IIPM Press Release

Wednesday, July 11, 2012

Naresh Chandra continues to perform a key role within the Indian government

Surprisingly, Chandra is not an isolated case. A number of high profile bureaucrats are allegedly making a fortune from their current/past presence in the bureaucracy/ministry and affiliation with regulators and policy makers. V. K. Shunglu, who is now serving PwC, had served as the comptroller and auditor general of India, the apex body having sole constitutional rights to audit independently. The same goes with B. B. Tandon, once chief election commissioner, secretary of the Ministry of Mines and the Ministry of Personnel, additional secretary of the Ministry of Corporate Affairs and also a member of the SEBI board. He is now on the advisory board of PwC.

Pradip Baijal, former Chairman, Telecom Regulatory Authority of India (TRAI) set up Noesis Strategic Consulting Company post his retirement for providing ‘advisory’ services. Ex-Indian Oil Chief M. S. Ramachandran is now chairman of Cals Refineries. R. V. Shahi, a former bureaucrat, is now chairman of total power solutions firm Energo. S. K. Roongta, former Chairman, Steel Authority of India Ltd., joined as MD of Vedanta Aluminium in April this year. These are crying examples of bureaucrats and PSU heads who are getting themselves into such positions where private companies can use them for unfair advantage. In fact, dozens of ex-bureaucrats and PSU executives become lobbyists and advisors in India. Similar is the case in the US too – as per estimates, around 43% of ex-Congressmen since 1998 are registered lobbyists. President Barack Obama tried to reduce the influence of ex-Congressmen on the Senate, a phenomenon called ‘revolving door’ – but was strongly contradicted by bellicose donors of the Democrats. He was worried about ex-Congressmen; while in India, people like Naresh Chandra don both hats with aplomb!

The government needs to monitor existing and previous bureaucrats with affiliations outside and take action. In the case of Naresh Chandra, he should not be in a position where there is a conflict of interest between his roles in private and public domains. He should take a cue from Nandan Nilekani, who ensured that he gave up his position at Infosys before taking over UID. It always pays for the greater good to lead by example.

Read more..............

Source : IIPM Editorial, 2012.

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
IndiaManagement Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

Tuesday, July 10, 2012

Japan’s new model of political leadership

Karel Van Wolferen, Author of The Enigma of Japanese Power, is Emeritus Professor of Comparative Political and Economic Institutions at the University of Amsterdam

Amid the horrifying news from Japan, the establishment of new standards of political leadership there is easy to miss – in part because the Japanese media follows old habits of automatically criticizing how officials are dealing with the calamity, and many foreign reporters who lack perspective simply copy that critical tone. But, compared to the aftermath of the catastrophic Kobe earthquake of 1995, the difference could hardly be greater. This time, Prime Minister Naoto Kan’s DPJ (Democratic Party of Japan) government is making an all out effort, with unprecedented intensive involvement of his cabinet and newly formed specialized task forces. The PM himself is regularly televised with relevant officials wearing the work fatigues common among Japanese engineers.

In 1995, Kobe citizens extricated from the rubble were looked after if they belonged to corporations or religious groups. Those who did not were expected to fend mostly for themselves. This reflected a ‘feudal’ like corporatist approach, in which the direct relationship between citizen and state played no role. This widely condemned governmental neglect of the victims was among the major sources of public indignation that helped popularize the reform movement from which Kan emerged.

Unfortunately, today’s Japanese media are overlooking that historical context. For example, the newspaper Nihon Keizai Shimbun recently lamented the shortcomings of the Kan government’s response, emphasizing the poor lines of command running from the cabinet to officials carrying out rescue and supply operations. But it failed to point out that the feebleness of such coordination was precisely the main weakness of Japan’s political system that the founders of the DPJ had set out to overcome. When the DPJ came to power in September 2009, it ended half-a-century of de facto one-party rule by the Liberal Democratic Party (LDP). But even more significantly, its intentions addressed a cardinal question for Japan: who should rule, bureaucratic mandarins or elected officials? The LDP, formed in 1955, had not done much actual ruling after helping to coordinate post-war reconstruction, which extended without debate into an unofficial but very real national policy of, in principle, unlimited expansion of industrial capacity. Other possible priorities hardly entered political discussions. The need for a political steering wheel in the hands of elected politicians was highlighted in 1993, when two major political figures bolted from the LDP with their followers. By doing so, they catalyzed the reformist political movement that resulted in the DPJ, the first credible opposition party that was prepared to win elections and actually govern. Lowering the prestige of the government right now is the fact that Kan has not shown any talent for turning himself into a TV personality who can project a grand image of leadership. But his government is dealing as best it can in the face of four simultaneous crises, its efforts encumbered by huge logistical problems that no post-World-War-II Japanese government ever faced before.

The efforts of Kan’s government are obviously hampered by a rigid and much fragmented bureaucratic infrastructure. The DPJ has had scant time to make up for what the LDP has long neglected. Its seventeen months in power before the current catastrophe have been a saga of struggle with career officials in many parts of the bureaucracy, including the judiciary, fighting for the survival of the world they have always known.

But it was the US that first undermined the DPJ administration, by testing the new government’s loyalty with an unfeasible plan – to build a new base for US Marines stationed on Okinawa. The first DPJ prime minister, Yukio Hatoyama, miscalculated in believing that a face-to-face meeting with the new American president to discuss long-term matters affecting East Asia could settle the issue. He was steadily rebuffed by the US government. As Hatoyama could not keep his promise to safeguard the interests of the Okinawan people, he followed up with a customary resignation.

Japan’s main newspapers have mostly backed the status quo as well. Indeed, they now appear to have forgotten their role in hampering the DPJ’s effort to create an effective political coordinating body for the country. A half-century of reporting on internal LDP rivalries unrelated to actual policy has turned Japan’s reporters into the world’s greatest connoisseurs of political factionalism. It has also left them almost incapable of recognizing actual policy initiatives when they see them. The rest of the world, however, has marveled at the admirable, dignified manner in which ordinary Japanese are dealing with terrible adversity.

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Monday, July 09, 2012

A new frontier with China?

As it is already being speculated that the Chinese space program may not entirely be for peaceful purposes, India has to take urgent action

Stoic China’s ambition of rising as a space age superpower is evident from its future plans including building space stations, manned space vessels and space laboratories. China has hauled up its space programs out of Third World mediocrity to successfully complete a spacewalk in 2008, and it earlier sent a human to space in 2003; thus becoming the third country after US & Russia to do so.

One would otherwise hope that China’s endeavours in this area only better our understanding of the world beyond us. But the catch here is that China’s space programs are run by the People’s Liberation Army (PLA), which raises doubts over its claim of being a program for peaceful purposes. This became a subject of debate when it fired missiles and destroyed a dead satellite in 2007. This raised the heckles of the US as a nervous Pentagon talked about Chinese “disruptive technologies.” But the country that’s really nervous is India.

The Ministry of Defence, ISRO and DRDO have expressed concern and feel that India’s space assets are under threat from China. India’s concerns are further reinstated with China’s possession of emerging anti-satellite weaponry and new classes of heavy lift off boosters. The way China destroyed its paralysed satellites and created space debris has not been even advocated under UN.

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Saturday, July 07, 2012

“The big players pose a challenge”

Sanjiv Kapur, Sr VP & Head, iGate Patni BPO

B&E: How has the Indian BPO industry been evolving over these years. What are the important phases in the last decade for Indian outsourcing?
Sanjiv Kapur (SK): The Indian BPO industry has come a long a long way from call centres. From there, we moved to deliver commoditised sort of work by handling back office operations and doing processing jobs. I think that the next generation in this industry will focus on providing more end-to-end services. Now the clients except three major things – they want end-to-end services and they expect significant cost data, which can only come through high level platform-based BPOs; for that you require certain skills and technology. And thirdly, they want to pay only for the final business output, so we have to ensure that we do this. Today, the client expects you to turn from a vendor to a strategic partner. And this is happening globally because our customers are global. So, you can term this phase as ‘transformational BPO’.

B&E: What according to you are the major challenges for the future growth of the industry in India?
SK: I think the biggest challenge is the execution of the model. I talked about the ‘transformational model’. How do you execute on it? Today, if you were to manage a client from IT or infrastructure, you have to have specific skills and technology expertise. The old lift and shift thing has changed. With old skills and model,s it’s not possible to deliver the need of the clients today any more. For Indian BPOs, adapting to this ‘global delivery model’ is a challenge.

B&E: What is the current hiring model in the industry? How have you tweaked it to your advantage?
SK: The hiring model has also changed in sync with the growth in the BPO industry. We are not just hiring graduates, as the requirement of the clients have changes. I would put it in this way today that we are doing more with less. We work on a non-linear platform based model, where I have 300 head counts who generate a business of $30 million. It you look at the people model, it would have taken some 1,200-1,300 people for this. So, the number has reduced and this has happened using automation and technological advancement. Today, we hire professionals like nurses, doctors, chartered accountants & post-graduates, because there is a scope for a lot of growth in terms of building a lucrative career. The industry has gone through a phase of consolidation, with major IT companies like Infosys, TCS, et al, making strong inroads into the space. Has it made the growth of independent BPO companies tougher? Certainly the big players in the market pose a challenge for the stand-alone BPOs, simply because the latter do not have the large IT skills and the consulting skills to be able to handle client demands. According to me, they are certainly going to struggle to survive, because most independent BPOs still run on the traditional model, which is inefficient when it comes to delivering on end-to-end processes. I would say that they will either struggle or will adapt themselves to this shift.

B&E: How has slowdown affected the BPO industry’s operations in India? What will be iGate Patni’s strategy in the coming years?
SK: The slowdown has not really affected the market, because expectations of your client in such times increases from you. Definitely, the growth had slowed down and the income had reduced, but you see that there was a constant positive upside maintained. Clients over the time have changed their investment pattern in the BPO market. As I have discussed, they have become more specific. Our focus here at iGate Patni is ‘iTops’, which is Integrated IT and Operations. We integrate IT technology and operations and focus on how we can reduce cost of operations, processes et al for our clients. So, we are neither purely a IT-based model nor a BPO with iTop.

B&E: What are the changes, in term of the way industry works and cooperates over these years? Do you see the sector still delivering on the bullish growth projections that we were used to hearing a few years back?

Read more........

Source : IIPM Editorial, 2012.

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

Tuesday, June 19, 2012

“Attrition has always been there and will be there”

Does the advertising industry follow a set of formal processes for succession planning?
There are two kind of scenarios. When there is an existing management team, which has acquired clients over a certain period of time, then the potentially successors are normally picked up out of all the departments. Just like any other company, there would be two or three people who might succeed and you might not exactly be the shortlisted one. But people who have proved themselves over a period of time are always on the radar. So basically, what we refer to as a second line of defence is always built up like that. On the other hand, if the management structure changes, then it is a different issue altogether.

The quality of people coming in to the advertising industry has dramatically changed over time. The level of commitment is not the same as it used to be. Do you think this is true? If yes, what impact has it had on succession planning?
It is true because a) Advertising today is not the best of businesses that people would want to join. It’s unlike the past when the best of B-school graduates and the most outstanding creative guys wanted to join the industry. Salary structures were much higher then as compared to today. Over a period of time, the best talent has migrated to other industries.

How has migration of talent impacted succession planning?
Not much, because if you are looking at someone from the point of view of succession planning, the assumption is that the guy has been there for 15-20 years because posts like CEOs, CFOs, et al demand a certain level of experience and a proven track record. During this tenure, these people also develop their professional relationships with the client. So there is an equity attached to these people.

Despite being a people driven business, the advertising industry has one of the highest attrition rates. How does it go hand in hand?
Attrition has always been there and will be there. Mainly, the percentages have changed over a period of time. It is not the kind of business where people come to retire in one organization. Secondly, due to certain impressions, people keep on doing parallel moves to take a higher position in another organization. The lack of talent and high demand has resulted in poaching becoming a continuous processes. There is little sense of loyalty in this business.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

An Initiative of IIPM, Dr. 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
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

Wednesday, May 16, 2012

“Grooming happens automatically”

What is the general scenario with respect to succession planning in the advertising industry?
We work towards upgrading people according to their skills and capability. In the creative departments, you know who is delivering what at the end of the day. You very well know how good they are at the job they do. We recognise a person based on the idea he gives and the contribution he makes to the campaigns. This is a regular process for us, which I believe is followed in most organisations across the industry. At least in the places where I have worked, there was always a clear structure of who is delivering what and it was purely merit oriented; so if there are people who deliver better work, they will move up faster and they will eventually hold better positions faster. So it has always been very transparent, very clear and merit oriented.

How does the grooming of people to succeed and fill senior positions take place in the industry?
The grooming of successors to senior positions happens automatically. It happens when your people keep delivering work qualitatively. When talking of grooming, your skills are naturally refined on the job everyday. No conscious effort is required to groom someone since. Even if you decide that this guy needs to be groomed, then he may not perform a good campaign next year. Can you say which director will do well next year, or who will win the Oscar next year? You can’t. So it’s a process where every task is a new mountain that you have to climb.

Thursday, April 12, 2012

“Necessity is part of the general evolution”

Do you think succession planning gets its due in the advertising industry?
That is a very broad generalisation, but I think there is a fair amount of succession planning happening. There is a transition at agencies and it’s a mixed bag. Some are looking for people from within and some from outside.

Is succession planning in the ad world as strong as it is in other industries?
It depends on what industry you are comparing the advertising business too. First of all, advertising is a relatively young industry. As an agency goes up in terms of size, succession planning becomes more formalised.

How is it done at your agency?
At our agency, it is very clear. We have the fortune of being a place with tremendous client and people stability. The senior management team of the agency has been with us for almost 10-15 years. That way, it’s a very stable environment. Having said that, we have a very clear structure in terms of succession planning.

The advertising industry is unique in the sense that there is a very thin line between creativity and management. So unlike other industries, the creative guy ends up as CEO. What are your views on this?
I think that’s a very personal choice. There was a phase when only the business managers got to head the agency. I think that has changed over the last few years because today, you have people who have a broader skill set – people like Piyush and Prasoon. In my mind, people who came from different streams became larger than their own area of expertise. This is what makes you a leader – to be able to go beyond just your specialisation.

Tuesday, March 20, 2012

“ I feel it’s a mixed bag”

What is the general scenario with respect to succession planning in the advertising industry?
I feel it is mixed. Some agencies have a clear line of future leadership, stated or unstated, while some don’t. I don’t think there is any formal structure.

The quality of people coming in to the advertising industry has dramatically changed over time. The level of commitment is not the same as it used to be. Do you think this is true? If yes, what impact has it had on succession planning?
As a holistic group, we are moving from a depth society to a width society in all forms of professional life. Talent coming in today definitely knows more things than we did. We didn’t know as much but perhaps a bit more thoroughly. It has therefore opened up the criteria for succession planning to multiple options.

If we may take the example of a company like PepsiCo, it becomes clear that there are a couple of people who have already been groomed to succeed Indra Nooyi. But the advertising industry is unique in the sense that a successor is often chosen out of necessity. What do you think are the reasons for the same?
In the case of most marketing/manufacturing industries, the ultimate objective for performance has stayed the same – to increase sales of existing products and to develop new products that sell. In advertising, with the services, products and business models undergoing rapid and huge change, the criteria for succession keeps shifting constantly.

Tuesday, February 28, 2012

Making the ‘Inside’ matter

By working with end product makers across 5 screens, Dolby seeks to move beyond its image as a sound technology for theatres. Will it be able to make the cut in a relatively dormant market?

They define it as the one campaign that dramatically raised the status of Intel from being a component manufacturer to a powerful B2C brand. Thanks to that campaign, even the most technologically challenged of consumers ask whether a computer has an ‘Intel Inside’ before buying.

Intel’s success has several positive lessons for similar brands in the industry. The case of Dolby Laboratories in India is somewhat similar, albeit with a twist. The company, which posted a revenue of $955.5 million (growth of 3.5% yoy) and a profit of $309.27 million (growth of 9.1% yoy) globally for the financial year ended November 2011, is already a known name in India. Thanks to their short, yet impactful, commercial at the beginning of every movie, of us cine-goers are well aware for years that our movies generally have ‘Dolby inside’! The company in fact did a survey some time back and found that the brand recall factor in percentage terms was in the mid to high 80s.

Surprisingly though, the Dolby people haven’t really moved beyond that positioning for the past several years in the country. More recently, they have decided extend their presence to 4 more B2C spaces – TV, mobile (including tablets), PCs & gaming.

Dolby in itself is a well differentiated player in the business of surround sound technology. The real problem that exists is with perception of the technology itself, rather than the competition. Ashim Mathur, Head-Marketing, Dolby India, comments to 4Ps B&M, “While Indian users have moved quite far with awareness of picture quality – from B&W to CRT colour to flat to LCD to plasma – sound quality is normally taken for granted.”

For now, the most exciting prospect for Dolby in India is TV and home theater, and they are particularly excited about the trends in this space with respect to HD (High Definition) TV. HD-DTH penetration pan-India is likely to reach 1% (110 million C&S households) and more than 10% of urban C&S households by 2012, which is expected to be an inflexion year for the sector (Kotak Securities report). A lot of HD content is being produced by channels like Star and there is regional HD content as well. Dolby provides the software in terms of HD content production, dissemination and also the playback device or the TV. Just like Intel, it is doing some co-branding with brands like Star TV, Airtel DTH and Panasonic; telling consumers that the products/programmes of these players use Dolby surround. On the home theater front, the penetration is still abysmally low. Ashim asserts that price is not the factor, as a number of people are buying TV sets in the range of Rs.50,000/- or so, and at least one in five would agree to spend Rs.15-20,000 more in enhancing the overall experience. The real problem is awareness and appreciation of the experience, which is a challenge for Dolby itself as mentioned earlier.

Dolby is approaching this problem largely through working with brands extensively. They are involved in selling the idea of Dolby to these players, training their staff in every aspect of Dolby technology and improving visibility of the technology. Besides, they are setting up demo areas in large format stores where customers are asked to experience Standard Definition TV without Dolby Surround in one area and HDTV with Dolby Surround in the other, so that they can appreciate the difference. The company is exploring PR and online media as opposed to TV, as the building awareness and appreciation is considered more crucial in the initial stages. Once they start gaining traction with Dolby enhancement features in mobiles and PCs, they plan to go pan-India more aggressively.

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
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

Tuesday, January 24, 2012

Congress needs to relaunch itself to remain relevant

It should be similar to what Land Rover did in Europe

I feel there is a reason why brands are relaunched every few years. It becomes difficult for a brand to change itself as quietly as the world changes, hence, they are relaunched to stay relevant with the times. The reason why the Indian National Congress was launched way back during the 19th century, was primarily to espouse the cause of India’s independence. But, today India has moved on. The way of life in the country is different, but the Congress continues to hold on to an old illustrious past – a past which a majority of Indians (which comprises 60% youth) don’t really care about.
Today, the issues affecting life in India are changing every 10 years. Therefore, Congress has no choice but to relaunch itself in order to remain relevant. Doing so dramatically is the need of the hour. Moreover, a half-hearted, unplanned approach wouldn’t work. I know they are trying to go about the changes and re-organising the party, but it’s too slow to be noticed by people.
If I were the one spearheading the rebranding, I would have latched onto what Anna Hazare was doing, instead of opposing it. I would have projected that we were willing to help pass the Lokpal Bill in every way possible. In one shot, they would have revamped themselves and the masses would have noticed and appreciated that sharp and dramatic change.
The kind of re-launch I am talking about needs to be characteristic in nature. It needn’t be a re-launch in terms of just posturing. It should be similar to what SUV maker Land Rover did in Europe. It knew that off-road vehicles were no more being actually used off road by automobile enthusiasts. SUVs had become more of a style statement rather than a mode of vehicles to cruse around off-road African jungles. So it went for a complete and dramatic overhaul in order to appeal to the new European consumers. The new product carried forward the solidity of its history but with looks that were more relevant in the current scenario.
Today, I feel corruption is a bigger issue than terrorism or even an attack on the nation, for it affects the life of the masses on a daily basis. An attack, say from China, might leave us weak but we will eventually get over it after some days or months. In fact, in contemporary times, you don’t want to occupy another nation, unless of course you are America! And terrorism is not necessarily pervasive across the nation. On the other hand, corruption is. It touches our lives everyday, right from getting a ration card to even a train ticket.
Therefore, I don’t understand why politicians are not accepting Anna Hazare? It only helps their cause of getting closer to voters and gaining the trust of people. What the Congress Party needs is to be seen as someone serious about being the party of the future. Someone who is genuinely in the business of politics with a motto of sincerely and efficiently running the country.

Congress needs to re-brand itself as well, in order to signal the change. Like they once changed to “Congress I” they need to call themselves something new , “Congress Plus”, for all I care. They are a solid party. Others don’t have the wherewithal or even the experience to run a large country like India. I think the way they have managed a coalition government for so long couldn’t have been pulled off by others.
Congress has to stop ‘just saying’ and ‘actually start acting’. The overuse of words often renders them irrelevant. Take the example of “transparency” and “poverty” – two words so oft used by politicians that the former is reducing, and the latter only growing. Stop saying we’re doing it. Do it and deliver results. Establish that we will not take any leader with criminal antecedents, even if it means losing. People will notice that.
For any good relaunch, we need to first re-energise the product. And for that, they first need to change internally and intrinsically, have regular core party meetings, punish leaders who are not delivering and measure performance. Don’t just prepare manifestos for the sake of it. Ensure your leaders deliver on them, and those who don’t, take them to task. This is what can make Congress the party of the future, which could have the wherewithal to take the country forward.
I know such steps wouldn’t guarantee a victory in today’s Indian political set-up, where muscle power (both physical and monetary) work at the grass root level. But then who is responsible for that? Isn’t it the political parties themselves? It’s they who stop the enforcement of laws that would act against criminalisation of politics, and debar criminals from elections. If Congress takes the cudgels of both internal and external good governance, it might miss some trees, but at least the woods will be calling for it louder and clearer!

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
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
Planman Technologies

Tuesday, December 27, 2011

“Multi-dimensional media buying is a strategic need”

Anwesh Bose, Branch Head, North & East, Mudra Max-Media, has been involved with media planning and buying for the past 13 years. In this interaction, he discusses media buying in the indian context.

On October 30, 2011, Omnicom, the second largest advertising and media network in the world announced that it would be acquiring a majority stake in the Anil Ambani led Mudra Group. The deal had significant implications and also pointed towards the rise of India as an important market, which perhaps no business can afford to ignore. In order to understand the evolution, dynamics and future prospects of the Indian media buying industry, we caught up with Anwesh Bose, Branch, Head, North & East , Mudra Max-Media. He Joined Mudra in April this year from Dentsu India Group where he worked as Chief Growth Officer. He has prior experience of 13 years in media buying and planning. In this exclusive interaction with 4Ps B&M, Bose shares his views on the challenges facing the Indian media buying industry and how social media is the next big thing which will shape the future of media buying agencies.

As it is with every other industry, the media buying sector too is unique in form and substance. What do you think are the fundamental challenges that media buying agencies in general experience?

The fundamental challenges experienced by media buying agencies today are that of the people who are engaged in the process of buying. In most cases the personnel know how to buy but are not knowledgeable enough in terms of what to buy. To add to that, most media buying agencies are given to creating buying silos, which is only harming the industry. A media buyer is supposed to know the rationale and logic for buying so that he/she can keep in mind the perspective and the strategy behind the media-buying plan. Also, the fact that it is planning that leads to buying and not the other way round is something which everybody in the industry should appreciate.

With consumerism on the rise in India, how has the role of a media buying agency evolved over the past several years?
Consumerism has given rise to heterogenous consumption… the result is visible in the media fragmentation that exists. Media fragmentation has made the task of the media buying agency very challenging as the advertiser is looking at returns on media investment models rather than only on returns on media delivery models. Therefore, there is an imminent need for multi-dimensional media buying strategy.

What do you think has been the most significant event or set of events to contribute towards shaping the media buying industry into its present shape?
Media fragmentation (explosion of choices), media access formats (DTH, CAS, etc), unknown metric of consumer consumption of media in rural India, rise of digital & explosion of mobility, to name a few.

How has 2011 been in terms of growth vis-à-vis 2010. What are you projection for 2012?
The Indian media & entertainment (M&E) industry bounced back in 2010 registering a growth rate of 11% compared to a mere 1.4% in 2009. The advertisement expenditure is estimated to grow by CAGR of 15% till 2015.

How do media buying agencies in the Western world differ from their peers in the high growth developing nations?

The demographics, psychographics, media choices and literacy levels in the Western world present a different landscape to media buying agencies there, which can be very different to that faced by media buying agencies in the developing countries. In countries like India, media buying is seen as a cost whereas in the Western countries it is seen as an investment.

What determines the growth and decline of media buying agencies in general?

The economy is the best measure of the growth and decline of media buying agencies. In a vibrant economy, advertisers spend more, agencies buy more and the advertiser & agency make more money. The reverse is applicable when the economy is not doing well.

What kind of an impact do ‘medium disruptions’ have on the way media buying agencies work? It is about being aware and knowledgeable of the technology shifts and the ways in which they are influencing media consumption that is or will lead to medium disruptions. The agencies that are investing in knowing and learning about these shifts will have the edge (Know-l-edge).

How has the growing popularity and widespread acceptance of digital media influenced the media buying business?

It has influenced the advertisers more than it has influenced the agencies. For most media buying firms, digital is terra incognito, thus they feel safe in either letting the business be taken by a ‘digital agency’ or they get into a ‘strategic alliance’ with a digital agency. But we seem to be learning fast… the leading media buying agencies are setting up digital verticals and very soon the mid & small set-ups would look at strategic tie-ups with independent digital media specialists.

Which trends are most likely to shape the media buying business in the years to come?

Multiple media access platforms and avenues along with media convergence will result in multi-dimensional media buying approach in the very near future. Agencies that have already invested or are making investments in scaling their knowledge of multi-dimensional planning will be the ones that will benefit.

Tuesday, December 13, 2011

Sellers want volumes. Buyers, discounts. Who will win?

Come festive season, white goods will start appealing more to consumers. Which way will the balance tilt in the buyer-seller equation is hard to predict.

Nothing symbolises the great cultural divide between ethnic India and much of modern America more than the very months when the hustle and bustle in the name of festivities begin in these geographies. This year, just like in the past, while marketers in India are already warming up for the annual rapture, those in America know that they have yet another quarter to go before the carols fill the air.

They know their audience, do the marketers in India. They know the time too. The murmurs and the amens make that obvious. As for the consumers, they love the message of the season that come in the form of discounts on various labels. The sudden rush of spoilt-for-choice emotions in the buyer category, make the messengers loved too, especially if you talk about the Rs.65,000 crore-a-year topline earning consumer durable sector. For their lot, the weeks leading to Dushera and Diwali festivals each year, mark a season of overflowing coffers that provide them adequate spiritual nourishment for the rest of the financial year. How?

That the plasma screen and refrigerator-buying consumers will exercise their right to splurge lavishly during the festive season is a given in the Indian market. But the consumer durable players in the hope of making the most of the excitement generated do their bit too. Most even prefer going easy on their marketing expenditures for most part of the year, so that they can get generous in their efforts to attract eye balls during the festive season. As per a market expert, the target for most consumer durable companies is to be able to generate on average, 30% of their annual sales during the three month period leading to end-November, after spending as much as up to 33% of their advertising and marketing budget during the same period.

No different is the plan this year, despite a non-impressive performance by the sector so far in FY2011-12, which primarily reflected the impact of persistently `est rates on demand for consumer durables. During April-July 2011, the category showed a y-o-y growth of 4.2% [lower than the IIP growth of 5.8% for the period], as compared to a much higher 18.4% during the same period last year [higher than the IIP growth of 9.7%; as per the Central Statistics Office & ICRA]. Most cons. durable players have lined-up various initiatives to lure the buyers. For instance, players like Sony, Panasonic, LG, Samsung, Sansui and Godrej are betting big on both the flat panel TV and the home appliances categories. The idea is to achieve more than 50% y-o-y jump in sales during the mid-September to end-October period this year.

Samsung, which reported sales of Rs.16,740.5 crore in the country in FY2010-11, is eyeing a 30% rise in sales during the two aforementioned months. The company plans to dole out freebies worth Rs.150 crore to lure customers during the 45 day promotional campaign ‘Samsung Smart Utsav’ (which started from September 15, 2011). With a new line up of slim TVs, and mass-targeted washing machines, the aim is to achieve Rs.2500 crore in sales during the festive period alone. Surprisingly, the other chaebol LG does not sound all-optimistic about the festive period. As compared to 2010, it has reduced the festive season marketing budget for this year by around 15% and hopes for a y-o-y jump in sales of 25%.

Japan-bred Sony is betting big on its Bravia range of TVs (which contribute to 35% of its TV sales) to achieve a 30%-plus sales growth with a turnover target of Rs.2000 crore during the season. It has introduced 15 LED TV models, with sizes ranging from 22 to 65 inch. Sony has allocated Rs.155 crore as marketing budget for a 360 degree multi-media campaign “The Rebirth. LED TV”. This will include both ATL & BTL activities, such as TV and print commercial, online, PR, outdoor and shop-front. While talking about his expectations for the month ahead, Masaru Tamagawa, MD, Sony India, says, “Our clear focus is on the Bravia range, which is the biggest contributor to our sales. We aim to sell 400,000 units of Bravias during the festive period.” Sony’s other focus area will be its Cybershot camera segment, where it has launched about a dozen low-end models to increase penetration and sales.

Tuesday, November 15, 2011

“You can Expect Newer Trends...”

Growing Demand for Sources of Entertainment, and a Fight for Supremacy over multiple vehicles will define The Future of Media Consumption.

The youth and the mature group – both form an integral part of your target audience. And in the recent past, due to changes in the trend of media consumption, both groups have evolved in preferences and expectations. What changes – in media consumption trends – have you observed in the recent past?
Well, for starters, the overall consumption of media has definitely gone up, especially in the last 18 months. The Internet has certainly helped in fuelling demand for international music amongst the youth. While on one end, the youth is getting back to international music per se, the more mature audience is willing to experiment with classic international music. What’s best – earlier, their preferences were only restricted to music. But in recent times, they have gradually shown an inclination to long format programming, and shows like ‘America’s Got Talent’.

So, you do confess that there have been notable changes in trends. Which are the most important ones that have shaped media consumption patterns?
Every few years, a new pattern emerges. During the mid-90s, there were just 12-15 channels and MTV was a rage. Slowly, Indi-pop became popular, and then came the flurry of daily soaps. All it takes is someone to think smart, unite a larger mass and thus set a trend. What Colors’ launch has done is also a paradigm shift in programming, which is coupled with pro-social messaging. And it is still cutting through the clutter. Similarly, in the reality entertainment space, we have moved from the more serious KBC to accepting a glamorous Khatron Ke Khiladi. There was a time when VJs were a big phenomena. Not any more. So, it has all got to do with the way the country is evolving. The television industry in India is very young right now. It is barely a decade-and-a-half old. You can expect newer trends to come by as the years pass.

So, where do the most interesting opportunities lie over the next 2-3 years, as far as media vehicles are concerned?
See, content is king. It will remain the king. The question is – how accessible can you make it? For instance, all the promises related to 3G will take shape only if you deliver on them. There are no LCD TVs in cars as yet; basically, it’s just about platforms. It’s a question of penetration. Mobile will have a larger penetration in the times to come, but at the moment, it is mostly at the entry level. Today, you have 565 channels on DTH, and it is important to understand what can keep the consumer glued to a particular medium. While mobile has the accessibility factor – which is why you see youngsters accessing social media through the mobile phone – you would notice that the TV sets are also on at the same time. And that’s where the fight begins.