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Posts Tagged ‘India

Some say its doomsday, and for some it’s more and more opportunity. The print media has seen a lot of flux with the advent of the internet and questions have been raised on whether it is in its declining cycle. Not all consumers behave the same, thank god! So while the US is grappling with a declining trend, there seems to be more optimism in Asia, especially in countries like India and China.

India sells approximately 78.7 million copies of newspaper every day, second only to China. However, the business model of the newspapers rely less on the revenue earned from the subscriptions (app. 40% revenue) and more on the revenue earned from advertisements (app. 60% ). Of course, one might argue that the advertisement revenue itself is subject to the circulation, reach and reader segment attracted. And hence it does not come as amazement when the Wall Street Journal decided to provide free newspapers to important corporate houses and business schools. If they get addicted, money would surely follow. Let’s look at some of the initiatives taken by Indian newspapers, and am sure, by most of newspapers abroad too!

Now let’s take a look at the bundling principles through newspapers. Of late, newspapers have been bundled with magazines and local newspaper. For example, The Times of India in Mumbai is bundled with the Mumbai Mirror and a bundled price of Rs. 4.50/- is charged for the same. Have we noticed? Yes. But have our preferences changed for the addition couple of rupee we have to shell? Actually, no. And hence bundling becomes a mode of survival for this industry. Maybe the future could see newspapers bundled with your train ticket in the morning, or a monthly subscription free with your month’s groceries!

The content of the newspapers is gradually becoming more target group driven. Debatable, yes, but here’s my take on it. Different sections of the newspaper have been targeted at different segments which was earlier not so much the case. And hence there is a clear distinction between editorial contents of the same day in different newspapers.

In order to make the newspaper attractive amidst the clutter, the publishing houses have come up with innovative ways of advertising. And thus, the first page of my morning newspaper always has a startling content, colour, font or interestingly shape! It surely does work, especially when it’s difficult to hold on to the newspaper! Add to that the advertorial page (Mint recently published “From time to time, you will see a page or a feature in Mint that is clearly labelled as Media Marketing Initiative. Such sponsored content is entirely generated by an advertiser or the marketing department of Mint on behalf of an advertiser, and does not involve any Mint editorial staff...”

The print industry is in a mode of collaboration (media and print), extension (Dainik Bhaskar keeps adding more cities to its network regularly), and the advent of local newspapers and of vernacular newspapers. All these, together, make me think optimistically regarding the print media in India.

The online print media and its evolution is another huge aspect, but maybe some other time. Also, the mobile phones may usher new revolutions in this space. I leave you with the question. Is there something the west could learn from the print media in India? Or is it just that “we are like that only!”

– Nemo

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There’s a lot of hullabaloo regarding the inflation and how it beckons doomsday for the Indian industry. Well, the FMCG industry seems to have tackled it pretty well till date. So here’s a review into their strategies.

Inflation hits the FMCG industry in multiple ways. While the price of raw materials keeps spiralling upwards, the end consumer does not have the ability to take the burden of this price increase completely. To add to this is the pressing need to pay higher salaries, which forms a large part of the fixed cost in this industry. With the increasing clutter and reducing wallet strength of customers, inflation brings an era of high spends on advertising too. It’s not a happy scene everywhere. An Assocham report shows that net profit margins of Marico and Dabur India ltd. recorded a decline of –11.1 per cent and –5.55 per cent on sequential quarter basis owing to the rise in their wage costs by 18.29 per cent and 48.71 per cent respectively.

The good news, however, is that the FMCG industry is growing by 18.8%, partly due to increased prices and by more than 8% volume growth. The strategies have been manifold, tapping opportunities at every part of the value chain. For example, to prevent down trading, the companies have introduced packs with lower SKUs so that the per unit purchase does not pinch the consumer’s wallet. For example, Henkel has introduced a new 400 gm pack of Henko washing powder at Rs 40 and withdrawn the 500 gm pack that used to sell for Rs 46. Some companies with huge war chest have been able to maintain the prices which they are identified with. For example, Parle Agro has not changed the price of Frooti in spite of upward pressure on prices. Soap companies have shifted to cheaper options of raw materials to source their products at a competitive price. Companies are also reworking on their packaging, product line while aggressively pursuing branding exercises to be differentiated in the market.

While the examples show how the smartness with which the industry faces inflation, the question remains if this buoyancy will continue if the effects of inflation are passed on to the consumer in priority sectors like oil and LPG. Will the consumer still buy without any worry?

-Nemo

We started with customer relationship management and have now moved on to customer advocacy. And the Orkuts and the Facebooks of the world are smiling away. With blogging being contaminated everyday with posts intended to catch the consumers eye and companies recruiting bloggers to maintain their image in the e space, there’s an open battle field ready to explode. Customer activation aims at reaching the customer where they least expect, the web space seems to be a lucrative choice.

However, with fewer laws governing the dos and don’ts in this form of advertising, there is ample scope of sublimed advertisement. Agreed it would take consumers years to get saturated in this form of advertisement, but a degree of caution on the part of the advertisers would do good. Also, the advertisements need to innovate and intrigue the consumers. There is need of a better control over the webspace, lest another Dell should wake up to watch their brand equity get eroded on websites.

Lastly, like all offerings, India needs a customized form of web advertisement. If your product intended to reach a greater mass, think about where these masses would go. And blogs may not be the right answer. So maybe an i-Shakti or an e-Choupal is where your gold mine lies. Are the companies thinking?

-Nemo

The boom in the Indian economy has surfaced a fresh buying hub – the Indian middle class. Still rooted in their traditional ways of shopping, gaining product knowledge and in their ways of life, these customers are surely not going to be wooed by the conventional marketing strategies. Spread across the country, these consumers would not converge to a single buying point. Nor would they be satisfied with the same products. Mass customization and customized service is the need of the day. Or the door is open; we’ve lot more guests waiting. J

One of the problems that companies face with mass customizing is the high cost to service at an individual level. Companies have however been proactive in identifying the group culture of Indians and launched rural programmes to influence group buying. For example, i-Shakti from HUL uses these groups to sell their products. Needless to say, the success has been phenomenal. I would consider more organized selling to be directed to established groups thus influencing buying behaviour and successfully knowing the needs of the particular segment. The products or services can then be customized to these needs.

Self help groups spread across the country are representative of this growing class of Indians. There is thus need of intermediaries which could provide a source of sustenance to these groups and provide companies avenues to increase their sales. Aggregation of small pools of customers would make customer relationship management possible and increase opportunities of growth for the companies.

-Nemo

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Way away from femininity, a Danish couple spend their moments idly in the backwaters of Kerala. And sipping coffee next to them are the elderly couple from Himachal. A usual sight? This article talks about domestic tourism and the latest developments on this terrain.

With the Incredible India campaign becoming synonymous to the great tourism revolution, there has been huge investment in the tourism sector of India. A total of 4.98 million tourists visited India in full-year 2007, representing an 11.9% year-on-year increase on 2006. In comparison, the government sites show latest figures of domestic travel in year 2006 as 461.16 million. Needless to say, in spite of the volumes, the revenue earned from domestic tourism is minuscule when compared to that from foreign tourism. This has led to a stratified tourism planning and development for the country. While exotic tourist destinations get developed and customized for foreign tourists, many of them are losing affordability for the average Indian. With growth of hospitality, aviation, hotels and railways infrastructure, there is huge scope of overall development of all tourist locations promoting greater domestic tourism and increasing employment opportunities. But sadly, not much has happened.

There are numerous pointers but here’s a few. Most tours and travels are highly expensive when compared to the costs incurred by self organized tourists and there is no established authentic check for such packages. While the wanderlusts enjoy the fun of unorganized trips, the family man pays a hefty sum for an organized tour. Commercialization in this sector has not come with a price reduction due to competition solely because information in this sector is not organized, especially for the budget traveller. With increased fares for short distance travel by air, travellers are looking back to alternatives like railways and roadways which are still not developed uniformly throughout the country.

There can be a lot of discussion on the various kinds of tourist destinations and packages, but a holistic picture surely shows higher concentration for development of expensive tourism with a lot yet to be done on domestic tourism with price affordability. Should we bother, considering the revenue share of domestic travel? According to me, yes. There still awaits a huge potential to develop, a sizable market not serviced well.

– Nemo