Month: September 2015

Wooing Millennials

Shabbir Chunawalla

Young millennials watch less TV and do not read print media. They skip the online commercials and block the ads on their web browsers and phones. It is time for the marketers to start from scratch, since every theory that they used have come to naught. It is a different world and a different game. Advertisers now know that there should be fewer 30-second commercials. Instead, there should be more emoijs and apps. The audience is young and with discretionary income. They buy houses and cars. They decide their brand loyalty from a young age. Millennials watch more TV shows on demand, and stream them. Their attention span happens to be short. They move from device to device. They lack the tolerance for traditional advertising. They feel it is sheer wastage of time.

Millennials thus have unique media consumption habits. They require a new way to connect on media like smart phones and tablets. Brands have to design emojis. Domino’s pizza customers can order pizzaz by texting or tweeting emojis. Traditional banner ads do not appear impressive on small devices. Brands woo them by arranging events. Apps are tried too. Brands arrange festivals too.

Radiation from Mobile Towers and Handsets

Shabbir Chunawalla

Radiation involving frequencies beyond ultraviolet is high energy ionizing radiation, e.g. x-rays, gamma rays. In large doses, this can damage the live tissue. Mobile towers transmit radio frequency radiation which is ultra-weak. Radiation is measured in terms of electron Volt ( eV ). X-rays have energy level of 100 eV to 1 lac eV. Ultraviolet has energy level of 100 eV or less. Visible light is 1 eV.

Radio frequency radiation from mobile towers is very small — one thousandth to one -millionth of an eV. As compared to X-rays or UV rays, and even visible light it is lacs of times weaker. It is not capable to alter either the matter or live tissue. It is, therefore, called non-ionizing radiation.

The average exposure level from towers is as low as 0.73 watt per square metre, far below the WHO-sponsored radiation norm. Mobile handsets are judged against the Specific Absorption Rate ( SAR ) limit, and good quality handsets operate far below the SAR limit.In fact, radio frequency fields emitted from mobile towers is more than a thousand times weaker than that of mobile phones.

Cost Plus Pricing

Shabbir Chunawalla

Very popular, this method tries to cover the total cost consisting of prime cost, office cost, selling cost, taxes etc. After covering the total cost, a certain margin of profits is added to mark-up the price.

Selling Price = Total Cost + Margin of Profit

= ( Prime Cost + Office Overheads + Selling Overheads + Taxes )

+ Margin of Profit

Where Prime Cost = Direct Labour Cost + Direct Material Cost + Direct Expenses

Overheads = Indirect Costs

This method is very useful for engineering products  and job costing. It is also useful for marketing intermediaries. It is also useful when we operate in a seller’s market.

In a high cost economy like ours, the consumer is at disadvantage when this method is used. As the cost is recovered from the consumer, there is no incentive to reduce the costs. This method is also not useful for a very competitive market. In a buyer’s market, we should adopt some other method.

India Too Likes the Blues

Shabbir Chunawalla

Big Bill Broozy is a big name abroad. He represents the Blues, which is melancholic. It goes back to the hardships of black slaves on the plantations of the old South. The music evolved from the fields. It has work songs, string ballads and spirituals. It travelled from the Mississipi Delta to Louisiana and Texas, St. Louis and Memphis, right up to Chicago and Detroit. It absorbed the regional influences and blended with the local styles. It generated genres like jazz, soul, blue-grass and rock and roll. Blues are now the flavor of the season. The 18-35 age group likes it. There are Blues musicians outside America, say in Chile, Australia and Finland. India too has accepted the Blues. The Blues should not be restricted to the elite. It should show the hard knock life with the electric guitar. India was for the happy sounding music, but the Blues is taking root here.

Khan Academy : Remote Tutoring

Shabbir Chunawalla

Salman Sal Khan set up an education website in 2011 — khanacademy.org. He has been listed by Fortune among the hottest business stars under 40. He is called Maths Moses. He initiated the revolutionary College 2.0 concept. Khan Academy is not-for-profit online educational venture. It received 80 million page views. The free videos, on an average, are seen by 20,000 people, and range from subjects from function to polynomials. His wife Umaima Marvi is a physician. Shantanu Sinha is the President and COO of Khan Academy. The trio is highly qualified. Sal has three MIT degrees followed by an MBA from Harvard. Shantanu has four degrees from MIT. Umaima has a biology degree from MIT and a medicine degree and post-doc degree. Before setting up Khan Academy, Sal was a hedge fund analyst. Khan uploaded his videos on YouTube. His mother is from Kolkata and father from Bangaladesh.

Generation Z

Shabbir Chunawalla

Marketers always try to put a group of adolescents into a generation archetype on the lines of the baby boomers. How far such slotting is correct is a moot point, but the fact remains that a teenager of today is really in a different environment from the one that prevailed some ten years back. Each generation has some unique characteristics, some of which may have been borrowed from the previous generations. Generation X was a generation in the 1970s. The Vietnam war had ended and the US was exposed to the Watergate scandal. Generation Z is a product of Generation X. The elders focused on the safety and security of their children. They lacked it. Through the 1920s and 1940s, there was the so-called Silent Generation that was shaped by war and the Great Depression. They believed in hard work and were career-minded. This grown up generation we had seen in the 1950s and 1960s. Gen Yers grew up to be the Facebook users who were bold enough to post openly whatever they felt. Millenials were raised in the relatively peaceful times of the 1990s, but they witnessed two catastrophic events in 2000 and 2008. Millenials are brash and narcissistic. They pioneered the Facebook selfie. Their innocence was lost. Generation Z is grown after the millennials, say the early 1990s to mid 2000s. Perhaps a Generation Z youngster is bracketed in a block of 15 years, starting from1996. They are thus 5-19 years old now. They form a huge size in the US as well as in India. They have remained close to technology of Tumblr, Instagram and Facebook. It is the first generation with the smart phones. They have not seen times without the social media. Advertising to them must be short and pithy, say in five words, and with a big picture or else the message will be lost

Generation Z is not like the brash millennials. They understand their privacy and personal space. They have good spending power. They are a matter of study for the market researchers, cultural observers and trend forecasters.

Future of Diesel

Shabbir Chunawalla

VW had a desire to overtake Toyota in the American market. VX had just 2 per cent of the US car sales, a fraction of what Nissan and Toyota have. It is less than that of American car companies Ford or GM. Toyota’s hybrid car Toyota Prius met the emission norms. Diesel as a fuel was associated with smoke-belching buses and roaring 18-wheelers, and this perception of it being a dirty fuel was difficult to remove. Diesel could give more mileage per gallon and it was for the car companies to establish it as a clean fuel. Heavy vehicles carry a tank of urea-based solution which reacts with nitrogen oxides ( NOx ) emission of diesel, and bind them. This reduces pollution, but the extra tank increases the weight, and reduces the performance. VW claimed that even without this extra tank, their diesel was a clean fuel; with fuel efficiency of hybrids. The strategy made VW to go past Toyota in terms of sales. Here was a car that was environment friendly without sacrificing performance.

However, West Virginia university researchers were perplexed by fuel emissions in the lab and on the road of the so-called clean cars. They observed these discrepancies in 2013, and the findings were reported in 2014. The brands were not mentioned. This prompted California regulators to conduct their own investigation. This led to the discovery of a software installed by VW to cheat on emission norms. It was installed on 11 million diesel cars worldwide. It was activated in lab conditions so that the car passes the test. Once the cars were out of the laboratory, it was deactivated, and the cars emitted fumes 40 times the permitted levels.

The event will affect the car makers, other countries and the future of diesel itself.

Qute Quadricycle from Bajaj

Shabbir Chunawalla

Quadricycle is a four-wheeler that is not a car . It is a separate category for which the regulatory norms are being fixed. Bajaj developed a four-wheeler mini-passenger vehicle, called RE60, which has been launched as Qute in 16 markets in Latin America, Africa, Europe and Asia at a price of around $ 2000. Its production has started at the company’s Aurangabad facility and the shipments for the export markets would begin by Sept 2015 end. In India, it awaits the Supreme Court verdict about its roadworthiness. It is powered by DTSi 4 valve engine. The engine is rear-mounted 200cc petrol engine. Its fuel efficiency is 36 km per litre. It can reach a top speed of 7o km per hour. It is positioned to an intra-city vehicle or urban transport vehicle targeting three-wheeler customer.

Authentication Techniques

Shabbir Chunawalla

Identity is established by finger prints and retinal scans. One more marker is the microbiome of each individual. It is the cloud of microbes or bugs which an individual rains on the surroundings at the rate of a million per hour. An experiment in Portland, USA has validated that a microbiome is specific to individuals. A person not taking antibiotics for months was examined. He sits under controlled conditions — sanitized and climate-controlled chamber. They study the sequenced ribosomal RNA from the cloud of microbes emitted by this healthy person. They also add microbes settled on surfaces in the surroundings. It is a mix of flora. It may constitute a specific marker like a finger print.

Face recognition, finger print recognition and retinal blood vessel pattern recognition are not fool proof as these may be altered by age or life events, say an injury to the thumb or cataract in the eye.

Fool proof authentication does require a mix of identification strategies. Microbiome is an alternative bio-marker. A US company used whorls of ears as a marker. A matrix of weight, anatomy and posture can uniquely identify a driver in an auto seat. Some of the old markers are to be eliminated as these are easy to crack. Multiple genetic patterns could be the Holy Grail of authentication.

Digital TV

Shabbir Chunawalla

Both Star and Sony have launched digital formats of their TV broadcasts. It is an App. Star has launched Hotstar and Sony has launched Sony Liv. They are making some exclusive content for the apps. Mostly they offer the already existing content. Some content will be shown both on air and digitally. It will be an integration of content. Star has also acquired digital rights for the IPL matches for Hotstar and Starsports.com. More and more people are watching television content on digital platform. The costs of creating content for a digital platform and for a television show are different. They are not comparable. These are the early days for monetizing the content digitally. Zee TV and Viacom 18 too have digital plans. Digital provides an opportunity to get an intimate view of the viewers watching it. There is no agency to monitor the incremental reach — TV plus digital. The gestation period will be long and it will take 5-7 years for the digital formats to break even.