Friday, January 11, 2013

The ‘welch’ of innovation

Bringing technology to the bedside of patients and ensuring that it fits the pocket size of the poor is bearing fruits for GE Healthcare in India

“You have just got to constantly focus on innovation. And more competitors. You’ve got to constantly produce more for less through intellectual capital. Shun the incremental, and look for the quantum leap.” These words of Jack Welch would still be resounding in the hearts and minds of GE employees long after he quit the hot seat. And the spirit is visible in the way GE Healthcare has developed a strong business model in India. “In India, for India” may sound a bit queer in the context of the $35 billion (expected to reach $75 billion by 2012 and $150 billion by 2017) Indian healthcare industry, which is struggling to make its offerings more accessible and affordable to the common man. But then, that’s where General Electric (GE) Healthcare India plans to make big money and as such, has been focusing upon “bringing technology to the bedside of the patient and to fit the pocket size of the poor.”

For the $17 billion global entity (GE Healthcare), the mission to take modern healthcare to semi-urban and rural India certainly seems to be an ambitious one. But, considering the 15-17% annual growth rate with which the $3 billion medical equipment and devices market in India is galloping ahead (expected to reach $4.97 billion by 2012), the imagination, to a certain extent looks like a healthy one. However, here lies the catch! Given the fact that the propensity to pay is much lower in India, the domestic market in all probability will offer lower profit margins. So, how can GE Healthcare India, which contributes to about 3% of the parent’s topline, remain competitive in the long run?


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Thursday, January 10, 2013

SIXTEEN YEARS AFTER TAKING ‘THUMS UP’, THEY WANT INDIA

“According to the latest data compiled by A C Neilsen. Thums Up, an Indian brand that was sold to Coca-Cola (in 1993), retains the top slot of the most selling carbonated drink in India: AC Nilesen study, April, 2009.”

When they re-entered India in 1993, the challenges were very different. They had to build the market from scratch, which was dominated at that time by a number of local brands. Pepsi had entered somewhat earlier in 1989 and Lehar Pepsi had started making some waves. Coca Cola’s ingenuity at that time was to hit the home run in one go, when they acquired Parle’s brands, Thums Up, Gold Spot and Limca for $40 million. It is said that Coca Cola ultimately wanted to kill Thums Up but failed miserably. But strategically, Thums Up proved to be an excellent brand for them. It still remains the soft drink of choice in the Indian market. Besides, it also helped them launch a flank attack against Pepsi. “Thums Up was added to Coca-Cola portfolio in 1993. During this period, it moved towards a more individualistic masculine positioning in ‘I want my Thunder’. In 2002, Akshay Kumar was roped in as the brand ambassador and the brand continued to strengthen its position as a Male Iconic Brand through consistent positioning,” explains Kashmira Chadha, Director, Marketing, Coca-Cola India to B&E.

It has been a virtual duopoly in the Indian market, as both struggled to go one up on sponsorships, promotions, celebrity endorsements, distribution reach, product adaptations, et al. People would remember many instances – like the Nothing Official About It campaign by Pepsi (1996 Cricket World Cup), or more recently, Coca Cola sponsoring the Delhi Dare Devils and Kolkata Knight Riders teams, which got Pepsi in a tizzy (as team players Virender Sehwag & Ishant Sharma are Pepsi brand ambassadors). One of the interesting ploys on the product front was the Rs.5 Coca Cola bottle for rural areas. The strategy was clicking well, but Coca Cola ultimately withdrew it due to the hit it was taking on margins. But Coca Cola has turned corners after years of struggle (it is now profitable in India). The company recorded a growth of 29% in India for the quarter ended June 2009. Muhtar Kent, Chairman & CEO, Coca Cola, admits “Our investments in key growth markets contributed to the good performance in China, Mexico, India and Brazil (despite tough global economic conditions).


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Wednesday, January 9, 2013

An Olympic brand : What marketers can do to become one

While brands which become official partners of the Olympic games benefit hugely for the event, there are other ways too to leverage this grand event

London 2012 presents a golden opportunity for brands. Everyone naturally has a heightened level of interest in the Olympics due to their sheer exposure through multiple marketing channels (advertising, television, online, competitions, merchandise). This provides a great opportunity for businesses to strengthen or rejuvenate their brand image by associating it with an event that has universal appeal.

Brands associating themselves with the Games might focus on the atmosphere surrounding them or specific athletes or events. Choosing to link your brand to the Olympics implies brand values of high performance, competitiveness, being world-class, innovative and dynamic. In the eyes of the UK public, British brands associated with the Olympics could build an image of promoting national values, supporting British talent and encouraging a healthy lifestyle. More generally, companies can use London 2012 as a platform for building emotional attachment and relationships with customers and other relevant audiences such as employees.

For a considerable financial commitment, several brands earned the enviable status of being an Olympic partner. Lloyds was the first company to sign up as an official sponsor. Being the only sponsor of the Olympic torch relay gives Lloyds the opportunity to connect with communities all over Britain by organising local events to celebrate the arrival of the Olympic flame.

In order to mark its position as a ‘national institution’, British Airways made sure to earn the position of ‘official airline’ for the Games. A previously less well-known brand in the UK, EDF has actively used the sponsorship to increase brand awareness by being the official electricity supplier of the Games. EDF has already used its Olympic credentials to create emotional attachment and consumer engagement by launching a campaign ‘Team Green Britain’ to encourage communities to do everyday things in a more sustainable way.

Deloitte, the official professional services provider for the Games has put its staff at the heart of delivering London 2012 through secondments and advisory work. A year before the Opening Ceremony, they had already provided more than 350,000 hours of expertise and this is expected to treble by the end of the Games.

What about brands that are not officially affiliated with the Games? The London Organising Committee of the Olympic and paralympic Games (LOCOG) has gone to great lengths to ensure that non-sponsoring brands are not publicised in any way with the event by not allowing them to use the Olympic logo in communications or advertising in Olympic venues. With these restrictions, does this leave any room for other brands to capitalise on London 2012? The answer is a definite yes: brands can associate with the spirit of the Games without breaking the rules. One way is to sign up well-known athletes. Gillette has recruited Roger Federer and Sir Chris Hoy to take part in activities including coaching, workshops and training sessions at local clubs and community centres, all aiming to inspire the younger generation to take up sports earlier in life.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Tuesday, January 8, 2013

Chief Marketing Obstacles: The treacherous trail to CMO Success

A savvy CMO must be clear about expectations, selling the changes that need to be made, and clarifying how he or she needs to be involved in business decisions

Donald Richards (name changed) knew he was in trouble when the topic of brand reinvigoration was raised by a consultant hired by his CEO. “I was all in favour of a renewed focus on marketing and brand,” the former Chief Marketing Officer recalls, “But it was clear as we discussed the proposal that everyone was thinking of this as purely a communications and advertising initiative. At that point I realised my efforts to position myself as an organisational change agent had fallen short.”

It’s a failure that seems to infect the CMO suite, with chief marketing officers suffering an average tenure of less than two years, according to a much-discussed study by Spencer Stuart in 2004. Marketing executives have an image problem, and it begins with the very definition of the title.

What is meant by marketing?

“There are three basic types of marketing people in an organisation, and where the CMO fits in depends a lot on the viewpoint of the CEO,” says McCombs School of Business Professor Vijay Mahajan, who has studied the CMO phenomenon extensively. “You’ve got marketing, sales and communications; they are not all the same, obviously. How the CMO is positioned within the organisation has a tremendous impact on his or her power to influence major decisions in the firm.”

Pete Hayes, Principal and CMO at Chief Outsiders, agrees. “We see CMOs get stuck in a pure communications role versus one that is at the heart of the business. If you are just talking about products that are developed, it is only a shiny veneer, and the rest of the organisation won’t value that.”

Mahajan defines CMO power as the ability to influence allocation of resources and other major strategic decisions within the top management team. “It isn’t just about leadership style or personal strength,” he says. “I’ve seen smart, dynamic executives falter in the CMO position when the job itself isn’t structured for power.”

Four sources of CMO power
In his most recent study, Mahajan and co-author Pravin Nath identify four critical factors impacting CMO power, regardless of the personal strengths of the executive:


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Monday, January 7, 2013

United States of India

Politicians must discourage unnecessary demands for separate states

Unity in diversity’ has always been a great strength of this nation. But now this diversity is alarmingly manifesting itself in a manner that threatens the unity of the country. There are about 10 bills pending with the Home Ministry currently with demands of separate statesout of existing ones. The list includes demand for a separate Mithilachal from Bihar, Harit Pradesh out of UP, Coorg in Karnataka, Saurashtra from Gujarat, Telengana from Andhra Pradesh and Gorkha Land from West Bengal. The supporters of a separate Bundelkhand want to whittle away districts of Banda, Chitrakoot, Jhansi, Lalitpur, and Sagar from UP and MP; whereas those rooting for Bhojpur intend to break UP, Bihar and Chattisgarh.

Rather than discouraging this alarming trend, the so-called ‘national’ political parties are in fact eager to make political points out of it. The Kutch Rajya Sankalp Samiti; an agitating group that is lobbying endlessly with the government of Gujarat government for the separate state of Kutch, has vowed to support any political party that is willing to precipitate their goal.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Friday, January 4, 2013

More than just incentives

Export driven industries need some basic changes to make the incentives work for them

Socialist economy has stifled the creation of wealth in India for more than four decades. Foreign trade never became the cynosure in the upper echelons of government till the advent of the era of economic liberalization in 1991. Since then, the removal of a plethora of barriers to trade not only led to wealth generation but creation of millions of skilled and semis-skilled jobs. But, then came the global recession and the tide turned. A continuous decline in the year-on-year (yoy) merchandise exports for last eight months with declining percentages hovering around 30% and above have cast a gloomy picture for the highest employment generating sector of the economy. The worst hit has been the labour intensive textile and handicrafts with demand plummeting by 30-40% over last year. The next worst hit has been the gems and jewellery exports resulting in a cumulative loss of around three hundred thousand jobs. A recent PHD Chamber survey covering 104 entities revealed that 80% of the export-oriented industries have registered a drop in order size and volume. Estimates show that around 5 million jobs have been lost.

The only saving grace in this tumultuous hour has been the reduction in the import bill though close scrutiny will reveal that this has been due to the reduction in oil prices more than anything else (oil import bill has dropped by more than 50% while the non-oil imports have risen). The recent spurt of excitement in the markets has sparked a new hope for all the sectors of the economy but for the millions of blue collar and semi-skilled workers in the export linked industries.

A new ray of hope can be shown only if certain policy initiatives are taken on war footing and a long term framework is made for the sustained growth of merchandise exports.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Thursday, January 3, 2013

Breed them, feed them and then eat them

Breed them, feed them and then eat them – contracting animal diseases frequently might just be their way of getting back at us…

If one observes keenly, there are certain peculiarities about these outbreaks, about the kind of victims as well as about the recurrence of such virus attacks. While the Spanish flu presented an unusual preference in its choice of victims – young, healthy adults instead of those with weak immune systems – the origin of the ailment is considered to be in the Eastern world. Again, an entirely new variety of human influenza, ‘Chicken Ebola,’ surfaced in the human population of Hong Kong in 1997. It was then that Hong Kong’s entire poultry population (ducks, geese and chickens) was slaughtered. SARS or bird flu also started among the Orientals and culling of several poultry animals was done to avoid it from gaining pandemic proportions. As far as the recurrence of these influenzas is concerned, influenza experts remind that aquatic birds maintain all the genes of all influenza viruses in the world and they transmit it to other species periodically. Even if these viruses are very ancient, they still have the capacity to evolve, to acquire new genes and new hosts. So, chances of such troubles hitting mankind again can’t be ignored.

While the 1918 Spanish flu took its toll in the pre-penicillin era, new types of viruses always pose a threat. It is quite clear that breeding farms for poultry and pig are the breeding grounds for such viruses. Well, the increased frequency of recurrence of such influenzas in the past one decade could be nature’s way of telling us that culling humans isn’t as difficult too!
 

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles.
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