Category: General Marketing

A person who comes at the top from a technical field is focused, but may not notice the critical changes around him. The environment requires scanning in terms of opportunities and threats. The Actuals is the novella authored by the Nobel laureate Saul Bellow where the team ‘ first class noticer’ has been introduced. Max Bazerman has further elaborated on this concept in The Power of Noticing : What Best Leaders See.

Ulric Neisser, the father of cognitive psychology, conducted an experiment with two basketball teams — one in white shirt and the other in black. The players were asked to count the number of passes made between the players in the white. A woman with an umbrella walks through the middle of the basketball court. Few people watching the video see her, as they were focussed on the passing of the ball by the team in white. Dan Simons, his student, replaced the woman with a gorilla. Most people watching the video did not notice the gorilla. This is inattentional blindness, or bounded awareness. Literally we see, but we do not see. In many cases, leaders ignore the information that is not visual. Enron and Satyam boards could not see the vital information.

It is necessary to bifurate the business if auditing and consultancy, as there is conflict of interest.

It entered the business in 1995 by setting up joint ventures with two partners-turned-franchisees Hard Castle Restaurants and Connaught Plaza Restaurants.

McDonald’s India is growing fast and plans to expand its outlets from 275 in 2012 to 500 by 2015.

They adopted a policy of glocalization — bring in its expetise in supply chains and restaurant operations from abroad and combine it with local requirement and culture.

The products and pricing for India were specially designed. They did not allow items with beef and pork. India is the first country to do so. Except fries, beverages, sandwich and the Filet-O-Fish, there is little in common between an Indian and a US outlet.

They practice here ‘ branded affordability.’ Some items on the menu cost Rs. 20. They focus on safe food and one-minute service. They focus on cost reduction.

McDonald spent six years and Rs 450 crore to set up a supply chain in India well before opening its first outlet.

Team owners earn money from :

• Ticket sales
• Team sponsors (local)
• Merchandise
• Programme tie-ups/events
• In-stadia ad
• Prize money
• Share of broadcast rights fees from BCCI  – BCCI retains 20 per cent for first three years, then30 per cent, from sixth year onwards 40 per cent. The remaining amount is shared between the teams.
• Share of IPL sponsorhip from BCCI

Team owners have to spend money on :

• Player salaries
• Stadium leasing
• Team advertising
• Administrative costs

Each team has paid franchise fees to the BCCI.

BCCI earns money from:

• Central sponsors — retains its share
• Online partners
• Theatre rights
• Broadcasting fees from the broadcaster retained as its share

BCCI spends money on :

• Umpire salaries
• Prize money

Broadcaster earns revenues from the advertisers and spends on production cost, and payment of broadcasting fees to the BCCI.

Ruchir Sharma’s new book Breakout Nations considers expectations of growth while deciding the breakout nations. A breakout nation exceeds the expectations. Another component he considers is the per capita income. If India grows at 4-5 per cent, it is underperforming since its per capita income is $1500. As against this, if Korea grows at 4 per cent, it is a huge achievement since its per capita income is $20000. India needs to grow more to get out of poverty because of lower base of per capita income. All countries are not able to sustain the bursts of growth, and become developed countries. That happens because nations driven to the wall adopt reforms and grow, but soon abandon the same very reforms.

The period between 2003 and 2007 was unique, where every single emerging market did well, and India too rode a global liquidity tide accelerating her growth rate from 5.5-6 per cent to 8-9 per cent. The expectations got too high, and India mistook the boom as being something unique to her.

Photography has gone digital, making Kodak a ghost company. Book stores and publishers are worried because of e-books and e-commerce. Travel agencies have been challenged by digital bookings on sites like makemytrip.com and cleartrip.com. What is the difference between IT in the past, and the recent trend of going digital ? The main difference is that the CEOs and CIOs have no control over it — the control rests with the customer, and not the company.

A digital strategy is not just mere presence on the Net. It begins with a new mindset. You have to be in the shoe of the customer. What is it that the customer values ? How to connect with these values ? Much water has flown through the Ganga and Yamuna since the time the mainframes ruled the roost to the appearance of the smart phones climaxed by the entry of the iPhone6. A new relationship has been established among the people, business and information.

Tesco taps the customers in Seoul, Korea by creating virtual stores in the subway, accepting orders from the commuters waiting for the train. These orders will be delivered when they reach home. It is based on insight that people can exploit their free time, who are otherwise busy. It is important to be there to avail of that time slot. A cruise company can give a smart phone to the passengers on ship with an application that tells them about the traffic in the restaurants on board, so that they need not wait unnecessarily for their food.

The digital approach should be focused. It is more important than a big budget. There should be a quick offering — speed is the essence. Those areas are selected which have high value, rather than all-and-sundry approach.

Arun Maira, formerly of  the BCG wrote book Redesigning the Aeroplane While Flying. According to him, institutions are not merely organisation with hierarchies and budgets. They are also processes by which socities perform functions. These also include norms by which the socities coduct themselves. Therefore, institutioal reform cannot be achieved only by redrawing organisational charts or creating new organisations with old templates. We cannot merely redesign the seats in the aeroplane when it is expected to fly out of the atmosphere into space. We have to change its structure more fundamentally.

Historically, the Olympic Games have been an ideal forum for brands looking to strengthen their original global presence. Companies pay heavily for the privileges of being associated with the Games, convinced that no other event offers the unique combination of mass worldwide exposure and fostering positive values. However, certain brands do get global exposure without paying large sponsorship fees through unofficial links with the event. For instance, Adidas, the key sportswear sponsor was outwitted by Nike whose gear was primarily worn around the village and during the ceremonies. Managers wonder whether the huge amounts of money on sports sponsoring is worth it. Social media are a lot cheaper than sponsoring sports events, but as Jan-Benedict E M Steenkamp, University of North Carolina says, ‘No body owns them.’

Gary Hamel, the management guru, is of the opinion that the pyramidal organisation structure is not conducive to innovation. Those in power are not ready to change. Only when the CEO changes, there comes a change in direction. Modern management originated at the start of the last century with the dawn of the industrial age. Let us call it Management 1.0. It was invented in Germany, Britain and the US. The present century will need its own new version of management. Let us call it Management 2.0. Formerly, organisations usedto innovate around products and strategies. Now organisations will have to innovate around the leadership and management process. This requires profound change — both at the individual and institutional level. The work will have to be distributed to the edges of the organisation. Management 2.0 could come from anywhere, the race is wide open.

As e-commerce is gaining a foothold in India and expanding fast, the hunt for talent is vigorous. The existing players pay a chunk of senior executives compensation in ESOPs. Mostly, the compensation is long-term incentive driven. New entrants try to woo the small pool of suitable talent by giving a salary hike of 50-70 per cent. A digital marketing head is offered around Rs 50-60 lac, category heads about Rs 70-80 lac, operations/supply chain heads anywhere between Rs 60 lac to 1 crore. At the senior most levels, salaries may cross even Rs 6 crore mark.