Can you take the heat?

With a mission to foray into the energy drink market of India, cola major Coca-Cola India recently unveiled its energy drink brand Burn in India. The initiative was to connect with the trendsetting, socially active and adventurous young adults. But the connectivity might not be easy with the existence of the big daddy Red Bull. Ricardo Fort (RF), VP-Marketing, Coca-Cola India reveals his Burn game plan to 4Ps B&M and talks about Coca Cola’s future momentum in India.

4Ps B&M: What was the thought behind Burn?
RF: The characteristics of Burn are potency and energy and it’s explained by the tagline ‘Can you take the heat?’ We needed this brand to complete our product portfolio. We are the largest beverage company in the market and our portfolio is also very very wide, so we thought we should have a brand in this segment.

4Ps B&M: You are now spearheading the marketing operations of Coca Cola in India. What will be the focus areas in 2010?
RF: Innovation has always been the hallmark of Coca-Cola’s business strategy in India. And such innovations would be implemented in our marketing program also. Like with Burn, we launched Burn cars as a 360 degree integrated marketing communication involving on-ground consumer activations including experiential sampling and community marketing initiatives.

4Ps B&M: SBurn is one of your most successful offerings globally. How do you view the energy drink market in India?
RF: Internationally, Burn is one of the most successful energy drink’s from the Coca-Cola stable and globally the energy drink market is growing at 50%, specially in countries like Russia, Ukraine, France, Italy and UK. In India, it’s growing at more than 75% and its launch in India is a testament of the evolution of the ready to drink packaged beverage industry in the country. We know we have a good market for Burn.

4Ps B&M: But then why did you keep the distribution channel so limited, specially when the rival (Red Bull) is so ubiquitous?
RF: We have kept the availability of Burn very limited, it would be available only in night clubs of selected metros as our target customers are young adults. It would be made available in select premium channels and outlets in cities like Mumbai, Delhi NCR and Bangalore. We are constantly evaluating and exploring the opportunities to expand and diversify our beverage portfolio and all our initial launches would be available in selected places.

4Ps B&M: So are you following the strategy of testing waters before the pan-India launch?
RF: We are experiencing a major transformation in the way people react to brands and you need to have an innovative marketing strategy. To support a brand, first of all it should be established in its target audience and then plans should be made for a pan India launch. So for our future brand launches too, we would be first testing the market and then launch it on a pan India basis.

4Ps B&M: Coca Cola India has been growing at an astonishing 37% per annum. What are your plans to support the growing demand?
RF: We are constantly increasing capacity to support the growing demand. Almost all our products are category leaders in India. So to support the growing demand, not only the company but also the bottlers are trying to increase the capacity. Our brands like Thums up, Sprite, Limca have been leading the market and we would be enhancing the market share of these brands.

Angshuman Paul

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Source : IIPM Editorial, 2010.

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

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Kyamovie, Kyamatch, Kyazoonga

Neetu Bhatia, Co-founder, Kyazoonga.com talks about her vision to make Kyazoonga.com a one-stop shop for ticketing solutions...

4Ps B&M: Online ticketing for sporting events is a novel concept in India. How did the idea click for you?
NB: It all began in the summer of 2006. When my brother and I wanted to go for a movie, we realised that there was not a single place where we could check out show timings and whether tickets were available or sold out. We checked with movie theaters to find out if their technical systems could be integrated with a single platform, and before we knew it, we were tying up with all cinema theater chains in the country. We began ticketing cricket once we received the first round of funding. We started with movies first as it is a year round phenomena whereas cricket is seasonal and it is only when team India is playing at home ground that one can see some frenzy. November 2007 was when we first sold online tickets for the India-Pakistan finals in Jaipur.

4Ps B&M: So do movie tickets net in more moolah or are cricketing events more lucrative?
NB: It depends on what we are selling – whether it is sports ticket that we are selling, is it cricket or some other sport. It depends upon the marketability and selling ability of a particular event. Our business model depends a lot upon the demographics and the city where the event is taking place. For instance, Mumbai has a very different buying culture than Delhi. While a customer pays because of the convenience he’s getting; the client pays because of the platform that we provide to sell his offering. So the business model varies for clients, events and situations.

4Ps B&M: What about competition from other ticketing portals like Bookmyshow.com? How do you convince customers to book with you instead?
NB: We’ve seen many competitors come and go in this market. There are very few companies around the world that are able to offer good centralised ticketing platform and can simplify complex problems. We’re not just selling tickets through our online channel, but also through retail stores where people can pay cash and buy tickets. And this is where we’ve differentiated ourselves from our competitors as in retail outlets, the customer does not has to worry about not having a debit or credit card like in the case of online transactions. Currently, we’ve 250 retail outlets and with the kind of strategic partnerships we are looking, we should be over 1,000 by the end of this year.

4Ps B&M: How has been the ticketing response to the recently concluded Hero Honda Cup?
NB: The response has been nothing less than phenomenal. We witnessed one of the largest stadiums in the country, in Mumbai, completely sold out, though it’s unfortunate that the rain wiped out the match. For the Mohali match, we were only selling high value tickets and we’ve seen encouraging response there too.

4Ps B&M: You had the online ticketing rights for IPL 2. Are you bidding for the 2010 Common Wealth Games?
NB: We’re the only sports ticketing company in the country. Everything and anything related to sports is always on our radar and Common Wealth Games are no exception. Our objective is to satisfy all needs of the Indian customer pertaining to sports and entertainment. We’ve recently tied up with a leading amusement park of the country and are also adding adventure sports like sailing in our portfolio. The idea is not just to provide convenient tickets but also to offer value added content to the customer so that we become a one-stop shop for them.

Surbhi Chawla

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Source : IIPM Editorial, 2010.

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

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Back to the Future

“We had a very poor market share of just 4%, so brand building, finding out new target was required and for that we needed new promotion campaigns,” Rajeev Surana, CEO of OCM India Ltd. told 4Ps B&M.

A change in ownership, the subsequent image change and an additional infusion of Rs.120 million for buying new machines combined resulted in a 9% jump in OCM’s market-share during FY08. Not satisfied, the management is now concentrating on further reinforcing the brand’s salience among consumers, both in India and abroad (particularly the European, US and Middle Eastern markets) with a further planned investment of Rs.200 million only for brand building. And a strong employee base of over 1,000 (thankfully with no ‘labour unions’ among them) is relentlessly at work these days to revive the brand.

So is the dawn finally on hand for OCM? The answer to that question would perhaps be yes, as after six consecutive deplorable loss-making years, OCM made a net profit of Rs.3 million last fiscal and is targeting a higher profit forecast of Rs.9 million at the end of this fiscal. And for that they are enhancing their product portfolio with fabrics, shawls, jackets, et al, and have even brought on board the spunky Saif Ali Khan as brand ambassador. In fact, this year, OCM had a pan-India launch of its Winter Collection for the first time announcing its serious intent to the world of becoming more than just a seasonal player. “For that we needed to upgrade our manufacturing plant and now have products for the entire year,” explains Surana. To promote the same intent, OCM’s new marketing communication initiative (with Saif at its helm) hopes to beckon the consumer with the brand’s heritage, nostalgically bringing back their old jingle ‘Oh… see him’. This is in sharp contrast to many yesteryear brands, which, when they make a come back, usually change the entire promotional campaign. Onida, for example, when it made a comeback recently, it changed its age-old but hugely popular tag line ‘Neighbour’s envy, owner’s pride.’ Within the textile industry itself, when Digjam made its come back, the brand changed its entire positioning- starting from the jingle to the creative communication. However, OCM did not try this route at all and stuck to its old jingle. Brand analysts claim that the reason OCM disappeared from the market was not because of any lack of brand salience but because of financial disturbances so “it’s natural in such cases for brands to stick to their old and popular jingles. It helps consumers make a quick association. Perhaps, six months later OCM will go for a new jingle,” says brand specialist, Harish Bijoor. Other brand analysts however feel that perhaps the choice of Saif as ambassador was not a perfect choice, since the actor has recently stopped endorsing another readymade apparel brand Provogue. But marketing honchos differ. They claim that changing brand ambassadors is on an upswing these days and Saif’s previous engagement with Provogue does not disturb OCM’s brand image as the two do not address the same market.

Moreover, the company is now also paying heed to its retail presence and has further expanded its domestic retail network with 75 new direct and about 750 indirect dealers to expand its presence to 1,300 multi-brand outlets and 16 exclusive stores. Surana says that the next step now is to conquer lands beyond India, for which OCM is focusing on US, Europe and Middle Eastern markets.

But all is not hunky dory. At a time when the formal dressing market is dominated by the readymade apparel category, the challenges in front of OCM seem to loom larger. When asked about OCM’s potential foray into the readymade segment, Surana was non-committal at first, citing OCM’s strong co-relation with other apparel retail players in terms of institutional sales alignments (Pantaloon, ITC, Westside) who are into the readymade formal wear business. “Besides, we are also supplying material to government organisations like military and several other institutions,” he says.

But dig a little beneath the surface and you realise that the new management at OCM’s help is perhaps just a little jittery about status quo. Concedes Surana, “We are quietly testing waters for readymade apparels too, but only in the very premium segment.” Clearly, the bid is to transfer the premium positioning for its worsted suitings onto their readymade venture. With the Indian apparel market growing at 11% annually, for now OCM has put all its cards on the table. Whether or not WL Ross, Surana and his core team are able to make the initial efforts pay off, will depend on the market’s future fabric!

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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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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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).

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