Category: General Marketing

Digital business is being facilitated by new enabling technologies such as 3D Printing, IoT and smart machines. We have already discussed 3D Printing. IoT represents a network of devices connected  to the Internet.

These are embedded with sensors and are mainly used to collect data. These can be controlled remotely. IoT can be used by incorporating it in a machine to minimise cost. Smart machines represent new mobile robots which can do an array of jobs, unlike the industrial robots which are often designed to do one type of job. Further smart machines also mean machines with cognitive computer systems, with advanced artificial intelligence. These can be used to perform complex tasks, traditionally performed by human beings.

The 3D Printing affects the Product Life Cycle theory. Before scaling up the production, a company can put short product runs with 3D printing.Later there will be traditional manufacturing. A 3D printed product can be made available even after the traditional manufacturing discontinues its production. In leasing decisions, there was reliance on depreciation. But thanks to IoT, companies can have data on the asset usage, and this enables a more realistic assessment of residual values. The workforce in future will be a hybrid workforce — people, augmented workers and smart machines.

The augmentation devices could be wearables such as Google Glass. A resource planner will have to find the right balance of workers and machines.

In the 1950s, the business schools came into vogue. The students who enrolled were engineers who acquired management vocabulary , but not necessarily the skill set.

Between 1974-78, there was a massive decline in jobs for students of humanities. Those who majored in music, history, literature and liberal arts joined MBA. The batch had both engineers and non-engineers.

In 1980s and early 1990s, private universities such as Harvard, Wharton, MIT, Northwestern, Stanford asked for work experience after undergrad degrees. As a result, people with 5-6 years experience joined business scools. These students, 75 per cent of them, go into either investment banking or consulting.

The proposed model expects business schools to run a one-year course instead of two years course.The specialisation could be in terms of discipline , say Finance or industry, say Telecom. The courses are to be designed around employability.

This write up is based on interview of Jagdish Sheth, Professor of Marketing, Emory University.

In a business organisation, the top management consists of the CEO and the departmental heads. If the CEO is also the member of the Board, he is called a Managing Director (MD). The departmental heads are Vice Presidents. They are No. 2 in the organisation, reporting directly to the Big Boss. However in banking, there is a plethora of directors, vice presidents and even MDs. It is estimated that an astounding 40 per cent staff of Goldman are VPs, and they have 2400 MDs. This stands in sharp contrast to the non-banking sector. Such fancy designations are common to all investment banks, including those in India. In MNC banks in India, it is estimated that of the 2210 people employed, 365 are VPs, 325 are directors and 65 are MDs. It thus constitutes 25 per cent of the total staff. In I-banking in India, including both the domestic and foreign sector, there are 49 VPs, 31 directors and 32 MDs out of the total executive head-count of 782. Just key in the bank VP in LinkedIn’s search box and you are likely to get around 5 lac hits.

It is explained that these designations are not jobs, but grades that reflect seniority. However, this is not a sufficient explanation.Maybe, these titles on visiting cards are suitable for market facing executives. They are ubiquitous and are not related to the job one is doing. Even a person doing in-house tech support can be called MD, technology.

The following factors influence  identity of a company.

1.Loyalty of customers is an indication of how good the identity is. Low loyalty points out to the need for developing an attractive identity.

2.Outdated identity which is not in sync with the present times requires up-dation of identity.

3.Identity should be consistent all over the market. Inconsistency requires proper identity management.

4.Addition of new products and services also require identity management.

5.Competitor’s identities do affect our own identity.

6.A changed customer profile require changes in identity.

7.When a company enters new markets, it must review its existing identity.

8.In slow downs of economy, identity is neglected. Later when time improve, we should pay more attention to identity.

In Pretty Woman, a corporate polo match was shown. Tag Huer sponsors golf tournaments. LVMH is signing a sponsorship deal in cricket in India. Omega and Rolex sponsor polo in India. Cartier SA too promotes polo internationally. DLF and Emmar promote golf. In Mumbai, luxury brands associate themselves with a boat show. Internationally, Oscars and Cannes lend themselves to associations with luxury brands. As in India such sponsorship opportunities are less, most of the promotion of luxury brands is directed to advertising in fashion magazines and in – store events. Sponsorships provide a tool to bring the truely memorable experience of the luxury brand to the consumer. Here the consumers get a participatory experience. Women’s golf has received a boost on account of sponsorships. Luxury brands are going beyond traditional events to art and architecture.

In India, the inaugural Grand Prix was held in October, 2011 at Greater Noida on Buddha International Circuit. There were 12 participating teams.Let us understand the logistics. Each team had a staff of 100-200 people. Each team’s racing cars had to be transported — 2 for each team and thus 24 cars were transported by Boeing 747 – 400F aircrafts. Along with the cars, thet had to bring spare engines, chasis, other car parts, tyres, race specific gadgets and telemetry equipment that connect staff and their drivers to their European HQ in real time. The whole cargo’s estimated weight was 600 tonnes.The racing support cargo weghed 900 tonnes.It  led to an estimated consumption of high octane fuel measuring 30,000 litres and diesel by indian oil measuring 40,000 litres.

Buddha International Circuit is 5.14 km long track. It is designed by Herman Tilke, the German track designer. It has been constructed by Jaypee Group — Jaypee Sports International Ltd (JPSI). The total project cost was Rs 1800 crore which includes license fees payable to Federation Internationale de Automobile (FIA) — the governing body of sports.

The event attracted 25 million viewers on Indian TV and 500 million viewers internationally. ESPN covered the event. The ad space rates were Rs. 1.5 lac for a 10-second slot.

It is proposed to have driving academy in India which would be set up by Mercedes to provide training for aspiring racers.

Harvard Business School used first case study to teach the concepts in 1912. Since then this pedagogic tool has completed 100 plus years of its existence. At HBS 80 percent of class time is spent on case studies. Darden spent 75 percent of time on  case studies. Of the 25 top business schools ( Bloomberg) 19 reported they use case studies as the main  pedagogy.

A case study leads to discussion of the strategies, methods, procedures and policies to tackle the problem, to resolve the issues on hand.It introduces the concepts to the students. In encourages several different approaches to tackle one common problem. It enriches the participants, as they gain from the insights given by others. It emphasizes the fact that there is no one solution to a problem. Cases increasingly incorporate video and web-based elements. It leads the learner through reflective and analytic participants, as wrocess. There are supporting teaching notes to facilitate the class discussion which are also sold.The key words are written on the board, and the discussion gets a direction.

Developing cases itself is very onerous task. The faculty has to visit the industry concerned. The data is to be collected. The issues are identified. It involves the investment of time and resources. These cases are published. The smaller business schools buy these published cases for use in their class rooms. This generates revenues for the bigger schools. Harvard sells about 4000 cases anually, generating a revenue of $ 194 million in 2014.

Case method’s success depends upon the experience and maturity of the participants, as well as the competence of the faculty

Ranjay Gulati, HBS, has written Rorganize for Resilience — Putting Customers at the Centre of Your Business. There are two approaches –inside-out and outside-in . The inside-out perspective is fundamentally one where you say I know what the market wants. The job of the company is to produce, distribute and sell. There is some idea of what the customers want, but the organization is not sure. In the outside-in perspective, the business is not defined by products, but by the markets to be served. Apple’s  iPhone is 90 per cent outsourced, and only 10 per cent made in. There are almost a lac of applications for iPhone, but not even a single one is made by Apple. Inside-out is closed architecture, where everything is made in. The outside-in model has mastered the ability to understand where the markets are moving. Customer-centricity does not mean blindly  listening to the customer. The customers do not design the iPhone.  Apple just understood the right trade offs between ease of use and other things. Everyone claims they are customer-centric. Either it is a matter of luck or some design. Progressively, companies get disengaged from customers. The myopic view and the arrogance of knowing better come in the way. The companies are not organized around customers. Outside-in starts the reverse way — the mission for which the company is established. A hospital can be managed with a crew of specialists. But it can serve the younger people with isolated problems, but not the ageing population with several inter-related problems. The configuration of delivery system could be inside-out and not out side in. Al Ries is of the opinion that customers do not know what they want till they are given a real world choice. The companies should do what they do best, and outsource the rest. The companies should not confuse between core and critical. Core things give a unique edge in the market place. Critical things are necessary to do business, but do not necessarily give an advantage. Power is needed to run an industry, but that does not mean that you need to own a power plant. The idea is shrink the core. Bharati considered coverage a core factor. Today it is a hygiene factor, taken for granted. At one point of time, owing towers was the differentiator. The tower must have electricity. The diesel to generate electricity was bought by Bharati. It was the second largest buyer of diesel after the Indian Railways. Bharati then hived off the towers into a separate company. It is not worried about diesel anymore.It now focuses its energy on marketing and new business development, and service innovation. The idea of shrinking the core means how I can do less and less myself.

DD used to televise cricket matches and did not pay anything to the Board for the transmission rights prior to 1993.The whole scenario changed when the Board sold the transmission rights of the Hero Cup in 1993 to a private channel.DD objected to this, and the issue went to the Court, which upheld the Board’s right to sell the transmission rights. This opened the floodgates of revenues for the Indian cricket. At this time, two private sports channels ESPN and Star Sports started bidding for cricket rights jointly.They entered into an agreement with the Board for 1995-1999 for a sum of 5 million dollars. The cricket Board’s administration during this period put Dalmia at the helm of affairs. The World Cup rights in 1996 were sold to Mascarenhas managed Worldtel. Dalmia got the opportunity to preside over the ICC and stated Champions Trophy; the rights of which were sold.In 1999, the transmission rights were negotiated again, and Prasar Bharati received them., after agreeing to pay the Board a sum of  5 crore 40 lac dollars (Rs 227 crore). The agreement had two components — overseas transmission rights and Indian airtime. Zee Telefilms got the domestic rights, and TWI-Stracon the overseas rights. Later, there was competition amonst channels for transmission rights, and the Board decided to test the bidders against the criterion of experience. Zee rights were denied on this ground, and they were awarded to EPPN. As the matter became sub-judice, in the interim Prasar Bharati was given the rights. Later, the Board elected Pawar as President and new bids were invited. Nimbus won the contract for 2006-2010 against 61 crores.Sony Max has now bade for IPL for 10 years against a sum of rs 4030 crore (1.06 billion dollars).

China’s TCL corporation offered free health check ups for consumers who visited any of its 24 retail branches in India. It is a consumer electronics company and it sets to distinguish itself by showing concern for consumers health. Companies donate a certain percentage of sales for socially relevant causes such as water-harvesting, education, women’s empowerment. Coca Cola’s ‘drops of joy ‘ campaign features an emotional narrative where deaf and dumb are employed to inspect bottles by them.” Drops of joy ‘ cover all their cola and non-cola products. PepsiCo takes initiative on its activities on water and waste management. Honda campaign ‘ Nature rides with Honda ‘ features its concern for safety, environment and energy conservation. SKF, a bearing maker, burns lot of steel, and is thus concerned about reducing environmental pollution of carbon  monoxide emissions.In their ad, a toddler is shown riding a toy car in the lush green field with the tag line ‘ We’re driving India to a cleaner future.’ It conveys their concern for future generations. Tata Tea’s ‘ Jaago India ‘ commercial connects the awakening effect of tea to social awakening. WorldSpace has launched a Go-green initiative. When a company shows concern with social causes, it empathises with the consumers. They then favour such a company and its products. Other things being equal, consumers tend to prefer brands associated with a good cause.  There is likely to be an indepedent CSR audit of companies in future. Though in the short run these companies are a drag on the bottom line, they bring more returns in the long run.