IPL’s Business Model

In the IPL’s business model there are four parties involved: franchisee, IPL body, players and media. The franchisees in the business model own different teams playing in the tournament. The IPL body sold the rights of the franchisee of eight teams in the year 2008 to right different bidders through bidding process. According to the business model the bidding parties own their franchisees for next ten years by buying it on the price of their bid from IPL. This is the major earning point for the IPL body. In the year 2010, two more franchisees are added to previous lot of eight teams.

The franchisee owners are given cities or states where they can conduct their matches as home ground. The franchisee owners have all the rights of sales revenue coming the marketing, promotion, ticket sales etc. Also, they have their share of revenue from broadcasting rights for their home matches. The other source of revenues for the franchisee are advertising for home matches, team licensing deals, sponsorship deals advertising on tickets etc. All the players playing for a particular team are considered as employee for the franchisee.

The bidding of players was conducted and different franchisee bid for the players they wanted and after winning the bid for a player, the franchisee has to give the bidding amount to the player on the yearly basis for next three years. The players selected for a franchisee now represents the franchisee and the franchisee owns all the right of players. The major source of revenue of IPL comes from broadcasting of matches. The media rights of broadcasting on Indian television have been given Sony Entertainment Television and Singapore -based World Sport Group secured the global broadcasting rights of the IPL. Also in the year 2010, internet rights of broadcasting of the matches were given to YouTube. The detail of the cost and revenue sources is given below:

ü  Franchisee:

o   Cost

§  Cost of bidding the franchisee

§  Cost of bidding the players

o   Revenue

§  Gate money of the stadium for home matches

§  Broadcasting revenue share of the home matches

§  The prize money that the team wins on the basis of its position in the tournament

§  Advertising revenues from the space in the stadia for home matches

§  Team sponsorship

§  Licensing products for their team like T-shirts

ü  IPL body:

o   Cost

§  IPL matches cost

§  Government body cost

o   Sources of Revenue

§  The amount bid by the franchisee owners

§  Revenue share from the franchisee

§  Broadcasting revenue share for all matches

ü  Players:

o   Sources of Revenue

§  Annual fee contracted with the franchisee

§  Bonuses from the team owners

§  The prize money that the team wins on the basis of its position in the tournament

ü  Media

o   Cost

§  Broadcasting rights buying cost for the duration ten years

§  Tournament promotion

o   Revenue

§  Broadcasting revenues

§  Selling some part of broadcasting rights to different companies in different countries

Lalit Modi was an excellent manager for the IPL for the last three years. He has created a brand out of it and in terms of brand management he has been spot on with his strategies. Also, as a functional manager he has done justice to the brand name of the IPL. The fact that the tournament was shifted from India to South Africa within a month after central government raised security issues was exceptional showing for a functional manager and that action speaks a volume for the great manger he has been for the IPL for the past three years. Talking about ethical point of the management, it can be said that the cricket took backseat in front the revenues and all the hoopla surrounding the tournament. For example, the introduction of advertisement in the middle of an over was an innovation if you look at the prospective of revenue generation, but as a fan it was annoying and highly unethical.

Paradoxes in Indian Political System

There are lots of paradoxes present in the Indian political environment. For example, Indian government initially wanted to have Hindi as the only official language of India. However, the politicians and people from south India were against such moves and under general consensus English became the common official language across all states. Now, the command over the English language is one of the biggest strength of India in the current globalization and outsourcing world. Take another example of Maoists. Maoists are communists who say that they are fighting for the poor people and still it is killing these people only in various parts of India. In Mumbai, the development was brought up over the years, with the help of people who were not originally from Mumbai and now same mumbaikars want its door closed for any new entrants. When L.K. Advani spoke about Jinnah it created quite a storm in the political circle. The same leader who was allegedly involved in Babri demolition, an act against Indian Muslim community, is now referring to Jinnah as secular leader who actually was instrumental in dividing this country on the basis of cast. Lalu Prasad Yadav, who has always been seen as corrupt face Indian politics, has brought a major turnaround in the Indian Railways operations which no one actually ever thought of.

Consider the fact the one of the main parties of our democratic country always has its head from one single family. In fact talks have started in the political circle that next PM of this country is going to be Rahul Gandhi, the current generation of Gandhi family and we call our system democratic. When Sonia Gandhi accepted the position of Congress Chairman, the first person to break away from Congress and formed his own party was Sharad Pawar on the basis of her foreign nationality (however people say that his main agenda was to become PM). Now Sharad Pawar is holding a key alliance and ministerial berth in the cabinet with the same party without even raising any voices against Sonia Gandhi. In fact some people believe that had he been in the congress party, he could have realized his dream of becoming PM of this country in place of Manmohan Singh. All these politicians of Indian political environment can be consider as a great thinkers as they have been running this country for such a long time and all of them have faced many paradoxes during their political career.

ITC’s CSR – Social Development Blended with Marketing Strategy

ITC is an Indian conglomerate, which was started mainly as cigarette manufacturing company in the year 1910. However, it has now diversified presence in many other industries such as Hotels, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel etc. ITC is the first Indian company and tenth in the world to come up with its sustainability report on yearly basis in compliance (at the highest A+ level) with the G3 guidelines of the Global Reporting Initiative (GRI). The various initiatives taken by the organization are as follows:

E-Choupal

ITC’s Agri Business Division, one of India’s largest exporters of agricultural commodities, has conceived E-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. The E-Choupal initiative also helped farmers to break the shackles of low investment, weak market orientation and low risk taking ability. E-Choupal serves as a place of social gathering and place of exchange of information for farmers. A computer linked with internet serves to almost 600 farmers at one time to access daily prices of local markets and price trends of global markets or find information about new farming technologies. The E-Choupal is used to order seed, fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders. At harvest time, ITC offers to buy the crop directly from the farmers at previous day’s closing price.

Social and Farm Forestry

This unique initiative by ITC benefitted around 19000 poor households in approximately 500 villages and helped to bring 16,400 hectares of wasteland for some use. This way the owners of these wasteland, who are generally out of work for good period of a year, have gained new way to earn by using their wasteland for pulpwood plantation. ITC also provides them with all the necessary training related to silviculture, land development and plantation maintenance.

Integrated Watershed Development

ITC has observed over the years that many communities with whom it is having some association in villages have struggling with erratic rainfall patterns leading to large scale crop failures. This has been the main reason for farmers leaving their villages. ITC’s watershed initiatives have led to an improvement of irrigation facility and thus improving the water tables. This development program indirectly also helps ITC since it enables farmers to extend the cultivation cycle and return to multiple cropping. Till date, ITC has assisted farming communities in 22 districts across 7 states

Women’s Empowerment

ITC’s has shown firm commitment towards women empowerment in rural society by forming women credit groups. The empowerment of women has a catalytic effect in rural society, strengthening their voice in the community, forcing attention on human development issues of child rearing, education, health and gender parity. ITC’s focus is on Micro-credit that plays a foundational role in their economic empowerment and helps women into micro-credit self-help groups. Groups of 10-20 women form common funds through individual monthly contributions where they can also borrow money from their group funds to start income generation projects. It also provides training in bank and accounting operations to help them get the access of bank loans and government development programmes.

Primary Education

“School going becomes an empowering process for the child and the community. The awareness of entitlements like education and health grows, along with a sense of the community’s responsibility.”  ITC in its rural endeavour wants to provide primary education in order to address the problem of economic weakness rural families. “ITC’s initiatives are aimed at (i) improving infrastructure in Government schools, (ii) providing supplementary education to support children with school learning and exam preparation and (iii) building community and parental involvement with school education so that more children go to school and finish school.” It also provides infrastructure facilities to primary schools such as drinking water tanks, toilets, lights and fans, desks etc. It also has a network of 353 libraries, resource centers, Roaming Laptops program and mobile library services covering 310 schools.

Critical Analysis

ITC’s is doing lot of CSR activities in rural region of India. Although it seems that most of these activities are done to develop positive image of ITC (it has negative sentiment going against it for many years, as their main business has been cigarette manufacturing) and help achieve its marketing objectives, all the initiatives taken by ITC are unique and sincere in nature. Apart from the marketing gain, some of the initiatives also help it to achieve financial and operational objectives since these activities are related to its functioning as company. For example, the success of E-chaupal and social and farm forestry is crucial for its operation in certain industries. When Classmate notebooks were launched, it came up with the initiative of contributing 1 rupee towards the education of poor children, from every single notebook it sold. On the environmental front, ITC has achieved 'Carbon Positive' - five years in a row; 'Water Positive’ for eight consecutive years (creating three times more rainwater harvesting potential than ITC's net consumption); Waste Recycling Positive for the last three years. Also, it utilizes renewable sources of energy which is 31% of total energy consumed. Its environment, health and safety management systems conform to international standards.

Telecommunication Industry India - Complexity

Competition in the telecommunications industry has become very intense and this is forcing some drastic changes in the landscape of the industry worldwide. There are lots of mergers and acquisitions happening around since at the current market situation that is the most suitable way of entering into the market and also to consolidate its position for existing companies. This has made the industry as a truly globalised industry with a high degree of competition level between companies. Thus it can be said that the telecommunications industry is continuously evolving on both technological and economic level. This has made the whole industry more complex. The technological changes occurring in the industry are happening at a very fast rate and the companies have to accept these changes and constantly evolve.

Also, due to so many companies entering the market the economics of every company has become more challenging. This fast evolving technological advancement and economic challenges are actually making the current business situation very complex for the telecommunications industry. Initially the telecommunication industry was only about telephone communications techniques and that to wired one. Afterwards, the focus shifted to mobile telephone communications and now there are various business sectors that are covered by the telecommunication industry such as local and long-distance telephone services, internet facilities, and cable TV systems. The traditional voice communication methods have now taken the backseat and consumers are demanding more of the Internet and wireless services in fact now cable companies are now entering this market and are providing local telephone and Internet services through cable TV systems.

Nowadays mobile phone companies are facilitating Internet services to its customer in order to retain its telephonic customers by providing them something extra. Also they are offering cable TV systems such as IP TV etc in order to combat attrition of its phone customers dropping their landlines connection. Telecommunications service providers are also selling TV via Internet protocol services, competing directly against cable companies. These kind of coupling of inter-sector services are making the relationships between different companies (which were previously not related) more and more complex and in turn it is making the telecommunications business more and more complex to operate.

BHEL- Bringing Success with Culture

Bharat Heavy Electricals Limited (BHEL), established in 1953, is one of the oldest and largest state owned engineering and manufacturing enterprise in India. It has been working mainly in the various fields of energy and infrastructure such as power, railways, telecom, transmission and distribution, and oil and gas. If we just consider its contribution to the power sector, BHEL manufactured equipments are used in the production and generation of 73% of total power in India and is 12th largest power equipment manufacturer in the world. It has been earning profits since 1971-1972 and has been rightly awarded with Navratnas status in the year 1997.

BHEL, as a company, has adopted a number of values in its operation, which helped it in the development and success. These values are:

•      Zeal to excel and Zest for change: it promotes excellence at work and openness to the changing environment and form of work.

•      Integrity and fairness in all matters: Integrity and fairness has been given utmost importance by BHEL, especially in the current scenario where it is competing with MNCs of all over the world.

•      Respect for dignity and potential of individuals: BHEL understands that every employee is an individual and it should take care of them, try to find out their true potential and helped them achieve it with dignity.

•      Strict adherence to commitments: Since BHEL is now facing stiff competition from other companies (especially foreign companies who have entered the market recently), it has inculcated meeting all the deadlines and prior commitments as one of its key value.

•      Ensure speed of response: BHEL believes in responding to any kind of complaints and queries in a speedy manner so that it doesn’t lose out on customer satisfaction

•      Faster learning, creativity and teamwork: BHEL follows the rule that to grow and be successful, it is very important to promote learning and creativity in the company.

•      Loyalty and pride in the company: BHEL understands the importance of loyalty and pride among its employee. If employees are not proud of being part of BHEL, then they are not going to give their hundred percent at work and are not going to be loyal to the company.

The work culture followed and promoted at BHEL is based on the values discussed above which the company believes in. Thus, the BHEL culture includes employees participation at all levels, encouragement to participate in various non-operational activities such as cultural, sports and educational, dedication to excel and safety habits and lifestyle for employees. Despite being a state owned unit, BHEL is comparatively decentralized, flexible and independent without having any bureaucratic structure.

In a nutshell, the work culture at BHEL is such that employees feel proud of being part of the company and always work towards achieving excellence which in turn facilitates overall development and growth of the company.

Canada Dry: Brand Failure

India never had any premium soft drink brand if we do not consider a brief period of 1995 to 1999. During this period Cadbury Schweppes launched and tried to successfully sell a unique product (in Indian context) known as Canada Dry. It is highly popular brand in international market and since it was launched by FMCG giant Cadbury, a lot was expected from it. But nothing happened the it was planned.

Cadbury Schweppes launched Canada Dry and Orange Crush in the Indian market with much fanfare. Canada Dry was a Champagne Softdrink. The brand has positioned itself as a champagne and the taste was different and refreshing.

The brand was also promoted heavily in various media. The ad featuring the snow and tiger brings back the nostalgia about this brand. The brand gained immediate acceptance because of its association with Cadbury. The brand had the potential to become a premium softdrink brand in India.

But in the year 1999, Coca Cola once again using its giant status took over the business of Cadbury Schweppes soft dring segment and like other Indian brands it acquired (Limca and Gold Spot) and killed the brand.

It is sad to see such brands being killed for no reason connected with customers. The only reason for Coke to kill these brands was to make way for Coke's original brands. In the case of Canada Dry, the brand only had a negligible presence in the Indian market. But still Coca cola has not been able to launch any premium segment brand in India and both Coca Cola and Pepsi are happy with their current segments and does not see the premium segment as very attractive. May be in future, when Indian market reaches maturity stage (especially in Urban areas), we can see much needed premium segment soft drinks.

Key competencies for a management student

There are few key competencies which are required for being a good management student. The most important one is ability and desire to learn new things. During a management degree, a lot of knowledge is passed on to the students which are very important to be successful in their careers after completing the management study. A good management student should have the desire to know and learn new things and should be able to actually understand the knowledge passed on to them so that he/she can apply it during his/her career. Another key competency required in a management student is logical style of thinking. During the study period in a management school, one has to apply logical thinking to solve questions and case studies and understand the basic requirements for being a good manager. Clarity of thoughts regarding career is also going to be important for any management student. He/she should be clear in mind what is his/her final objective of doing the management and he/she should never lose focus with regards to that. Also, good communication skills can be considered as key competency required from a management student. He/she should be able to communicate and discuss their doubts, questions, explanations and results in an effective manner in both speaking and writing.

Being a good manager requires many key qualities since for a manager the role can be as diverse as it can be with various responsibilities and challenges. One of the key qualities he/she needs to have is clarity about final outcome required. He/she needs have clear focus on delivering the required results in the best possible manner. This helps in adhering to timeline and guidelines and reduces the scope for any mistakes. Next key quality required is planning. A manager is always occupied with various works at a time and he/she needs to plan his/her work in such a manner none of his/her work suffer. Therefore a good manager should be able to plan his works in an efficient manner so that each of his/her work gives best of the outcome. Another quality that he/she should have is being open to any change. The change could be about anything related to process, people and service etc. that could improve the thing in question. Obviously while bringing any change one would have to overcome few obstacles and a good manager should always be ready for that. Team development can also be considered as one of the key qualities required for a management student. Manager always works in a team where his team does the work for him/her. Therefore it’s important for a good manager to look for team development that would satisfy his/her team members and drive them achieve excellence. A good manager is also a good communicator. He/she must be effective speaker who can put their points in a clear manner. Also, he/she are also effective communicator in writing and listening.

Gold Spot: Killing the Brand

Along with Thums Up and Limca, Gold Spot was the brand built by Ramesh Chauhan of Parle during the period of 1970’s to early 1990’s. Things really changed in the year 1992, with Indian economy opening up, when both Coke and Pepsi reentered the Indian market with a bang. Everybody was looking for the three way fight between Coke, Pepsi and Thums Up. But then something unusual happened. Giving in to the mighty power of these global giants, Ramesh Chauhan sold all three brand to Coke. Within a year or so, Coke started to kill the brand to make way for its own brands in Indian market. Gold Spot was removed from Indian shelf for its international brand Fanta.

Gold Spot was the orange drink with a Zingy taste. This iconic youth brand was positioned as "Zing Thing" and was promoted heavily through all media. The jingle " Gold Spot. Gold Spot was positioned as the youth brand and the ads talked about being crazy about the brand.

But the brand was killed. Fanta was launched but till now the brand has not being able to take the position of Gold Spot. Coke was not able to clearly focus on the segmentation of Fanta. Fanta is never perceived as a youth brand. Fanta is not viewed or targeted at college students/youth. This confused targeting may have crippled the growth of Fanta and still it couldn't reach the status of Gold Spot. Coke expected that the users of Gold Spot will migrate to Fanta but it did not happened.

Killing a brand, which was highly successful to launch its own international brand, clearly did not worked for Coca Cola in Indian context. In recent years both Thums Up and Limca have been re-launched again but still there is no sign of Gold Spot. May be in future, we will see this brand to come back again.

Top Billionaires Who Never Graduated From College

Dhirubhai Ambani

Dhirubhai Ambani never went to college. He was only 16 when he left for Aden to work as a gas station attendant. He returned to India to start his own business at only 26 years of age. Dhirubhai Ambani set up Reliance, the largest private sector company of India. Ambani family became one of the richest families in the world, with the fortune running into billions of dollars. The business empire got split between his sons Mukesh Ambani and Anil Ambani in 2005.

Larry Ellison

Larry Ellison is the CEO and co-founder of Oracle, the multi billion dollar enterprise software giant. He dropped out of University of Illinois and later from University of Chicago. He worked as a computer programmer for a number companies. Started Oracle in 1977 with an investment of $ 2000. Forbes’ 2009 estimated net worth to be $ 22.5 billion.

Subhash Chandra

Subhash Chandra, the Indian Media Tycoon, dropped out of school in class 12. He is the man behind Zee TV, one of the most popular Satellite TV networks in India.  At just 19 years of age, he started a vegetable oil unit and after some time he began exporting food grains. He ventured into packaging business in 1981, set up Essel World Amusement Park in 1988. He started Zee in 1992. Forbes’ 2009 estimated his net worth to be $ 1.1 billion.

Michael Dell

Micheal Dell is the founder of Dell Computers. Micheal Dell dropped out from the University of Texas at 19 years of age to venture into the computer business. He started with just $1000 dollars which he turned into a multi billion dollar corporate empire. Forbes’ 2009 estimated his net worth to be $ 12.3 billion.

Gautam Adani

Indian Entrepreneur and Self Made Billionaire Gautam Adani, is the man behind Adani Group, one of the leading diversified conglomerates of India. Gautam Adani a college dropout, was only in his teens when he came to Mumbai where he got the job of a diamond sorter. After some time, he started a diamond brokerage business. He entered the Plastics Business in the 80s. In the late 90s Adani diversified into infrastructure. Had net worth of $ 1.6 Billion according to Forbes’ 2009.

Richard Branson

British business tycoon Richard Branson started his first venture at only 16 years of age. Branson established the famous ‘Virgin Brand’ which includes companies such as Virgin Atlantic Airways, Virgin Mobile and Virgin Records. Forbes’ 2009 estimated his net worth to be $ 2.5 billion.

INDIA BUDGET HISTORICAL FACTS

Government budget is a financial plan for the government of any country to define its expenditure of a usually fixed resource and sources of income during a financial year. Like for any other country, it it is the most important economic and financial event in India. The budget is usually anteceded by an economic survey which gives the general course for the budget and gives an outlook for the economic performance of the country. It also includes financial projection for the next fiscal year.

The Finance Minister of India presents the Union Budget of India on the last working day of February in the parliament. The Budget has to be passed by both the houses of the Parliament before it can come to effect on April 1st.The Union Budget is also known as the general budget.

The history of Indian budget is unique in its own sense and there are quite a few interesting facts related to it. Here are some of the interesting facts about Union Budget:

·         R K Shanmukham Shetty presented independent India`s first budget.

·         Till date, Morarji Desai has had the longest tenure as FM, 8 years.

·         Desai was FM for 5 years under Nehru and 3 under Indira Gandhi.

·         Morarji Desai presented two Budgets on his birthday  in 1964 and 1968.

·         CD Deshmukh was the first Indian Governor of RBI to have presented the Interim Budget for 195152.

·         Jaswant Singh was FM for 13 days.

·         During Jaswant Singh`s regime, Enron got counterguarantee.

·         Initially, budget papers were printed in Rashtrapati Bhavan. In 1950, budget papers were leaked. This changed the printing venue to Minto Road located security press.

·         Since 1980, budget papers are printed in North Block.

·         A week before the budget is presented, the employees of the press stay in the ministry and have no means of communicating with the outside world.

·         The Budget process has its roots in the Bombay Plan of 1944. Bombay Plan was authored by John Mathai, GD Birla & JRD Tata.

·         Revenue deficit is excess of revenue expenditure over revenue receipts.

·         Revenue expenditure doesn`t result in capital formation (subsidies, salaries).

·         Revenue receipts is money that Govt doesn`t have to return (duties,taxes).

·         The government can borrow from three sources. From the market, small saving deposits & from PSU banks.

·         The govt borrows from the market 3 to 4 times annually Plan Expenditure is the Budget allocation to fulfill 5yr Plan obligations.

·         Plan Expenditure creates new assets for economy.

·         Total Plan Expenditure in 5 yrs should match allocation for a 5yr Plan.

·         Total Plan expenditure in 5 years has always been lower than target .

·         The 1991-92 final and interim Budgets were presented by Finance Ministers of two different political parties. While Yashwant Sinha presented the interim budget, the final budget was presented by Manmohan Singh.

·         The 1965-66 budget contained the first disclosure scheme for black money.

·         Jawahar Lal Nehru was the first Prime Minister to present the budget when he held the Finance portfolio in 1958-59.

·         R Venkataraman was the only Finance Minister who later became the President of India.

·         Three interim budgets were presented in the 1990s. While Yashwant Sinha presented the interim Budgets for 199192 and 199899, Manmohan Singh presented the 199697 interim Budget. 

Frooti – Innovative Packing Leads to Success

Frooti was the first beverage product (either Cola drink or Fruit Juice category) in India that was launched with new innovative packing called TetraPack. It was Launched in 1984  by Parle group and it still holds a dominant position in the Rs300 crore fruit juice market. Because of its unique packing and royal mango taste, Frooti has carved out a niche for itself over these years. Initially the drink was positioned as a kids drink. It was perceived as a healthy fruit drink with no additives that will retain its taste and quality. Thus, when cola ginats came back to India again in 1992, it became the healthy alternative to Cola drinks. Tetrapack enhanced the shelf life of what is generally considered as a perishable product.

With success came great competitions as there was a lot of new launches in the fruit juice market. Players like Godrej with Jumpin, kissan etc came into the market but nobody can dislodge Frooti from its position. For over a 7 years, Frooti was positioned as a mango drink that is “Fresh-n-juicy”. The product have tried to create excitement in the market through a series of new variants and packing. But with dawn of new millennium the brand was facing stagnated sales. The company tried to provide variety to customer withy orange and pineapple variant but both the failed to do so. Then came the experiment with packaging. Worried by the stagnating sales, Parle tried to reposition the brand to appeal to youth aged between 16-21. The positioning changed to be more fun based. The package also changed. The old green color of the bottle changed to more bright mango color with lot of graphics added to it. The YO! Frooti variant came with a slim paper can aimed at the college going youth.

One of the most famous marketing campaigns India have witnessed took place during the repositioning. The campaign is the famous “Digen Verma” campaign. This campaign was considered as one of the most successful teaser campaigns in India. The campaign lasted for 15 days started in February 2001. The campaign was about a faceless person Digen Verma. There were posters and outdoors all across the markets that had messages like “ Who is Digen verma” “ Digen Verma was here” etc. This created lot of excitement in the market and “Digen Verma “became the most talked about faceless name at that time. The campaign was executed by Everest communication. But the campaign was not followed up and the hype was not translated to long term brand building.

Automobile Sector in India

The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate at an average of 17% for last few years. The industry has now attained a turnover of Rs. 1,65,000 crores (34 Billion USD) and an investment of Rs. 50,000 crores. Over Rs. 35,000 crores of investments is in pipeline. The industry is providing direct and indirect employment to 1.31crore people. It is also making a contribution of 17% to the kitty of indirect taxes. The export in automotive sector has grown on an average CAGR of 30% per year for the last five years. The export earnings from this sector are 4.08 billion USD out of which the share of auto component sector is 1.8billion USD out of which the share of auto component sector is 1.8billion USD during the year 2005-06.

Even with this rapid growth, the Indian Automotive Industry's contribution in global terms is very low. This is evident from the fact that even though passenger and commercial vehicles have crossed the production figure of 1.5million in the year 2005-06, yet India's share is about 2.37% of world population of 66.46 million passenger and commercial vehicles. Indian automotive export constitutes only about 0.3% of global automotive trade.

It is a well accepted fact that the automotive industry is a volume driver industry and certain critical mass is a pre-requisite for attracting the much needed investment in R&D and New Product Design and Development. R&D investment is needed for innovations which are the life-line for achieving and retaining the competitiveness in turn depends on the capacity and the speed of the industry to innovate and upgrade. The most important indices of competitiveness are productivity of both labor and capital.

India with its rapidly growing middle class (450 million in 2007 as per NCAER Report), market oriented stable economy, available of trained manpower at competitive cost, fairly well developed credit and financing facilities and local availability of almost all the raw materials at a competitive cost has emerged as one of the favorite investment destinations for the automotive manufactures.

Fastrack: Repositioning the Brand

Fastrack is one of coolest brand launched in India in recent times. Titan was a brand for older people beforehand and never appealed to younger generation until the launch of the brand Fastrack. It was launched in 1998 targeted at 15-25 years of age. The brand was promoted with the slogan "Cool Watches from Titan". It was the time when Titan and Timex parted ways. Initially the product was a success but within five years sales stagnated since it was priced too high for the target youth segment which mainly consisted of college going students.

It changed its target segment to executive segment and casual watch segment. But the repositioning strategy failed big time. The sales came down to one of its lowest level of 23 Crores. The consumers were not willing to pay Rs 1200-2700 for a watch that did not have the executive image.

Then it conducted consumer research that for youngsters most popular products are mobiles, deodorant, sports shoes and sunglasses. It zeroed it down to sunglasses as supplement product for its watch under the same brand name and do the brand extension. The other brands available in market, Ray-Ban etc., were too expensive for the target market and there was a big gap in the market as youngster used to prefer local brands over these foreign sunglasses brand.

It repositioned once again in 2005 with a new logo and advertisements. It adopted the cost leadership strategy by cutting the cost of production by going for cheaper raw materials and reduced the price up to the level of Rs. 500. Its advertisement campaign was focused on coolness of the brand with tagline “How many you have”.

This repositioning strategy was a big success and within a year sale reached the 35 Crores level. Its brand extension exercise of adding sunglasses also paid off big time. The freshness the brand brought with its repositioning and advertisements appealed to its targeted customers of young college going students a lot.

Alpenliebe: Making Crores from One Rupee Candy

Indian sugar confectionary market is estimated to be of 1200 crores and Alpenliebe is the leader in the market with its worth around of 160 crores. The brand has been one of the most successful launch in the last two decades and it has been positioned as family candy brand. The brand was launched in the year 2001 with a successful merger between the Italian and Dutch companies Perfetti Vanmelle (PVM). Now the Indian venture is the second largest of their global portfolio next to China.

PVM has many products in India but undoubtedly Alpenliebe is the shining star in its armour. With effective and aggressive brand building , this brand has grown to become the single largest brand in the segment. The brand is a very unique because of its name and the size. Alpenliebe is a very complicated name, which means “Alps with Love”.

When the product was launched, the biggest challenge was to teach such diverse community of Indians with 24 languages and a million dialects to pronounce a brand name that does not have a meaning and is very peculiar  sounding. According to marketing basic concepts brand name should be simple and be able to reflect the brand values and can be easily pronounced. However, Alpenliebe broke all rules. Its initial advertisements were focused on its name only. For the initial 30 second ad, Alpenliebe was pronounced the name 5 times to ensure that the target group pronounce it correctly. The name became the biggest differentiator and reflected an International image for Indian people who are known to be crazy about foreign brands and Alpenliebe capitalised on that.

The shape was also unique because most of the candies at that time was rectangular or cylindrical but Alpenliebe came out with a round shape. The product was also really good .The company changed the taste of this brand to suit the Indian Palette making it more Caramelliar than the international one.

Perfetti knows the method to build the brand and it spends lot of money on Alpenliebe through interesting ads. The brand is positioned as a Family Candy with kids and elders sharing the limelite. Alpenliebe is a classic case where basic concept were defied and still the product succeeded.

AASHIRVAAD ATTA : Converting Commodity to Brand

ITC launched Aashirvaad Atta on 27th May 2002 in Jaipur and Chandigarh. Today, it is available all over India and is the number one branded packaged atta across the country. The focus is kept on providing the best quality atta using the most traditional yet cumbersome methods. Through its PET poly packaging and E-choupal initiative, the freshness of the atta is guaranteed giving the consumers a confidence no other brand can comply. Khushiyaan Chun Chun ke (Happiness handpicked) is the motto of Aashirvaad atta and to achieve this, ITC buys wheat straight from the farmers using the sourcing strength of its e-Choupals.

Aashirvaad Select Atta (5 kg pack) was awarded one of the most prestigious awards in the world for Packaging- The World Star Award for Excellence in Packaging in the Consumer Pack Category. Aashirvaad atta also created a first in packaging in the branded atta category. Its premium offering, i.e. the 5kg premium pack, is available in vacuum sealing and carton packaging. Both these technologies help maintain the freshness of the product.

Aashirvaad Atta is formed from the choicest grains - hard in bite, golden amber in color and heavy on the palm. Modern 'chakki - grinding' process is used to grind it for the perfect balance of taste, nutrition and color ensuring in the process that Aashirvaad atta contains 100% Sampoorna Atta  and 0% Maida.

SWOT Analysis of Aashirvaad Atta

Strengths

·         ITC has been able to establish itself as the market leader in the packaged food market. Within 8 years after launching Aashirvaad Atta, it has become number one in branded packaged Atta sector across the country with a whopping market share of 55%.

·         The focus of ITC has always been on the providing its customer with best possible quality and in the case of Aashirvaad Atta also, they have emphasized on the quality and freshness. To keep the taste of packaged Atta authentic with respect to Chakki Atta, ITC follows traditional methods to produce it. It obtains finest wheat grains directly from the farmers and then the grains are grounded using modern 'Chakki - grinding' process to produce genuine and authentic Atta. ITC also tries to ensure that Aashirvaad Atta contains 100% Atta and no Maida. In addition, the quality is maintained such that the dough made from Aashirvaad Atta absorbs more water making the Rotis softer.

·         ITC has been able to successfully use its E-choupals initiative to obtain finest wheat grains for the production of Atta directly from farmers. This backward integration gives them two distinct advantages. The first being reduction in the cost of wheat by around 2 percent as no middlemen is involved in the process. The second advantage is of course quality since ITC does not have to rely upon the Mandi system where the wheat grain can be of inferior quality.

·         ITC offers a wide range of Aashirvaad Atta products to cater to different consumer demands. Apart from the basic brands, there are two high-end brands with some special ingredients.

·         ITC has its own packaging business and it utilizes its packaging business to come out with really superior and innovative packaging. The material used for packaging the Aashirvaad Atta is “PET Poly” which keeps the Atta fresh. Further, it also offers carton packaging and vacuum sealing for its premium packs.

·         Although ITC already had excellent distribution network for its cigarette products, it needed to develop new and different distribution infrastructure for its Aashirvaad Atta product. However, in the last 8 years it had really developed its distribution network and with its strong E-Choupal network it can compete with its competitors on the distribution front.

Weaknesses

·         Aashirvaad Atta can be considered as a premium priced product, as it is very costly when compared to unpackaged Atta sector.

·         Currently, the focus of ITC is on urban market with respect to packaged Atta sector and with packaged Atta sector still being less than 3% of the total Atta market; ITC can focus on rural market also to capture more of the unpackaged Atta market.

·         ITC has focused more on the retail shop based promotion strategy. However, to attract more and more customers, ITC needs to promote it more using TV and other media promotion strategies.

Opportunities

·         Food Industry is India’s sleeping giant. With the rise of modern retail formats, increasing disposable incomes and health awareness, the category is undoubtedly evolving. With the branded Atta market in India being very attractive in terms of size and consumption patterns, growth has also picked up pace with the Government’s proactive approach with the formulation of national food policy, reservation of select segments.

·         Apart from North India, which has always been very high in wheat consumption, ITC can concentrate in rice dominant regions such as Andhra Pradesh. Atta is used for mak¬ing puri, which is a popular breakfast item for South Indians.

·         ITC can collaborate with fast food chains such as McDonalds, Pizza Hut and Subway. This has been an untapped market until now and tying up with these chains as their main flour supplier can open up a new window for ITC. 

Threats

·         Indian market is largely dominated by innumerable local flourmills and ‘Chakki Atta’, which are the biggest threat to Aashirvaad atta. Chakki Atta is still perceived as the best quality Atta and it is cheaper as compared to branded packaged Atta.

·         Obvious threat is the domestic competition. Competitors such as Annapurna and Pillsbury are doing their best to increase their market share.

·         Until now, the competition is mainly domestic. In future when Western companies will see India as an exciting opportunity for packaged atta, then the competition will get intense.