ReLiAnCe FrEsH - Fresh threat for the traditional retailer....

I am writing this post in Indore, spending the last 15 days of my 2 month long vacation before joining my company. Last 3-4 days newspapers are full of posts about Reliance fresh’s recent launch and the controversy surrounding the same. The day RF was launched here; I also went to the nearest outlet. Didn’t purchased anything {I am a firm believer that vegetable purchasing is the responsibility of the distaff side of our society, not because of any male chauvinism but because of the fact that they are better judges of the items under consideration ;-)}, however spend almost half hour in the overcrowded store, witnessing the shopping experience and how the entire sales process is conducted. I witnessed heavy shopping and while going back I observed the 3 local grocery shops in my colony not having any customers to cater to.

The next day, early morning, Mukesh Ambani stared at me from a burning poster. There had been heavy protests against RF in the city by “Sabzi mandi associations” and local grocers and “Thelawalas” united under local politicians. RF employees were manhandled and 1 van was also damaged by angry protesters. RF was not allowed to conduct business in the local mandi despite of possessing all the required licenses and permits. Local politicians were making a lot of hue and cry over banning RF & safeguarding the poor vege mongers interests.
I always feel proud of my ability to immediately take sides and analyze things in black and white. Those who may have read my last posts will vouch for it, as my view points have always been extreme.

But with this scenario I felt totally lost. I am reading the controversies daily and still can not take sides or think of any arrangement which will be mutually benefitting to all the parties in consideration.
On one hand is the giant RF, who no doubt will ensure customer satisfaction. {Fresh vegetables, reasonable prices-lower then local grocers, convenience, benefits like RF membership cards etc.} & on the other is the poor grocer who will be very badly hit and his entire family will suffer.
All the stuff which I read at IMT, pertaining to “Customer delight”, “Customer is the king” and the theories which specify that ultimately the concern offering customer the best alternative shall survive and others will perish, point to the fact that in the long term RF will be the preferred option and this will ultimately cause havoc on the poor grocer and people dependent on him.
But again, survivals of fittest have always been true and guess this philosophy has never been disturbed of effected by emotions.

Hellllll did I just mentioned “emotions”…. There is something wrong here, because I pride myself with zero emotions & ruthless attitude when it comes to business matters. A part of my heart wants that the poor grocer does not loose his business. May be this is happening because I know the Thelawalas in description from past so many years.
But is this how life always works???????????? “Survival of the fittest & DEATH OF OTHERS”…….{Geeee I am no philosopher, rather a Sales manager who may even sell RF in the future & that too much better then most, still just posting a thought for consideration of the readers…….}

Debate on the Rockzz

During my stay at IMT, I along with my partner Rajat {The Invincible Debators} have won quite a few debate competitions {IIT Powai Gladebators, Eureka 2006.....}.

Below is the writeup which was prepared for Eureka 2006 -

Job reservations in private sector is an idea whose time has come

AGAINST

 Indian economy is on a development track. One of the major reasons for this development is that after the liberalization plan of 1991 many MNCs, FIIs etc. have shown deep interest in India. Many private companies have strategic tie ups with foreign entities. If any measure where these companies are forced to recruit individuals whom they would not have selected otherwise is adopted then the overall image of Indian corporate will suffer and there is a serious threat that the foreign players showing interest in India will be disillusioned putting the globalization plans of India Inc. in jeopardy.

 We are living in a red ocean. The fact that human resources are “the” most important ingredients in any organization’s success mix does not require any justification. In this highly competitive world only that organization can have sustained growth, which have superb human resources at its disposal. Forcing a notion as described in the topic will hit the companies where it will hurt the most, the main pillar of any entities success.

 Why does the new generation aspire to be a part of a big MNC? Why does not many of us aspire to become a government official rather aim for management entrance exams? The answer lies in the simple fact that the work conditions in the government sector are not up to the mark. Red tapeism is all prevalent. The selection processes are not transparent by any standard. Does by introducing reservations in the private sector do we want the similar conditions to present themselves in private sector also. Every step must be taken to ensure that “Rent Seeker” concept is not able to penetrate the private sector.

 Even when our fore fathers devised the reservation system they remarked that this must only be employed for a set amount of time, however as reservations became a political tool, the entire knot has become very seriously entangled and it must be ensured that the private sector is kept isolated form any sort of political hindrance and it must only be an individuals skills and competencies which dictates his selection not his last name.

 If any hindrance in the working of the private sector is allowed at this juncture it may result in the initiation of chain reaction where in every next day new demands will be raised, causing a negative effect on the fiber of free economy and disrupting the concept of “Survival of the Fittest” and in the process causing serious damages to the future prospects of India Inc. on the global map.

 The supporters of the motion will argue that it will lead to the overall development of the backward faction of our society. We believe that to achieve this objective steps like providing reservations in educational institutions and enriching & equipping them with knowledge must be the solution instead of providing with a guarantee of job in private sector which will inadvertently result in germination of complacency in them and ultimately dedicated efforts from backward classes to match themselves to the requirements of market will not arise.

FOR

The Constitution of India defines India as “Sovereign, Socialist, Secular, and Democratic Republic”. The architect of our constitution Dr. B.R. Ambedkar instituted the policy of reservations to ensure Equality of opportunity & status for every citizen, which is enshrined in the constitution. It is with this goal in mind that the SC & ST were provided reservations in various government sector jobs & government institutions.

But the advent of Globalization, post 1991 era and the changes in the scope and role of government to a facilitator have made upliftment of backward societies virtually impossible through reservation only in the public sector. It necessitated the need for the private sector to come forward and shoulder their share in uplifting backward classes. It called for an “Affirmative action” on the part of private companies under which they should ensure job reservation for the weaker sections of the society. The concept also found a mention in the Common Minimum Program of the UPA government.

The time for “affirmative action” on the part of the companies has indeed come. The following points underpin and corroborate the above line of reasoning:

1. Government jobs have shrunk to almost zilch: The post 1991 era, present macro-economic conditions and the onset of globalization behooved the government to not only put a freeze on new recruitments but also to down-size to right-size. The government had to go in for disinvestment and privatization of various public sector undertakings to infuse efficiency in the economy. These developments indicate that the goal of social equality can not be fulfilled by public sector alone, as the job vacancies in the public sector are very less. The private sector has come up in leaps and bounds in the previous decade and it offers tremendous job opportunities, which can be utilized to this effect.

2. Corporate Social responsibility of the private sector: The concept of corporate social responsibility is becoming increasingly important in the present scenario. The concept involves giving some thing back to the society from which the business earns it survival and growth. Job reservation for backward classes is an effective tool for discharging that responsibility. This in turn helps the company in the long run by generating positive word of mouth about the company.

3. Beneficial for the private sector itself in the long run: An analogy can be drawn between job reservation in the private sector and setting up of industries in the backward regions of the country. It not only provides benefits to the companies in the form of tax holidays/rebates & duty cuts but also develops newer market for the companies. In case of reservation also, the private sector can get various benefits from the government and also create a market for itself by improving the standard of living and the purchasing power of certain sections of the society, which have been untapped hitherto.

4. Effective implementation of reservation policy: The policy can be very effectively implemented by the private sector because:

• The major reason for reservation policy in the public sector not having the desired effect is the rampant corruption in the government ranks. The private sector is free from all such anomalies and therefore can lead to effective implementation of the policy
• Another reason is the job security that is there in the public sector. But the private sector has very high performance demands. This will ensure that the people getting jobs through reservation work hard and launch themselves on the path of continuous improvement.

In the light of above arguments it gets proved beyond any doubt that it’s about time the job reservation in the private sector be implemented. The measure would indeed go a long way towards realizing the goal of “Social Equality”.

Information Security

Hi friends.....Here follows a small part of my paper "Information Security", which won in last years tech-fest at NMIMS, Mumbai.....Njoi and BE SECURE!!!!

Information technology is a powerful tool in the hand of corporate looking to increase their business and earn sustainable profit and also for countries on a development spree. Reach of computers and other tools of information technology is deepening at a very rapid rate.

However as conventional systems of information is becoming obsolete day by day and digitization of information is taking place, there is also the information theft brewing around the corner.
Information security is a growing concern for any entity dealing with neo information technology tools. We are witnessing virus threats with every passing minute. Individuals having superior technological competencies but having mala fide intentions are exploiting vulnerabilities presented by the digital age to earn illegal advantages and in the process causing havoc for a general user.
It is not at all an exaggeration when certain IT experts claim that future wars will not be won by AK-47s or Tomahawk Missiles but with the use of mouse and keyboards.
An establishment not having proper security installations can be brought down on its knees with in no time by a sophisticated attack directed towards it.
Unlike the normal crimes it is also very complicated to catch a maverick stealing your information. Also Internet and other types of information technology tools identify no geographical boundaries, so there is no way one can ever predict from where the attack on information base will originate.

Another major issue ailing the information age is the set of laws and regulations, which are inadequate in almost all countries to prosecute or catch someone using information technology for wrong purposes.
Majority of the users of IT tools considers that they can never be a target of information theft as such attacks are always aimed at behemoth organizations like banks and intelligence agencies. It is this myth, which make them the most vulnerable to an attack.
The need in this information age is to have proper safe guards in place to ward of any attack, which can put the information base of an entity in jeopardy.


It goes without saying that to survive in the red oceans and prepare an organization for the age of glocalization extensive use of information technology is necessary. Coupled with these need is the Herculean task of properly managing information security. Proper safeguards such as firewalls, encryption, updated anti viruses and conscious approaches such as not divulging credit card details, maintaining proper back up of the important database etc must be employed. Religious efforts towards protecting once information sources are the only way to have efficacious information security. The following report analyzes all the threats, issues and challenges in information security and also provides with the recommendations to be followed for having stronger information security.

U r wrong Prof. CK Prahlad

CK Prahlad advises corporates to target the bottom of pyramid.....here is what i feel should be the strategy.......................................

Not the bottom of the pyramid.

Not the existing middle of the pyramid.

Target should be middle of pyramid and those joining middle class from the bottom.



Middle class will be the driver in the future. Middle class here should not be confused with those living in URBAN India. As per my idea the target should be the middle class comprising of both RURAL as well as URBAN population. Only targeting the urban consumers will provide a company with very small segment size and that too a saturated one. Also it will be very wrong on any marketer’s part to consider only urban market for a kind of goods. There is no justification that why a rural Indian will not want to consume an item used by an urban Indian. In fact with the rapid growth in IT and increasing penetration of other communication tools, an individual living in rural sector also wants the same set of services and goods for his use. Also any individual’s mentality is that he wants the same goods as consumed by his immediate upper level, and statistics have very prominently established that Indian middle class is swelling and there is a continuous infuse into the middle class form the bottom of the pyramid. According to me the company who perfectly caters to the two groups i.e.; the existing middle class and the neo middle class will dominate the market proceedings.

An innovative player can find ways to deliver low cost (even sophisticated) goods and services to demanding consumers across all income ranges. It can sell to the urban distressed areas as well as the poor rural villages or towns. Innovation might arise from the focus on the lower quintile market which creates cost advantages from economies of scale, or the firm may have developed distribution links to the end consumer in the village and so are able to better harness knowledge of the actual needs of this segment of the market. Firms might keep costs low through outsourcing, for greater flexibility
.
A college going student is a prospective customer for a beverage company and so is a farmer returning home on his tractor.

Why middle class?

A poll conducted last year for India Today indicated the Indian middle class has grown substantially over the past 10 years in all income, products, and spending categories. Eighty-three percent of the respondents believe their lifestyles will further improve in the next 10 years. Also interesting is the rapid growth of cable TV, which provides an important promotional medium for new entrants to the consumer markets.

Many such statistics establish it beyond doubt that middle class is swelling. Middle class is the one which according to me must be the target segment for a corporate. It consists of individuals who have ambitions and dreams and considerable resources to attain the desirables. This makes them the ideal target for a marketer.

It basically comprises of service sector and mid-level business men. Peer pressure and matching lifestyle with colleagues is widely seen in them. Also increasing standard and possessing goods used by class above them are the dreams in their eyes.

Theoretically middle class is “THE” segment to be targeted. Practically getting hold of middle class’s nerve has proved to be the most arduous task for companies. It is often remarked that it is extremely hard to understand their mentality. A middle class youth may purchase a Reebok shoe and also be very satisfied with the usage, but will generally stick to it for 2-3 years!!!! The concept of a satisfied customer coming for a re-purchase goes for a toss. Effectively penetrating the middle class and performing profitably is an extreme up hill task.

As already stated if I was at the helm of a company as its chief executive my target would have been to target the middle class and those households who are getting added into the middle class form the bottom of the pyramid.


Why to target the entire middle class not just the urban or the rural sector?

It will be unwise for any company to see the urban and rural middle class as different. Any company should devise strategy which will aim at both. Of course some execution differences will inadvertently creep in.

A company must not specifically target the urban middle class because the rural middle class consists of a very sizeable chunk of customers and has almost similar aspirations.
I have recently visited a Chaupal Sagar on the Indore-Bhopal highway and it contains almost all the items you will find in a town’s supermarket. Rural people were purchasing Pepsi bottles and other goods which one may think of catering to the urban consumers.


Information technology and telecommunications Medias have diluted the boundaries between rural and urban market. A television advertisement reaches to both the urban as well as a rural consumer. Any attempt to just lure the young collegiate of a metro or may be B grade towns will not be that fruit bearing…an effort to excite the younger generation of rural + urban middle class will be the best to be followed. The aspirations and expectations of the rural rich are the same as their counterparts in urban India, with the result that many big-ticket brands, especially in the consumer durable sector, are doing well in rural India. Also the following facts can establish that why an able chief executive and a marketer will target both the rural as well as urban sector not just the urban sector.

ü Small towns and villages -- home to 70 percent of India's one billion-plus population
ü It is estimated that 40 percent of the graduates coming out of universities in India are from rural areas. Many of them remain in the villages and look for jobs in industries located in nearby towns
ü Whereas rural consumers bought only about 45 percent of goods in 1995/96, they will account for 60 percent by 2009/10
ü Rural India has changed tremendously. The data published by the National Council of Applied Economic Research shows that in the last ten years, the income of rural India has grown several-fold. There is a definite shift from middle to upper middle class and from lower to middle class segments.


Why not bottom of pyramid?

The base isn’t strong enough, they pay taxes n have other obligations of loans etc. A marketer may not get the dreamed output. Government is trying to improve the power of the base. This can be very easily confirmed from the design of union budgets in which government comes out with subsidies, schemes and various schemes, which is bound to cause an effect to the tune that bottom of the pyramid will decrease in size and as an effect the middle class will increase in size. A marketer must capture the middle of pyramid which is swelling continuously and is getting penetrated from the base of the pyramid at a very rapid rate.

Why is any company in business? What is the top priority of a CEO? Why is a marketing manager hired? The answer to all this questions is the same – to earn profit and when CK Prahlad said that by targeting the bottom of the pyramid a company will prosper as well as the bottom, he diverted decision makers from their sole aim into two different aims…social service or profit booking?

The above mentioned points may sound a bit unethical, but when dealing in real market situation one must never forget that why exactly is he there

Many companies try to be well wishers of the bop and in the process dreamt of earning profit from it (ITC-e chaupal)…a marketers job is to sell and identify his segment, this job coupled with social service is bound to fall flat on the face.

My recommendations for corporates -

ü Concentrate on the middle class because that is where the real scope lies.

ü Do not make the mistake of differentiating between urban and rural middle class. The aspirations and expectations of the rural rich are the same as their counterparts in urban India, with the result that many big-ticket brands, especially in the consumer durable sector, are doing well in rural India


ü Capture the neo middle class. A company who successfully convert this segment into customer will be the one to earn the maximum output whether in term of volume or profit.


ü We are in the business to earn money and not for social service. And also both does not goes hand in hand. The base needs special attention, but not from a CEO but from the government and NGOs.

ü The base is not strong enough in terms of purchasing capability, so it provides very little opportunity and must be avoided.


ü By middle class, I mean the entire household and not just the younger generation. A company must try to lure the entire family, whether it may be the house maker or the youngest member.
Be innovative and come up with creative ideas (example – CavinKare’s 50 paisa shampoo sachet idea) to lure the middle class.

HONDA ON WRONG TRACK

Unicorn advertisement torn apart

A medical student who misses a movie for welfare of others……
An engineer burning mid night oil because of studies…………….
A CA who is damn serious and loves no fun………………………

What do all of these have in common – they all are typical mom’s boy, and Unicorn is trying to target them……in short trying to attack the segment which purchases Boxer or Splendor and that too at a price tag comparable of CBZ…………

Who purchases a 55000rs bike???????
ü Some1 who wants a machine to vroom vroom into the campus and maintains an extrovert profile.
ü Some1 who frequents discotheques.
ü Some1 who has a girl friend and can skip a movie with friends so as to be with her……..n u bet not to study.
ü A medical student who is most probably involved in politics in his college and also holds a position in student’s committee and is the one who dictate proceedings in his college.
ü An engineer notorious for bunking classes and is heavily involved in extra curricular.
ü Some1 who loses sight of his goal once in a while to live life king-size.

This segment consists of mavericks who want a machine to whiz past others on a highway with their girlfriend as pillion, or moving in a group of 4-5 with horns blazing not some1 who contributes majority of time in his room as a book worm because he can never lose sight of his goal and generally serious biking is not his cup of tea. A bookworm needs a way to commute not an action packed bike…….
Honda has got its strategy totally wrong…..
They must reposition Unicorn or if they are so desperate to get oil haired customers they must introduce a bike in mid segment…..
This is what advertisements can do to a product…a bike which could have been positioned as a power punch is now seen as a phadaku’s gaadi……..
COMING SOON LADIES AND GENTLEMEN IS AN ADVERTISEMENT FOR UNICORN WHICH I HAVE DESIGNED………AND ALSO KEEP LOOKING THIS PLACE FOR MY NEXT POST

“CK PRAHLAD TORN APART”