brands vs products: Return of the king err the consumer

well whether we like it or not our life is surrounded by ads. Now amidst all the hoola hoop of marketing language and advertising gimmicks may a great product has failed miserably because somewhere the connect that the brand was trying to make with the masses simply did not click. With the technology revolution with advent of social media, information is just a mouse click away - and the realm of google has not been very kind either. Most advertising campaigns - a result of some daring thought process coupled with a healthy dose of copy-paste and the prowess next Mr 'Hunk'/Ms 'IT' or the granddad of Indian cinema, has at the end simply failed to connect with the masses. Stuff keeps flying off the shelf at a supermarket and often in this price conscious market, brand loyalty goes for a toss for product innovation sometimes, lower prices at others. Its not true that the brands are dying altogether but the relationships between products and brands are changing - rather evolving with consumer insights into a product being affected by choices, information other similar products. Most advertisements today have become the ever changing wallpaper on the workstation of a adolescent geek - the brand news and updates we are seeing on different forms of media simply does not cut the cake anymore with the consumers. It is rather the innovative traits the product brings vis-a-vis competition is what is driving sales mostly.

We see large business house spending a truckloads of money in trying to build up brands which is all too well in a perfect scenario and also necessary but amidst all his confusion and glitter of brand ambassadors and messy script of the campaign - product managers fail to realize why a consumer should spend his hard earned time and more importantly money to buy certain "intangible" that a brand brings along. We will not take the case of Apple since back in the 90s Apple too was stuttering under the pressure of a great brand vs not so good products - it was only the advent of the iPOD, iTunes and iPhone and the beautiful integration between the products and the brand and the interaction with the end consumer that say a meteoric rise in Apple fortunes financially and more importantly a great brand. A great product has the essence of being a great brand in the future but untimely rise to cult status has its falls - a chip making company in India is a great case where the brand essentially became so powerful initially, with the lack of actual products on shelf and a average product - it bombed eventually.

Branding is essentially a good exercise - but to simply put it some intangibles in a 10 second campaign on the tube or multiple full page(s) on a national daily will not always make a case of brand recall. Yes it will give rise to fanboys and with viral marketing and social media where everyone is a critique - this might also be essential but at the end you have to put on the customers shoes at some point of time. As of now the brand rules but so do the Apples and Microsofts of the world - better they realize the cost vs apparent product value, thought process that a brand initiates on the consumers mind before a sale - a good product can go a long way in building up a brand, its not always the other way round. At the end the consumer is always the king.

From the ashes a fire shall be woken,
A light from the shadows shall spring;
Renewed shall be blade that was broken:
The crownless again shall be king.

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Of obtrusive thoughts and cohesive policies

Once a friend had asked me – “what does life mean to you?” Being in the prime of my life I had nonchalantly stated that “life is what happens to you, while you are busy planning other things” – a quote misused frequently these days. Probably I was living in a world of ‘make believe’ and boy those were the times then. The economy rose to steep heights, GDP touched new frontiers, stock markets climbed to new highs on a daily basis – without any solid reason to do so. People invested in an illusory bubble and boy did that justify the returns initially – justifying further investment.

Coming back to reality and current times – I cannot help but notice the false sense of security that most people had placed on the economy some time back has currently gone bust. And the most humorous yet probably short term measure that was suggested some time back can probably take the sagging global economy head-on and turn it around. In a world of conspicuous conspiracy theories and jagged claims this might just be it.

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution.”

Well this might apply to India as well. The housing bubble took off a few years back – rising demand was met throughout – but with the shinning failure of the government to curb the market with correct policies and regulations – prices shot off – leading to the market escalating false demand cases – a vicious cycle of price coup in an open economy. Everyone wanted a price of this bubble – and when the bubble burst – we all know the story right.

So technically if we do live in a world of make believe and false imagery does make the world go round then why not continue living a life of make believe. At least most people around won’t have a issue with coffee table discussions around global recession, Rakhi’s swayambar and Obama’s new muse. Like some bright politician stated a few days back on an issue to address India’s population burst, “Marry late, Watch TV”. Are we so dumb that we need the idiot box as a way to curb population control – who is this directed to? The middle class toiling away in a private firm, burdened under taxes and loans or the “real” Indian toiling away in the fields with no access to electricity, education, normal living conditions. So we are to dump education and stop enlightening peoples minds on what’s right and what’s wrong and instead follow medieval tactics to curb something as simple as population control.

Mr. Minister please go back to school.

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the economy and the escapist Indian

well….we all have heard the word “recession” looming large over the global market for the last 2-3 quarters and it seems that the baby is here to stay – well at least for the next 2-3 quarters that’s what pundits say. So realistically what does it mean for the average India – let’s put it into perspective.

- inflation dipped to jan 2008 figures at around 5%

- home loans at lower 7.50-8% monthly reducing

- property prices slashed by 10-15% at most places

- shops offering discounts galore in a last ditch attempt to move merchandise

Well all seems hunky dory then – Indian markets seem to be on an upswing trajectory, or is it? Around half a million workers in India have lost jobs between October and December 2008, according to sources in the labor ministry. It is estimated that by end of March the total job losses in India's export oriented units may mount to over 1.5 million. In contrast the picture does not seem as rosy a before.

The problem is that the market sentiment has touched rock bottom - India being mainly a services economy seems to have been affected some what by the US economy downswing. But somehow data seems to show that Indians and Asians as a bunch seem to be doing comparatively well. Yes the attrition rates are lower, raises are almost non-existent but India offers a beacon of hope.

According to the latest Nielsen Global Consumer Confidence Study. The survey is the largest bi-annual study of its kind, covering more than 26,000 internet users in 52 countries. Savings save Indians – it seems.

Sixteen per cent of those polled in the country think it is an excellent time for jobs, while 59% feel it’s a good time. Consequently, the respondents’ perception of personal finances is just as glowing, as India topped the list as the most optimistic with 77%; 9%of Indians think it’s an excellent time while 68% opine it’s a good time.

In keeping with the negative global sentiment, 38 out of 52 countries are pessimistic about the economic situation in their country in the second half of 2008 with 63% of the respondents saying that they believe they are in recession. Only three countries think they will be out of the economic recession in the next 12 months: China, India and Vietnam.

Absolute numbers have come down in India. Six months ago, 26% thought it was an excellent time for jobs while 60% said it was a good time. On the personal finance front, things are down by two percentage points. A report released by jobs portal Naukri.com states the overall job index in October 2008 was 781 as against 1,000 in July 2008. That’s a decline of a whopping 21.9%. It is not as bad as the United States, but the numbers are down with many sectors retrenching or holding hiring.

The most palpable of all fears is the one that has stricken business schools. Many firms are not going to B-schools this year. The spokesperson for Indian School of Business agrees that the coming placements season will be challenging.

While the rest of the world may be living from pay cheque to pay cheque, 58% of Indian respondents said they were in the saving mode. Indians have gone a step further and slashed spending on holidays and vacations by 10 points. Spending on new clothes and out-of-home entertainment has dropped two and eight points, respectively. But not much has changed with regard to paying off debts, credit cards and loans.

Saving continues to be a high priority in these times of uncertainties. In India savings remains the biggest priority, with 58% consumers preferring to save their spare cash, almost the same as six months ago.

Net net amidst the global lull though the only thing Indians have down is to cut down on the shopping and entertainment front – so we see lesser footfalls in malls and even lesser outright purchases. And yes thoughts of the luxury car and the second home have been put on hold - at least for short while. While that is bad news for the retail industry and other associated industries that grew along with the sentiments of those times. As Indians want their money’s worth now even more so than before - we might be looking at companies coming out with innovative products and price points to set the market going. One way or the other the escapist Indian is the winner.

All hail the escapist Indian.

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the rise and the fall....

"Satyameva Jayate" (Sanskrit: "Truth Alone Triumphs") is the national motto of India. It is inscribed in Devanagari script at the base of the national emblem, which is an adaptation of the Lion Capital of Asoka at Sarnath, near Varanasi in the north Indian state of Uttar Pradesh. The origin of the motto is a well-known mantra from the mundaka Upanishad.


In context for the last few weeks the apparently senseless news channels are airing their views and presenting sensational (masaladar) takes on the whole event - the common man, the shareholders (well the smaller ones) and the employees are at their wit's end. So where is the truth? Are we actually surveying the real truth or have the so called perpetrators of truth and information decided that stirring up the fragmented pieces of information collected, in a melting pot with bad presentation and weird assumptions would lead to a better selling information piece and higher TRP ratings. And I thought that reporters and news houses were supposed to find and highlight the real truth – at least that’s what my uncle once told me a long time ago.


Well I will & refrain from commenting on the situation that one of the biggest IT vendors in India finds itself today, story but after careful scrutinizing and observing the proceedings I will but just present a spoiler in the making, drawing a hypothesis with the Enron story - one of the most tragic and sinister instances of corporate crime in American history. Well for starters the case of the above mentioned Indian player might be just up there in the Indian perspective.


I did not follow the story well when the news first broke in 2000-2001 but followed it closely in my fourth year of bachelors. By 2002 as far as I remember not only Enron but its accountancy firm Anderson Consulting went bankrupt and some investors of Merrill Lynch were indicted for fraudulent Enron-related business.

Well the story starts in 1985 with the foundation of Enron a traditional energy supply company, by the chairman Mr Lay (Can’t remember his first name !!!) – Enron grew into a "energy commodities” in the late 90’s under the then COO Jefferey Skilling. Under his famous but equally weird “hypothetical future value” policy, Enron started overlooking current losses and started booking non-existent future profits. For e.g. if you took a home loan of say 30 lakhs today in 2009 as a case of financial investment – normal balance statements should indicate today a debt of 30 lakhs. Suppose you sold this house in 2012 for 40 lakhs then Enron in this example would cite a profit of 10 lakhs and book it today i.e. in 2009 itself. (Any resemblance here to the Indian perspective).


One of Enron later CFO’s too played the cards well getting the top investment banks to invest big time in Enron citing false inflated balance sheets – and getting these huge sums to pay off Enron’s debts. Another way was to siphon off debts to sister concerns or subsidiaries or limited liability companies most of which were headed by the top management itself. So the game continued till 2001-02 when the govt. and the investors started taking the P&L sheets seriously and it was matter of time when the truth came out. The management went off with over 100 million USD in bonuses wheres the normal personal were left with 4000 USD as severance package and zero value 401k plans. It must be mentioned that within a short span of time most of top management who had huge shares in the company sold it off wheres the employee’s stock options plans were frozen. Yet another similarity here with the India story.


Well to put it in perspective the govt. put its weight behind Enron throughout – from the Bush presidency to higher circles within the Senate and California – huge projects, deregulation of the electric industry and manipulation of electricity charges – well this would not have been possible without the reality of red tape there. Cut to Hyderabad and Bangalore – huge projects including roadways, metro etc to a particular infrastructure company owned by the chairman could not have been possible without the govt. backing here. Well the apparent merger of the two companies could have fooled the people even more had it gone through smoothly– who knows.


So should we call this a blatant case of corporate “fraudalism” – or is it just a question of timing. Maybe, had the global markets not tanked the Indian corporate romantic story could have continued – this could have emerged even rosier with the kind of respect and market sentiment that the Indian player commanded both globally and in India. Another biggie in the petroleum and natural gas as well as telecommunications industry too commands equal respect though there have been innumerable instances of stories of frauds and corporate deceit surfacing every now and then but never enough to gain speed.


Well some will say that it was a case of actual deceit or simply bad luck. I am sure this is not the first nor will be the last to surface soon. (The news of Nortel tanking just came in….)


It’s said that we don't grow unless we take risks and that any successful company is riddled with failures. Well I hope and pray that that in the long run it does. Somehow my hope goes out to the 50000 odd people and their families that are/were associated in one way or the other with the company.


God bless.

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a year of hope....

well its been over 70 days since my last post and i would like to apologize to my readers (a handful to be honest but clearly the feedback from them is highly appreciated) for the long hiatus. Apparently business tours and the administration tasks associated with with can make your world go round (:0) for a considerable amount of time - creating expense sheets, deleting them, re-creating them, time sheets etc etc - you name it, i got it.

Anyway a lot of changes on the personal front too had been keeping me away from one of my favourite activities - "voicing my opinions" and this platform

has honestly opened up new avenues in my persona that even i was nto aware of.

So continuing on that note and wishing my dear reader a belated but prosperous new year - i hope that i can continue doing what i had started last year.

Let this year 2009 be a year of HOPE for all the people of this world - amidst the political and social gloom let 2009 herald in a new chapter of socio-economic reforms and human uplift-ment.

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