“A customer’s lifetime value is our focus”

Marketing in the financial services sector is tough currently, but Ajay believes that ABFSG can keep its ship steady and on the move.

Ajay Kakar has a rich background in financial services as Head-Branding of Reliance Capital and also in PR as he was also Country Head of Oglivy Public Relation (apart from simultaneously being the head of their financial services group) before joining the Aditya Birla Group’s Financial Services arm. In this interaction with mona mehta, he talks about his strategies to ensure better penetration for the company’s products in a cluttered market:

How is the marketing of ABFSG products taking off at a time when the Indian economy is facing one of its toughest times; be it rising inflation, falling Sensex, impact of the sovereign debt crisis in Europe and above all customer confidence?
Aditya Birla Financial Services Group (ABFSG) is a virtual brand, representing all financial services businesses of the Aditya Birla Group. At ABFSG we are committed to meeting all the felt and unfelt needs of our target customers. And today, as a significant non-bank, our 7 companies help us address nearly all such needs of mass India, short of core banking. We are fortunate to be in a category (money) that is the base need of every citizen across the globe. And therefore, we look at India’s underpenetrated financial services industry as an exciting and limitless opportunity. Every economy goes through seemingly uncertain times, but when you see the larger opportunity, such times are just minor dots in the life of an industry. Also, do remember that in moment of doubt, you need a doctor the most. And so it is with our category. We continue to reach out to our target customers with solutions that best meet their need. Towards this end, we are blessed to have a pedigree that represents one of India’s most trusted brand names - “Aditya Birla”.

How is the integration of your various financial services benefitting ABFSG in generating targeted revenues? What is the strategic roadmap ahead?
While we are a broad based financial services player, we have chosen to adopt an integrated approach towards our target customers. And we believe that this unique approach is beneficial to all our key stakeholders, be it our employees, customers or shareholders. To deliver on this approach, we have set up a unique structure with 4 key functions (HR, Risk & Compliance, IT & Operations and Marketing) driven by a cross ABFSG perspective. Our ambition is to come across as One virtual brand representing many businesses – a brand that speaks like one, looks like one and acts like one. This approach provides simplicity and convenience for customers. For our employees, we provide a world of career opportunities across businesses. And our shareholders benefit, as we offer solutions to customers across their life cycle. This approach helps us optimise our customer acquisition costs while maximising cost efficiencies with an integrated approach to our operations and back end costs.

What, according to you, is the most effective marketing approach for financial services specific to India today? How is ABFSG leveraging that tool?
With a heavily underpenetrated market, we focus not only on maximising our market share, but also on expanding the market. Just as an example, after more than 47 years of existence, mutual funds only enjoy a 5% penetration. And life insurance has an under-15% penetration. Today, we enjoy the trust of over 5.5 million customers. But while expanding our customer base, our energies are also focused on maximising the life time value of our existing customers. We are in a category that sells “trust”. To that extent we are unique from most categories that you can touch, feel, sample or taste. Trust is not built over night. And therefore we need to move beyond an “IPO/NFO” approach of need based advertising i.e. when we need to advertise. We need to engage our target customer throughout his life cycle and be there for him more so in his moments of need. At ABFSG, therefore, we track the customer through his life cycle with our category and brand. And we are always seeking newer ways and opportunity to engage with him. Therefore, we do not restrict our marketing spends to mass media campaigns alone, but also on being a part of the customer’s world 365 days of the year by capitalising on every customer touch point.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Omni’s nano curse?

Maruti has been trying to position omni as a multi-purpose vehicle for some time now – perhaps it’s time to dedicate the product purely to the commercial segment

For generations, Maruti Suzuki has been the vehicular lifeline for millions of middle class families in India. Two cars, namely India’s first hatchback Maruti 800 and the multi-utility vehicle Maruti Suzuki Omni from the 80s, have been the longest running models on the Indian roads. But the days have changed, and the automaker has shifted from a virtually no competition scenario to a market marked by cut-throat competition put forward by a number of global brands like Volkswagen, Honda, Chevrolet and Toyota. But a product like Omni is still the most viable value for money buying proposition, leave the Nano. But is it now time perhaps to question the way Omni is being positioned – as both a family vehicle and as a business vehicle? Is Maruti Suzuki really reaping the benefits of such a positioning?

The current Omni TVC (see some of the TV grabs given above, where the positioning is clearly an attempt to make Omni be viewed as a family car than as a pure and proper business vehicle) perhaps personifies this change, which attempts to position Omni as a multi-purpose vehicle (MPV) that can be used as a commercial vehicle as well as a passenger vehicle (Maruti Suzuki still addresses the Omni as a ‘van’). For that matter, a look at the past few Omni campaigns reveal that Maruti Suzuki has been trying to play on the emotional quotient associated with Omni for the Indian consumers. How successful has been Maruti till now in its Omni battle?

Well, going by data available with SIAM, while total units sold by Maruti Suzuki in its multi purpose vehicles category (Omni, Eeco) in August 2010 were 14,157, the same in August 2011 stood at 12,500, down by nearly 12%. Of course, one could mention here that the industry in itself has been slowing down due to the general rise in interest rates and drop in consumer savings. Add to that the plant lockdown that have occurred due to worker unrest at Maruti. But despite that, if one were to look at the aggregate sales of Maruti Suzuki from April 2011 to August 2011 under the concerned segment, the figure actually went up by 8.7% year-on-year to 66,628 units from 61,295 units in the same period in 2010. A detailed view at monthly sales indicates that it was the month of May when Maruti sold the most number of cars in this segment, 15,545.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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"Is Branding Yesterday , Passe , Dead ?"

4PS B&M Consulting Editor Endeavours to Unravel a new-age, Revolutionary, Path-Breaking Philosophy put forth by an Ad Guru that Puts The Age-old and much-revered concept of Branding to Sleep… Well, at Least if you Believe us Blindly !

Branding, for decades, has been hymned, celebrated, exalted, venerated and worshipped as the gospel truth by any marketer worth his FMCG lapels! The high priests have pronounced that the ‘Brand’ is ‘God’ and the ad executives, GCROEs (God’s Chosen Representatives On Earth!). For decades, the ‘brand’ has been acknowledged as the single most important aspect of business. Its success equals the business it drives. Branding’s prime objective remains the same – to make a product look distinct & different from competition and epitomise the vision & values it represents to gain that decisive cutting-edge lead.

The textbooks, to gloat over it, pronounce its value, power and criticality in no uncertain terms. Author Sanjay Tiwari in his much acclaimed book (The Uncommon Sense Of Advertising – Getting The Basics Right) offers his informed take in style: “Brands rule the world of marketing today because they rule the world of consumers today. They have not only changed the way we shop & buy, or consume, but have also had a profound effect on the way we live. Just count the number of brands you interact with since getting up in the morning till you sleep in the night.”

For some of us, he says, it might be more than the number of people we interact with in the same time. We don’t drive cars any more; we drive our Mercedes, Hondas & Toyotas. We don’t wear shirts, jeans or sneakers, but wear our Arrows, Allen Solleys, Levis, Wranglers, Nikes & Reeboks. We don’t drink cola, eat chips, burgers & chocolates, rather we drink our Cokes & Pepsis, eat our Ruffles, Pringles, McBurgers & Kit Kats. The brands that promise us a unique offer of utilities, benefits, values, personality traits, images and associations, that will satisfy our given needs (functional or emotional) and that we can relate to (consciously or subconsciously), are the ones that we identify with and show preference for. Therefore, more often than not, the brand (and its promise) extends beyond the product core. Successful brands often transcend their physical existence, take on a life and build relationship with their consumers. The positive experiences, values & associations that consumers perceive the brand brings to them leads to fulfilment of their expectations. The feeling of fulfilment becomes the reason for the success of the brand, and the basis for the relationship.

Ultimately, building brands is about running a marathon. And it makes huge business sense to invest in brand building. In fact, strong, reputed brands have a lasting bond with their consumers. Their brand loyalty is very difficult to break. The loyal consumer base raises the entry barriers for the competition and enables the company to enjoy benefits like premium pricing and sustained market share over longer periods of time. All these put together result in the brand being able to leverage in equity with the consumers and reap long-term profits for the company.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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“We Didn’t think Lava would be Such a Big Hit!”

After Business Phones, Lava now Aims to enter Smartphone and tablet segments. And The Logic comes straight from S. N. Rai, Co- Founder & Director, Lava, who believes that Handsets will soon become Infotainment Gadgets

Some say it’s the new kid on the block, yet within 18 months of its inception, Lava International has shifted the rug from under many a player and made its presence felt in a huge way in the Indian handset sector. In fact, in a sector earlier dominated by MNCs, Lava has ensured that today, an Indian brand cuts as much ice with the consumers as any other brand. After making an entry into the business phones segment recently, Lava is now all set to add Tablets, Android, 3G Smartphones to its offerings by the October this year. Eying convergence on the handsets, the Delhi-based handset maker is also planning to take Apple and Nokia head on with the launch of its application stores in the near future. By then, as founder S. N. Rai tells 4Ps B&M in an exclusive interview, the company expects to be present in 36 more countries. A strategic treatise follows:

You have entered the segment of business phones in the recent past. What’s next from your stable?
Well, Lava has recently launched its much-awaited business phones and it is getting an overwhelming response. With this, now we have 24 handset models with price tags ranging from Rs.1,200 to Rs.6,000. Now, our target is the smartphone segment, and we are expecting to launch it in the first quarter of the next fiscal. Currently, smartphones are growing at a good pace in both India and abroad. Tablets would be the other addition the coming year. Besides, we would also be launching 3G and Android-based phones later this year. By the end of 2012, we are planning to capture 10% of the handset market share in India and 1% globally. Lava will soon expand its global foot prints to 40 countries from four.

Mobile phone penetration in urban India has already gone past the 100% mark. Keeping that in mind, how exciting is the Tier II and semi-urban cities in terms of business opportunities? What are your plans to tap this market?
We think Tier II cities along with rural and semi-urban have a huge growth potential. Mobile service penetration is less than 30% in these areas. But this market is evolving very fast, more so for the fact that it’s a market of basic and multimedia phones. Also, we are strengthening our distribution network, so that our product is available to the maximum number of buyers. The aim is to take the retail presence to 1.5 lakh outlets from 50,000. Within a year, we would add another 700 distributors to our existing 1,000. On the other hand, in urban areas, we would see people upgrading to smartphones from basic and multimedia phones.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
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IIPM: Indian Institute of Planning and Management

OFFERING JUST WHAT THE MARKET WANTS!

Maruti today promises more to its customers than just hatchbacks and a great after-sales service; It offers variety at varied price points. most importantly, it doesn’t go over the edge trying to deliver more than what its customers want.

With Maruti Suzuki, the torchbearer of the Indian automobile brigade and the fifth-most valuable brand on this year’s 4PS B&M Most Valuable Brands list, it has been a consistent drive to build consumer trust and loyalty. But it wasn’t an easy start. When it began its journey on the Indian soil, most would have used their mega-sized scissors to cut short any argument which defended the fact that Indians would prefer hatchbacks. Those were the days of the Ambassadors and the Padminis fitting the pockets of the high-gentry, and the Indian masses had accepted this fact. But instead of shying away, it chose to stick on. Since then (when its first model Maruti 800 was launched in 1983), this Indo-Jap giant has made its way into the hearts of millions in the country. To talk about dominance, today, even a market share shy of the 50% margin bothers Maruti. And when it comes to brand equity, ask a middle-class Indian about the car brand he trusts the most. The answer, in all probability, will be – Maruti! Between its early days when the company pulled the ground from under its competitors feet, till the advent of the likes of Hyundai and Daewoo, the ‘People’s carmaker’ had literally ruled the Indian passenger car market. For this brand, the goodwill building process wasn’t a year-long drill or a scrabble-game lasting a few years. It has been on the task for close to three decades now. Also, while players like Mahindra (which has tied with up Ford and Renault in the past) have had a bitter experience of joining hands with foreign players, Maruti’s JV with Suzuki has not only given it the technology leverage, but has also helped build a perception in the minds of the consumers that the mid-range Maruti car that they are driving, actually runs on a high-quality Japanese engine. Talking about the success of this JV, R. C. Bhargava, Chairman, Maruti Suzuki India says, “This JV has been successful in building a strong brand for us till date because in this case, both the parties are bringing their respective expertise to the table, to work for the benefit of the JV, rather than looking at getting the other party out.”

Till date, all that Maruti has done is play to the gallery. It gives what Indian consumers desire. There is no question of over-delivery and no doubt about its positioning strategy (which has been – selling at affordable pricing points). Forget about its customer-pleasing and brand-building launches in the past (like the 800, the Zen, the Omni, the Alto, the Swift, the DZire and the SX4), even during the past year, this automaker has worked towards retaining the crown in the auto industry. During the past 12 months, besides the launch of another version of its hit Alto (Alto K10), the carmaker has announced plans to roll-out CNG versions of the Alto, the Estillo, the WagonR, the SX4 and the EECO. What more can make the price-sensitive and fuel-cost minimising Indian consumers happy? Such moves also prove that that company is conscious of the fact that 15% of its sales come from Tier II & III locations. “Even in the past 12 months, Maruti has tried to give what the consumer has expected. When they were looking for small cars, the company met the demand. Now we are offering what the evolved consumer wants,”says Mayank Pareek, Managing Executive Officer – Sales & Marketing, Maruti Suzuki. The company has even tried to work towards ensuring that the 21st century customer does not perceive it as a company that makes only hatchbacks. “In recent times, Maruti hastried to reinforce its image as a technologically superior carmaker that offers products at great prices. This has definitely helped the brand,” says Shashank Srivastava, CGM – Marketing, Maruti Suzuki India.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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FACE2FACE WITH D UDAYA KUMAR, CREATOR OF THE NEW RUPEE SYMBOL

One notices that the symbol depicts both ‘ra’ in Hindi and ‘R’ in English. Was that the intention?
Of course, it was thought of that way. I wanted the symbol to mean something nationally as well as globally. The best I could do was to make it look like a ‘ra’ and an ‘R’ at the same time. ‘ra’ for Indian ‘rupya’ and ‘R’ for global rupee. And the symbol served that purpose perfectly.

Why did you stick to an alphabet and not to any other interesting symbol? For example, when you look at the dollar symbol, it’s has no ‘d’, but a $...
When it comes to representing your national currency, you can’t pick a symbol at random just because it is visually appealing. It has to make some sense as well. And that was the idea, right from the beginning. I have been interested in typography so I could do justice with Devnagri.

Why are you inclined towards typography so much?
I have found that there are very few institutes in India that provide courses in design and typography. I have always been interested in scripts and since Tamil is my regional language, I want to be able to study its typography and maybe design it at some time. I have a zeal to learn to be able to develop a regional script.

Future plans? Are you taking up further designing?
If there are any such opportunities crossing my way, I will certainly take them up. But at the moment, I plan to do full time teaching. I have already joined IIT Guwahati and look forward to great academic years of teaching there.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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MEHERNOSH PITHAWALA, GM – INTERNATIONAL BUSINESS & MARKETING COMMUNICATIONS, GODREJ SECURITY SOLUTIONS

How big is GSS at present?
Well, in terms of revenue, currently we are a Rs.400 crore company.

You are quite visible in the North Indian market. Do you have any specific targets for the particular region?
North India is a big market for us. We have already initiated a campaign in public awareness. We have introduced a host of intelligent security products for the market. We are also planning to expand our distribution and service network in the North.

Are you also eyeing for a pan India expansion?
We are already present in almost all the cities with a network of over 700 dealers. Moreover, we are planning to expand our presence in modern retail outlets too to make our products readily available to the consumers.

Do you have any plans for a paradigm shift in tier 2 and tier 3 cities or want to make it a niche for Godrej securities?
Security is just not the concern of the niche, but of every individual. We are already present in almost every city in the country with a strong network.

What is your pricing strategy?
We are well priced. Our products are not as cheap as those of the fly-by-night operators. But then, they come with a warranty and the trust of Godrej. As mentioned above, our products are priced to suit the requirement of various security needs and budgets.

Indian real estate sector is on a boom as builders are coming up with new projects every passing day. Do you have tie ups with any of these builders?
Yes. Post campaign, we have been receiving many enquiries and we are in the process of finalizing deals with some prestigious builders across the country.

Do you think mass media ads for products of Godrej Securities, which has a niche market, is a viable move?
In the context of Indian consumers, category awareness is a major issue, and we have tried to address the problem with this campaign. The campaign has got a very good response not only from the metros, but also from non-metro cities.

Who do you think are your existing competitors?
Security solutions is a very unorganised market. There are a few organised players in the market offering either electronic security, premise security or physical security. But Godrej is the only player in the industry to offer comprehensive security solutions comprising all three.
Ashutosh Harbola

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
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