B-schools Need to Focus on Students’ ‘Doing’ Skills

Pedagogies need to be changed to develop certain skills, values, practices and attitudes 

The global economic meltdown in 2008 made the world critical of business managers and what they learnt at B-school. Around the time, Harvard University professor Srikant Datar was working on his latest book, Rethinking The MBA: Business Education at a Crossroad. When he completed the book in 2010, corporates were already wondering if they were hiring suitable candidates from B-schools or just bright students. Datar’s book suggests a curriculum review and stresses on ‘doing’ rather than ‘knowing’ skills. The book went on to become the base for a national conference on curriculum change organised in July jointly by IIM Ahmedabad and Calcutta. In an interview with Parag Dave, Datar says he is now working with B-schools in Asia and Europe for a similar exercise. Excerpts:
How did you plan to write a book on curriculum change?
We started the book project as part of celebrations of 100 years of Harvard Business School, pre-recession. In the course of our interviews with various stakeholders in B-school education, we realised that the number of students applying for an MBA degree was declining. The world needs more managers because BRIC nations, Latin America and Eastern Europe are emerging, and yet students were not enrolling into B-schools. The major issue, as we found out, was lack of student engagement. There is high demand for talent, but people do not want to come (to study). And those who come are not willing to be engaged in academic activities; they just come for better placements. We realised, B-schools were attracting wrong people who were not adding value to employers. Students think, they are smart since they get into IIM-A, but what they do there is not important. When we got the same sense from 10 to 15 Bschools in the US, we were clear there was a serious problem. There is a need for rethinking the curriculum.
What was your first thought when you realised there is a meltdown? We all were seriously worried. All of us who studied the Great Depression (in 1929) always believed we had institutions that could teach ways to avoid it in future. Still, we had a similar problem again. We thought it was high time to sensitise students to think innovatively and act ethically. We have to make students think fundamentally that business exists because society believes business has more good than bad. We need to make people understand that the licence that society gives them (businesses) is not a blanket one; society can take it back.
Why has the focus on ‘doing’ skills come so late? In management education, the emphasis is more on science than arts. Analysis emerged as a major skill. And since we were so successful doing that, we did not think about anything else. However, across the world, B-schools are ready to change their focus. Like the conclave on curriculum change held in Ahmedabad, we will organise similar conferences in the US, Europe, Latin America, China and Africa by April 2012. We can see a major change in the current MBA curriculum in the next few years.
What should Indian B-schools do now? The major challenge is to engage students. B-schools should ensure that students think critically. A number of fundamental things should be taught to students before they go to work. Also, pedagogies need to be changed to develop certain kinds of skills, values, practices and attitudes. Some Indian B-schools have already made changes. Some of the IIMs and other B-schools are willing to change their curriculum, and are also willing to share it with others. Many schools are also starting leadership laboratories, like their Western counterparts.

SRIKANT DATAR
Professor, Harvard University

Who Workds the Most Around the World

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Maruti Board may take a Call on Gujarat Plant Next Month

The board of Maruti Suzuki India is likely to take a decision on setting up a new manufacturing unit in Gujarat by end-October, chairman RC Bhargava has said.
“In the next two days, we will acquire more information to understand the risk factors of the probable sites. Only the board has the authority to take the decision,” Bhargava told reporters in Gandhinagar on Thursday after he and Suzuki Motor president Osamu Suzuki met chief minister Narendra Modi at his residence.
The country’s top car maker, which is facing labour unrest at its Manesar plant for the second time in three months, has said it needs another plant in India for its future requirements. It would be the car maker’s first facility outside Haryana.
Suzuki said it was his first visit to Gujarat and the chief minister assured all help to the company.
On Thursday, Maruti produced 340 units of Swift, its best-selling vehicle whose sales have been pummeled by the standoff that has entered its 11th day. The company’s Gurgaon facility rolled out 90 units, while another 250 were manufactured at the Manesar plant.
The company is looking at a cumulative production of about 500 cars daily from both facilities. The cars would be partially manufactured at Manesar and then transferred to the Gurgaon unit for final assembly. “The company has decided to speed up delivery of Swift hatchbacks, which have a long waiting period and a cumulative booking of 90,000 units. As the company is working with less manpower at Manesar, the decision to make Swift both at Manesar and Gurgaon will help in raising the volume of Swift models,” Maruti’s spokesperson said. The strike began on August 29 after the company asked workers to sign a good conduct bond. Maruti is seeking 1,000 acres of land from its proposed new plant, of which 500 acres would be for vendors.
The Gujarat state government has suggested land in Hansalpur village in Ahmedabad district. The site borders Mehsana district in north Gujarat along the Viramgam-Mehsana state highway.
Company officials, however, didnot disclose the site for the proposed plant. Maruti already has a car terminal at Mundra port, in Kutch, from where it exports its A-star hatchback. Mundra could be another option for the company.
“Once we have the land, we will conduct studies on the basis of market conditions and then decide when to start production. It may be 2014, 2015 or 2016. But this is sure that we need an additional manufacturing facility in India,” Bhargava said.
Maruti Suzuki India has manufacturing facilities at Gurgaon and Manesar in Haryana. The proposed facility in Gujarat, the first outside Haryana, will have the capacity to produce 2 million cars every year.
The company plans to invest Rs 12,000 crore in two phases and expects another Rs 6,000 crore from vendors.
‘Manesar Unrest a
Political Issue’ NEW DELHI Maruti Suzuki has termed the ongoing labour unrest at its Manesar plant a “political issue” and said it will not compromise on its principles of industrial relations. “My understanding is that the Manesar labour problem is essentially a political issue and not a problem which involves any significant demand from the workers,” chairman RC Bhargava said, addressing the company’s AGM here. Suzuki group chairman Osamu Suzuki was also present. Production of Maruti’s Swift hatchback, has taken a severe hit, since August 29 when the management said it would not let workers enter the plant unless they sign a “good conduct bond”.

Maruti chairman RC Bhargava

Fight Tariff Hike With FREE CALLS

Sunil Mittal, chairman of India’s largest mobile carrier Airtel, has warned of an increase in telecom tariffs. This finally marks the end of a 15-year era during which phone call rates always fell. But even with this threat looming large you should not worry about a spike in your phone bill, which, in fact, can be totally immune to the hikes and still head southward. For there are free apps that will help you make free calls, no matter what operating system your mobile phone uses.

Name Means a Hell Lot to Some Brands

Weird names help connect instantly with young consumers

Next time somebody tells you to go to hell, head straight to Greater Kailash in New Delhi. You can find Hell at the bustling M-Block market there. Walk in to see a skeletons’ rock band behind a slab reading ‘R.I.P.’. Numerous pictures of fire, serpents, ghostly figures and rock shows adorn the walls as you make through to the dimly lit second floor that has satanic and gothic interiors. The bill counter looks like a graveyard, hiding behind several crosses backlit in red. Don’t miss spider web-like grills. And you can devour Bloodbath, Ghoul, Green Gore, Demon….
Welcome to Hell, a new pizza pub in the town. It’s already a hit, growing some 25% month-on-month since its launch in January. “Of course, some people have criticized our ambience. But what the hell, nothing better than negative publicity,” says Ineet Dua, who brought the New Zealandbased international pizza chain to India along with his sister Jigyasa.
Barely 6 km away, in the Select City Walk mall at Saket, the store window of handmade cosmetics firm Lush India invites you to “Get in, Get Dirty”!
Lush India Director Sangeeta Kamath says its ‘Dirty’ range of body sprays, shower gels and shaving creams, launched in May, was sold out in the first week. “Such names are an instant draw. People get curious to know more about the product,” she says.
In a cluttered and competitive market where winning users’ attention is one of the biggest challenges for a new entrant, a slew of brands has realised its good to play bad, to make an instant connect to young consumers. Killer Deo, Harley Davidson’s Fat Boy Bikes and Lush Cosmetics’ Gorilla Perfumes are among the recently launched brands that hinge on the negative.
“We are living in a day and age of acute brand clutter. A negative or wicked name gives an edge to the brand as it incites someone to find out more sooner than later,” says brand consultant Harish Bijoor.
A negative name gives a brand a daredevil image and a mystique element that arouse curiosity, particularly among youngsters. With as much as 70% Indians below 35 and more and more young people joining the workforce, the Indian market place is now controlled by young consumers.
Kewalchand P Jain, chairman and managing director of Kewal Kiran Clothing, which launched Killer Deo some three months ago, says the name connects well with its target group of 18-25-year olds.
It’s an old trick that several marketers all over the world have used to make an initial impact. Cobra Beer, Christian Dior’s Poison perfume and Unilever’s Axe are among the trendsetters in this space.
Karan Bilimore, who launched Cobra Beer in the UK in 1989, however, warns that the name is not a ticket to success. “It can be good for a start. But beyond that it all depends on what you are offering,” says the chairman of Cobra Beer.
“Besides the name, we have the attitude of being a challenger brand. That’s what sustains the interest,” he adds. Cobra has been in Superbrands’ list of ‘cool brands’ for seven consecutive years now.
Ad filmmaker Prahlad Kakkar says such positioning sets an exciting pace for the brand. “It all starts with a name. We decided to name our restaurant Papa Pancho in Bandra 10 years back. It was very Punjabi in essence and one could even perceive it as an abuse but it worked out well,” he says.
In most cases, these brands extend their name as a philosophy and play around it in their advertisements and promotions.
Hindustan Unilever’s deodorant brand Axe, which has a target clientele of young men, rides high on ‘The Axe Effect’ tagline. Its ads have been bold and cheeky, many times courting controversy in India.
Hell Pizza, which has a serpent as its logo and serves the “most wicked pizzas” in town, has a graveyard complete with crows and a moving ghost on the background of its website.
Experts, however, say India is still largely conservative and extreme negative names may backfire. Bijoor calls it a case of ‘polite negativity’. “We haven’t yet reached the stage of overt negativity… There is always the risk of that communication going kaput,” he says.

ZINDAGI NA MILEGEE DOBARA MAGIC WORKS

Rock On! Farhan on Endorsement Spree

HUL, Titan Xylys, UB Group rope in Bollywood star as brand ambassador

MEENAKSHI VERMA NEW DELHI

Farhan Akhtar is the new star in the celebrity endorsement circuit, having cut five deals since the runaway success of his latest flick Zindagi Na Milegee Dobara released in July.
The actor-director-producer has signed 4-5 deals with companies including Hindustan Unilever, United Spirits and Titan, two executives in the media planning industry said. Celebrity management firm Bling! Entertainment Solutions CMD Atul Kasbekar, who manages Farhan’s endorsement deals, said the actor has signed up with five brands, but refused to name them or share other details.
Akhtar—who is nowadays fulltime engaged in editing of Shah Rukh Khan-starrer Don 2, which he is producing and directing—said he will be selective about the brands he endorses.
“It is important to remember that I am not lending just my face to a brand, but my reputation as well,” he told ET.
“It makes sense to endorse products that I use in my everyday life,” he said.
Hindustan Unilever, the country’s largest advertiser and FMCG player, has signed Akhtar for its water purifier brand Pureit, the two media buyers said.
Vijay Mallya’s United Spirits, the country’s largest alcohol firm, has roped in the actor-director for one of its liquor brands, while watchmaker Titan has signed Akhtar for its high-end Xylys range, the media buyers said.
A Japanese healthcare brand is also in talks to make him its brand ambassador.
The media buyers said Akhtar is charging an estimated . 4 crore per year and most deals are for two years.
Hindustan Unilever and United Spirits did not offer any comment.
The trigger for India Inc’s newfound interest in Akhtar is standout performance as a casual, chilled-out young poet Imran in Zindagi Na Milegee Dobara.
The film, which also had Hrithik Roshan, Abhay Deol and Katrina Kaif playing key roles, grossed . 108 crore worldwide in the first 10 days after its release on July 15.
Celebrity management firm Kwan Entertainment & Marketing Solutions COO Indranil Das Blah says that there is a renewed interest among brands for Farhan Akhtar after the success of this movie.
“He is an actor, singer and director, which makes him unique but whether he can emerge as big as some of the other big actors on the brand endorsement space remains to be seen,” Blah said.
Lyricist and McCann Worldgroup Executive Chairman Prasoon Joshi says the Indian youth will connect with Akhtar who is an unusual star.
“He is intelligent, exceptional and effortless and very real unlike the usual Bollywood stars. I believe youth connects with stars who are real,” he said.
Joshi has written the script for director Rakyesh Om Prakash Mehra’s upcoming film Bhaag Milkha Bhaag, which may be the first film Farhan Akhtar could sign as an actor outside his Excel Entertainment banner. Akhtar’s breakthrough in the endorsement world comes exactly a decade after the son of Javed Akhtar and Honey Irani stormed the film world with his directorial debut Dil Chahta Hai, a super hit that won the national award for the best feature film.
He made his acting debut in Rock On!! in 2008, playing rock star Aditya Shroff and doing the playback singing himself. The movie was a big hit among the youth in metros and Akhtar, along with the Shankar Ehsaan Loy trio who did the music for the film, went around cities doing live rock shows.
“Farhan is someone who stops at nothing and appeals to the youth or anyone who is young at heart,” said Mayank Pareek, managing executive officer, marketing & sales, of Maruti Suzuki.
The carmaker had signed Akhtar for its A-Star compact car. But Akhtar is choosy. “I will represent the philosophy of the brand to the consumer, so it is imperative for me to agree with it.”
His criteria for choosing a deal include “aesthetic, social responsibility, my conscience and on a creative level, the clarity of the idea and its ability to be communicated as simply as possible”.
Anyone?
2001 Dil Chahta Hai
Director, Producer
2004 Lakshya
Director, Producer
2006 Don - The Chase Begins Again
Director, Producer
2007 Honeymoon Travels Pvt Ltd.
Producer
2008 Rock On!!
Actor, Producer
2009 Luck By Chance
Actor, Producer
2010 Karthik Calling Karthik
Actor, Producer
2011 Game Producer
Zindagi Na Milegi Dobara Actor, Producer
Dhruv (To be released) Actor, Producer
Next (To be released)
Actor, Producer
Don 2 (Under production) Director
Kismat Talkies (Under production)
Producer

FARHAN AKHTAR
Born: On January 9, 1974, in Mumbai to Javed Akhtar and Honey Irani
Studied : At Maneckji Cooper School and HR College
Married: To Adhuna Bhabani Akhtar, a hairstylist

P&G Targets Emerging Markets to Fuel Sales

CINCINNATI Procter & Gamble Co. expects that offering more products in big emerging markets will help offset sluggish sales in the United States and other developed countries. The maker of Pampers diapers, Gillette shavers and Pantene shampoo has bolstered sales in Brazil, Russia, India and China.—AP

Tommy Hilfiger Buys Out Murjani Brands’ Licence

International apparel giant bets big on Indian market, Arvind to continue its partnership

OUR BUREAU BANGALORE

    American lifestyle brand Tommy Hilfiger has bought the license for its trademarks and a 50% stake in a JV with Arvind Ltd that sells the American lifestyle brand in India from the Murjani Group.
“Direct engagement in the Indian market will enable us to make additional investments with the goal of growing the business,” Tommy Hilfiger Group CEO Fred Gehring told ET.
The terms of the deal were not disclosed.
Textile firm Arvind will continue to partner the joint venture as Tommy Hilfiger bets aggressively on the Indian market under PVH Corp, which acquired the designer brand in a $3-billion cashand-stock deal last year. But India was not part of the deal.
Murjani group chairman Mohan Murjani, who helped the legendary American designer float his brand in 1984, got the brand rights for India in perpetuity when he ceased to be an investor in Tommy in 1989.
ET on July 29 reported Tommy Hilfiger’s plans to buy the rights to have direct ownership of its brand in India, one of the fastestgrowing consumer markets in the world. Murjani had sublicensed its India rights for apparel, footwear and handbags to Arvind Murjani Brands.
The JV with Arvind will manage the other sub-licensees in India, the company said.
Murjani had sublicensed innerwear, watches and home textiles to Eastman Export group, Titan Industries and Creative Portico India, respectively.
The firm said it hopes to better align sublicenses with the master brand and improve the consistence of the brand experience.
Gehring said the company plans for additional growth in tier two cities such as Baroda, Vizag and Patiala where the growth patterns are more pronounced than bigger cities.
Tommy Hilfiger has 80 exclusive outlets in the country.
The India deal is in line with Tommy Hilfiger’s strategy of consolidating brand management in other international markets including China, Japan and Turkey. It allows integrating India into Tommy Hilfiger’s global platform for design and sourcing. Higher disposable incomes and overseas travel has driven the market for western fashion in India. More than 20 international brands fashion brands have been launch in India since 2005.
Tommy Seals the Deal Murjani helped designer Thomas Jacob (Tommy) Hilfiger launch the brand a quarter of a century ago in the US
Although he exited the venture in 1989, Murjani held the rights for Tommy Hilfiger in India in perpetuity
2006 Tommy Hilfi ger sold his company to Apax Partners for nearly $1.6 billion due to declining sales
2010 PVH Corp, formerly Phillips-Van Heusen Corporation, bought Tommy Hilfiger from private equity fi rm Apax Partners for nearly $3 billion

High Rates, Fuel Costs Dent Car Sales

 

 

Passenger car sales fall 10% to144,156 units in August

OUR BUREAU NEW DELHI

    Fewer buyers drove out of showrooms in new cars for the second successive month in August, following the central bank’s serial intervention aimed at easing demand in the economy to tame inflation. Production cuts at two of the bigger carmakers, coupled with high fuel prices, compounded the challenge for the auto industry, dragging down car sales 10%, even as two-wheelers posted a 16% growth. Passenger car sales declined 10% to 144,156 units, a month after the industry reported a 16% slowdown in July. Market leader Maruti Suzuki, which sells every second car in the Indian market, posted a 19.21% decline in sales, to 63,296 units, as it continued to face labour unrest at its factory in Manesar. Referring to Maruti’s labour problems and a two-week maintenance shutdown of a Tata Motors plant in Sanand in Gujarat, Society of Indian Automobile Manufacturers’ Director General Vishnu Mathur said, “Production has also been affected with large players not able to churn out optimum production in August.” While Tata Motors reported a 39.45% decline to 13,508 units, Hyundai Motors posted a 7.51% decline in sales to 26,451 units.
Industry players said the September-November period would prove critical. “While the new launches will propel the sales in coming months, the prevailing high interest rates and prices of fuel could spoil the customer sentiment,” Hyundai’s director (marketing & sales) Arvind Saxena said.
All eyes in the industry are now on the slew of new launches and the upcoming festive season. “The Indian market has strong fundamentals and is expected to outperform most automotive markets in the region. This (slowdown) is a temporary phenomenon and as we move forward the real potential is expected to bring it back on the track,” Jeffrey M Henning, analyst with international consultancy Ernst & Young said. According to figures released by SIAM, the market for two-wheelers remained robust with sales growing by 16% to 11.11 lakh units.

Hero has a Smooth Ride

Shares of Hero MotoCorp rose to a new high on hopes of better prospects triggered by a robust growth in vehicle sales last month. The stock touched an intra-day high of . 2,231.7, before ending with a gain of 2% at . 2,215 on the BSE. The country’s largest two-wheeler manufacturer recorded a 19% growth in motorcycle sales in August on a YoY basis, which was achieved despite general concerns that auto sales across segments will hit by rising interest rates. While Hero MotoCorp has sold 25 lakh units between April and August this year, analysts hope the company will achieve the initial target of 60 lakh vehicles by end of the current fiscal.

Fiat Plans to Build Own Distribution Network Here

OUR BUREAUS DELHI | MUMBAI

Close on the heels of Fiat’s assertion that its partnership with Tata Motors will continue with the terms revised, the Italian car major has decided to open its own distribution network in India as the joint dealership with Tatas failed to deliver.
The company will open 55 independent showrooms in 20 cities in the next one and half to two years, Rajiv Kapoor, chief executive officer, Fiat India, told reporters on the sidelines of an industry event. “Having our own showrooms should help boost sales to a considerable extent,” he said.
One of the major problems for Fiat in India has been the fact that for cars sold through Tata’s network, dealers tended to favour Tata rather than Fiat vehicles.
Fiat has identified 20 cities across India where the existing Tata dealerships will open separate showrooms for Fiat cars. The Italian car major will continue to sell cars through Tata dealerships as well.
Last month, Ratan Tata had said that both Fiat and Tata Motors are having a relook at their 50:50 joint venture partnership to see if it could be made more realistic. While admitting that the contractual relationship had suffered losses, Tata Motors chairman had said that, “Assumptions in terms of volumes didn’t work out, more so for Fiat than for us.” Fiat’s chief executive Sergio Marchionne had said that the terms will change but the project will keep going ahead.
Fiat also plans to open special boutique showrooms called Fiat Cafe in Delhi and Pune to further promote its brand in the country.
Failure to build brand affinity has also been one of the major issues that kept Fiat from pulling more customers. In the year ended March, Fiat sales declined 15% yearon-year to 21,112. This compares with 29% year-on-year growth in local car sales to 2.52 million vehicles last fiscal.

Mobile Tariffs to Rise Further

Mittal:

Bharti chief & RCOM chairman Anil Ambani stress on regulatory consistency; Sibal asks telcos to keep national interest in mind

OUR BUREAU NEW DELHI

Mobile tariffs are set to go up significantly in future, Bharti Airtel chairman Sunil Mittal said on Monday, indicating that recent hikes in call rates by leading mobile phone companies were only the first step by the industry towards a structural shift in pricing. Speaking at an industry event, the chairman of India’s largest telco by both customers and revenues, said that call rates will have to go up as mobile phone companies seek to offset lower revenue from rural markets, where customers make fewer phone calls when compared with the metros and big cities.
“The pressure on this industry will be acute as operators will have to serve the rural markets, as well as low-end customers, who use only voice calls and SMSes. This correction is required to compensate companies for their rural operations because cost of operations has gone up exponentially,” Mittal said.
Bharti Airtel recently hiked tariffs by 20% in some regions across the country, the first increase in mobile telephony rates by any company in three years. This resulted in all leading operators, including Vodafone Essar, Idea Cellular and Reliance Communications joining the bandwagon marking the end of a twoyear era of savage price wars that destroyed profits, slashed revenues and eroded margins of all wireless firms. The increase in call rates has also attracted the attention of sector regulator Trai, which has asked mobile phone companies to explain the rationale behind the price hikes.
Mittal urged the government to be more liberal and judicial in allocating airwaves, while also adding that operators here had paid far too heavily for 3G spectrum during last year’s sale process. He acknowledged that wireless broadband was the future for both rural and urban markets. “We are at the cusp of moving from voice communications to broadband. It (broadband) must be given due recognition on a par with road, electricity and water infrastructure for the benefit of our industry," Mittal said. Taking a similar stance, Reliance Communications chairman Anil Ambani said that ‘data would form the root of convergence of all mobile services’.
Ambani called for regulatory consistency and pointed out that it was hard and challenging for Trai to manage different forms of communication services. “There needs to be timelines to decisions and more clarity for us to move forward,” he added without elaborating.
Sharing similar views, Mittal said that going forward, Trai must seek to have minimum regulations for the sector. But telecom minister Kapil Sibal, who was also present for the inaugural session of the event, cautioned mobile phone companies to keep national interest in mind in their quest for profits.
“If national interest is on one platform and you are on a profit-making platform, nothing is going to work. If the growth does not benefit the country, then there will be regulations,” Sibal said.
The telecom minister agreed that over-regulation would hurt growth but added that rules were key to ensuring that telcos did not abuse their market position. “If it is an over-regulated environment, then you can not get growth. If it's under-regulated, then you get abused. So deciding on an optimal level is a challenge,” he said. Sibal also assured the industry that the government would put in place a transparent and meaningful regulation that protects the interests of all stakeholders without compromising the growth of the sector. He also called for increased collaboration between telcos and said he favoured spectrum sharing between operators.
In July, during an interaction with ET, Sibal had said that corporate rivalry could end up destroying the sector. “Because the industry is at war with itself and because they are trying to destroy each other, the consequences are that we are destroying the hen that lays the golden eggs,” he had said.
Tariff Hikes
June 2011 Tata Docomo doubled STD call charges for new subscribers; raised local and national SMS charges by 67% and 25%
Mid July Bharti Airtel increased local and STD call tariffs by 20-50% in Delhi, Andhra Pradesh, Kerala, Rajasthan, Madhya Pradesh and Gujarat
July end Vodafone and Idea Cellular raised STD and local call tariffs by 20% in Delhi, Gujarat and Andhra Pradesh in persecond billing plans
August Reliance Communiations raises tariffs for its GSM & CDMA customers by 20% in 19 of the 22 circles it operates

Reliance’s Cash-and-Carry Store in Ahmedabad Today

AHMEDABAD/ MUMBAI Reliance Industries will open its first cash-and-carry store— Reliance Market— in Ahmedabad on Wednesday. Reliance Market will be the first cash-andcarry outlet in Gujarat as Metro Cash and Carry, Bharti Walmart and French retailer Carrefour have not yet opened their account in the state. Reliance had opened its first hypermart— Reliance Mart— at Ahmedabad in 2007.

Vodafone Launches Facebook Phone

MUMBAI Vodafone has partnered with Facebook to launch a new phone that offers end-to-end Facebook experience with unlimited access to the popular social networking site for one year. Branded Vodafone Blue, the handset is priced . 4,950 and comes with a 2 mp camera, qwerty keyboard, a Facebook button and Opera 5 browser. It targets the 33 million Facebook users in the country. “This phone is the answer to the mobile social networking needs of our huge young population,” Vodafone Essar CMO Kumar Ranganathan said at the launch on Tuesday. Vodafone, the world’s largest mobile provider, is launching the Facebook phone in other markets as well. There are more than 750 million active users on Facebook.

Adidas Campaign With Messi, Beckham Soon

NEW DELHI Adidas is launching a new global campaign featuring soccer superstars Lionel Messi and David Beckham. Called ‘all adidas’, it will be the sports footwear and apparel maker’s biggest campaign in terms of media spends in India, beating those featuring champion cricketer Sachin Tendulkar. The 'all adidas' campaign focuses on the German firm’s presence across different sports, cultures and lifestyles. “This is the first time in the brand’s history that all aspects of the brand come together into one storyline,” Adidas India Brand Director Tushar Goculdas said. The global campaign fuses sport, music and fashion, he said.

Audi Plans Luxury Drive Into Smaller Cities, Towns

To roll out cars in Lucknow, Indore, Coimbatore & Surat next year

CHANCHAL PAL CHAUHAN NEW DELHI

Luxury carmaker Audi is looking at the potential of smaller cities and towns as it undertakes its journey to become second largest player in Indian luxury car market.
The company launched a new dealership in Ludhiana this June and will start its dealership at Surat this week. It will roll out the cars in Lucknow, Surat, Indore and Coimbatore from 2012 onwards.
The German giant is aiming to double its dealerships to around 25 by end of 2012 as it readies its network to get on high-volume models such as the Q3 SUV and the smaller sedans like the A3.
This year, the company has sold 3,655 cars till August, a growth of 95% year-over-year, and is looking at displacing Merc from the coveted second slot by 2013.
“There have been some good years, and we are planning to get right products to generate volumes and meet customer expectations,” Audi India head Michael Perschke said. “While other players in the Indian market are reviewing their targets downward, we are confident that we will exceed our target of 5,000 units this year.”
The carmaker will also consolidate its operations in two major metros by opening sales outlets in Delhi West and Mumbai South. In addition, Audi India and its dealer partners aim to hire at least 600 employees by the end of 2012.
The company, which has invested around 30 million euros in India so far, is finalising its investment plans till 2015.

Why Healthy Snacks, Diet Cola Struggle

Consumption too low for health concerns

DEVENDRA CHAWLA

With rising lifestylerelated diseases such as obesity, there is increased awareness about healthy food habits among consumers
DEVENDRA CHAWLA
Head (private brands) Future Group 

 

What is tasty is not always healthy and what is healthy is not usually tasty. Food companies are constantly trying to bring the two together, but success has been elusive.
With rising lifestyle-related diseases such as obesity, there is increased awareness about healthy food habits among consumers. To cash in, marketers have been introducing new categories and products in the health food segment.
The ones meant for permanent behaviour—read for regular consumption at home-—such as olive oil, corn flakes, muesli, sugar replacers, multi grain bread, brown bread, whole wheat breads, multi grain atta and alternatives have gained acceptance. But those meant for occasional indulgence such as sugar-free ice creams, baked potato chips and diet cola have not found many takers in the country. Why?
Let’s take a look at the processed packaged foods. The assortment of products under this category includes potato chips, wafers, cookies, biscuits, chocolates, confectionery, various types of snacks, sauces, ketchups, carbonated and non-carbonated drinks, bottles beverages and so on. If one draws a share of plate for these products in a typical Indian palate, it could be anywhere between 2-10%, not more than that.
The purchase decisions of packaged snack and beverages, or indulgence products, are mostly made at the point of sale and are not predetermined, just like buying aloo tikki, paani puri or ice-cream from the street corner.
Now, for most Indians the eating behavior is different at home and out of home.
Here, the woman of the house owns up the responsibility of providing wholesome food to all members. She wields the ultimate authority of designing a ‘good food habitat’ in the house, incorporating brands, products and ingredients that promise to deliver holistic health on a platter. She acts as a gatekeeper of what comes in the house. Indulgence items are occasional and not part of the daily diet.
Hence, a Saffola sits on the kitchen shelf along with a bottle of olive oil. Multi-grain atta too finds its way. Juices, muesli and corn flakes are making slow but more permanent changes on breakfast tables. Everything that comes on the dining table is strictly under the watchful eyes of the kitchen gatekeeper.
These virtues give way to the temptation of small indulgences swiftly as soon as one steps out of home. Eating out does not follow the rationale of health because we convince ourselves that it is strictly once-in-a-while consumption: “So what? Just once, and I will never look at it in days.”
Thus we indulge in that rich chocolate bar or a big piece of pastry. The consumption per capita of these products is so low that it does not make a compelling reason to alter taste for health and thus impacting behavior.
Foods, which will otherwise be met with strong entry barriers at home, get prominence outside. The more restrained makes do with minor indulgences like having cups of meetha chai, while the adventurous ends up savoring local street food— most of which would be deep fried, high on saturated fats, sugar and carbohydrates, the favorite cola with bags of chips and namkeens appearing more frequently on such sojourns.
The Indian consumer psyche is best at display onboard full service airlines. Most consumers here are well educated, come in the age group of 30-45 and have high awareness about healthy diet. On enquiries in different occasions, inflight crew revealed that most travellers tend to consume the dessert being served. But a generous percentage of the same population asks for noncalorific sweeteners while having their hot beverage.
Perhaps the reason for this behavior is our value-oriented mindset. “The cost of the dessert is included in the fare, so why waste it?” Perhaps it’s the feeling of letting oneself go from the restraints back home where sweet dishes are generally not part of the lunch or dinner. Maybe it’s a mix of both. Using sugar free in tea/coffee may be a habit due to daily consumption.
In India, indulgence is at its best out of home. So, would health be the driver in the indulgence and impulse food products? Perhaps not until it becomes a mainstream with high per capita consumption. Health consciousness would seep in only when indulgences form part of daily diet.
But then, there are some who consume a can of cola a day and they may choose a diet version. But the sheer minority of this class would see the diet versions of out-of-home foods remain a small market for a long time.
Marketers looking at bringing gradual changes in ‘in home’ consumption are finding gradual success where the decision follows consumer acceptance of health benefit. And it is a long drawn process, as endorsed by the leading breakfast cereal maker who has been at it for the last decade and half.
Because, for any change to happen in food habits in India, it has to happen at our homes. As the saying goes, change, always starts at home.

Galaxy Tab 10.1

Apple Wins Case to Block New Galaxy Tab in Germany

JUN YANG SEOUL

Samsung Electronics is halting promotion of its latest tablet computer in Germany after Apple won a second injunction blocking Galaxy Tab sales there as one of the world’s largest electronics shows gets under way in Berlin. Samsung, Apple’s closest rival in tablet computers, pulled the just-unveiled Galaxy Tab 7.7 out of the IFA consumer-electronics show in Berlin after a court on September 2 granted Apple’s request to ban sales and marketing of the product, James Chung, a Seoul-based spokesman for Samsung, said on Sunday. Chung could not confirm if Samsung has received the court order, while Steve Park, a Seoulbased spokesman for Apple, could not immediately comment on the ruling. “Samsung respects the court’s decision,” said Chung, adding that the company believes it “severely limits consumer choice in Germany”. Samsung will pursue all available options, including legal action, to defend its intellectual property rights, he said. Samsung and Apple are involved in legal disputes across three continents, as Apple — also one of the biggest customers for the South Korean manufacturer’s chips and displays — claims the Galaxy devices copied its iPhone and iPad. Last month, the Dusseldorf Regional Court granted Apple a temporary sales ban on the earlier Galaxy Tab 10.1 model in 26 of the 27 European Union member countries.
The August ruling, scaled back to only Germany on jurisdictional grounds, could have cost Samsung sales of as many as half a million units this year, according to an estimate by Strategy Analytics.
Legal disputes between the two technology companies began after Apple charged Samsung with “slavishly” copying its products in an April suit filed in the US. Samsung, which holds the second-largest number of patents in the US, countersued in Seoul, Tokyo, Germany and California.
Samsung on August 25 lost a court ruling in Holland which ordered it to halt some sales of its smartphones after October 13.— Bloomberg

Amazon Lines up Cheaper Rival to iPad

Amazon.com plans to unveil a cheaper, smaller $250 rival to Apple’s iPad tablet device in November, industry blog TechCrunch reported on Friday. Sporting a back-lit 7-inch screen — smaller than the iPad’s and about the same as Research in Motion’s Play-Book — the device is geared toward playing music and movies off the Internet, the tech blog reported.
TechCrunch, which said it had played with a testing prototype, reported that the plan was for Amazon to offer Amazon Prime — its $79-ayear internet streaming service — for free along with the gadget. It did not cite any sources. Amazon did not respond to requests for comment. The internet retailer’s first entry in the tablet computing arena — the Kindle functions more like an electronicbook reader — has been touted as a strong contender to Apple, whose cheapest tablet goes for $499.
This week, Sony leapt into the field with its own poorly reviewed device. Analysts have been upbeat on Amazon’s gadget, particularly if it beats the iPad on price. It may sell as many as 5 million tablets in the fourth quarter, becoming the top rival to Apple, Forrester Research estimates. Apple sells between seven and nine million tablets a quarter.
The upcoming tablet, running an operating system developed from an older version of Google’s Android software, will be Wi-Fi only and come with a colour touchscreen but a limited 6 GB of memory, according to the blog.
TechCrunch said that was because the device is geared toward playing content off the cloud or Internet, rather than the gadget itself.
The tablet’s main screen features a carousel that spins between a bookreader, a music player, movie player and other applications. A 10-inch version may arrive 2012 if the 7-inch device sells well, the blog added without citing a source.

Annual Reports Get a Brand-New Makeover

Film tracks, sms lingo & social networking theme— cos use report as marketing tool

RAJIV SINGH NEW DELHI

You could try television commercials or social but there’s another vehicle—a well targeted one at that—to send your message across to potential consumers. Hint: it’s sent out once a year, it’s packed with numbers and information – and it’s sent out to company’s shareholders.
Yes, it’s the often mind-numbing annual report that managements send out to inform, impress, and often comfort, people who own their shares. But such yearly accounts of profit & loss do not have to be humdrum affairs.
Of late, a clutch of companies has figured out that annual reports can serve two vital purposes beyond the core ones: project an image that is in sync with the brands they market and services they provide; and, two, connect with an increasingly young audience in a language they understand.
Baar baar dekho...haazar baar dekho, Yahan ke hum Sikandar, Sar jo tera chakraaye...these songs could be a compilation of some of your all-time favourite hits. Perhaps. Yet, these are also some of the famous Bollywood chartbusters that Emami has used in its latest annual report! Its grt 2b 25, V r 25 too :-). That’s the language of a texting, tweeting Gen-Y that Kotak Mahindra Bank has used in its latest annual report.
Bright colours, appealing illustrations, attractive graphics, innovative designs, and whacky ideas—India Inc is leaving scripting a new chapter in communicating with its shareholders.
Abraham Koshy, professor of marketing at IIM Ahmedabad, says companies are now using annual reports for reasserting their brand’s value in the minds of the shareholders. “When Emami uses songs and Bollywood in its report, it’s talking to the investors in their language. It’s communicating to them that it’s a young brand,” says Koshy.
Annual reports give companies with old-world businesses a chance to create a contemporary landscape. Shriram Transport Finance, India’s largest trucks financier, has used the theme of social networking in its latest annual report to drive the home the connect between communication in the real world and amongst people. By using innovative graphics, bright colors, talking and thought bubbles, the company has used social networking icons – Facebook’s ‘Like’ icon, emoticons on fingertips, human icons connected with each other – to position itself as a youth-focussed organisation.
Managements have also realised that nostalgia has a great pull effect. So, if Emami used classic film tracks, Kotak Mahindra has – along with sms lingo – added some rare old pictures of its board members when they were 25 years old. The report highlights how a company communicates when it feels 'young at 25'—a theme that it used to celebrate its 25th anniversary.
REPORTS AS LOVE LETTERS Shankar Jaganathan, economic historian and author of the book Corporate Disclosures 1553-2007, says an annual report can be a love letter written to the investors. “Whilst many view it as chore – like a travelling salesman filling up a travel statement –there are reports in which the joy of communication is visible,” points out Jaganathan.
Emami, for sure, doesn't belong to the travelling salesman group. The cover page of its annual report proclaims in big, bright and bold font—Munni Badnaam Hui Darling Tere Liye. And this is just the beginning. Apart from the use of lively colours, informative snippets and catchy infographics, their latest annual report is interspersed with first line of some popular songs to go with the respective subheads.
N H Bhansali, CFO, Emami, says: “An annual report has to be seen from an investor's perspective. It’s a marketing tool to connect with them.”
Karthi Marshan, Executive VP & Head (Group Marketing), Kotak Mahindra Bank, points out that the annual report of any company is first and foremost a vital brand document that has both emotional and rational arguments about the brand.
“Behind every analyst’s eagle eye is a human being who responds to emotional stimuli,” says Marshan. “Hence, we choose to treat them exactly like we do our consumers, and provide content, information and brand stimuli in every way possible.”
Kotak’s report bagged Gold award for being the most creative report in Asia Pacific, and Platinum award for being the best report in the banking category at the League of American Communications Professionals Vision Awards 2010. This is the largest annual report awards programme with over 5,000 companies applying from 25 countries.
BONDING WITH YOUTH India Inc is gradually realising that the profile of its investors is changing; a new breed of young, ambitious and restless investors is replacing the old, orthodox and conformist ones. So, there is an urgent need to talk to them in their language, address them in a manner that makes them feel comfortable and, most importantly, connect with them to gain their confidence.
Brand expert Ramanujam Sridhar feels annual reports are now used more as a means to build image of the brands. “India now has young investors and bankers. So a company has to be tuned into their demands and expectations. And they are doing it with the help of annual reports,” says Sridhar, who is CEO of brand consultancy firm Brand-comm. In fact, the best known case in India of using annual reports to build brand is Infosys. “The IT giant used pictures of Madhuri Dixit, Anil Kumble, CK Prahalad and Shivram Karanth in one of its annual report of the 1990s,” points out Jaganathan.
Arvind Agarwal, CEO of corporate reporting consultancy Atherstone Investor Communications says annual reports must look and read attractive so as to evince interest. HUL, Kotak Mahindra Bank, Hero MotoCorp and Monsanto are among Agarwal’s clients.
However, companies should not go overboard in their attempt to look different.
“Sometimes whackiness isn't the best solution. The annual report is, at the end of the day, a serious legal document accessed by all around the world. So, the communication should be universal, and one must avoid flippancy in visual rendition and textual tone,” says Agarwal.

RCOM to Merge Three Biz Divisions

Move likely to make around 10% of its 7,000 executives redundant

JOJI THOMAS PHILIP NEW DELHI

    Reliance Communications (RCOM), India’s second-largest telco by subscribers, is merging its three business divisions, a move that will make around 10% of its 7,000 executives redundant and also result in redeployment of another 2,000 employees to ‘field functions’.
The telco will collapse its existing business units that are carved out geographically – North, South and East – into a single entity reporting to a chief operating officer, who will be recruited from outside by the month-end, executives with direct knowledge of the developments told ET. All support functions such as customer services, IT operations, networks and products amongst others will be moved to a newly-created ‘services division’. After restructuring, around 75% of RCOM’s employees will do ‘field roles’ to drive sales execution as against 60% currently. RCOM now joins Bharti Airtel and Tata Teleservices, who recently carried out major restructuring exercises by merging business verticals and reducing employee headcount. All telcos are focusing on cost-cutting measures to boost efficiencies as they fight multiple challenges of high debt burdens, slowing growth and high marketing spends amid cut-price tariffs. RCOM chief executive (wireless) Sayed Safawi said the telco was undertaking a ‘structural rationalization, including organisational de-layering, and making few key changes the leadership team ’.
“Eventually it may result in significant slimming of the organisation as a whole, especially at the back-end functional level, though the potential number impact is yet to be assessed,” he said and clarified that the ‘restructuring was not about head count rationalisation, but getting right resources at right places’.
The company’s northern region head Nilanjan Mukherjee will head the newlycreated ‘services division’, its current head of southern operations CS Rana has opted for ‘superannuation’, while Vivek Garg , who is in charge of the east, will be assigned a new role internally. Safawi dismissed as ‘rumours’ the market buzz that Bharti Airtel’s former president for mobile services Atul Bindal may he headed to RCOM.
RCOM, recently reported a 37% fall in profit for the three months ended June 2011, its eight straight quarterly fall and it remains weighed down by debt of over Rs 3,36,000 crore. It recently raised tariffs in 19 of the 22 regions by 20%. Safawi said that the company’s debt would come down by 50% after the sale of Reliance Infratel, its tower arm, and added that the full impact of the tariff hikes would be felt during the next two quarters. The restructuring, he said, would also help the company increase its focus on new revenue streams such as data, 3G, mobile commerce amongst others, he added.
RCOM is also increasing its number of regional hubs to 12 by making Mumbai a separate unit and all hubs will now report to the new COO.
“Each hub CEO manages businesses worth more than Rs 1,000 crore - these 12 hub heads are being empowered to lead wireless business like geographic CEOs,” Safawi said.RCOM has only 66% active customers, compared with Bharti Airtel and Idea Cellular at over 90%, and its other concern is that its 17% customer market share has not translated to a corresponding revenue market share.
“We are trying to improve the quality of our portfolio by focusing on 3G and data, enhancing the quality of minutes by doing away with free minutes and trying to improve the quality of our customers by targeting high-end customers and retaining them,” Safawi added.

Marico Plans to Parachute into Skincare Now

Hair oil and edible oil maker Marico will enter the . 4,500-crore skincare market in the country by extending its two-decade-old coconut hair oil brand Parachute to body lotion and other skincare products, an official directly involved with the development said.
First off the block will be a body lotion at entry-level pricing to compete in the mass segment, the person said on condition of anonymity. The company has carried out a low-key test exercise in the east and a wider rollout in select cities is expected in a few weeks from now.
“The strategy is aimed at reducing dependence on Parachute hair oil,” the official said. “In this case, the company hopes to ride on Parachute’s purity and value-for-money attributes.”
Marico CEO (Consumer Products Business) Saugata Gupta declined comment.
The company will enter the cluttered skincare market under Parachute Advansed umbrella and compete with Hindustan Unilever’s Vaseline and Pond’s, German company Beiersdorf ’s Nivea, L’Oreal’s Garnier and Johnson & Johnson’s Neutrogena among others.
TOUGH CHALLENGE Analysts and industry watchers say the success of the move will depend on how much marketing and distribution muscle Marico can infuse in the brand.
“Success of brand extensions are generally linked closely to the parent brand’s attributes; and depends on how closely these are aligned to the consumer’s perception of the brand,” says consulting firm AT Kearney Partner and VP Debashish Mukherjee.
Extensions of strong brands are not always certain. While Reckitt Benckiser’s Dettol is a classic succession of an antiseptic medicinal liquid to antiseptic soap, cereal maker Kellogg’s extension to biscuits flopped. Marico so far has had limited success with its brand extensions.

Maruti Suzuki falls on drop in August sales

MUMBAI: Shares of car-maker Maruti Suzuki India fell by over 2 per cent in morning trade on the bourses today after the company reported a 12.74 per cent fall in sales for August due to the ongoing labour unrest at its Manesar plant, which has affected production.

The stock, which made a weak opening, lost further ground and fell by 2.3 per cent to an early low of Rs 1,067.15 on the Bombay Stock Exchange (BSE). Similarly, the stock went down by 2.24 per cent to an early low of Rs 1,067.05 on the National Stock Exchange (NSE).

Maruti Suzuki India yesterday reported a 12.74 per cent fall in sales to 91,442 units in August.

The company had sold 1,04,791 units in the same month last year.

"The disruption in production at the company's Manesar plant in end-August adversely impacted sales numbers during the month," the company had said.

The fall in the company's scrip was in sharp contrast to the overall bullish trend in the market, with the BSE benchmark Sensex trading higher by 103.87 points at 16,780.62 at 1012 hours.

Hero MotoCorp accelerates to record high on bourses

MUMBAI: Shares of two-wheeler maker Hero MotoCorp surged by over 3 per cent on the bourses today to touch an all-time high after the company reported an 18.61 per cent jump in August sales to 5,03,654 units.

The stock, which opened the day on a robust note, rose further by 3.56 per cent to touch a lifetime high of Rs 2,120.80 on the BSE. On a similar note, the scrip of the country's largest two-wheeler maker went up by 3.4 per cent to touch a lifetime high of Rs 2,121.65 on the NSE.

Hero MotoCorp yesterday reported an 18.61 per cent jump in August sales to 5,03,654 units.

The company sold 4,24,617 units in the corresponding month last year.

"The cumulative sales of Hero MotoCorp between April to August this year have now crossed the 25 lakh units milestone, a growth of 21 per cent over 2,086,342 units sold in the same period last year," the company said.

Amazon Tablet Seen as Worthy iPad Competitor

With Amazon reportedly poised to launch a tablet computer, technology research firm Forrester is predicting the device could be the first legitimate challenger to Apple's iPad.
Forrester Research analyst Sarah Rotman Epps, in a blog post accompanying a report released Monday, said Amazon taking on Apple is a “bit like David taking on Goliath.” But Rotman Epps said Amazon's “willingness to sell hardware at a loss combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market.”
“If Amazon launches a tablet at a sub-$300 price point -- assuming it has enough supply to meet demand -- we see Amazon selling 3-5 million tablets in the fourth quarter alone,” she said.
The Seattle, Washingtonbased Amazon, maker of the Kindle electronic book reader, is capable of “disrupting not only Apple's product strategy but other tablet manufacturers' as well,” the Forrester Research analyst said.
Apple sold 9.25 million iPads last quarter and dominates the market for the multimedia devices, which are also being produced by South Korea's Samsung, Blackberry maker Research In Motion and scores of other companies.
But none of the iPad's rivals has managed to put a scare so far into the California-based gadget-maker whose legendary co-founder Steve Jobs stepped down as chief executive last week.
Citing disappointing sales, US computer giant Hewlett-Packard killed its iPad competitor, the TouchPad, last week after just seven weeks on the market.
According to technology research firm Gartner, the iPad will account for 68.7 percent of the 69.7 million tablets to be sold this year and will remain the top-selling device over the next few years.
Amazon has not publicly announced plans to produce a tablet but numerous press reports have said the online retail giant will come out with one this year.

Godrej Consumer to Take Brands Overseas

Good Knight, Hit, Renew and Godrej Expert to foray into Asia, Africa and Latin America mkt

WRITANKAR MUKHERJEE KOLKATA

Godrej Consumer Products will take its brands Good Knight, Hit, Renew and Godrej Expert abroad and possibly enter beauty products, shampoos and food segments as it targets more than . 30,000-crore turnover by 2020, a top official said.
"We are drawing the roadmap to take our own brands to overseas markets by end of the year,” Godrej Group Chief Strategy Officer Vivek Gambhir said.
“We want to take our insecticide brands like Good Knight and Hit to the African and Latin American markets, and hair colour brands like Renew and Godrej Expert to Asian markets like Indonesia," he said. Godrej Consumer wants to accelerate its pace of growth to 25% a year from 18% to become a . 30,000-crore entity by 2020, Gambhir said. He said the group plans to evaluate its 3X3 strategy—which is about expanding in three continents (Asia, Africa and Latin America) through three categories (home care, personal wash and hair care)—to accelerate growth.
“We would look at ways to expand personal wash into personal care without diluting margins as profit margins are comparatively lower in this category and subject to commodity price swings,” Gambhir said. “We would evaluate a possible entry into foods which too can become a big driver.” He said the company localises the formulation of its brands for international foray. For instance, it recently rolled out the Renew brand on trial in South Africa where the product has been customized for Caucasian hair.
Godrej Consumer is already a market leader in hair care in South Africa, Kenya, Ghana, Argentina and Uruguay, thanks to an international acquisition spree over the last couple of years. It has bought South African firms Darling Group Holdings, Rapidol and Kinky Group, African medicated brand Tura, Indonesia’s Megasari Group and Argentina’s hair colour companies Issue Group and Argencos. Gambhir said Godrej Consumer will look at possibilities of brand extension for popular brands like Cinthol, Godrej Expert, Good Knight, Hit and Protekt in its product expansion process. He said the company will be cautious in expansion. “We will not get seduced for growth and will take calibrated steps.”

World's Top 10 Beauty Companies 2010

 

L'Oréal, with reported 2010 consolidated sales of 19.5 billion, tops WWD Beauty Inc’s list of the world’s top 100 beauty companies for 2010, ahead of P&G, Unilever, Estée Lauder and Shiseido. Together, the 100 top companies clocked sales of $176.18 billion in 2010.  

1 L'Oréal HQ: Clichy, France
Subsidiaries + Main Brands: L’Oréal Professionnel, Redken, Kerastase, Matrix, L’Oréal Paris, Garnier, Maybelline New York, Lancôme, Giorgio Armani Perfumes & Cosmetics, Yves Saint Laurent, Biotherm, Kiehl’s, Ralph Lauren Fragrances, Shu Uemura, Cacharel, Helena Rubinstein, Diesel, Vichy, La Roche-Posay, SkinCeuticals, Innéov, The Body Shop 

 2 P&G HQ: Cincinnati
Subsidiaries + Main Brands: Pantene, Head & Shoulders, Clairol, Herbal Essences, Wella, Cover Girl, Hugo Boss, Old Spice, Lacoste, Jean Patou, Gucci, Christina Aguilera, Dolce & Gabbana, Olay, Secret  

3 Unilever HQ: London, Rotterdam, Netherlands
Subsidiaries + Main Brands: Axe/Lynx, Impulse, Rexona/Sure, Dove, Lux, Pond's, Suave, Sunsilk/Seda/Sedal/ Hazeline, Timotei, Clear, Mods, Vaseline, Tigi, Monsavon, Radox, Duschdas, Brylcreem  

4 The Estée Lauder Cos.
HQ: New York Subsidiaries + Main Brands: Este´e Lauder, Aramis, Clinique Prescriptives, Lab Series, Origins, MAC Cosmetics, Bobbi Brown, Tommy Hilfiger, Kiton, Donna Karan, Darphin, Michael Kors, American Beauty, Flirt, Good Skin Labs, Grassroots Research Labs, Daisy Fuentes  

5 Shiseido Co. HQ: Tokyo
Subsidiaries + Main Brands: Shiseido, Cle´de Peau Beaute´, Sea Breeze, Carita, Decle´or, Nars, Joico, Shiseido Professional, Zotos, Bare Escentuals, In and On, Parfums Issey Miyake, Parfums Jean Paul Gaultier, Parfums Narciso Rodriguez,Parfums Elie Saab  

6 Avon Products HQ: New York
Subsidiaries + Main Brands: Avon Color, Anew, Skin-So-Soft, Mark, Liz Earle, Tiny Tillia, Advance Techniques, Reese Witherspoon, Derek Jeter, Christian Lacroix, Fergie, Herve´ Le ger  

7 Beiersdorf HQ:Hamburg, Germany
Subsidiaries + Main Brands: Nivea, 8x4, Atrix, Labello, Hidrofugal, Eucerin, La Prairie, Juvena, SBT Skin Biology Therapy, Marlies Mo¨ller, Florena, C-Bons Hair Care 

 8 Kao Group HQ: Tokyo
Subsidiaries + Main Brands: Biore´, Sofina, Asience, Essential, Merit, Liese, Blaune´, Segreta, Cape, Est, Jergens, Cure´l, John Frieda, Goldwell, Molton Brown, Sensai, RMK, Suqqu, Lunasol, Coffret D'Or, Doltier, Evita, Allie, Suisai  

9 Johnson & Johnson HQ: New Brunswick, N.J.
Subsidiaries + Main Brands: Neutrogena, Aveeno, RoC, Clean & Clear, Johnson's, Ambi, Purpose, Shower to Shower, Lubriderm, Bebe, Natusan, Penaten, Prim'Age, Vendome, PH5.5, Biafine, Persavon, Sundown, Dabao  

10 Chanel HQ: Neuilly-sur-Seine, France
Subsidiaries + Main Brands: Chanel No.5, Allure, Coco, Chance, No.19, Cristalle, Pour Monsieur, Antaeus, Egoi¨ste, Les Exclusifs, Bleu de Chanel, Sublimage, Hydramax + Active, White Essentiel, Le Blanc, Rouge Allure, Le Vernis, Inimitable, Les 4 Ombres, Vitalumie`re, Joues Contrastes

Brands Unravelling Mystery Shopping

Shoppers Stop, Kimaya, Nirula's, Samsung & Axis Bank among cos using quality audits

NEHA DEWAN NEW DELHI

    Ashopper recently walked into a Hidesign store and asked if a particular bag was available in a certain colour. A salesman said the leather goods brand does not make that bag in that colour. He was lying. And the customer knew it because she was a mystery shopper. Mystery shopper—someone paid by companies to masquerade as a customer to discreetly measure the quality of services in their showrooms and front offices—is the new blue-eyed boy of marketers and service providers who have realised the importance of customer experience in a competitive marketplace.
A slew of companies such as WeMark, Bare International, Shaw Hotels & Consultancy and Grass Roots now offer mystery shopping audit, helping brands assess and improve the performance of their sales staff.
“Brands have to evolve along with change in consumer behavior. Mystery shopping is a good measurement tool available for benchmarking,” says Grass Roots India MD Charoo Aggarwal. Many brands including retailers Shoppers Stop and Kimaya Fashions, restaurant chain Nirula's, electronics maker Samsung and Axis Bank have already made such audits part of their quality initiatives.
And the list is growing steadily as mystery audits often throw up startling facts and reveal huge room for improvement.
“Imagine someone turning their back on you and refusing point blank when you ask them what can I buy with a budget of . 2,000? But that’s exactly the surprising lack of etiquette that came through when a footwear brand salesman was asked that question by a customer,” says Gaurav Pachauri, head of We-Mark, which offers its service to more than 100 brands including Major Brands and Metro Shoes. Hidesign President Dilip Kapur, who started secret audits in his company one-and-half-years back, had several surprises in store when he did that. “At times, the staff would say that a product was in buffalo leather instead of cowhide to avoid hurting religious sentiments,” he says. In certain other cases, the primary agenda was just about closing a sale without listening to the need of the client.
EARLY DAYS YET Globally, retailers and hoteliers have been using mystery shopping as a significant measure to assess customer service, training and other facilities for more than 50 years. But in India, this is a nascent phenomenon.
While hospitality and aviation companies have been doing this for about a decade now, the industry is gaining momentum only now with consumer brands and retailers taking to it.
“Product categories which involve high involvement purchase and require experiential selling are the ones using mystery shopping services in India,” says ChannelPlay Consulting Founder & CEO Sundeep Holani. He says Indian retailers are still reluctant to try mystery audit. “Many of our clients are in the trial stage of this concept. Many do not want to shake up the existing structure and fear the retailers,” says Holani.
LACKING SOFT SKILLS Mystery shoppers and brands identify soft skills and intuitiveness as the key default areas among store staff in the country. “A lot of times, it has been found that the store staff expects customers to approach them. Also they are unable to understand what a customer really wants and are just interested in closing a sale quickly,” says WeMark’s Pachauri.
Garment brand Kimaya Fashions, which conducts these audits once a month in every store, found that the key concern area for them was ‘going the extra mile’ for customers.
In one of its audit, the mystery shopper was insistent on having sleeves on an outfit, which was not possible due to the cut and the make of the fabric. But the salesman would only say it can’t be done and offered no explanation. “Instead of answering in the negative, she could have explained about the fabric of the garment. The fabric was chicken work and tampering with it in any way would damage the fabric, rendering it useless. That would have made sense to anyone,” says Kimaya Fashions Chairman Pradeep Hirani.
Now, Kimaya has started giving away performance-related incentives to employees who make
    an extra effort
    with customers. Bare International, which offers mystery audits to clients such as Shoppers Stop through an army of 10,000 freelance mystery shoppers in the country, says that the biggest drawback that has noticed in India is a lack of intuitiveness.
“This aspect is a big miss in India,” says Bare International GM & MD—India, Middle East and Africa Sonul Verdia. “Sales staff mostly only see and hear what is being asked. They don’t try and gauge what the consumer may actually need,'' he says.
Its audit helped Shoppers Stop realize that it could do better on the add-on selling service.
“The practice where staff can recommend more things to match with a garment or an accessory was not up to the desired level. For instance, they could suggest an accessory with a kurta when a woman is shopping,” says Shoppers Stop Head—Operations Best Practices Aniyan Nair.
After the audit, the departmental store chain made a conscious effort to train its staff on product knowledge so that they could offer such appropriate recommendations to customers, Nair says.
SOLVING MYSTERIES Shoppers Stop has scaled up these audits across their 43 stores in India to three visits in a month over the last one and a half years. Typically, mystery auditors charge . 1,500-2,000 for a small size retail format store, with fees going up if clients want specific scenarios to be created or if they want a specific profile of a mystery shopper. While a mystery shopper spends 30-45 minutes to review a small retail store, it could take 2-3 days to review a hotel.
Such audits also highlighted the need to put in place appropriate grooming standards, especially for leading fashion brands. Major Brands, which has fashion brands such as Mango, Promod, Charles & Keith and Inglot in its portfolio, found that their stores ranked low on the grooming report card. So, it tied up with salons to improve the look of their staff.
Almost all brands that have employed mystery shoppers swear by these secret audits and say they will make it a regular practice. “It keeps people on their toes all the time. They never really know who could turn out to be the next mystery shopper,” says Hidesign’s Kapur.

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