As Hero & Honda gear up for their Solo Rides in The Indian Market, Honda will be The Biggest Contender for Hero’s Numero uno Position
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India, for a very long time had been known as a market for scooters on the global charts, especially when Bajaj Priya and Super ruled the Indian roads. An executive from Bajaj Auto even said in the mid-70s that the company doesn’t require a marketing department, as the waiting period was running into several years. They would have perhaps even welcomed a person who could help them bring down the demand!

In fact, when the visionary Brijmohan Lall Munjal made the idea public of launching a four-stroke motorcycle for the Indian market back in 1984, many industry experts laughed at the idea; assuming that the Indian consumer will reject the product outright. The perception changed in the next decade, some time after Hero Honda launched its CD 100, coupled with the immensely popular and unforgettable ‘Fill it Shut it Forget it’ campaign in 1985. In the years that followed, Hero Honda did the ‘Suzuki act’ in the motorcycle segment with follow-up launches like Sleek and CD 100 SS. The product went on to become a best-seller in the country and the critics had to simply stop laughing.

More to the present time, on August 26, 2010 at Taj Palace Hotel, New Delhi, the senior Munjal must have relived a few days from history, when SIAM’s 50th annual convention was in its last leg before the long day was called off. The theme of the session was crystal ball gazing for the Indian automotive industry, and the panel had eminent names of the industry like Anand Mahindra, Vice Chairman & MD, Mahindra & Mahindra, Abhay Firodia, Chairman, Force Motors, Ravi Kant, Vice Chairman, Tata Motors and Venu Srinivasan, CMD, TVS Motors. As the session was in its question and answer round, Madhur Bajaj, Vice Chairman, Bajaj Auto pointed out that it is somehow difficult to predict the future. As an example, Madhur forwarded the example that in the early 1980s, no one could have predicted that scooters will be replaced by motorcycles. Before Madhur could complete his statement, Abhay Firodia gesticulated towards the much respected Brijmohan Lall Munjal, Chairman, Hero Honda Motors (sitting next to Madhur Bajaj on the same table), giving a repartee, “He predicted it!” And the Munjals had also acted on the same in a brilliant manner, by forging one of the most successful JVs in Indian corporate history with Honda Motor Corporation in 1984.
 
However, just four months after that SIAM convention, it was announced that Honda will sell its 26% stake in the JV at Rs.739.97/share and both the players will be gearing up for solo rides in the domestic circuit. After the announcement was made public, Hero Honda has been working on its new brand identity, exploring new markets for exports and firming up plans to set up its R&D base in India over the past few months. The company has already roped in the globally renowned agency Wolff Olins to work on its new brand identity and positioning, as it will be very critical for its long-term success. For the less informed, Wolff Olins has worked for Airtel and Tata Docomo in the recent past. Moreover, Hero would now like to export to markets like Africa, Latin America et al, which the company was not able to pursue before due to its agreement with Honda. On the other hand, its arch rival Bajaj Auto exports close to one-third of the total production annually, and this leaves a huge window of opportunity for the market leader.

On the other end, by already establishing its presence with Honda Motorcycle and Scooters India (HMSI) in 1999, Honda has moved on to the top gear already by announcing its plan to catapult itself into the top three in the next two years and on top of the Indian two-wheeler industry by 2020. “In India, year 2011 marks the beginning of a new era for Honda. With new aggression, Honda has set up plans for rapid expansion to serve customers better. Our target is to be No. 1 in India in the next 10 years,” claims Naresh Rattan, Head of operations (Sales and Marketing), HMSI.

Clearly, Hero Honda, with its dominant position in the two-wheeler space is going to remain the market leader for many more years to come, but as mentioned, Honda is not in any hurry to climb onto the coveted position anytime soon. And one should not forget that the Japanese auto major has already established its presence in the scooters segment with over 43% market share against strong competitors like TVS Motors and Hero Honda, who follow the segment leader with a 21% and 16% market share respectively. Going forward, HMSI has plans to expand its presence in the commuter segment with the launch of a 100cc product that will help it climb a few steps on the volumes front. 4Ps B&M presents to you the first ever comparative analysis between Hero & Honda and whether Honda can turn into the biggest competitor to Hero’s pole position.

Distributing it right?
Just days after Hero Honda announced the exit of Honda from the JV; the Munjals called key dealers from across the country to share the way ahead with the dealer fraternity of Hero Honda. “There were many questions that were answered at the event. It was more of a confidence building session for the dealer community of Hero Honda as many dealers were not sure about the future after the split between the two partners,” said a person who was present at the event. Hero Honda shares a very strong bond with its dealer community and a lot of credit for that goes to Brijmohan Lall Munjal.

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 ranked No 1 B-School in India
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IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
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As an event, it was unique, unusual and unprecedented. Some of the senior-most journalists of India gathered together; not to excoriate the political class, but to hold a mirror to themselves. Virtually 25 years after that iconic programme Janvani first appeared on the small screen on Doordarshan in 1986, The Sunday Indian organised a seminar to ponder, debate and argue whether the Indian media really represents the voice of the aam aadmi or not. Virtually, the who's who of Indian media was present at Kamani Auditorium on March 12, 2011 for the seminar. And the fabulous success can be gauged from the fact that the seminar – scheduled for two hours – actually went on beyond four hours and finally came to an end only when the staff at Kamani virtually forced us to cease and desist!

The Editor-in-Chief of The Sunday Indian, Prof. Arindam Chaudhuri kicked off the proceedings in his characteristically candid manner, pointing out how it was his dream and passion since his youth to launch a media house because he was convinced that Indian media didn't really bother much about the common man. Giving the example of the rotten judicial system in India where a poor man would die before getting justice, Professor Chaudhuri blamed the ownership pattern in Indian media for its indifference towards what we can call the real Janata ki Vaani. He strongly advocated a cooperative model of media ownership so that it can then write and telecast news fearlessly and without succumbing to pressure.

The Editor-in Chief of The New Indian Express Prabhu Chawla echoed the views of Professor Chaudhuri, giving numerous real-life examples of how Indian media catered mainly to the elite and the upper middle class consumer while ignoring the common man. Mr. Chawla, one of the senior most journalists in India, frankly admitted that there have been occasions in his career when he had to bow down to 'extraneous' pressures.

Well-known anchor and Managing Editor of IBN-7 Ashutosh preferred to be more optimistic, insisting that the largely positive role played by the Indian media is bringing about revolutionary changes in the country. Of course, Mr. Ashutosh did agree that the period 2004 to 2009 was arguably a disgraceful period particularly for electronic media as it went overboard and over the top. But he argued that things are back on track once again. Another well-known anchor and television personality Punya Prasoon Vajpayee was of the view that the 'profit' motive was the most harmful trend for Indian media. Senior Executive Editor of NDTV India, Sanjay Ahirwal, argued that there is still space for credible and honest journalism and it is up to seniors in the profession to uphold high standards.

The Group Editor of Amar Ujala, Ajay Upadhyay, provided a brilliant historical and contextual perspective on the current state of the Indian media and argued that the problem with the media is that it often misses out the core message in its quest for breaking news. Some of the other top journalists who attended the jam packed seminar and put forth their substantive views were Qurban Ali, Shri Achyutanand, Sharad Dutt, Kuber Dutt, Zafar Agha, P.C Pandey of Times Foundation, Rahul Dev, N.K Singh, Mukesh Kumar and Vartika Nanda.

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 ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

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In a Market where Products are not differentiated, Bisleri has Constantly Innovated new branding Techniques, Distribution Channels, Advertising and packaging; 4PS B&M Documents The Brand Of This Iconic Brand

In 1969 Italian entrepreneur Felice Bisleri, who introduced the concept of bottled water to India, was casting about for a buyer for his eponymous brand. He found an eager taker in Ramesh J. Chauhan, then a 28-year-old businessman looking to expand his soft drinks business. For Chauhan, the purchase made sense as it complemented his branded soda (carbonated water) portfolio. “In late ‘60s and early ‘70s, there was good demand for soda from five-star hotels. We had brands such as Gold Spot but no soda and soon after buying the brand I launched Bisleri Soda. But we did not even look at the water business then,” recalls Chauhan, Chairman of Bisleri International.

The bottled water market in India then was in an embryonic stage. Chauhan could not have imagined in his wildest dreams that Bisleri would one day become so hugely popular and profitable so as to become a generic name for the bottled water industry. Today, he presides over a growing range of Bisleri products, which starts at 250-ml bottles and goes up to 20-litres containers. He is credited with creating the bottled water category from scratch, which is today estimated to have a market size of Rs.2,400 crore (just the organised sector). He controls about 60% of the market in volume terms and owns a brand that consultants value at being over Rs.3,000 crore. The company sellS some 17 million bottles a day through its 3,50,000 nationwide retail outlets and some 4,000 exclusive distributors.

That’s not bad, considering that the market for bottled water has three strong national players other than Bisleri: Aquafina, Kinsley and Himalayan; and countless other regional pretenders. In fact, the industry, which analysts say is expected to keep growing at a scorching pace of over 25% annually, is one of the most thriving sectors in India. “Per capita consumption of bottled water is low, estimated at about five litres per year as against the global average of 24 litres. Attracted by the huge potential that India’s vast middle class offers, multinationals have been trying to capture this rapidly growing market,” says Tushar Trivedi, founder of bottledwaterindia.org, a provider of water treatment plants and mineral water plants.

Chauhan agrees, “The water business is huge and is going to get much larger.” He cites a recent AC Nielsen study on the beverages market that indicates water is 2.2 times the size of the soft drinks market, in terms of litres. The volume sale of bottled water in India is forecasted to exceed 7,440 million litres by the end of 2013, translating into a market worth more than $1.5 billion. However, the category is still largely commoditised and price-sensitive.

Four years before Chauhan bought Bisleri, bottled water was launched in India in Mumbai in glass bottles, in two variants: Bubbly and Still. Recalling those early days, Chauhan says: “Business was very difficult as there was a lack of awareness about the benefits of drinking purified water. Even the brand was acquired as a supporting business to our soft drinks portfolio.”

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 ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

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As The Recovery dawns, Asia Pacific is Emerging as The Hot Destination for Indian it players who have been heavily Dependent on us & Europe. 4PS B&M discusses key points they need to Remember as they Improve their Presence closer to Home

Dynamism is hardly in short supply in the technology industry today, where numerous undercurrents of change are at work simultaneously at any particular time, as every player looks for ways to expand business and most importantly, stay relevant. At the macro level though, one is accustomed to buzzwords, which catch popular imagination, get used and overused, but also define the shape of things to come.

For Indian, as well as global IT players, the inevitable shift towards Asia Pacific (A-Pac) and other emerging markets is one such paradigm that has been talked about too often. For obvious reasons, it started with the recession in the west. And to be true, the A-Pac market is indeed showing a lot of potential for IT business from the growth perspective. But how big is it really? And how are Indian IT players leveraging it?

Firstly, it makes sense to understand the potential in terms of numbers. Forrester Research projects that total global IT product and service purchases (government and corporate) will account for $1.84 trillion in 2012, out of which a huge Rs.1.087 trillion will come from IT consulting & system integration, software and IT outsourcing. Total IT product & service spending in A-Pac will touch $503 billion by 2012, growing at a CAGR of 7.6 % (2007 taken as base year), which will amount to 27.4% of global IT spending in that year. For comparison sake, IT spending in US is projected to be $658 billion in 2012; growing at a CAGR of 4.5% since 2007 and accounting for 35.8% of global IT spending. Western & Central Europe, meanwhile, will fall behind A-Pac and have IT spending of $420 billion by 2012, a CAGR of 0.09% and contributing 22.8% of global spend. In an exclusive interaction with 4Ps B&M, Infosys CEO Kris Gopalakrishnan comments, “The impact of consumers in Asia and the impact of technology, mobiles and the digital revolution in the region are particularly significant. These are creating a perfect storm of opportunities, even though we are emerging out of a downturn.”

So that means that with their stupendous record in US and Europe, Indian IT players should be getting a huge share of the Asian IT space as well, right? But if you look at how A-Pac figures in the revenues of Indian IT players, there is still some way to go before reaching that objective. Only TCS really treats it as a geographically separate revenue head (excluding India) among the top 3. Even then, it accounted for 5.24% of its revenues in FY 2009-10. When you look at Infosys, they club emerging markets into India and Rest of World (ROW), which together contribute only around 10.6% of global revenues. Wipro, on the other hand considers any market other than US, Europe and Japan as ROW, which contributes some 14% of its total revenues. Even Cognizant denotes non-US and European markets as others, and the not so significant others represent 2.4% of its total revenues as per calendar year 2009 figures.
 
The obvious question is, what is holding them back? For starters, it is obvious that they felt the need to expand in Asia Pacific slightly late. As US and Europe were providing a huge chunk of IT spends, little need was felt to serve markets like A-Pac. Nishchal Khorana, Head, ICT practice, Frost & Sullivan, comments to 4Ps B&M, “A-Pac began as a derisking market for Indian players. Now, it is turning into more of a strategic geographic market.” Meanwhile, American giants IBM and HP have been better off, since both lead the A-Pac market. Springboard research projects IBM as the leader in APeJ (Asia Pacific excluding Japan) with a market share of over 10%, while HP has a share of just under 10%. Other major players include Accenture, Fujitsu (when it comes to Japan, Fujitsu is the leader by miles), NEC, CSC, Hitachi, LG, Samsung & NCS. Girija P. Pandey, Chairman, TCS Asia Pacific Pte Ltd. comments, “What is really required at the moment is for companies in Asia Pacific to understand the brand of Indian IT and what Indian IT can do. That only comes with time. We took 30 years to build US as well.” Clearly, Indian IT players have their work cut out in terms of tapping this market. So, how should they go about it?

Some of the key markets that Indian companies are looking at are Australia, People’s Republic of China, South Korea, Singapore, Japan and Hong Kong. Firstly, it is about understanding diversity in these markets, which Indian players should be quite comfortable with, considering the diversity they face back home! The fact is that while the A-Pac as a whole becomes a sizeable market, it consists of multiple markets of various sizes and different dynamics. Firstly, the diversity is visible in the regulatory environment. Singapore, for instance, is extremely welcoming, while the regulatory requirement in China is still quite arbitrary, as per Nishchal. The concerns were highlighted in 2009, when China brought Microsoft under the ambit of its antitrust law, which was meant to bar dominant companies from selling products at obviously high or low prices. Interestingly, Chinese premier Wen Jiabao promised to remove trade barriers to Indian IT firms recently, which could pave the way for IT exports worth some $100 billion in the next five years. Protectionism is a fear that foreign IT players will always have when it comes to China. Australia, on the other hand is getting more friendly towards IT companies, but there are still concerns of jobs going overseas that are highlighted in political circles. Countries like Malaysia and Korea are, on the other hand, looking for investments and collaborations by Indian players. But in South Korea and Japan in particular, the tendency is to have more work done locally. Conglomerates like Samsung and LG try to meet their IT needs internally.

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 ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

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The Mountain Dew team Unleashes Another convention breaking Campaign with High Altitude Photography, wing Suit flying, and to top it all – Salman Khan! Any Guesses on Their next Frontier?
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PepsiCo’s Mountain Dew has kick-started this summer yet again with its ‘modesty be damned’ brand campaign featuring Bollywood action hero Salman Khan. Shot in the mountainous terrains of New Zealand, the film is high on the adventure quotient, keeping up with the brand’s philosophy of ‘Darr Ke Aage Jeet Hai’. The star cast of the film extends to internationally celebrated action-adventure ad film maker Bob Gordon. The exciting new TVC shows Salman taking up the Mountain Dew challenge to jump from one of the highest peaks of New Zealand. This is the first time that a brand ambassador has been appointed for Mountain Dew. The introduction of wing suit flying, a highly anticipated upcoming sport, has set the campaign apart. Alpana Titus, Category Marketing Director (Flavoured Carbonated Drinks), PepsiCo India Beverages, said to 4Ps B&M, “This campaign (with Salman Khan) takes the idea of ‘Darr Ke Aage Jeet Hai’ to the next level. The concept and the action are larger than life and never seen before in India.” The 45-second TVC is power packed with five helicopters on location, an international crew comprising the director and an expert stunts team, an unexplored location, a daring sport and Salman, who automatically gives it the larger than life feel.

“We shot in New Zealand with director Bob Gordon, who is an expert in adventure-sports led ad films. It was fascinating to see all the stuff happening; the TVC almost looks like a very large budget action film,” commented Salman Khan. The mega campaign will be corroborated by robust outdoor, online and on-ground activation. Soon, an exciting ‘Darr ke aage jeet hai’ experimental activity will be launched for consumers in key markets across India. “In previous commercials, we have used rafting, motorcycles, gypsy on mountains, crossroads et al. But this time, we planned to take it to the next level. The concept of wing suit flying is not too well known to India, but we did a lot of research,” said Sabuj Sen Gupta, Associate VP, JWT, to 4Ps B&M.

“Darr ke aage jeet hai’ has maintained a high recall with the Indian youth by consistently harping on the theme that the young generation of any era swears by – the attitude of pushing beyond the status quo and taking the path less trodden. While celebrities were not used in the campaign earlier, Salman is an interesting fit, as a cine star who has a cult following and is known for going against convention; whether or not it is for right reasons. “With Salman Khan on board, this year’s campaign promises to redefine adventure and we are confident that it will be well received by the audience. To shoot at that high a terrain was extremely challenging and exciting. We have never witnessed such a production scale before,” adds Sabuj Sen Gupta and Shobhit Mathur, Associate Vice President & Sr. Creative Director at JWT. Naturally, the effort shows when it comes to Mountain Dew’s brand perception, but the obvious question that comes to mind is - How will they beat this benchmark in the next commercial? Will it be over to space travel now?

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 ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

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