Monday, May 24, 2010

NO CHEAP STRATEGY, THIS!

Sell value not cheaper brands, this is what HPCL did with its Rasoi Ghar concept

So you thought that selling to rural India means selling cheap and inferior stuff? Well, think again. A few years ago, when state-owned HPCL made its first attempt to target rural consumers, it met with resistance. The problem was two-fold. First, the fact that consumers in rural India (used to cooking on chulhas and angithis) did not really see the need to switch to LPG cylinders and secondly they did not have the purchasing power to buy a connection of LPG at Rs.1,600 and then shell the refill cost of Rs.270. Realising this gap, HPCL teamed up with rural marketing agency MART and came up with a novel idea of Rasoi Ghars to make women experience the benefits of LPG (clean, convenient and safe) and dispel myths associated with LPG. Rasoi Ghar was a strategic marketing effort of HPCL to extend LPG use throughout rural households in India.

Targeted at the Bottom of the Pyramid (BoP), Rasoi Ghar is a community kitchen set up in villages where women come to cook food. While HPCL contributes cooking stoves, LPG cylinders, utensils, cooking counter and water and appoints a woman from the Self-Help Group (SHG) as a caretaker, the local Panchayat contributes a room (10 x 10 or bigger) for the kitchen. Women bring basic materials and pay (Rs.3 for half hour) for using gas and take away cooked food home. The caretakers’ role is to collect money, order refills and keep the premises clean. BoP non users experienced the advantages of clean, convenient, safe and non-polluting LPG without having to buy a connection. Once they are satisfied, many decide to buy individual connections subsequently. Says Pradeep Kashyap, Founder, MART, “On behalf of HPCL, MART has already rolled out over 1,600 community kitchens in 2,000-plus population villages in half-a-dozen States, where women from the poorer sections can experience the convenience of cooking with LPG in a pollution-free environment.” What’s more, to address the affordability issue, HPCL introduced a 5 kg cylinder with initial connection cost of Rs.800 and a refill at Rs.95. While evaluating the Rasoi Ghar initiative in UP, NCAER found that there was 82% acceptance of Rasoi Ghar by the people, 85% users use Rasoi Ghar twice a day and 6% of the dropouts have opted for individual connections. HPCL’s strategy seems to have worked out as among the users 20% are intending to install individual LPG connection in near future. “Once all the women realise the benefit, ease, safety and health aspects of cooking on LPG and the easy finance helps them get their own connection, HPCL will uproot its fixed assets in terms of the community kitchen and move it to the next village for a similar exercise,” explains S. V. Shahni, Executive Director, HPCL. What’s more, rural women who have saved time by using these kitchens utilise in productive activities, better child care, domestic chores and have more leisure time at hand. Encouraged by the success, Ministry of Petroleum has also put together a proposal to open around 80,000 Rasoi Ghars across the country.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

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Wednesday, April 28, 2010

Despite the dilemma, which the industry is facing, aviation stocks seem to have suddenly caught the fancy of investors.

Ratan Lal Bhagat questions this big run-up in Indian skies...

“I invest my money in stocks which give me good returns, irrespective of the company or the sector. If the market is optimistic on the future of the aviation sector, then I won’t hesitate in investing in it, even if the sector has been in bad shape for quite some time now,” avers Lalit Ahuja, a former employee of Indiabulls Securities and now a businessman, who still has a hawk eye on the stock market.

Even Prakash Bhatt, an avid day trader, believes in somewhat same philosophy. “As the economic recovery gathers steam, I feel that the Indian aviation sector might bounce back in no time. In fact, I have made some really good money trading in stocks of domestic aviation companies during the last one month,” he tells 4Ps B&M.

No doubt, investors like Lalit and Prakash are well aware of the fact that investment in the share market is certainly a big gamble (What else would you call Sensex’s roller coaster ride from 21,000 points to 8,000 and then back to over 17,000?). They know it’s the right acumen with proper market study and projection that becomes imperative before one dishes out his hard earned pennies on any stock. But even then they are betting big on the Indian bourses, particularly, on the stocks of domestic airline companies, which are in a financial mess at the moment. And, it’s not just the two of them. In fact, there are thousands, or rather say millions of such Lalits and Prakashs who are busy reaping profits by investing their hard earned cash in the stocks of the domestic aviation companies.

And why not? In the last one month alone, the stock prices of almost all the domestic aviators including Vijay Mallya’s Kingfisher Airlines, Naresh Goyal’s Jet Airways, or even for that matter SpiceJet, the budget carrier financially backed by US-based billionaire Wilbur Ross, have all moved up a whopping 23-66% (Interestingly, the benchmark index Sensex merely rose by 4% during the same period). What’s more? The rally has been accompanied by an over 300% increase in trading volumes of each of these listed stocks. So what is it that makes the stocks of these domestic aviators a perfect catch?

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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Friday, April 09, 2010

SLOWDOWN? OR SHOWDOWN?

When slowdown comes as a blessing, what do you call it? Showdown? Shoppers Stop is one entity that took quick advantage of the bad times

The slowdown fever has even forced the country’s first departmental store – Shopper’s Stop to resort to many changes. And such changes (or ‘adjustments’ as it prefers to call it) range from financial policies to distribution practices. Changes, adjustments or whatever else you may call it, but these most recent moves have really been helping this retailer during times of slowdown. Sure enough, investors too have been particularly pleased with the changes, as during the past 10 months (till September 2009), Shoppers Stop gave back investors a massive return of 68%.

So, was the massive logo change exercise undertaken during 2008, a part of the combat strategy against the slowdown? Question senior officials at Shoppers Stop on this, and all they deny the fact that the move came about as a consequence of recession. Rather, they claim, it was a shift in focus to transform itself into a gen-next brand. But as the financial tale goes, before the year 2008 began, the company had incurred losses during Q2 & Q3, 2007-08. The respective figures stood at Rs.25.6 million & Rs.256 million. Apparently, the slowdown fever that gripped this retail giant forced it to undertake immediate and radical alterations in structure and brand policies to bounce back.

“We thought, we should convey the message of what we have achieved and how we are unique in providing our customers the best of shopping experience. Therefore, if truth be told, the logo change was not due to the slowdown,” B. S. Nagesh, MD, Shoppers Stop told this magazine. Then there was also a change in positioning that was undertaken, doubled-up with a merchandise revamp and increase in retail penetration. This year saw Shoppers Stop do it all. And it did help the group. As compared to just a year back, the decline in same store sales (SSS) for August 2009 was a small 2.5%, an improved figure as compared to the 7.5% decline in June 2009. Losses from other formats such as Crossword, Mothercare and HomeStop have also declined and most of them are nearing break-even levels. Sources in the company also confirm that by 2010, these new formats would start contributing positively to the company’s earnings. Sure enough, the slowdown seems to have come as a blessing in disguise in more ways than one. Here’s a first-hand confession from Nagesh – “There’s a real-estate problem, which all the retail players have to face, but we as a group, came up with strategies that will help us to cash in on the threats,” explains Nagesh. Not a hollow boast, as during 2009, Shoppers Stop has been able to renegotiate new properties at lower rentals, which helped lower its debt burden. Slowdown times? Really? What slowdown?

Angshuman Paul

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

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Thursday, March 25, 2010

The movers...

l Viadeo, one of the world’s largest business and social networks, has announced the appointment of Yogesh Bansal, Founder & CEO ApnaCircle on the Board of Directors. The move has strategic importance considering the growing interest of Viadeo in the Indian market. ApnaCircle, founded by yogesh, was merged with Viadeo as the latter’s Global strategy of thinking global while acting local.

l Google India has appointed Nikhil Rungta as Head of Marketing. Nikhil will be based out of Google’s Bangalore office and will be responsible for driving the strategy and execution of all marketing efforts to support Google’s sales verticals, products and partnerships in India. With over 12 years of experience in sales and marketing, Nikhil brings on board the perfect combination of industry knowledge and thorough understanding of the consumer market in India. Prior to joining Google India, Nikhil was associated with Yatra.com as its Marketing Head. l Pearl Uppal, Director-Sales, Yahoo! India has called it a day and put in her papers. It is believed that Pearl will join an online retail venture as its co-founder and CEO.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

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

For More IIPM Info, Visit below mentioned IIPM articles.

The Sunday Indian:- B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here

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