HERO & HONDA?: BREAK UP PLANS

Speculations abound on the probability of the Hero Honda JV heading for a sudden break up. B&E’s Pawan Chabra does a speed-check on the repercussions of such an event for both players

To both Honda and Hero’s credit, spokespersons from both groups have denied any such development repeatedly in the recent past. But industry analysts comment that’s not quite the case. It has been reported that the Hero Group has set up an SPV for buying Honda’s share and has also contacted a handful of PE players to pick up a stake in the company. However, there have been concerns on the valuations of the share of the company as it is expected that the share price of the company will fall once Honda moves out of the picture and the home-grown Hero group is facing difficulties in clutching a deal. At the current share price of `1,700, the valuation of Honda’s 26% stake comes close to `90 billion.

So what would Honda have to lose? The answer is quite straightforward – the maddeningly huge and extensive distribution, sales and service network that is one of the key differentiating factors for Hero Honda products. One has to note here that Honda has been separately operating in India with its 100% owned subsidiary Honda Motorcycles & Scooters India Limited (HMSI) since 2001. The company has gained ground in the scooter segment in no time with products like Activa, Eterno and Aviator and is also moving very aggressively into the motorcycle space.

“Honda is looking at the bigger picture here (by breaking up the JV, if that happens) and is eying the huge potential of the Indian two-wheeler industry,” said Vaishali Jajoo, auto analyst, Angel Broking. Not only will Honda have to compete with the market leader, the Hero group, but it will also not bank any share of profits from the JV, apart from foregoing royalty payments (in case Hero decides to have its own R&D). For the record, the Japanese auto major rakes in close to 2.5% of sales as royalty fees every year. It is to be mentioned here that the amount of royalty payment to Honda from the Hero Honda JV stood at `4.2 billion in fiscal 2010. In fact, it is expected to rise to around `5 billion in 2011. A report by IDFC Securities comments that after moving out of the JV, it would take at least 3-4 years for HMSI (Honda Motorcycle and Scooter India Ltd) to scale up to a level to challenge the two domestic market leaders. Our analysis is that given the huge odds among the minor evens, it appears impracticable for the duo to separate, at least for the short run. Differences of opinion over royalty payments can easily be sorted out, especially when the synergy between these two has been empirically evidenced and statistically proven. This time, staying married seems the better course...

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Source : IIPM Editorial, 2012.

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

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Lessons from the past

The rotational chief minister system was experimented with by the BJP and the BSP in 1998 in Uttar Pradesh where a deal was stuck under which Mayawati was to be chief minister for the first six months of the coalition government following which the BJP’s chief minster nominate would have taken over. BJP got the posts of deputy chief minister and leader and deputy chairman of the Legislative Council. However, merely 28 days after her six months got over and Kalyan Singh became the CM, Mayawati did a volte face and withdrew support.

When the Congress and PDP formed a coalition government in Jammu and Kashmir after the 2002 elections, they had decided to share the post of the chief minister for three years each. They had shared power accordingly starting with PDP chief minister Mufti Muhammad Sayeed at the helm. The transfer of power was smooth and Ghulam Nabi Azad took over after three years. However, the PDP never came to terms with the reality and a section of it never actually wanted Azad. In short, they were looking for an opportunity to withdraw support. 


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Source : IIPM Editorial, 2012.

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

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Too costly to kill?

The death penalty, besides being a question of morality, is also becoming a question of cost. But the cost of crime must also be considered

James Ellis, Chief Criminal Judge, Oregon put forward the point quite succinctly, “Whether you’re for it or against it (capital punishment), I think the fact is that Oregon simply can’t afford it.” The rising cost of capital punishment is becoming a ground reality across the world; thus forcing nations to reconsider it.

According to the California Commission, the entire infrastructure behind an execution system costs $137 million per year, but a system without the death penalty costs only $11.5 million in California (as per 2008 data). A 2003 legislative audit in Kansas noted that the estimated cost of an execution case ($1.26 million) was 70% more than the cost of an analogous non-execution case ($740,000). As per the Urban Institute (2008), the cost of execution cases amounts to almost 3 times more as compared to non-execution cases in Maryland. Similar comprehensive studies are not readily available in other countries, but the fact that the death penalty is considerably more expensive is amply clear. Most costs relating to capital punishment occur prior to and during trial; not in post-conviction proceedings as the trial period becomes too lengthy over the time for execution. As per the Florida Department of Corrections, the average length of stay on death row prior to execution is 12.68 years.

However, this doesn’t nullify the relevance of death sentences, as it’s also important to calculate the cost of crime to a nation. According to Georgetown University Professor of Public Policy Jens Ludwig, the cost of crime to the US economy is around $2 trillion per year.

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Source : IIPM Editorial, 2012.

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and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Prof. Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School

The Word Profit has Provoked a Wide Range of Issues and Emotions among Respondents & Businesses around The World. It also Launched Debates, and many readers Argued for Measures of Success other than Profit, writes Prof. Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School.

Charles Green (founder and CEO of Trusted Advisor Associates) continues the discussion by suggesting, “The really interesting question raised is: if profitability is higher when pursued as a by-product than when it is pursued directly, why then do managers (irrationally) choose to pursue profit directly rather than indirectly? I think the answer is to be found more in psychology than in economics.” Does that account for the increasing interest in the field of behavioural economics? What do you think? H. L. Hencken once said, “For every problem there is a solution that is simple, direct... and wrong.” This brings to mind experiences with leaders of the most profitable organisations that I have observed. Almost to a person, they treat profit as a by-product of other things to which they devote most of their attention, things such as a focused strategy that delivers results to carefully-selected customers while pursuing policies and practices that leverage results over costs, hiring people with the right attitude (one that fits with the organisation’s culture), and proper training and organisation (often in teams). Financial targets are given no more or less emphasis than targets associated with employee and customer engagement, often by means of some kind of balanced scorecard. Rewards and recognition – whether based on the performance of the entire company, teams, or individuals – reflect this philosophy. The idea is to create what my colleague, Michael Beer, calls a “high commitment, high performance” (HCHP) organisation.

This idea has been addressed at length in a new book, Obliquity, by British economist John Kay. You might guess that Kay thinks profit as a “direct goal” is overrated, otherwise he wouldn’t have much substance for a book on the subject. Kay argues that business problems cannot be solved by drawing a straight line between cause and long-term effect because they are so complex, a manager’s information so incomplete, the competitive environment so complicated, analytic techniques so inadequate, and the number of things over which a manager has control so limited, that it is impossible to make the connection with any assurance. As Kay puts it, “The mistake is to make inferences about the relationships between outcomes and processes when we cannot observe and do not understand the processes themselves.” The argument is that those things that contribute to long-term shareholder value will be revealed and achieved by realising intermediate goals or through some kind of overarching mission and vision that helps an organisation achieve long-term shareholder value as well. Of course, it assumes that we know what those things (missions, visions, intermediate goals) are and that we have some understanding of how they contribute ultimately to shareholder value.

There is some empirical evidence to support Kay’s thesis. For example, Fortune’s 100 Best Places to Work regularly produce more profit than a matched set of competitors. Kay’s response to this would probably be, “What does that prove?”
If it can be demonstrated that this approach yields more profit, why doesn’t the leadership of more organisations pursue profit through “indirect” means? Or is it, as Kay might ask, as simple as this? Can this philosophy be carried too far? Is it compatible with the need in a public company to “make the numbers” every quarter? Is it dangerous or misleading to give too much emphasis to the idea that profits are a by-product of many other policies and practices? Is it wise to communicate this concept to all levels of an organisation? If so, how is this best done without confusing people?

Is profit as a “direct goal” overrated? And if it is, why then is it so frequently found among goals?
Coordinated by: Steven Philip Warner

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and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Kashmir on The Backburner

Now that Even Pakistan has Woken up to The Evils of Terrorism (or has it?), Is it possible for The Two Countries to Work Together?

When Pakistan’s Gibraltar Operation against India failed in 1965, the then Foreign Minister of Pakistan, Zulfiqar Ali Bhutto, vowed in frustration that “Pakistan would wage a war of a 1,000 years, a war of defence.” Stephen P Cohen, senior fellow at Brooking Institute, opined recently that “the Indo-Pakistan conflict, which includes Kashmir besides many other problems, will last for 100 years or even more.”

While putting a number to the years is really ignoring the gravity of the situation, this acrimony really doesn’t appear to be vanishing very soon. And interestingly, this is despite Kashmir going on the back burner in recent times. Discussion on the same between the two nations came to a standstill post the 26/11 attacks. Since then, the prime agenda for high level diplomatic interactions has been terrorism. In three diplomatic meetings between the foreign secretaries of both nations – in July 2009 on the sidelines of NAM meeting, then in September on the eve of the annual UN General Assembly session, and in February 2011 during the SAARC conference – the main agenda was terrorism, a speedy probe on 26/11, Rana, Headley, et al. The agenda remained the same when the Prime Ministers of both countries met in Pittsburg for the G20 summit. America’s successful ‘hunt Osama’ expedition in May followed by a series of terror strikes on Pakistani soil further enhanced the focus on terrorism.

So while Kashmir may remain important over the long term, given the fact that confidence building measures build anything but confidence, this is a good time for India to perhaps earn sincere brownie points by engaging Pakistan economically.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
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Time for a ‘Crude’ Landing, People!

The Current Surge in Global crude Oil Prices puts forth two basic Questions – what are The Underlying causes and what’s The Worst we can expect. While The Most Pessimistic Projections may prove untrue, The World is Indeed staring in The Face of another crude shock that could derail Global Recovery

Be it the oil shock of the 1970s or the impending oil crisis of 2011; the spike in oil prices in both cases has been the consequence of a combustible mix of geology and geopolitics; with the latter inflicting much more of the damage. The turmoil in Egypt, Tunisia, Yemen, Libya and the consequent fears of disruption of Suez Canal and SUMED pipeline have led to oil prices breaching the $100 per barrel mark (on February 24, 2011 it touched $120 per barrel, well short of the July 2008 peak of $147 per barrel). The continued political upheaval in Libya, which produces approximately 1.6 million barrels per day and accounts for close to 2% of global oil output, will further escalate prices and dampen the fragile global economic recovery.

As the ‘Day of Rage’ rules the roost throughout the Middle East and North Africa (MENA) region, oil-supply side vulnerabilities can only increase. It is to be noted that the MENA region is home to about 60% of global crude oil and 45% of the world’s natural gas reserves. Given such dynamic statistics, any disruption in the supply of resources from this region will tantamount to a significant price rise. Though Saudi Arabia and other OPEC members are bent on meeting the challenges, fear of underinvestment in the MENA region will undoubtedly push oil prices northwards.

Amidst this scenario, research houses are forecasting that oil prices could well surge to $220 per barrel (as suggested by Tokyo-based Nomura Holdings). With the bitter aftertaste of the economic crisis still lingering across the globe, the forecasts of spiralling crude oil prices is an indication that we could be in for a reversal of the global economic recovery, as if it wasn’t sluggish enough already.

Even if one assumes that the current spike is merely a result of speculation and that the dust would soon settle down; the potential loss is huge. As per estimates, the British economy would have to wipe out £45 billion in the next two years if oil prices surge to $160 per barrel this year. The economic recovery in the US too could be hurt; it is estimated that every $1 surge in oil prices would cost the consumers $1 billion over the course of a year. The entire episode of unrest has seen the West Texas Intermediate (WTI) and other crude oil spot price increase by about $15 per barrel since mid-February. The US Energy Information Administration (EIA), in its latest outlook (Short -Term Energy Outlook, published on March 8, 2011), has raised its forecasts for the average cost of crude oil to refiners to $105 per barrel in 2011, $14 higher than its previous outlook. However, EIA has raised its 2011 forecast for WTI by only $9 per barrel to $102 per barrel, because of the projected continued price discount for this type of crude. EIA has further projected a small increase in crude oil prices in 2012, with refiner acquisition cost for crude oil averaging $106 per barrel and WTI averaging $105 per barrel.

At best these projections are but optimistic in nature. BMO Capital Markets further goes on to suggest that given the lag and the cumulative 46% increase in WTI between 2009 and 2011, the oil price increase will reduce the US economic growth by 0.7% (a huge figure in their case). Substantially higher prices (as forecasted by Nomura) arising from a supply shock would also significantly heighten the risk of a renewed recession. The current political problem is more grave than the geopolitical problem of the 1970’s, since the problems have spread to the entire MENA region.

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Source : IIPM Editorial, 2012.

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

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Apple shifts: Businesses, too, have eyes for ipads, iphones

Steve Jobs never cared much for selling Apple products to big businesses. A funny thing has happened, though, in the last few years. Big companies have started buying Apple products – a lot of them – for their employees

The late Apple chief executive so disliked the process of catering to the needs of business, rather than those of consumers, that he called chief information officers in corporations “orifices” at a conference in 2005. “There are 500 men and women in the Fortune 500 – CIOs – that you have to go through,” Jobs said then.

A funny thing happened, though, in the last few years. Big companies started buying Apple products – a lot of them – for their employees. The iPad and iPhone have given the Apple symbol a presence in workplaces that Apple never enjoyed when it was strictly focused on selling Macintosh computers.

While corporate technology buyers say Apple does not try to hide the fact that consumers are still its top priority, they note that the company has gotten easier to work with in recent years, adding features to its devices that make them more palatable to business. It also doesn’t hurt that Apple’s new chief executive, Timothy D. Cook, is known to be far more at ease meeting with the CIOs Jobs once so memorably disparaged.

“What they’ve done in the past few years is really started thinking in a deeper way what the enterprise needs,” said Rich Adduci, chief information officer of Boston Scientific, a medical device manufacturer that has distributed about 3,000 iPads to its field sales people and expects to buy 1,500 more by the end of the year.

Apple, which declined to comment for this article, has begun to drop hints that it sees the corporate market as a big growth opportunity. During recent earnings calls with Wall Street analysts, Apple executives have boasted about the portion of Fortune 500 companies testing or deploying iPads and iPhones – 92% and 93%, respectively, Apple said in October.

“You never heard those stats before,” said Gene Munster, an analyst at Piper Jaffray. “The reason why is they struggled for decades, and finally they have a story to tell in the enterprise.”Among the big customers Apple has won recently is the home improvement retailer Lowe’s, which said it bought about 42,000 iPhones to be used by employees on store floors. Instead of having to find a computer, the employees can use the devices in store aisles to check inventory, pull up how-to videos and help customers estimate costs for painting, flooring and other projects.

Airlines have begun to use iPads to replace the printed aircraft flight manuals, navigation charts and other material that pilots are required to bring on board. The binders holding those manuals typically had to be popped open every few weeks by pilots so they could replace pages with updated information. With iPads, the updating occurs electronically.

All of Alaska Airlines’ more than 1,400 pilots now have iPads, and United and Continental Airlines, which have merged, started giving iPads to all 11,000 of its pilots in August.

“We’ve shown we can retrieve an electronic page faster than we can retrieve a printed manual,” said Captain Joe Burns, a United pilot and managing director of technology and flight tests for the airline.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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10 steps to build a successful Asian brand

Building a brand is an overwhelming task. Here’s a quick ‘how to’ guide for asian companies to build great brands and get the best out of the process

The orientation of brand management has gone through substantial changes over the last few decades, and has evolved as a more integrated and visible part of the overall corporate strategy. The evolution of the brand equity concept during the 1990s, development of advanced financial brand valuation models and its adoption by advisors and their clients, and emergence of better brand tracking tools, have all facilitated the elevation of the branding discipline beyond the middle management and into the boardroom.

Asian boardrooms generally lag behind this trend and tend to manage brand marketing from a bottom-up perspective instead of a top-down perspective. There are a couple of reasons for this. As marketing and brand decisions traditionally have been managed in mid-level marketing departments among most Asian companies, a large emphasis has been placed on tactical marketing activities as opposed to strategic branding approaches led by corporate management. Branding has been widely perceived as advertising and promotions.

But several indications show rapid progression in the right direction for select Asian companies where branding as a strategic tool has become more recognised and accepted within their boardrooms. This is also driven by the increasing attention on branding and its value-driving capability among stakeholders, media and opinion leaders across Asia. To achieve these objectives successfully, Asian companies must follow a comprehensive brand strategy framework supported by a systematic process throughout the organisation.

There are 10 crucial steps to building a successful branding strategy and manage its implementation. The steps enable Asian boardroom to focus their attention on the required areas, and serve as check-points which can be tailored to the individual company’s specific needs and requirements.

1. The CEO needs to lead the brand strategy

The starting point for branding must be the boardroom, which also serves as the most important check-point during the project. The CEO must be personally involved in the brand strategy, and he must be passionate. Fully buying into the idea of branding is necessary. To ensure success despite the stressful routine which entails various duties, the CEO must be backed by a strong brand management team of senior contributors, who can facilitate continuous development and integration of the new strategy.

2. One size doesn’t fit all: Build your own model

All companies have their own specific requirements, set of business values and a unique way of approaching business functions. Therefore, even the best and most comprehensive branding models have to be tailored to these needs and requirements. Often, only a few but important adjustments are needed to align them with other similar business models and strategies in the company to create a simplified toolbox. Remember that branding is the face of a business strategy, so these two areas must go hand in hand.

3. Involve your stakeholders including the customers too

Who knows more about your company than the customers, employees and many other stakeholders? This is common sense, but many companies forget these simple and easily accessible sources of valuable information for adding value to the branding strategy. A simple rule is to use 5% of the marketing budget on research and at least obtain a fair picture of the current business landscape including the perceived brand image among stakeholders along with the brand’s positioning.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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“Most people are sincere”

Customer and dealer centricity in tandem have been key to the success of JK Tyre in the Indian market according to A. S. Mehta

For A. S. Mehta, a career spanning 25 years in JK Tyre has been professionally and personally fulfilling. From starting as a CA, Mehta took up additional roles in the company before becoming Marketing Director in 2007. In this interaction with amir moin, he talks about his personal and professional journey & success mantras:

What is your leadership style? What are the factors that have contributed to your success?
Since the last 25 years, I have always believed that most of the people are sincere and committed. They have the passion to succeed and aspiration to move upward. My efforts have always been to channelise their passion and their competencies to excel in their respective fields. I have followed the inspirational style of leadership rather than the hierarchy-based style. Highest degree of integrity, very focused approach for any assignment, quick decision making, easy access to members of the team, coverage of connection, process driven and systematic style of functioning have been the attributes to whatever I have done for JK Tyre.

What would you regard as the key milestones in your journey to this position?
I must say that success is a journey where the destination is not defined. It is always a moving destination because once you reach one destination you have the next destination in your mind. Hence, there have been many milestones. Keeping the sales force united and motivated was the first milestone and thereafter, there were several milestones like leadership in the truck radial market, introduction of CRM, introduction of fleet management and introduction of dealer relationship management et al.

What are the unique strategies that you have undertaken for the Indian market and what is the outlook at the moment?
We have been a prominent player in the commercial tyres, OTR and car tyres. For commercial tyres, our strategies have been two pronged; one on the customer front and the other one for channel partners. In the Indian market, the dealer is the most influencing factor and we have been very strong in our relationship with channel partners. On the consumer front, our Fleet Management and Customer Relationship Management have been the best initiatives in the tyre industry.

How do you spend your free time? Which is your favourite vacation getaway?
I am very religious person at heart and family man. Whenever I get some free time, I like reading on religion, philosophy and spend time with family and relatives at religious places. I’m also very close to my brothers, their children and even other distant relations. It has been an inner urge to do whatever I can do for them. For vacations, the best place I could think of is Udaipur.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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IIPM Best B School India
Management Guru Arindam Chaudhuri
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IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
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“Security threats have grown more complex”

Pradeep Nair, Director, Software Group, IBM India/South Asia discusses the security market, client expectations and ibm’s competitive edge

Security is a big concern for business in today’s time. Which industries are the most concerned about security issues?
When we look at the Indian market, we have BFSI, telco, retail, organisations in the government space; we have a number of sectors which basically are large. Who would be concerned about security? Typically they would be organisations that need to protect their brand & reputation in the market or have a mandatory regulatory compliance requirement. So when I look at it from a prioritisation perspective, I think BFSI is one of the key adopters from a regulatory compliance perspective, or from the perspective of data protection; ensuring there is no risk of data loss, unauthorised entry or unauthorised access into their systems. A lot of organisations have adopted such solutions. The next set of customers is from the telecom base. With the kind of massive inroads into technology, giving access, going ahead and working with clients, having huge amount of customer information are areas that organisations wish to protect. You would have heard in the news about breaches that led to degradation of an organisation’s brand value. The ITeS and BPO sector are also very stringent from a security perspective. Efforts from NASSCOM and the industry have been made to ensure that once companies from outside India outsource their infrastructure and data & applications, it is maintained and operated in the most secure environment. These companies are most concerned and want to adopt the best security infrastructure. We are also working with regular enterprises that could be across manufacturing retail, healthcare and even in the SME space.

Despite innovations, security threats persist in today’s organisations. How are the threats different today, say, with respect to around a decade back?
Firstly when you look at threats, they can be in the form of worms and viruses; unauthorised access into your network infrastructure; access of privileged users to information that they are not supposed to see; when you are looking at a global mobile workforce and you open up your access to infrastructure for productivity, security gets compromised et al. The threats have only gone more complex and with the greater penetration of IT, they are growing. Worms and viruses that harm infrastructure and productivity are there today as before. IBM has a solution called endpoint security that ensures that your patch management and virus updates are in place. For external threats, there are intrusion prevention and protection systems so that the threat is mitigated. Threats haven’t changed, they are only evolving. For instance, seven to eight years back, there was no phishing like, say, sending e-mails posing as banks and asking for your details. I think those are increasing now. Around 2-3 years back, the banking system got vulnerable in the face of these attacks.

There has been a spate of recent attacks on organisations and even government infrastructure. So does that mean organisations are not really as prepared for security breaches as they look?
You are as secure as you think you are. You think you are secure and when there is an attack, you realise that you are not. IBM has brought out a security framework that is a combination of our capability around software, hardware and services – a complete framework. It has three tenets. The first is around security governance – rules and policies that organisations lay down and ensure that they are followed. There should be a security governance leader who ensures that the rules are followed and there is a right monitoring capability in the organisation. The second tenet relates to risk management. What is your approach to managing risk? What is the analysis that you are doing on the risks faced day in day out by the organization? How do you really manage current and future threats? And what is the best way to manage security exposure? For instance, how do you really correlate that the incident that happened was due to a vulnerability in the firewall or was an unauthorised access? The third tenet is compliance. Companies must ensure that the current security infrastructure meets compliance requirements and established guidelines.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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JWT Meet the Icons!

Call it luck, Call it anything, but ‘Vispy’ and ‘Debu’ were destined to meet and create wonder together

One is extremely funny. The other is no less in terms of wit too. We tag them as the most effervescent duo (not literally!) of the Indian ad industry. Meet Vistasp Hodiwala (Vispy), VP & Senior CD and Debu Purkayastha, VP & CD, JWT, who believe that finding the right creative partner is 90% your luck and 10% your partner’s. Here are the iconic Lead India campaign creators!

How did you two pair up as a team?
VH: It was in 2007, when I was looking for a change after a rigorous stint at McCann Erickson. At that time, JWT had just acquired Agnello Dias and was looking for fresh talent to supplement their talented core. Aggie called me and requested me to meet Debu. I didn’t think twice.

DP: Senthil and I were a team. After he left for Bangalore, I was looking for someone to partner me. I met a few, but nothing fructified until I met Vispy. There was an instant connection as he was quite honest and spoke from his heart. Plus, he was bawa and I love bawas!

You two had struggled with your first campaign as a team. How was your experience working on that?
VH: Our first piece of work did not see the light of the day. It was for The Times of India, and it got shelved. It was like hitting the ground running because with TOI you have to be on the ball as soon as the brief is delivered. And then, there’s Aggie’s breathlessly healthy competition to contend with. However, our first proper work together which broke in the media was the incredibly awarded Lead India campaign. Needless to say, it won us the first ever Grand Prix for Indian Advertising and the First Integrated Lion at Cannes.

How was your industry experience before you two paired up successfully?
DP: I started as a Jr. Visualiser in Triton in 1992. A year later, I moved to Bangalore HTA. But soon returned to Bombay and joined Saatchi & Saatchi. Some crazy bug bit me there and I teamed up with a friend to start Digital Nirvana, a digital multimedia design studio way ahead of its time, just to call it quits soon. Then, in short stints, I worked with RK Swamy BBDO, Channel V, STAR TV, Hongkong, till 9/11 happened and I decided to come back to India. I stayed undecided for a few days trying out art direction for TVCs, direct marketing, CRM and web designing. Finally, advertising beckoned again and I walked into JWT.

VH: Materials Management, the subject I specialised in, wasn’t exactly getting my life’s juices flowing smoothly. And one fine day, when yet another corrupt supplier’s charms got too much for me to resist, I wrote out in longhand an application (nah, a plea) to the head of an agency, which was growing at a breathtaking 236%, to hire me as a trainee writer. It was 1994 and I started my advertising carrier in Percept. Then I worked with many mavericks like Murzban Shroff and Mohandas KK. Later I worked with Prasoon Joshi and Agnello Dias; two immensely successful creative directors, who couldn’t be more dissimilar in their approaches.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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The true Indian! On camera!

The man shares with Amir Moin & Neha Saraiya his career journey, the past, present and future of Fujifilm India, and why he loves India considerably

Kenichi Tanaka
MD, Fujifilm India

As we step into the plush interiors of Fujifim India’s office in Gurgaon, we contemplate how our delay in reaching this MD’s office – owing to the record rainfall in Delhi NCR – would affect the quality of our discussion. Much expecting to see a miffed Japanese face as we scamper through the corridor leading up to his office, what comes next is much pleasantly surprising. Sitting comfortably in his plush office, Kenichi Tanaka’s face splits into a smile on seeing us. Even before the ceremonial introductions, he confides to us the fact that the vagaries of Delhi’s rain and traffic delays are very well known to him. It hits us then that Kenichi Tanaka, MD of Fujifilm India, is perhaps more accepting of the Indian-way of functioning, than we ourselves. Here was a true blue global citizen! That said, despite being a globetrotter, Tanaka still deeply respects Japanese culture and values; something that keeps him rooted.

Tanaka started his corporate journey in 1978, when he joined Fujifilm. 32 years onwards, and Tanaka is one of the most respected multinational leaders in Fujifilm history. The respect bestowed upon him by his colleagues and peers for expanding Fujifilm in seemingly difficult geographies, is legendary. When Fujifilm decided to set up a wholly owned subsidiary in India 2 years ago, Tanaka was the man of arms that the Fuji top brass chose. The market was replete with top of the mind recall for arch rivals Canon, Sony, Nikon and Olympus. But Tanaka had this great self belief that their products could be targeted at the mid range consumer segment. He excitingly shares, “Sony and Canon are considered as premium while Olympus and Nikon market cameras with value for money. We saw a market in between – the mid range segment – and concluded that our high quality offerings and a reasonable pricing would make for a potent combination to tap this market.”

It was tough going for the first two years. Tanaka confesses that the situation was tough as consumers were not even award of their brand. The first hurdle therefore was to make consumers aware of brand Fujifilm. Dealers and retailers were not willing to budge an inch. However, thanks to extensive investments in training and development of sales force, Fujifilm soon established its own fraternity among the dealers. “We overcame the initial challenge of establishing our products with the retailers and dealers. But still, we have the task of replicating the same with our customers. To make sure this happens, our company is in the process of conducting training sessions round the year wherein, we train our sales force to handle both the customers as well as retailers and dealers,” says Tanaka.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
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IIPM: Indian Institute of Planning and Management

Makings of a great marketing escape!

Vivek Nayer hopped on to M&M after a vast experience in FMCG & consumer durables. And auto has been immensely exciting as well, as he discusses with Pawan Chabra of 4Ps B&M

Vivek Nayer
Executive Senior Vice President – Marketing (Automotive sector), Mahindra & Mahindra

It had been just a few days since the Marketing team of the automotive division at M&M was shifted to the Kandivali office at the Western Express highway from the Worli office when we landed for the interview with Vivek Nayer, Senior Vice President – Marketing (Automotive sector), M&M. However, even on a normal Wednesday afternoon, while the refreshing environment at the lush green facility was not matching with the usual scenario that one finds at the offices in the financial capital, the work was going in full flow.

Prior to this assignment, he was working with Reckitt Benckiser back in the UK, certainly one of the best names in the FMCG business. The decision to relocate to India was because of the India growth story. In fact, Nayer still misses his BMW 5-Series and the kind of Lebanese food he used to relish in London. He didn’t come into the automotive sector by design. The first offer that came to him was from M&M and he joined the company in 2005 to give it a shot for six months but comments, “Here I am five years hence, which clearly means that I am enjoying it a lot.” The kind of portfolio that Mahindra has is quite unique even compared to other players in the industry. However, he feels that the marketing foundations to engage with consumers remain largely the same.

Words like tough, rugged and solid are almost synonymous to the Scorpio, Xylo and Bolero models that Mahindra offers to Indian consumers. And that’s not all. The marketing philosophy that M&M follows in terms of advertising and positioning its brands is very different to what the rest of the industry follows. Be it the recent commercial featuring the ace photographer Atul Kasbekar for Xylo or the earlier campaigns, it has often followed the road less taken. “At Mahindra, we focus on the product and its positioning rather than the brand ambassador; unlike the case where the consumer has a recalls for the brand ambassador but not the products that he endorses,” avers Nayer. In fact, Nayer considers the success of Xylo without any cannibalisation in the Mahindra portfolio as one of the major successes that he has had so far in his M&M stint.

Nayer stepped into the corporate world after finishing his Master in Management Studies from the University of Mumbai back in 1987. After six years at Voltas, Nayer stepped into Reckitt’s premises in 1993 and was there for over a decade handling different brands and divisions. “But I was one of the lucky ones to handle Dettol in Reckitt,” recalls Nayer. He admits, “FMCG is one sector where one gets a clear understanding of marketing and sales concepts. Perhaps that’s why you see people with marketing and sales background in FMCG moving to the other sectors and not the other way round.”

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management