Managers and politicians (Indian)

This seems to be rather an odd association. Taking the liberty of not matching every move and character with each other, I believe certain similarities do exist.

A manager will exaggerate things, make tall promises, give a feel that he is everything in the old company and he will be everything in the future company. Does that not sound like a politician’s campaign speech and promise?

The risk he takes is jumping the ship and starting a fresh in a new company, the victory is the 20% to 30% hike in salary. The politician’s victory is a MLA or MP tag. Remember both have vested interest and both have made some investment, so both looks for R O I.

A special note on people who jump the ship and join a competitor (hoping for a minister post). Now that’s exactly what poaching from the competitor is all about (the minister tag can be equivalent to the creative new designation, senior manager of first floor second room last desk).

The politician swindles as much as he can to make sure that he earns from the current tenure. Similarly the manager does everything he can to boost up his resume value. The politician’s tenure is one term in office, the mangers term is one quarter in office. How about all the case filed against the last government. Now we can rest assured our new manger will throw all the old strategies and make way for his new ideas, remember all the repositioning and advertisement changes. If I continue with the old mans positioning and brand building ideas where is my contribution to the company, so ditch his ideas. Let’s do a brain storming.

Who is to be blamed for all this, well how about the citizens for a change for political issues and the management culture and pressure for all manager related issues. We have a vision and we have strategy, but we always act with a short sightedness. We get jittery if we don’t keep up with the industry growth standards. We don’t think long term, reason shareholders pressure. You get worked up because some fool in the share market is selling his shares at a low price, because he wants to extend his bathroom.

Stay put, think and align with the vision, profit will find its way into your statements.

Lets play, guess the insight!

Everything has an insight, your advertisement, branding, positioning, product et all. If you get the insight right, everything else is spun beautifully around it. The insight comes out of your market research, observation of your environment, trends, even your personal needs. Some one in the shop floor had a need for a portable, personal audio device, the walkman was born. Hence insight is everything. If the sources of insight are so obvious, why do we have failed products, boring advertisements and wrong positioning?

The million dollar questions are, how trained are your eyes and senses to spot the obvious? Can you pick it up intuitively? Can your gut feel guide you to the insight?

Somewhere in our career or studies, someone might have asked us to guess the insight for a product, advertisement or positioning. We might have done it with a grudge or with lots of interest for the first time. I request you to ask yourself why haven’t I continued doing it (i.e. if you have done it with enthusiasm)? Or why was I asked to do it (if it was a torture)?

The answer to the question will vary from person to person. I believe the exercise has a lot of meaning in it. To put it in a nut shell, it will help you give a confident and positive answer to each of the million dollar question. If you do this continuously, insights will jump at you, from financial statements to the way a child laughs.

I believe the PCRA ad that is titled “pump”( where the petrol station helper tells a customer that he is eligible for a 20% discount in price) is a great advertisement. If you refer to my earlier blog on great advertisement, it satisfies most of the criteria’s. The most interesting part is that, it has the right mix of recognition and surprise.

So lets play, guess the insight!

The problem: Right from green peace to the environment conscious person staying next door, everyone knows that petrol and petroleum product is drying up fast. Hence we should make a conscious effort to save petrol. But we don’t do it.

The insight: people are worried about petrol and LPG prices. Everything related to money is of interest to us. People love to hear the word free, discount and sale.

The solution: communicate to people that not wasting something is as good as getting something for free, or on a discount.

Just recollect how often we would have seen the word sale and petrol conservation in the same page? How often we would have come across advertisements emphasising energy conservation followed by a sale advertisement? But why did it take such a long time to correlate (at least in India) both?

Neither the problem nor the insight is new to us. But the way this person spotted it is new.

SO LET’S PLAY, GUESS THE INSIGHT! J

How to make great Ad’s

 

• Never accept your dog’s admiration as conclusive. - Bernard shaw.                          This is a very important point when it comes to creativity. Let not your bias be the judge, and don’t get carried by your friend’s appreciation.

• You should have the guts to be critical and should be ready to reject a bad advertisement or idea, irrespective of the costs involved or deadline pressures.
• The ideas should be fresh and not run of the mill.
• The creative intelligence or the wit portrayed in the advertisement should be a massage for the mind. It should make you take notice and say ah! That’s nice and interesting.
• A good advertisement often takes cues from jokes, clichés, or daily happenings.
• Creativity is looking at the same thing as everybody else, and thinking something different.
• A good advertisement should have equal measures of recognition and surprise. Too much recognition and little surprise is a boring ad. Too much surprise and little recognition is a baffling ad.
• Visual puns and metaphors should be used wisely and creatively.
• Using of pictures and words need not be done the same way, all the time. Sometimes  words become pictures and pictures become words.
•  When it requires a little bit of thinking from the viewers side, then the advertisement is remembered.
• Get your problem right.
• Get your insight right. Insight is nothing but the observation about the user or consumer (behaviour).
• A great advertisement starts with a great brief. Remember a brief is not about the client’s grief.
• Think from the viewer and consumers point of view. Understand who is it for? Personify the audience, try to relate it or use people as examples, someone you might know or some characters in the movies.
• Use extreme words to describe the benefits and ideas.
• Get your point straight with regards to what you want to say thru the advertisement, benefits, attitude or something else.
• Use people along with emotions to create an insight.
• Think of a branding idea. A branding idea is an idea which can proliferate into a number of ideas, put across in a variety of situations.
• If you get a chance play with the product, touch and feel it, handle it.

 

Thanks to Indu balachandran. Most of the points are from a session taken by her. Her passion for advertisement will rub off on everyone; it has on a non believer like me.

(Indu Balachandran is a travel writer and also runs creative workshops in advertising and creative writing. She secretly adores all client servicing people and has a few names she'd like to recommend for the next Param Vir Chakra awards.)

Problems faced in sales and distribution in India

 

“What they don’t teach you at Harvard” by Mark H McCormack is a must read. If you don’t have the patience or need an Indian version of that, naru is the man. He is a demi god who can guide you thru the complex, often treacherous world of Indian business.

How often do you meet someone?

Who made millions?

Who lost his loin cloth?

Who fought back and gained a reputation?

Who takes everything in a stride?

Who loves dealing with curved balls?

Who jokes and smiles about his misfortunes?

 naru is all this and much more. I am happy and everyone who meets naru will be happy, because he is a rare phenomenon, he is unique and he is a great motivator. I wish I had a recorder and recorded his whole session, because his voice, his words and his wisdom is in league with best of the best orators, management gurus and philosophers. Few (rather lots of) snippets from his session in CBS.

Where are we heading?

Any book worth its dime will tell you that, we had different era’s in the marketing evolution, product era, sales era, marketing era etc. but where are we heading is what political thinkers and management gurus can predict. They love the game of guessing where we will be five or ten years from now. They are the astrologers of the marketing world; they have lots of science and analysis to support it. As per naru that next age of marketing management is customer group management. Customer group management is all about addressing the needs of a specific group of customers, the communication vehicle and every aspect of marketing revolves around the customer.

Tax laws and logistics:

Well, who needs a session my Philip kotler if he is going to talk about the same things that appear in the 13^th edition of marketing management? So naru thru some light on, how we Indians can get over any law barrier and make a profit in business.

Arbitrage – the ability or the process of using your knowledge to get thru your local tax laws and tax rules, obviously not all or the good ones, but those that are colonial in nature.

The tax structure is 3 tier in nature. Central tax that is paid at the time of manufacture, State taxes which is sales tax. Then we have the local tax which is octroi.

What is wrong in this, if it is uniform in nature, nothing is wrong. But things work differently within each state. Then there is huge difference between the states. Bombay has a different octroi rate than that of thane. So what does our smart business man do, he gets goods delivered to thane and then moves his Bombay requirements either legally or illegally using C & A agents.

What happens if the state has a higher sales tax, well dump your goods in the neighbouring state which has a lower sales tax and repeat the above mentioned show. For example the arbitrage earned by dumping goods in Orissa and selling it in west Bengal is close to 21%. Hence, depots by companies are to avoid tax not to evade tax. C & F agents are a matter of convenience.

Since laws and taxes have an impact on the price, management pricing strategy is good for your grades, not for your business in India. Your profit margin is directly proportional to your arbitrage.

Lets think of a scenario, your whole operation is in the south, you want to sell your product in the north east. It is easy to find a channel of distribution, but a distribution is never closed till the reverse flow of cash happens. you trust a retailer and you also believe in the law, that’s a deadly combination. The first thing the retailer will do is, sell your product and empty his bank account from which he has given you a check. You start the court room drama and end up with overheads and earn a far lesser share of your money. So this gave rise to open cheque book system, open credit or cheque system and document thru bank system (with the help of freighters approved by banks).

Value in the value chain or supply chain always shifts to a place where there is shortage.

Organised retail, why is not working today?

Today it is at 3% of the total retail sector. To understand the scenario better, we need to ask further questions. How much volume can a modern retailer sell in order to compete with kirana store? What if the manufacturer is giving higher margin to organised retailer? ( then the organised retailer will sell to kirana stores). We are also forgetting the whole sale dealer in places like koyembadu, parrys etc. they operate on unbelievable margins, which benefits the retailer and the end user. Hence market is in a flux. For modern retail to succeed, the market needs to be in equilibrium. Hence there is a very good opportunity for private labels. But we have a greater threat of price undercutting.

Where there is a market, role of distribution will follow.

There is a good market for coaching institutions that help students prepare in entering I I T and other premium institutes in India. how does this help the country and what is the distribution? Only one student per hundred enter the premium institutes. people bring bright students from different parts of the country, coach them and train them. So a good pool of talents gets nurtured. When 99 out of hundred miss the premier league bus, they end up in the open market. The institute direct this talent pool to second and third tier institutes and make a kill. The second and third tier institutes get good talents who are then recruited by good employers, this brings a good reputation for the institute. By this a new distribution channel and value chain is created.

Why do we see so many restaurants fold up?

In restaurant value of the value chain rests or is captured by the real estate person. hence when a leader like McDonalds says that they are not in the food business but in real estates, better give some taught. It is becoming increasingly difficult for one outlet restaurants to survive because every one is hustling for the street level space. Hence chains are the only way out. Once you set up your first outlet and build a brand name, you brand power builds loyalty and pulls in customers wherever you are, so then you can move into less costly real estate places. If you have brand power a real estate person will be willing to give you a lower price, because he knows you will increase his value by bringing in more crowds. So always have a strategy towards real estate handling and movement.

How about franchising?

Franchising is possible only when the franchiser has a core competency and product or service is replicable. Franchising also requires entrepreneurial abilities form the franchisee, so that they grow together rapidly.

What is so difficult or so interesting about sales?

For every thousand person there is one retail outlet. If you want to find out how many retail outlets are there, just divide the total Indian population by thousand, so go find the outlets to make a sale. As a manager better have the tie muscle to prove that you can do a 60 call per day schedule, so that your rep can do it too. Sales job require leadership skills to do anything up front and to live the life of your subordinate. As an MD you should be the person up first and up front.

How do you work the market or what is your sales strategy?

Only one product companies can have a push strategy. A sales rep or a company who gets customers thru pull strategy can never push. A company should have one pull product, this will in turn support other push products or give us an opportunity to cross sell or up sell. After creating a pull product or if your product is a pull product, when you enter new market you need to push. Purchase pattern of a kid is different from a mother, the kid puts the money in your hand and then makes a choice, the mother or adult will never give you the money until he or she has made a choice. So be sure of your target consumer. If a product generates at least one customer of high value to the retailer, then that product gets an entry in that retailers shelf, because the retailer would not wish to loose the customer because of this product. Retailer is king in impulse products. Customer is king in the case of adult products. An adult product seller will be treated well by a retailer, where as the salesman dealing with impulse products have to make a fresh pitch on every visit. For impulse products every sales has to be won from retailer to retailer. Hence efficiency and cost of distribution goes up with impulse goods, because of attrition.

All good things must come to a close. This session came to a close, with Mr. naru explaining to us how a company which was not able to meet the demand, ended up having a years stock, in just three months time. This is because the brand ambassadors who represented the brand got into a controversy, which ended their career and bankrupted the company. 

What’s wrong in being the 10th?

Nothing.

If you are happy being so, why bother. We have people talking about first mover advantage, we have people minting money writing books about being the first in the category, if you miss the bus, then create you own bus (category). So on and so forth.

Give me a break. Right from our childhood days we know that their can be only one first rank holder. For a moment let’s apply this principle of first mover and new bus creation in a kindergarten level. So you get an admission for your kid, lets say you are even the first parent to do so. You patiently wait for the first term result, he is not the first. Then what, you move him to a new school. What if he is not the first in the new school as well, then you built a new school where he is the only student, hence the first rank holder. Now people will love your son and will remember him for being so special and the first in the new school.

This might sound out right crazy or very argumentative line of taught. But there is a grain of truth in it. You can slice your market only to a limit. You can create new buses only to the point where there is enough room to travel.

How about the competitive spirit? Why accept someone as the first and run to be the first somewhere else? What about the survival of the fittest? If our ancestors have made a rush for this whole issue of new category creation, then we would be having the first set of brothers walking up straight, the second category creator walking on his head, the third category creator walking side ways with his right hand and right leg, the fourth with the left hand and left leg. Pretty interesting isn’t it.

Our management gurus who talk about being the first, will also give us a list of companies that where market leaders in 1975 and who are no where now. That’s pretty much eating there own words. So if you are the 10^th today, may be in 2034, you’ll be the 1^st.

It all boils down to your business goals. If you are happy being 10^th in ten different categories and earning twice the profit than a company that is the 1^st in one category. Hat’s off to you. You are going to get more capital and more investors, and you are going to create more shareholder value.

So nothing is wrong in being the 10^th, if it makes business sense to you and your shareholders.