Colgate: Now that is called an Aggressive Strategy!

I was reading the news and views of Corporate Industry to keep myself updated on the strategies and policies. I came across an article about the launch of Oral-B toothpaste by P&G in India. P&G already has Oral-B brand tooth brush in India and with this launch they are entering the toothpaste industry. Now what was surprising and caught my attention was the article talked more about Colgate revamping its marketing expenditures and less about launch by P&G.

Prabha Parameswaran, the MD of rival Colgate was the one watching it most closely. As soon as the launch was announced by P&G, Colgate was quick to respond in the market to ensure entry for Oral-B isn't as smooth as they expected. Colgate is market leader in Indian Oral care market. They could have waited to see the response Oral-B gets in the market. But Colgate doesn't believe in wait and watch philosophy. I also believe a lost ground is more painful to gain back than protecting and going aggressive especisally when we are talking about sensitive consumer industry like this one.

Madhuri Dixit is roped in as brand ambassador for Oral-B toothpaste.

Colgate has hiked its advertising and promotion spends considerably during the first half of this calendar year. Company is roping in more and more Bollywood stars to promote their product because they know that is one of the best way to capture Indian mind space and influence their buying. It has bought more shelf space in retail outlets and giving better margins to shopkeepers. For consumers, buy one-get one free or money saver packs are introduced. The company is truly going aggressive and sending out the message that it is not a sleeping elephant in this market. In short run, this may possibly hurt margins for a quarter or two but that should be alright in the long run till the time company doesn't loose market share and give space to competitors.

The company has done well when it faced competitions from Pepsodent and low cost Anchor brands. It faced similar situation in Brazil market where Colgate held around 80% of market share and Oral-B toothpaste was getting launched. The company adopted same policy and went aggressive to keep the new competitor at bay.

For Oral-B, I think they should not take Colgate head on to start with. Colgate has around 55% market share in India but there is a good 45% with other players. It should slowly edge out the second and the third players and win space in  large number of Indian bathrooms. It should then challenge the market leader having understood the market and people enough.

fOoD fOr ThOuGhT: While P&G has all the resources, startegy and good brand in place - they are challenging the market leader. Colgate has been successful in maintaining its dominance in all the markets wherever it got challeneged by competitors but Indian market is always special and different to watch out for. This could an interseting contest.

Sources: Online News

Windows 8 - Will this leap of faith really work?

I am really not a tech geek, reviewing the latest gadgets. I try to keep them in minimum number. For me it is clearly a means for comfort in life and not life itself. More than the technology I appreciate the minds behind them.

The very first book that I read distantly connected with technology business was by the name Odyssey: Pepsi to Apple, an autobiography by John Sculley, former Apple CEO. I found the book fascinating and Steve Jobs got introduced to me. I googled more on Jobs and then the Stanford Commencement Speech that he delivered in 2005 became my favorite. I played the video in loops and almost learned the speech by-heart. I had enough material and information about Steve Jobs to show off while I conversed with my friends. By this time my answer to the question, "Who is your role model?" became 'Steve Jobs'. The answer looked correct and choice - intelligent.

I watched movie 'Pirates of Silicon Valley'. The more I came to know about Steve Jobs, the less I thought I knew about him. The first Apple product that I possessed was a smart, sexy and beautiful iPod. It was gifted by my foreign return sister. I was in awe of this genius! Today when I am online, among the favorite pass times is to watch his product launch and interview videos on youtube. Fascinating is the word I would want to use for him. The simplicity and thoughtfulness behind his design is worth getting inspired for. He always knew what people wanted but were not aware of. From his Stanford speech,

"... And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary..."

are the words, that keep ringing in my head. His demise was sad and an era ended with that event. I grabbed Steve Jobs by Walter Isaacson book in the first week of its launch and I was done with it pretty soon. His personality comes out very well in that book. By this time I started working on MacBook on a daily basis and the pleasure that comes out right from looking at the artistic logo on the lid, opening it and then the start up chime is tremendous.

Now, the origin of my thoughts was actually a new machine which came loaded with Windows 8 Operating system that was recently bought for my parents. First time I booted and it looked jazzy with new User interface. I thought of spending time with new machine since my parents would be using it and I end up explaining the navigation and buttons from a long distance over phone, imagining the screens. I have spent some 10+ years using a windows machine and I was sure it would all be same with some more features added.

The so much reliable 'Start' button and menu was disappearing. I thought it might have been moved to some other place in some other look-and-feel. I found myself googling and my reaction was, what the heck! There was no way that I could explain navigations and actions to my dad if I was not infront of Windows 8 OS. The last time I was pissed off with a Microsoft product was when they did not have MSOffice 2003 and 2007 integration. There was no way you could open a MSOffice 2007 file in a system with 2003 version.

For creating a 'User' for access, so much of information is required! An email account is must and most of the things point towards Microsoft Outlook and related products. I am sure Microsoft has taken a lesson or two from Apple for Software integration but without keeping usability in mind.

After spending more than 40 mins, I was convinced that it was a better idea to uninstall Windows 8 and replace it with Windows 7 or XP which is still my favorite out of all MS OS. StartIsBack came to my rescue and I was relieved that there was still a way out. I have now configured the system which looks more or less like Windows 7 from UI point of view.

Feature wise I think the product is incomplete and launched in haste. Something like, 'lets go to the market and feedbacks will tell what to do next!' Windows is a mass product and such a drastic change in Interface can backfire the sales, or has it already!

fOoD fOr thOuGhT: Beauty in a product lies in its usability and comfort. There is a place for everyone and everything. If you try to emulate somebody else, you would loose your own ground and capturing competitor's may not necessarily result in net gains!

Did you shop from Coca Cola Footware or Mercedes Benz book store?

Apple Inc. A word enough to keep the techno savvy world on its toes. Innovation is what you look for after hearing the brand name. McDonalds’: I M Loving it – first thought in mind, a burger with cheese slice peeping out from the circumference, Coco cola – comfort, lifestyle, enjoyment! Nokia, Google, IBM, Toyota, Disney, Intel, Mercedes Benz, Jaguar, Cisco, BMW, Honda, Nike, Sony, Citi and I can go on and on! Yes, these are world’s best of the brands and the brand name reminds sweet memories associated with the products. It is about lifestyle. Happiness. Comfort.

Would you like to buy clothes from Tata clothes Limited or Tata Apparel Unlimited? How about Maruti Book store? Microsoft Shoes? Did you try new Bata Laptops? You must have tried Philips Jewellery? Oh, how can you miss Accenture watches? Haven’t tried yet! How about Colgate coconut Oil? Amul Dantmanjal? Very effective manjan and keeps your teeth utter butterly deliciously white! I bet you must have tried Birla Milky Bar? I know you are planning to give your girlfriend an Audi diamond ring! I suggest you rather don’t even think of doing that. Neither would you get the girl nor would you get your diamond ring back. So what exactly do I want to say? Why I am trying to tarnish some of the world’s biggest and bestest brands! The case in point is Reliance Industries (Mukesh Ambani) and its brand extension strategy. Out of place to say the least!

Brand extension is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. A company tries to do this to leverage the already created brand image. For example, LG – Television, Refrigerator, Mobile phone. The company has an image of high quality electronic durables. So brand extension helps it in establishing products in different product categories. Another example could be Park Avenue: Shirts, After Shave, Belts, Soaps and Razor. Consumers associate the image of a new product with an existing product under same brand.

Now, Reliance Industries, which requires no introduction, is usually associated with Petroleum, oil and refinery. The solid brand associated with execution, efficiency, propelling high growth for the economy. The brand extension of Reliance to ‘Reliance Fresh’ is in itself diluting the value of Reliance Industries. Reliance Digital – doesn’t connect with electronics. The dot on the letter ‘i’ in Reliance symbolises a drop of oil. How would Reliance digital appeal to techno savvy youth of the nation? It is difficult to associate same brand with as diverse businesses as oil, books, clothes and jewellery. Each product has different emotional appeal which a same brand cannot address. When we say Airtel, the fantastic Airtel music composed by AR Raheman, rings in our ear.

Products name should have emotional connect. Emotions drive us to buy more. No matter how many Levis Jeans somebody has, he would go for one more. A Nike shoe gives satisfaction to my legs. Apple iPhone gives a style statement to the users. Would you ever leave your home to shop from ‘Reliance Footprint’, a footwear concept, ‘Reliance Jewels’, a jewellery concept, ‘Reliance TimeOut’, a books, music & entertainment concept? There are the Cross Words, Westsides, Pantaloons, and Mobile Stores! Why would you want to indulge in shopping that won’t give you ‘that’ satisfaction! And Reliance offerings dosen't end here. ‘Reliance Living’, a homeware, furniture, modular kitchens, furnishings concept, ‘Trends’, an apparel & accessories concept, ‘Reliance Wellness’, a health, wellness & beauty concept, ‘iStore by Reliance Digital’, an exclusive Apple products concept!

I respect Mr Senior Ambani for pure vision, planning and execution. If he wants it, he does it! The big thinking! But sometimes you need to put emotions into product apart from money, reach and power. The brand extension ‘Reliance’ to clothes and book store won’t ever allow them to emotionally connect with people.

fOoD fOr ThOuGhT: The process of creation of a brand image sometimes takes decades. Possession of successful brands give people confidence. They see their projections in the brands they hold or possess. If the brand extensions have no advantage over competitive brands in the new category, then it will fail. Hope somebody from Reliance Industries is reading this!

Strategy: Why Videocon wont “pakad life ka any signal”!

Glued to swanky Videocon ads aired on television these days? The advertisements depict various stories trying to connect emotionally with the viewers. Be it “naye kharche ka signal”, “naye job ka signal” or “naye dosti ka signal”, the company scores well when it comes to creativity. They have also managed to showoff India’s biggest brand Sachin Tendulkar every now and then. 100 cities in 100 days look aggressive from outside. But advertisement can only create awareness about a product; strategically the company seems to be lost out, before the battle really begun!

There are many reasons than one. First of all, “Pakdo Life Ka Har Signal" message given in the ads with the company’s reasoning that it underlines Videocon’s commitment to deliver an efficient service through a strong network. When you launch a new product, customer looks at the novelty. What is the value add if I switch from the existing one. And when it comes to changing service provider and number, the reason should be really out of the box. Videocon has emphasized on good signal or connectivity. But when you compare the level of competition, Videocon seems to be in a totally different space. Each service provider is focusing on value added services, promising customers better utilization of money. Good connectivity is not a ground to compete anymore. It is assumed that it has to be good.

Vodafone is trying to empower customer with its Power to you campaigns. DoCoMo is going for caller tunes and low calling charges. Aircel is focusing on connecting with social networking sites with its Pocket Internet add-on. Airtel is again promising on lower call rates and higher value added services. Videocon seems to be boarding the bus when everyone else seems to have taken the flight!

Industry is burgeoning with new entrants. The leaders, the likes of Airtel and RCom are facing problem retaining customer. The prices are falling, profits are hurting, and outlook seems to be bleak. Analysts are shrugging off telecom companies. 3G spectrum is only going to add to the worries of these companies by increasing the capital investments, not promising quick returns.

fOoD fOr ThOuGhT: Videocon doesn’t seem to be in the right industry at the right time. The strategy also isn’t promising. The brand value isn’t so high that people go gaga about the product. Hope somebody is listening and taking corrective steps before it is too late!

You will google, the way you never thought…

Be it meaning, information, places, maps, etc, we google it. “Google” has become synonymous with “search” on the internet. A fantastic company founded by Sergey M. Brin and Lawrence E. Page. It is now hard to imagine world without google. Gone are the days when I use to issue 10s of books from library, photo coping few of them and taking long notes, to complete school assignments. Today, we google it! But things doesnt look encouraging for google, going forward.

It all started in 1980s. Apple computers introduced Macintosh, the first commercially successful small computer with a graphical user interface. He naively discussed the operating system with Bill Gates. And as matter of fact and in the words of Steve Jobs, “…And since Windows just copied the Mac…” It was the brain child of Jobs but Bill Gates successfully copied and marketed it with Microsoft label, making huge fortune. But still Apple is far more superior when it comes to performance, processing, experience. From Hollywood to Bollywood, film making, processing, high digital stuff, etc would not have been possible, had it not been Apple. It is the “Rolls Royce” of IT industry. Steve Jobs made a mistake of sharing knowledge. He was betrayed and Microsoft became far bigger company than Apple.

History repeats itself. Steve Jobs is betrayed again.

Apple and Google are pioneers in their ambit of offerings. One has proved marvels in computer, operating system, music and phone industry while other is leader in search engine. Their path never crossed. Their mission was to limit Bill Gates and Microsoft till PC and do not dominate the online and phone business. Steve Jobs committed same mistake again. He invited Eric Schmidt, the CEO of Google, to join Apples Inc’s board. They worked together to ensure that iPhone has Google as default search engine. Google quietly built Andriod, an operating system for smart phones. Launched it on phones with HTC and Motorola, directly competing with Mac OS. Then it introduced the Nexus One, its flagship phone designed in close collaboration with HTC, which carried some of the designs and features like the patented multi-touch feature of iPhone. Google has challenged Apple Inc, by copying the very own features of iPhone. Schmidt did what Bill Gates did, two decades ago.

fOoD fOr ThOuGhT: I trust Steve Jobs, you will google, the way you never thought. Whenever this man has been challenged, the world has been blessed with out of box, state of the art, industry changer product. Be it ipod, iphone, itunes, ipad or the App music store. This guy will introduce an application, I am not limiting the scope by saying a search engine, an application that will change the way we search. I cannot think what it will be like but it will surely see Google scratching its head.

"Attack the leaders"

Why do you see Amitabh Bachchan being attacked again and again by politicians? Why MNS drags him is meaningless issues? Why SRK is attacked on his IPL selection statement which wasnt contradictory to patriotism? And at the same time, why SRK has accused ShivSena of dirty politics? Why only Indians are attacked in Australia? Why at the global level US, Russia, Pakistan, Iraq are found attacking India and Indian leaders again and again?

Earlier it was between Khans now it is between AB and SRK, Chetan Bhagat and 3 idiots, only Tiger woods over infidelity, Mukesh Ambani over KG basin, Tatas over Singur, Steve Jobs over iPad, n number of cases in every walk of life. If you ask Shivsena, MNS, BJP, RSS some other acronyms, "What are you fighting for?" I bet, they wont have an answer! They just want to attack anybody who has visibility and can help them in their pursuit.

In the marketing parlance it is called "Attack the leader." It is one of the easiest way to take your words to the world. Any leader in his industry/ segment is dominant. He decides the pace, direction and sets the rules and trends. When you attack a leader, you are elevating yourself close to that leader's position, temporarily. The world gives you ear. And in a subtle way your work is done. When Mamata Banerjee created issue with Tatas over Singur land, she knew, it is not worth fighting against the business behemoth. But she got the coverage, she was heard. She retracted from her stance later, is a different story. The movie My Name is Khan cannot get a better marketing than what it has got! Look at Sarkar, Gangajal or some other movies. If you look around yourself, you will find either people have mastered or are trying to master the art of attacking the leaders.

fOoD fOr ThOuGhT: When ever you find any leader getting attacked, understand the motto. Hmmm, that means if I want to get famous, I should attack some political or business figure or ideology. Hahaha... Its not a child's play. When a leader retracts, you need to be fully loaded because 100% of the times, the attacker is at fault. For you guys, if you look at everything from "attack the leader" angle, you will always find it applicable!

Business Challenges After the Recession

When the recession is over, business challenges will be different, not gone. Companies wrestling with the downturn need to consider what new problems they’ll face in the recovery.

You may have cut back on your staffing level to survive the recession. When sales recover, you’ll start hiring—but whom? Many of the folks you laid off will not be available. Some of the people you hire may not have worked in your industry before. You will have a training challenge greater than you had before the recession.

The employees who stayed with you through the recession will be different. They may have felt guilty when they survived layoffs. Then they worked hard without bonuses, pay raises or much chance of promotion (because the company was not expanding, and few higher-ups were quitting or retiring). After working hard through the recession, their attitudes will be different than had been a few years earlier.

Consumers are cutting back on their spending, but the day will come when they buy cars and furniture again. How will the recession change their attitudes? Will they buy the same products, the same styles, at the same price points as they did in 2005? Probably not. What mix of products will fill the consumer’s need to celebrate the return to normalcy, without falling into the same old bad habits?

When it’s time to ramp up production, will your vendors be ready? If you had to cut back your orders during the recession, your vendors will be hurting. They may have laid off key personnel, and they may not have the financing in place to buy raw materials to provide you with products. Their problems will become your problems if you rely on them for critical supplies.

Speaking of finance, what about your own situation? The financial crisis has changed the world of credit in ways that won’t quickly be reversed. Securitization will continue, but at a much slower pace, with far simpler deals. This is a problem even for companies that never floated complex deals on Wall Street. Virtually all forms of business credit have been securitized: bank loans, lease receivables, commercial mortgages, credit card debt. Many business borrowers didn’t even know that the money for their loans came through these channels. The closure of secondary markets, though, makes business credit harder to obtain.

Business recoveries are stressful to balance sheets. Chief financial officers who have felt stressed by declining sales volumes will feel a different kind of stress next year. Increasing orders will require spending on inventories and personnel, much of which has to take place before payments are received from customers. This need for working capital will increase before credit markets fully adjust to the financial crisis.

How does a business leader prepare for these new challenges? The first step is to keep the company going, which means dealing with today’s challenges. At the same time, take a few hours and sketch out the challenges you expect when the recovery comes. Bring in a few colleagues and brainstorm. Then look at the issues that need current action. Some problems can wait until they arise, but others can be nipped in the bud with a little forethought. The companies that thrive in the recovery will be those that not only survived the recession, but also planned for better times.