoI). Having said However, for marketers who don not
brands should engage customers in all the
have any e-commerce presence, this
this, there are some guideposts, which
channels display advertising, Facebook
becomes a little trickier. We have to find
will help us make re-targeting work
marketing, email, SMSes, notifications,
ways to close the loop at stores and
better:
mobile ads, apps in a unified manner.
counters to measure effectiveness
Keep in mind that re-targeting is a
It is also important to time your retarof re-targeting.
geting efforts. For example, if someone has
ordered monthly disposFigures in %
able lenses then Lenskart
starts reminding the user
Investment in retargeting goes up y-o-y Retargeting stands its ground against
with messages to change
How much of your budget goes into retargeting? the titans of performance
her lenses before the
<10 10-50 >50
2013
expiry date. We keep a
92 retargeting performs same as or better than search
40
53
7
close check on the per91 retargeting performs same as or better than email
formance of each seg2014
92 retargeting performs same as or better than
ment and measure met15
71
14
other display
rics like click-through
Of companies with over 1,000 employees, 24 per cent spend at least
half of their online budget on retargeting
rate, conversion rate, cost
How do you Insights into customer
per action and ROI on a
Marketers are
55
behaviour
SOCIAL TRENDING
measure
using retargeting
55 daily basis, says Peyush
Total conversions
campaign
in new ways:
Bansal,
CEO
and
of marketers say
success?
High RoI
43 founder, Lenskart.com.
social media is the hottest topic
| Brand awareness
Its a tie!
Cost per click
20
in retargeting
Retargeting can prove
| Social engagement
Success means
Low
CPA*
20 especially helpful in a
MEASURABLE SUCCESS GOES
| Customer retention
sales plus
CROSS-DEVICE: 54 percent
understanding Click through rate
15 category like furniture
| Driving sales
of marketers are currently
of the
9 where the purchase
CTC**
retargeting on mobile
customer
cycles are longer. If a
*CPA: Cost per acquisition, CTC**: Click through conversions; Source: The state of The Industry report by Adroll; Adroll surveyed 1,000 marketers
customer is looking to
and analysed campaign data from over 11,000 advertisers to find out how US marketers are using retargeting
buy a sofa, she may take
EXPERT TAKE
Work in progress
HOW RETARGETING IS SHAPING UP
54%
95
>
THE STRATEGIST
10-30 days to make a decision. Hence, by

effective targeting, we can stay relevant in
her decision- making frame and tailor offers
depending on how far she has progressed in
the purchase cycle, says Vikram Chopra,
CEO & founder, Fabfurnish.com.
In the e-commerce space, the entire
game is moving to apps. App re-targeting
makes more business sense and companies
have been investing heavily on data-led
retargeting via apps. We have seen four-five
times better conversion ratios in apps compared to mobile web, says Murthy.
Vserve offers two retargeting platforms
Smart RT and Smart Connect. Smart RT
is capable of retargeting customers from
desktop to mobile and show ads to consumers in real time with customised content. Smart Connect helps leverage offline
consumer intent to help brands remarket to
their consumers across mobile sites and
apps. Data collection tags are implemented
in apps and mobile web pages and then
passed into Vserv servers. The information
passed on in the server contains encrypted
data about the user. Once the system deciphers this data, it starts running a match for
the similar user with the same unique identity variable for audience identification.
After the user is identified, a predetermined
action-oriented communication is shown
to the user with a clear call-to-action. The
final step would be closure or re-engaging
the customer into the client funnel.
In a campaign there can be multiple elements to entice a user to respond. Hence,
retargeting potential buyers with different
styles of communication and channel is
important.
a way to identify the customer you are retargeting and stop at the right time. The decision is mostly based on mature algorithm
and judgment that help to determine that
we are not moving in the direction of spamming and it doesnt become a noise, says
Sinha of Jabong.
To get this right the first step would be to
exclude customers who have completed a
transaction or to identify users who have
lost interest based on their user score that
factors in responses to ads. Dont overdo
campaigns; you will end up with higher optouts from emails, says Kalpit Jain, chief
operator officer, netCORE.
Travel portal Makemytrip retargets customers more aggressively when she is close
to the departure date. Customers are not
retargeted for the second time if there was
no conversion at the first instance.
At the same time it is crucial that companies dont compromise on the privacy of
the consumer while retargeting. It has to
be a controlled strategy to ensure that you
dont over-sell or reach out on too many
channels, creating a lot of noise in the
process. Most important, give the power to
opt out of ads or emails targeted at the customer.
In other words, let the controls be in the
hands of the customer.
Pulling the plug

Companies need to consider two metrics
conversion and RoI to determine the
effectiveness of a retargeting strategy.
Typically for e-commerce companies, 5-10
per cent of daily sales should come from
retargeting. The next thing would be to
check the return on investment, tells
Krishnan. You also need to consider if the
campaign is enabling traction on higher
margin or lower margin products.
Besides this, you have to keep in mind
that the retargeting efforts should not prove
to be a dampener because there is a thin
line between following up, reminding or
retargeting and spamming. There has to be
96
THE STRATEGIST
>
The demise of
a star brand
When the time comes, a company must kill its star
product. Heres how to go about it for maximum
impact, little damage
ROHIT NAUTIYAL & SONALI CHOWDHURY
f you dont make your market

successes obsolete, someone else
will, says author Josh Linkener
in his latest book The Road to
Reinvention. What he means is
that smart organisations must unshackle
their thinking from the past and its restrictions to explore newer pastures.
In todays volatile markets, companies
are under constant pressure to upgrade their
offerings to keep pace with the ever-changing technology and consumer demands.
The complexity of this challenge increases
manifold when a company is faced with the
task of killing the goose
that laid the golden
eggs or, to put it simply, ending the run of
its star product.
Hyundai Motor India
(HMI) did exactly
that a couple of
months ago by stopping production of its

compact car Santro. It is important to note
that this decision was not the outcome of
dwindling sales. HMI was selling around
30,000 units of Santro every year. An HMI
spokesperson was recently quoted in the
media saying that every part of the Santro
was outdated now and its presence in
Hyundais portfolio went against the carmakers fluidic design philosophy.
Well, Hyundai is not the first company
in automobile industry to execute a tough
decision like this one. In the past, Maruti
Suzuki and Toyota Kirloskar Motor have
swallowed the bitter pill of discontinuing
their star products the Maruti 800 and
the Qualis respectively. While Maruti
Suzuki rebadged the fast-selling Alto as the
Alto 800, Toyota replaced the Qualis with
the Innova, which even after a decade of
presence still rules the multi-purpose vehicle (MPV) segment in India.
It is important to understand that as
valuable as brands are to companies, they
can become a strategic liability over time.
97
The reasons are many: the consumer might

have moved on; a new technology might
have come to threaten the very existence of
that category; or the decision might be driven by the exigency of generating financial profits for shareholders. In such situations, companies face the touch task of
choosing between trying to revive a brand
so that it becomes a cash cow or to kill the
brand to ensure that the rest of the portfolio and the corporate brand remain intact.
Today Maruti and Hyundai are multistarrer companies with many products
being market leaders in different segments.
So the decision to phase out one brand may
be relatively easy. But way back in 2004
Toyotas decision to stop the production of
its largest selling product would have come
across as an audacious move. Toyota could
do that because of the confidence it had in
its next product. The decision to discontinue the single largest-selling product was
a high-risk high-return gamble which paid
off for Toyota, says VG Ramakrishnan,
managing director, South Asia, Frost &
Sullivan.
So what is the best time to kill a brand to
ensure minimum damage? How does a corporation sell the idea to the various stakeholders? Above all, what is the best way to
undertake the job to derive maximum
impact?
Have a Plan B
To minimise the impact of killing a star
product on customers, companies mostly
bring a replacement product in the market
so that consumers have a choice and the
company does not lose out on the market and the goodwill it has already
created. Coming back to the
THE STRATEGIST
>
EXPERT TAKE
Things to remember when 4

killing a star product
Dont confuse new with the old:

Maruti Suzuki replacing a star product
like Maruti 800 with Alto shows us that the
positioning of each variant must be highly
differentiated. As Maruti 800 and Alto
variants increased in numbers their relative
positioning became less clear to customers,
it was time to upgrade the 800 to next
higher version of the Alto.
to the minimum, otherwise incremental

gains in sales and profits during the
transition is low.
2
RAMENDRA SINGH
ASSISTANT PROFESSOR OF
MARKETING, IIM CALCUTTA
Watch the PLC: Companies should keep

a close watch on the product lifecycle
(PLC) stage of their star product. If the
product is in the late maturity stage of the
PLC, innovation is the only option as the
product will soon enter the decline stage
where it will lose market share. So firms
should focus on continual innovation which
keeps track of the PLC stages of existing
successful products. Also, companies must
ensure losses due to cannibalisation are kept
Santro, HMI is happy bidding adieu to its

first launch in India because, over the years,
the company has strengthened its position
in the compact car segment with the Eon,
the i10, the i20, the Grand i10 and the Elite
i20, which cumulatively offer it a strong
21.8 per cent market share (as of the
January-October 2014 period) in the compact car segment. Says Abdul Majeed, partner, Pricewaterhouse Coopers (PWC),
Brands like Maruti 800 and Santro had a
long run because back then there were not
many auto players in the small car segment
and competition was comparatively less
fierce. But today the new age brands are
not able to sustain beyond three to five
years.
A products life is shortened anyway
when it becomes too familiar in the mind
Move faster than your competitor:

Companies should kill or replace their
star products before competitors do the
same. In the latter stage the loss is bigger.
So replacing star products is hardly an
option. The level of innovation of Yamaha
two-wheelers is to the extent of a dozen
new models each year that replace many
star variants with even better vehicles. With
customers seeking variety, it is important to
reduce time to market and constantly
innovate to stay ahead.
Number-crunching is crucial: Watch

the cash flows of your start products as
you initiate the process of replacing them.
You should start innovating much before
the cash flows are going to peak. In fact
when the start product reaches the peak it
is the time to launch a new product. Its
about timing the market with exciting
products at the right time.
of the consumer or when a better product

hits the market. Says management and
market research consultant Rama
Bijapurkar, If a company claims to have
a star product in its portfolio, it means
that it thinks of that product as the best
available option in the market. In future,
the decision of killing this star product
will be spooky as the company wont be in
a position to assess the success rate of its
new/replacement offering.
With competition heating up in the
market, the reaction time for incumbents
has also become shorter. If companies wait
for inventories to finish and delay the
launch of a new product, it could result in
an inevitable loss of market share with
consumers gravitating to better options.
If Maruti Suzuki had to upgrade the Maruti
98
Customer service should never

suffer: Marketers should realise
that there is a service in every product
and a product in every service. So when
they kill a variant, would they kill the
service inside that variant too? What
happens to the existing consumers of
the star product that is being killed?
Remember Matiz from Daewoo? So
where do you expect the owner of Matiz
to get paid service from? A good option
for firms would be aligning the service
of the killed star product to that of the
service for the next-upgrade product.
For instance, this means providing
Santro customers with the option of
getting their cars serviced in the same
facility that services the Eon and the i10.
But in many cases the customers are left
high and dry when their once-a-star
product gets killed.
800 to comply to Euro IV norms, it would

mean significant investments. Says
Ramakrishnan, If Maruti had to follow
Euro IV norms and also upgrade the safety components in the product, the company would have ended up designing a
new car altogether. Since it was launched
almost three decades ago and is not exactly the car even an entry-level buyer would
aspire to today, the company decided to go
ahead and stop production.
Change is inevitable
For some organisations, innovation is about
incremental improvements, not reinvention. To manage the lifecycles of its products, Godrej Appliances has a multi-generation portfolio planning system in place.
This system keeps a check on the perfor-
>
THE STRATEGIST
mance of a platform on which a product is

developed over the years and assesses the
right time for phasing out what is fast getting obsolete.
There are broadly two ways in which a
company would make changes to its product portfolio. First, cosmetic changes, that
involve modifications in colour, design and
the overall look and feel of the product.
The second one is platform change as part
of which the structure of a particular offering is overhauled. Since the main objective
here is to upgrade technology, this requires
huge investments. In the consumer
durables industry, while a company could
churn products out of a particular platform
for six to eight years, today a platform
becomes obsolete in four to six years. While
earlier the capacity of an entry-level refrigerator was 165 litres, today it is 190 litres. In
washing machines the average entry-level
capacity has changed from 4 kg to 6 kg.
Because of all this, today a company has to
kill its star products and come up with fresh
offerings more often.
In two years of its launch in 2002, Godrej
Appliances Pentacool range of single and
double-door refrigerators became a star
product in the companys portfolio. By
2003, the companys overall market share
in the refrigerators segment stood at 9 per
cent. In 2006, the Bureau of Energy
Efficiency (BEE) introduced the National
Energy Labelling Programme for electrical
home appliances, which meant that consumers could choose them based on performance. Under the programme, electrical
appliances are rated on a scale of one to
five, with the most efficient product getting
a five-star rating. Energy-efficiency
labelling is an informational instrument
that is widely used across the European
Union to raise awareness of environmental
issues, such as global warming. Experts
feel that energy labels have an impact on
consumer behaviour and their acceptance
of clean technologies.
Says Kamal Nandi, business head and
executive
vice-president,
Godrej
Appliances, Since the rating is revised
every two years, the labelling system creates a pressure on all players in the
durables space to upgrade their products
for energy efficiency. In 2006, the
Pentacool range was replaced with the
Eon. Nandi goes on to explain how, in the
It took three years for Godrej to make

transition from Pentacool to Eon. While
premium customers warmed up to the
change in a year of the Eons launch, the
strong segment loyalty and the brands
association in the direct cool refrigerators space made communication challenging. A 360-degree communication
plan focusing on point of sale promotions
ensured that all consumer segments
knew about the transition within two
years of the new launch.
As is evident, a transition is never easy.
Brands become institutions in their own
right with communities made up of loyal
customers and their own meaning systems
for these brands. So irrespective of the reason
for killing a brand, companies should tread
this path carefully. The thing corporations
ought to remember when killing a brand is
that they need to ensure they dont lose loyal customers but transition them to a different brand in the portfolio.
Brands like Maruti 800 and

Santro had a long run
because competition was
less fierce. New age brands
are not able to sustain the
tempo beyond
three to five years
ABDUL MAJEED
PARTNER,
PRICEWATERHOUSECOOPERS
In the consumer durables

space, customers buy into
the mother brand. This
makes it easier for us to
kill our star offerings,
replace them with
new ones
KAMAL NANDI
BUSINESS HEAD & EXECUTIVE
VP, GODREJ APPLIANCES
consumer durables space, customers buy

into the mother brand. This is quite different from the behaviour one sees in the
automobile market where different brands
from the same company have different
levels recall and different levels of acceptance. This makes it easier for us to kill
our star offerings, replace them with new
ones and communicate these changes to
customers, he adds.
99
>
THE STRATEGIST
Chasing the long tail

The spread of online retailing has spawned many internet entrepreneurs
hawking obscure or regionally known products. So when is the long
tail market viable?
MALINI BHUPTA
ndias e-commerce story is no longer

limited to billion-dollar valuations
and discount-crazy consumers
thronging shopping websites. The
online marketplace has now become
an incubator for entrepreneurs who are
hawking rare, obscure or even unpopular
products. The shift was inevitable. The
search for differentiation in an environment
of cut-throat price competition has taken
marketplaces like Snapdeal, Myntra,
Pepperfry and Fashionara to the doorstep of
many small, regional brands and makers of
niche products, who are now able to sell
their products across the country without
worrying about managing logistics or marketing. Says Sandeep Komaravelly, senior
vice-president, marketing, Snapdeal, The
online platform enables this transaction
between sellers and buyers at zero upfront

cost, and hence, the size of the business is not
a pre-condition. This is how the online marketplace model democratises entrepreneurism and business growth by giving people more options.
So while analysts continue to question
the sustainability of a model driven by
heavy discounting, some marketplaces are
already chasing the long tail, tapping
demand that is unarticulated and translating it into incremental sales. And since the
internet makes distribution easier and uses
state-of-the-art recommendation techniques to help consumers become aware of
more obscure products, niches that werent
popular are now being discovered by consumers.
The simple truth is, the long tail makes
little economic sense in a physical world
because stores only have so much shelf
100
space and any brand/product stocked needs

to justify its presence on the shelves by selling a requisite amount. On the other hand,
it costs a Snapdeal nothing to put a rare,
not-really-top-of-mind product on its catalogue, and sell a couple every week. Sure, it
may never become a smash hit, but some
sales in the long tail do add up to a significant market size.
In that sense, e-commerce has the
potential to queer the pitch for the short
head large-volume, mass market products. Says Sudhir Voleti, assistant professor, marketing, ISB, The long-tail model is
about finding demand that is latent and
players who find this latent demand will
succeed.
Product is hero
At the end of the day, says Ganesh
Subramanian, COO, Myntra, the hero of
>
THE STRATEGIST
Brand: Fabdeal
STARTED BY: AKSHAY JUNEJA, KISHORE AGARWAL
YEAR: 2011 (SURAT)
>>PRODUCT: The brand focuses on Indian ethnic wear dress
materials, readymade kurtis and saris. The brand has
partnered with Myntra and Amazon among several other large
e-commerce platforms
>>GROWTH STORY: The duo used to sell 50 pieces a day, which has
now gone up to 200-300 pieces a day. During festive season
they can handle up to 600 pieces a day. The founders expect to
grow three fold by 2016. Online commerce platforms provide
them with banner ads on their website as sales growth has
been strong
>>BIG MARKETS: Tier-II and Tier-III and south India
Brand: Style Homez

STARTED BY: RAHUL KHULLAR
YEAR: 2012 (NEW DELHI)
>>PRODUCT: Bean bags
>>GROWTH STORY: Company clocked
revenues of ~58,000 soon after launch.
Achieving MoM growth of 15 per cent.
By October 2013, it has clocked ~2,
20,000 in sales. After partnering with
Snapdeal in November 2013, it has
clocked sales worth ~3, 21,000 a month,
a 25 per cent
increase in revenues
>> BIG MARKETS: Tier-II and Tier-III apart

from towns in Tamil Nadu and Assam
this story is the product, which is offered at

a good price. He believes, online platforms
are a great opportunity for sellers since
young buyers are willing to experiment. In
terms of value, a third of our business comes
from small-and medium-sized brands. We
help with marketing support but success
hinges on the product, he says adding that
while building scale to keep pace with growing demand can be tricky for a small producer, it is not impossible one of his
regional partners, for instance, has scaled
~50 crore in revenue in two years.
Indeed, there are many such stories of
internet entrepreneurs who ditched their
jobs to sell fun products online. Some started for a lark, but now have credible businesses and are now building scale. Rahul
Khullar, CEO & founder, Style Homez Inc,
for instance, decided to sell bean bags from
his home in 2013 in Delhi. His relationship
with Snapdeal began in November 2013.
From 30-40 pieces a month, Khullar now
sells 3,200 pieces. Says Khullar, We grew
100 times in one year
and the branding support that Snapdeal
provided through
newspaper inserts
and via Google ads
drew customers to
our website and
urged them to
check out our
products. The
brand today ser-
101
vices more pin codes in the country than it

had hoped for in 2013. The team has also
grown and stands at 35 people right now.
Anupam Barman, a silk sari retailer
based in Varanasi, has seen his sales jump 25
per cent in 2014 compared to the previous
year, after Snapdeal approached him to sell
his products on the portal. Not only has
Barman found a new audience for his
woven silks, he now gets to connect with the
consumers directly and gets feedback on
what products sell well and which ones
require a bigger push.
Khullar of Style Homez says that since his
venture was self-funded, it did not have the
required financial muscle to invest in brand
building. But its relationship with Snapdeal
gave it instant visibility. What has worked to
his advantage is the payments cycle, which
coincides with a sale.
Kitsch is king
One visible trend is that most marketplaces
are reaching out to people who either manufacture or deal in kitschy products. Arun
Sirdeshmukh, founder of Fashionara, says
unusual products that are not found in
physical stores do well on online channels.
Unusual gift items or trinkets are known to
attract millennials who tend to shop more
frequently online.
Given that most of these merchants are
not really bred-in-the-bone merchants they
need support in product selection and in
showcasing them online. Most marketplaces help merchants build their e-catalogue and in listing them on the platform. In
many cases even the product descriptions
and photo shoots are facilitated by the ecommerce platform.
>
THE STRATEGIST
Even when it comes to inventory management, the shopping portals give inputs
to the sellers on the minimum inventory
they need to hold at any given point in
time according to the category. Akshay
Juneja, founder of Fabdeal, an ethnic wear
brand from Surat that sells on Myntra, says
that Myntra gives his team a heads-up on
how their stock is doing and how many
pieces of which design they should they
hold. Says Juneja, The advantage of this
relationship is global reach. When we were
offline we could only sell to local customers; now we reach overseas audience as
well. From 50 pieces a day, our sales have
gone up to 200-300 pieces a day. During
the festive season, Fabdeal had to organise
delivery of 600 pieces a day.
That said, some analysts are wary of the
long tail theorys implicit challenge to the
Pareto principle or the so-called 80-20
rule, which would make it appear that there
was a greater importance of the hit products
and warn the long tail theory may not be
universally applicable. In a working paper
titled, Is Tom Cruise Threatened? Using
Netflix Prize Data to Examine the Long Tail
of Electronic Commerce, Wharton
Operations and Information Management
professor Serguei Netessine and doctoral
student Tom F Tan contended that while
the long tail effect holds true in some cases,
mass appeal products retain their importance when expanding product variety and
consumer demand are factoring in.
There are companies based on the
premise of the Long Tail effect that argue
they will make money focusing on niche
markets, says Netessine. Our findings show
it is very rare in business that everything is
so black and white. In most situations, the
answer is, It depends. The presence of the
Long Tail effect might be less universal than
one may be led to believe.
According to Netessine, The Long Tail
effect may be present in some cases, but
few companies operate in a pure digital distribution system. Instead, they must weigh
supply chain costs of physical products
against the potential gain of capturing single customers of obscure offerings.
Companies must also consider the time it
takes for consumers to locate off-beat items
they may want. (Source: Rethinking the
Long Tail Theory: How to Define Hits and
Niches, Knowledge@Wharton)
Brand: Joker & Witch

STARTED BY: SATISH SINGH,
MAYA VARMA
YEAR: 2014 (NEW DELHI)
>>PRODUCT: Kitschy accessories, apparel
and handbags
>>GROWTH STORY:Starting off with just 19

orders in October 2014, the brand has
closed December 2014 with 200 orders. It
plans to clock 1,000 orders per day by the
end of 2015
Also the task before the curated marketplaces is far from easy. They have to
evaluate the products for their quality
and the vendor for his reliability to be
able to make a difference in the market.
Most of the marketplaces have separate
quality teams to monitor products, quality and catalogue. Mind you, this is not a
one-time effort but has to be done continuously. That apart, the onus of distribution also lies with the marketplace. On
receiving an order a marketplace will connect with the relevant vendor and take
care of the packaging and delivery within the promised time. Managing reverse
logistics ferrying returned products
is also handled by the concerned marketplace.
Handholding new entrepreneurs might
be a wonderful thing and the long tail might
earn e-commerce players rich dividends,
but is the model sustainable? Most sellers on
these marketplaces are growing at breakneck speed and if this growth continues,
102
they will have to scale up rapidly to meet

demand. Failure to meet demand or quality expectations would not only harm the
vendor, it has the potential to hurt the credibility of the marketplace as well.
Fashionaras Sirdeshmukh, however, does
not believe it is an issue. Most marketplaces
use advanced predictive analytics to get a
sense of future demand. If they sense that a
vendor cannot meet the demand, the easiest thing to do is to remove the vendors
catalogue from the site.
Subramanian of Myntra says, The
growth of these smaller brands will be determined by their ability to scale up. They have
to invest in infrastructure.
Most e-commerce portals believe that
this trend will play out in two ways. Some of
these brands will emerge as strong standalone brands in their own right. If and when
they do, they would want to migrate to their
own websites. On the other hand, some will
remain niche and only cater to an audience
their inventory allows them to service.
However, maintaining quality and managing the time-to-consumer-doorstep will
continue to be the biggest challenges on
their way.
>
THE STRATEGIST
Making a difference
As more global QSR chains target India as their next big market, the battle for
supremacy will be won by delivering a unique customer experience
ROHIT NAUTIYAL
n September 2013, right at the beginning of his training period at Pita Pits
headquarter in Kingston, Canada,
Anun Dhawan, director at Mentor
Hospitality (master franchisee for
Canadian QSR chain Pita Pit in north and
east India), figured out the significance of
creating great customer experience.

Recalling an incident in his first training
session, he says, The session started with
a seemingly idealistic question: how do
you train store staff to deliver the right
customer experience in a country where
theres a huge economic disparity between
them and the customers?
That is where the problem really starts,
103
he says. The other issue that compounds

the challenge of creating a great customer
experience is language. First, each market within India speaks, or rather understands, a different language. Therefore, a
store staff must know at least two languages English and Hindi. This is quite
different from any other market where the
restaurant is present be it South Korea,
THE STRATEGIST
>
QSR: 2015
and beyond
The Indian organised QSR industry is
a ~7,000- crore market dominated by
chains like McDonalds and Subway
In the organised eating-out market, which includes cafes,

casual dining, frozen dessert, pub/club/bar/lounge etc, QSRs
will lead with a projected growth rate of 21 per cent till 2020
Increased spends on eating out activities, exposure through

international travel and media and evolving palate of the
Indian consumer are the key demand drivers in QSR
France, Australia, Brazil or the US. After listening to Dhawans concerns the trainers
told him that it all boiled down to building
confidence and that to instill confidence is
his team Dhawan had to lead by example.
So when Pita Pits first store was opened
in November 2013, Dhawan along with the
leadership team of Mentor Hospitality,
rolled up their sleeves to manage some of
the key aspects of the stores operations
such as noting down orders at the front
counter and managing the workflow in the
kitchen. All along, the companys cofounder Nelson Lang, who was present at
the store, kept a keen eye on the goings-on.
While the store staff was intimidated by his
presence initially, they understood what
the management was trying to convey.
Over the next five years, Pita Pit will
2015 will see leading international burger

chains like Fatburger, Carls Jr., and
Burger King battling to win the trust of
the evolved Indian consumers
open around 50 outlets across the north

and east of India. Its training calendar
comprises induction sessions for new
employees besides weekly manager meetings. Most of the training happens on the
job. The area manager is mainly responsible for maintaining the score cards of all
the employees from store managers
down to the cleaning staff. With a little
more than one year of operations, Pita Pit
India is already trying hard to cut down the
turnaround time for orders, especially the
ones placed during the so-called rush
hours. The company claims it can serve a
sandwich within 2.5 minutes of receiving
an order. We understand that delivering
the right customer experience is actually
about staying on high alert and adjusting
your operations to consumer demand from
104
time to time, adds Dhawan.

Pita Pit is not alone. With competition
in the ~7,000-crore quick service restaurant space hotting up, most players feel
they have to conjure up fresh ways to
attract and keep guests coming back. And
if you are a relative new-comer, you have
to work a lot harder to attract new customers or simply to maintain a steady
stream of patrons to keep the cash boxes
ringing. This is sometimes accomplished
with inexpensive marketing initiatives,
but other times more elaborate and expensive approaches are in order. The fact is, in
addition to getting customers in the door
you have to ensure that they have a positive in-store experience. From promotions
to web advertising, from vouchers to social
media, a QSR has to attempt to stay ahead
>
THE STRATEGIST
of the competition through a variety of

methods. But the first point of human
contact, or the store itself, has now
emerged as the field where the battle for
the customer is being fought.
Timing is everything
Popular for its charbroiled burgers, US fastfood chain Carls Jr. has done its homework well ahead of its scheduled store
launch in April this year. Interestingly, the
company has taken three years to re-engineer its menu for India. Since Carls Jr.s
main objective is to serve fine-dining
food within three minutes of getting an
order, it has devised a unique consumer
engagement strategy. Says Samir Chopra,
chairman and founder, Cybiz BrightStar
Restaurants (Carls Jr. franchisee), The
distinction between the experience at a
fine dining restaurant and a QSR is made
on two grounds: the quality of the food
and the time taken in delivering the service.
To understand how Carls Jr. is reworking the serving time, we have to first look
at the amount of time customers spend on
an average at a fine dining restaurant. After
walking into the restaurant the customer
tends to spend three to five minutes in getting a table of her choice. The next 5-10
minutes is spent on placing the order followed by another 15-20 minutes of waiting
before the food arrives at the table. At the
end of the meal it takes around 5-10 minutes to settle the bill. Put together, the overall turnaround time for any order at a fine
dining restaurant is 40-50 minutes. If we
take that much time in processing an
order, customers will never revisit us, adds
Chopra.
He says that today many QSR chains
end up on the wrong side of the customer,
especially during rush hours, because
theres little to do to kill time while they
wait for their food. In that situation, even
a three-minute wait seems harrowingly
long. To keep its customers engaged, Carls
Jr. will introduce the concept of partial
service. After they place an order at the
counter, customers will be asked to fetch
beverages from a vending machine.
Initially, the company will place one staff
member to help the customers at the vending junction. To some extent, this is expected to reduce the workload of the serving
staff. By the time the customer reaches her

table, the food would have been served by
a staff member. All this in three-and-a-half
minutes.
A strong training process and the handling capacity of in-store equipment will
play a major role in cutting down the turnaround time per order. All the training is
undertaken by the Carls Jr. Star Academy,
known to provide MBA-style leadership
training, in tandem with a web-based instore learning management system.
Currently Carls Jr. India is setting up its
training calendar for 2015. This will include
off-sites for general managers, sessions for
the leadership team at the master franchisee premises, classes on business planning, time management and other things
related to store operations. By the end of
this month a team of seven general managers from Carls Jr. India all with more
than eight years of prior experience will
fly down to California for a 10-week training programme. This team will be responsible for training the rest of Carls Jr.s India
staff.
The show must go on

Uma Talreja, chief marketing officer at
Burger King India (BKI), is of the opinion
that service is faster and better when a
restaurant gets crowded. Otherwise low
footfalls spread lethargy among the store
staff. On an average weekend, BKI makes
5,000-6,000 burgers, more than double
the number it does on weekdays. Talreja
says, Going forward, right training will be
the key differentiator in ensuring the best
customer experience. Talreja, who has a
background in fashion with stints at
Westside, Aditya Birla Retail and Shoppers
Stop, went to Miami to receive functional
training for her role at BKI. The first part of
her induction had begun in India when
she was introduced to the hygiene principles adhered to by the chain so that she is
better prepared to assimilate the second
part of her induction in the US. In Miami,
she spent a week understanding every
aspect of store operations. Marketing-related training sessions included lessons on
innovation, research and the brands visual imagery.
As part of her training, Talreja was
required to visit competing QSR chains
like Wendys, Johnny Rockets, Chipotle
105
Mexican Grill, among others, to understand what they have to offer and what are
some of the things that Burger King could
adopt in its format. She says on a lighthearted note, One day in my week-long
training calendar was assigned for restaurant visits only. Besides observing the best
practices followed at these restaurant
chains, I was also expected to try their
food. Honestly I did throw up the next
day.
For Burger King, store managers are a
key cog in the wheel because they carry customer feedback to the companys leadership team. One thing that BKI has learnt is
that consumer expectations vary from market to market. For instance, in Singapore
consumers expect robot-like efficiency. The
store staff can have a conversation with customers, but without ever stopping their jobs
behind the counter. Such efficiency is
respected in Singapore. On the other hand,
an average customer in India who is equally interested in experiencing a new brand,
like it if the store staff pays extra attention
while helping them select items from the
menu. So on every new restaurant opening, while the store staff is responsible for
efficiency, Burger King Indias leadership
team spends more time interacting with
customers, adds Talreja.
In order to receive Burger Kings certification, every crew member and store
manager has to work in the kitchen. For
training purposes, BKI has a fullyequipped test kitchen in Mumbai. Under
the companys training system, when a
country opens a new restaurant and
expands operations, it earns credit points.
Before the opening of its first three restaurants in Delhi and Mumbai, the BKI crew
was sent to Sri Lanka for training. Before
that, BKIs regional heads along with the
countrys training head went to Bangkok to
undergo a month-long training programme.
The QSR industry is a tough business to
be in. It isnt a secret that a majority of new
restaurants shut down within five years.
Some of the ways to attract new customers
are extremely affordable, but others may
require imagination. If youre on a tight
budget in an overcrowded space it would
be a good idea to start with your people.
>
THE STRATEGIST
Winning in
the aftermarket
You may choose to outsource it or bring it under your
own roof, but keeping a keen eye on after-sales
service will ensure consumers come back
for more
ABHILASHA OJHA
here is such a massive supply of goods and services

nowadays both on the
internet and on the high
street in practically every
industry that looking after
customers and keeping them happy has
become almost a hygiene factor in business today. Most companies understand
that and many of them are continuously
tweaking their aftermarket strategies to
cut costs and make

customers come back for
more. Some have outsourced part
or the whole function of after-sales to a
third party; some others are consolidating
them under one roof to make them more
efficient. Here we look at the experiences
of three companies Philips, Micromax
and Volkswagen that have made radical
changes in their after-sales service models
over the last two years or so and are seeing
the results pouring in.
The experiences of the three companies were different the first two decided to outsource part of the service function while the last decided to spruce up its
act by throwing in its might for more in-
106
house work. But all three

realised that it would be fatal to let
things be.
Take Philips, for instance. A little over
two years ago, the management noticed a
growing number of complaints by customers on social media on how the company managed its aftersales. The customer
care department, the management felt,
was not equipped to handle the aftermarket queries and the resultant delays in handling customer complaints was putting off
many prospective consumers. We struggled with our service centres, customers
were dissatisfied with the products and we
realised we needed processes that could
effectively to address this issue, says ADA
Ratnam, president, Philips Consumer
Lifestyle India. Additionally, even while
the customer base in Tier-II and Tier-III
cities was growing, the management
noticed, repeat customers were few and
far between simply because there were no
service stations to repair the kitchen appliances that were sold in those markets.
Given the mess, the top management at
Philips felt it would be wise to outsource a
major chunk of its aftermarket activities
while it took time to create a more robust
and strong distribution network/centres,
complete with after-sales service facilities
for the customer. In 2013, it inked a deal
with HCL Care, an aftermarket service
provider, for pan-India support for its con-
THE STRATEGIST
>
Partner for progress
After-sales service is a key influencer

that can make or break companies
SACHIN TAYAL
MANAGING DIRECTOR, PROTIVITI
IT HASBEEN GLOBALLYACKNOWLEDGED
that after-sales service strategies are used
as a tool to consolidate sales and enhance
customer experience. It helps stakeholders
get a better understanding of customer
needs and aids clearer positioning of an
organisations brand in the market.
Enhancing an after sales-service
experience is much more than focusing on
marketing tools such as brand
ambassadors, logos, packaging and unique
propositions of product/services. Aftersales service is a key influencer in the
purchase decision of a consumer. While the
customer is getting empowered,
companies are spending big bucks to
manage their public image.
Negative publicity of brands or products
spreads much faster today as customers
increasingly share their views on social
sumer lifestyle products. We understood

that we needed a much wider reach and
network to address the growing concerns
of the customers, says Ratnam. HCL Care
currently handles the distribution and service of spares of Philips consumer lifestyle
products across India. The service team is
jointly trained and developed by HCL Care
and Philips. The company has a different
service partner to cater to complaints
specifically emerging from Tier-II and
Tier-III markets. In fact, when Philips
acquired Preethi, the south Indian home
appliances brand for ~350 crore three years
ago, the idea was to amass both manufac-
media platforms. That said, feedback can

be used as a tool to help decision making
and point out subtle tweaks that may
benefit a product. It is also essential in the
assessment of the satisfaction level of
customers who may have engaged with the
brands after-sales service team.
After-sales can also be a burden on a
companys bottom line due to the increase
in operational expenses if it is not planned
in an efficient
manner. Company should plan the exercise
in such a manner that it is well aligned with
the core
customer problem.
To reduce investments in service assets
and cut operating costs, companies should
consider the following steps:
9 Identify which products to cover
9 Create a portfolio of service products
9 Design and manage an after-sales service
supply chain to optimise location of

resources, utilisation and planning for
contingencies
9 Monitor performance continuously to get
customer feedback
9 Resolve issues immediately and provide
reasonable assurance for better and
improved product/services
9 Have a customer complaint study to
evaluate complaint patterns: This serves
as
an excellent base for data analytics
9 Monitor the after-sales service initiatives
of competitors and market leaders
turing and after-sales facilities of the company. For any company looking to rope in
a customer for the long haul, after-sales is
key, adds Ratnam.
While it is too early to start counting the
fruits of Philips move, aftermarket experts
reckon that the results may already be
showing the companys consumer
lifestyle division that comprises domestic
and kitchen appliances (also the area
where after-sales service was relatively
weak compared to the companys other
divisions) has become profitable after
struggling with flat to low growth till about
two years ago.
107
As experts will tell you, it is good for companies to innovate and bring out newer
products and models, but it is then even
more crucial for them to have a robust after
sales/aftermarket strategy, especially if you
are operating in a market that seems to
have hit a speed-breaker.
See how Volkswagen, the German
automaker, is now learning from its mistakes and making after-sales an integral
part of its growth strategy in India. When
Volkswagen entered India in 2010, it had
an ambitious aim of grabbing around 20
per cent market share in the country by
2018. But the automakers travails began
soon after and it noticed that sales were
slipping as customers were complaining
about the unavailability of parts.
Volkswagen, it appears in hindsight, had
forgotten one crucial thing: putting the
customer in the front seat. In an earlier
interview to The Strategist, Michael Mayer,
director of passenger cars in India for
Volkswagen, admitted that while a market like India with its complexities posed a
challenge to the automaker, Volkswagen
didnt realise how critical after-sales service was for the customer. After-sales
becomes a critical factor for the customer
in deciding which car to buy next, Mayer
had said, admitting that the auto maker
desperately needed to go back to the
basics, think deeply and emerge with a solid after-sales service strategy.
Over the last year or so, Volkswagen has
been working on decoding the Indian customers expectations. For starters,
Volkswagen needed to deliver genuine
parts to customers, especially in south
India. Though a part distribution centre
(PDC) was operating out of Gurgaon, near
Delhi, (it was set up in 2012, two years after
the auto major entered India), customers
were fed-up with the time taken for the
required parts to be delivered to the authorised service stations of the company.
That problem would be sorted to an
extent, hopes the company, when the companys part distribution centre in
Bangalore becomes operative from mid2015. This centre is being set up to expand
the companys after-sales and spare parts
infrastructure in the country, especially in
the southern region, while also reducing
>
THE STRATEGIST
companies is, one, how quickly a complaint is addressed, and two, how quickly
spare parts needed to repair products are
made available. To be sure, HCL Care, a
business unit of HCL Services, has one of
the largest and most extensive service netDecreasing service time
works across the country and provides support services across a range of product catIf Volkswagens aftersales strategy is
egories. According to Talwar, as product
geared to ensure the company has a betcategories grow, a good after sales strategy
ter second innings in the Indian market,
is intrinsic not just to industries such as
see what its competitor, and the number
automobiles and electronics but also to
one player in the Indian auto industry,
several others, including consumer health
Maruti Suzuki, did recently as part of its
care, appliances, telecom, durables etc.
after-sales strategy. When Kashmir valley
The customer portfolio is changing and
was hit by floods last September, the
though the failure rate of products has
company stationed 900 technicians from
gone down considerably with companies
different parts of the country to quickly
investing in R&D and innovation, comperestore damaged cars. As part of its deditition has increased and so has the comcated aftermarket customer care initiative, nearly 6,000 vehicles were repaired plexity of customer demand, he adds.
Think about it: a smartphone company,
in a jiffy and a huge cache of spare parts,
for example, acquires a cussupplies and equipment were
tomer for the first time when
rushed to the state to cut Outsourcing
she is in her teens but can
down time taken to repair the after-sales service
retain her for the next few
damaged vehicles. Pankaj to experts is a
decades if it plays the cards
Narula, executive director, good idea because
service division, Maruti they have stronger right. The cost of customer
acquisition, according to anaSuzuki, explains, Our experi- data analytics
lysts, is typically 40 per cent of
ence suggests that a key skills and better
the value of the brand.
determinant in the car buying facilities to
However, if the customer is a
decision is the after-sales net- train people
repeat one, the costs come
work, its accessibility, service
down significantly.
costs and the availability of spare parts.
A sure shot way for a brand to get recOur big goal has been to run a robust serommended is by having a great after-sales
vice network that also supports sales.
strategy and ensuring that each cusHeres how Maruti Suzuki has got its
aftermarket strategy spot-on. As we grew tomer and her complaint is important, says Talwar. He adds that outsourcour business, our network kept pace with
ing service to an expert might be a good
the spread. The company has a network of
idea simply because they have stronger
over 3,000 service touch points capable of
data analytics, better facilities to train and
servicing 15 lakh vehicles every month.
equip people and address customer comThen there are concepts like Maruti Mobile
plaints.
Support, under which the customer gets
Talwar cites an example: For one of
door-step services; Express Service, that
aims to complete a service in 90 minutes. our smartphone companies we saw that
while two specific models were made obsoExperts say that the most critical part of a
lete, many customers still came to us
good aftersales strategy is addressing the
requesting us to repair those specific modcustomer complaint in time at Maruti
els that they had purchased. We informed
service centres, workshop service advisors
the company to give us original spare parts
with handheld devices have already
of the old models, we kept those with us for
reduced the service initiation time from 15
the next two years and that allowed us to
minutes earlier to less than 10 minutes
service customers well. This step also bode
now.
well for the company that realised that
According to Sharad Talwar, head, HCL
innovating didnt mean abandoning what
Care, two of the biggest challenges that
was old.
make or break an aftermarket strategy for
the current lead time to reach genuine
parts to dealers and service centres. With
this development spare parts will reach in
24 hours flat (and not days as was the case
earlier) to improve customer satisfaction.
108
Staying with handphones, consider the

experience of Micromax. While its phones
sold like hot cakes, the company realised
where it tripped was aftersales. Thats
when the company decided to increase the
number of its partner-managed service
centres from 436 in 2013 to 1,250 in 2014.
The company also painstakingly put
together processes (building its spare part
inventory, for example) to reduce the turnaround time to less than seven days from
15 days earlier.
So there you have it: Whenever consumer spending is slowing down, you need
to defend your market position and maintain your competitive edge. And one great
way to do that is by looking after your existing customers. They will be your competitors'
target
market.
So offer better support by being more
responsive to their needs and expectations.
If possible, through in low-cost benefits
such as discounts or loyalty schemes.
Remember, it's cheaper and easier to keep
customers than to find new ones.

Strategist 2

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Strategist 2

Transféré par

Droits d'auteur :

Formats disponibles

THE STRATEGIST

EDELWEISS LOOKS FOR A ROLE MODEL

WHEN SPEED IS OF THE ESSENCE

MAKING THE MOST OF RETURNS

LOOKING BEYOND NUMBERS

DAWN OF THE HYPER LOCALS

THE RISE OF ALPHA CONSUMER

HOUSING.COMS TEACHABLE MOMENTS

COPYCATS PLAY UNDER AMUL FIRE

PERFORMANCE INCENTIVES:CAN THEY DRIVE EXCELLENCE 11

ROUND THE CLOCK PERFORMANCE REVIEW

A NEW SOCIAL ORDER

CELEBRITY OR HOT POTATO

MAPRO SPREADS THE JAM

TWO SUSPENSIONS & A SLEIGHT OF HAND

NATIVE ADVERTISING: FLOP OR FUTURE?

THE FOUNDERS DILEMMA

GOING REVERSE IS JUST FINE

SAINT GOBAINS INDIA'S MARCH

BRINGING ORDER TO CHAOS

THE MOTHER OF ALL BRANDS

ADS THAT CROSSED THE LINE

PROMISING A SEAAMLESS USER EXPERIENCE

PEPSI MTV INDIES HELPED BY ITS BRANDED CONTENT

BAJAJ FLEXES PULSAR'S MUSCLES

SMALL PROVES BIG FOR MERC

FOR A BIGGER SHARE OF THE PIE

BARC: STABILITY COULD EASE FIRST SET OF HICCUPS

THE NEW ADVERTISING ORDER

WINNING THE PEOPLE WARS

STRATEGY & PERFORMANCE

COST CUTTING IN ACTION

FROM THE SELLER TO THE BUYER

WIN BACK LOST CUSTOMERS

RECREATING THE OLD MAGIC

THE DEMISE OF A STAR BRAND

PIAGGIO SWITCHES LANES

CHASING THE LONG TAIL

GES INDIAN ODYSSEY

GROWING SHARE OF WALLET

WINNING IN THE AFTERMARKET

THE BATTLE OF RETAIL BRANDS

erome Golaszewski, programs and

This can do approach can

LAURENT MARCEL, managing

programs and innovation

director, Danone Nutricia: I find

called this imbibing life skills that can help

playing cricket matches. Rather than being

system allows people not to

Panasonic India: I have been

sidered the stretch version of ambition.

ets get this straight first: No one

with fewer resources. Given this, the ability

being clear about the company strategy,

Dont waste time

gut feeling whenever in doubt. Venugopal

here is some new heat around the

When advertising creative directors

and brands get to listen in to these

SAMAR SINGH SHEIKHAWAT

first by the sophistication of a category

Reach out and