Tuesday, July 31, 2007

The Lifebuoy Brand-Session3

To view previous sessions click below:

Session 1
Session 2

Lifebuoy started off with Print Ads, depicting the Lifebuoy of a sailor.

Then there were some vintage Lifebuoy Print Ads.

A vintage Ad depicting LIFEBUOY as a health soap, attracting Mothers to buy the soap.

The initial Television Ads focused on the hygiene part of the soap wash.

A little boy can hardly conceal his excitement, as he is about to take his newborn sister in his arms...
...when the doctor stops him and asks him if he is clean. "Nahaake aya hoon," is the prompt reply. The doctor runs a check and shows him the germs in his hands, "Kya main hhoti ko kabhi nahin utha sakta?"
"Utha sakte ho. Lifebuoy se nahaane ke baad." MVO: "Lifebuoy ka Active B kitaanuon se suraksha de ghanton tak."
The next time, the doctor requests to hold the baby. Pat comes the reply, "Lifebuoy se nahaaya kya?"
MVO: "Lifebuoy Active Orange. Minton ka snaan. Ghanton ki suraksha."

Then during the transition, Lifebuoy came up with the NAYA Lifebuoy Campaign:

The shot of a car packed with luggage on its roof, stuck in a traffic jam.
The passenger, just returned to town, grumbles irately, "Yahaan pe kuch nahin badla."

"Log nahin badle, road nahin badli..." "Kya baat kar rahe ho saab? Lifebuoy badal gaya hai!"
MVO: "Haan. Lifebuoy badal gaya hai. Khushboo badal gayi hai. Taazgi badal gayi hai."

"Super! Lifebuoy badal gaya!" exclaims the man in surprise.
Pack shot. MVO: "Naye Lifebuoy se nahaaya kya?"

The next step was to portray it as beauty soap, rather than being just hygiene soap:

A young girl wakes up one morning and rushes to the mirror praying fervently, "Please, no muhaase."
Warily uncovering her face, she finds it flawless and jumps for joy, "No muhaase! Yes!"

MVO: "Muhaase? Problem. Upaay, Lifebuoy International Gold, jo chiknaayi hataaye aur kitanuon ka safaaya kare. Aur yeh...
...barkha gaya hai." The shot of the girl happily out on a date, as the MVO adds, "Muhaase? Woh kya hota hai?"

And finally the new age Lifebuoy, which left a message:

A boy wakes up from sleep. MVO: "Kabhi kabhi sirf ek insaan,..."
Getting up he takes hold of a broom. MVO: "...ek soch, ek irada, duniya...

...badal sakta hai." Fully equipped he looks around at his filthy street.
He gets down to clearing the garbage and is soon joined by a friend.

The boy's mother reassures her worried maid, "Arre baba koi dar nahin."
Soon many more helping hands arrive as the other colony children join in.

The street is finally cleaned up. MVO: "Duniya wohi badlenge jinhe...
...apni suraksha ka koi dar nahin. Isliye Lifebuoy. Kitanoo...

...se de 100% beheter suraksha." The kids enjoy a good bath with Lifebuoy.
On their way to school they speak out confidently, "Koi dar nahin."
Watch out for the next session for more details...

Business Intelligence-Session4

To view the previous sessions
Session 1
Session 2
Session 3


The rapid pace of today’s business environment has made Business Intelligence (BI) systems indispensable to an organization’s success. BI systems turn a company's raw data into useable information that can help management identify important trends, analyze customer behavior, and make intelligent business decisions quickly. Over the past few years, business intelligence systems have been used to understand and address back office needs such as efficiency and productivity. Now organizations are increasingly using BI to analyze customer behavior, understand market trends, and search for new opportunities.

BI relies on Data Warehousing (a data repository designed to support an organization's decision making), making cost-effective storing and managing of warehouse data critical to any BIDW solution.

Without an effective data warehouse, organizations cannot extract the data required for information analysis in time to facilitate expedient decision-making. The ability to obtain information in real-time has become increasingly critical in recent years because decision-making cycle times have been drastically reduced.
Competitive pressures require businesses to make intelligent decisions based on their incoming business data and do it quickly. Simply put, the ability to turn raw data into useful information in a timely manner can add hundreds of thousands up to millions of dollars to an organization’s bottom line.

The figure above illustrates the major components of a BI system and the process of generating business results from raw data (the operational data that is used to run the business). A brief overview of the general functions involved in the process follows.


Step 1: Raw data is stored

Raw data is typically stored, retrieved, and updated by an organization’s on-line transaction processing (OLTP) system. Additional data that feeds into the data warehouse may include external and legacy data that is useful to analyze the business.

Step 2: Information is cleansed and optimized

The information is then cleansed (for example, all duplicate items are removed) and optimized for decision support applications (i.e. structured for queries and analysis vs. structured for transactions).
It is usually “read only” (meaning no updates allowed) and stored on separate systems to lessen the impact on the operational systems.

Step 3: Data mining, query and analytical tools generate intelligence

Various data mining, query and analytical tools generate the intelligence that enables
companies to spot trends, enhance business relationships, and create new opportunities.

Step 4: Organizations use intelligence to make strategic business decisions

With this intelligence, organizations can make effective decisions, and create strategies and programs for competitive advantage.

Step 5: The system is regulated by an overall corporate security policy

Information in a data warehouse is typically confidential and critical to a company's business operations.
Consequently, access to all functions and contents of a data warehouse environment must be secure from both external as well as internal threats and should be regulated by an overall, corporate security policy.

Step 6: Business performance management applications track results

A well-run BIDW operation also includes Business Performance Management (BPM)
applications, which help track the results of the decisions made and the performance of the programs created.

BIDW Drivers/Trends

The world is changing and the need for accurate and timely business intelligence is ever more pressing.

Key drivers that are making BIDW solutions mission critical include:

Rapid increase in “information democracy” i.e., business is putting BI tools and data in the hands of large numbers and types of users, not just an elite few. More people are getting more information in more detail on more devices.

Businesses are required to make more decisions, more frequently and more accurately in shorter time periods. The amount of time between when a decision is made and when feedback is received (requiring a new decision) is becoming shorter and shorter. The ability to make intelligent business decisions quickly is imperative to remain competitive.

Data is being customized on a mass scale. Personalized information such as portals, digital domains, recommendations, and news feeds are commonplace – all of these require that data warehouses be flexible enough to provide different views to different people.

New legislation and compliance regulations have made BIDW mission critical. Regulatory requirements (such as Sarbanes-Oxley, HIPAA, Gramm-Leach-Bliley, etc., and non-U.S. equivalents) put greater demands on determining and maintaining business intelligence and have made access to and analysis of information critical. Data must be captured, retained, and managed in a way that will satisfy courts and regulators.

The diversity of data is enormous. Organizations must store and manage data from multiple different sources such as ERP and CRM systems, and in a variety of formats such as text, images, voice, video, unstructured data, and more.

The increased need for better security due to wider data access availability and a larger number of users. Organizations around the world are looking for ways to reduce the risk associated with managing growing and disparate forms of data.

In addition, there are a number of industry-specific drivers .Taken all together, it’s
clear that the need for timely business intelligence has become critical in today’s business world.

Monday, July 30, 2007

The Lifebouy Brand-Session2


To view the previous session Click Here

A pack for every budget

The potential is even larger, both in terms of consumption and penetration. The fact that 70% of the population accounts for only 50% of even relatively well-penetrated categories for soaps, indicates the enormous scope of consumption-led growth in these categories. Therefore such categories will derive growth out of increased usage. In categories, which are relatively less penetrated, like personal products, rural India offers an even bigger growth opportunity through greater penetration and then consumption. For example only three out of 10 consumers in rural markets use shampoo or skin care products. Therefore growth in such categories will emerge, as more consumers purchase these products, and then continue to use them regularly. Hindustan Lever has taken many initiatives over the decades to create markets in the rural hinterlands. By marketing relevant products, at affordable prices.

A unique example is Hindustan Lever's Lifebuoy soap. In rural India, health is of paramount importance, because indisposition is very directly related to loss of income. Lifebuoy, whose core equity is health and hygiene, has for decades now been synonymous with soap in rural India.
Changing habits

For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation in communication channels, by innovatively leveraging non-conventional media. Among them are wall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given the rural consumer's fascination for cinema, the cinema vans show popular movies, interspersed with products advertisements. Weekly markets, fairs and festivals are parts and parcel of rural life. They give an opportunity to address consumers, spread over many tiny hamlets, at one location. The occasions are used to demonstrate product benefits and also sell such products. Such demonstrations have played a significant role in creating the soaps market in rural India. In recent times, such demonstrations are being deployed to illustrate how visible clean is not hygienic clean, and how using soap is essential to prevent easily avoidable infections. Communication through fairs and festivals are backed by direct consumer contact. For example, in 1998-99, Hindustan Lever implemented a major direct consumer contact, called Project Bharat, which covered 2.2 crore homes. Each home was given a box, at a special price of Rs.15, comprising a low unit price pack of shampoo, talcum powder, toothpaste and skin cream, along with educational leaflets and audio-visual demonstrations. The project has helped eliminate barriers to trial, and has strengthened salience of both particular categories and brands. Similarly in 2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which already covers 70 million people in 18,000 villages of 8 states. The project is intended at generating awareness about good health and hygiene practices, and specifically how a simple habit of washing hands is essential to maintaining good health. The initiative will involve interaction with students and senior citizens, who act as change agents.

At every nook and corner

Generating awareness pays dividends only when steps are taken to ensure constant availability of products. In rural India particularly, availability determines volumes and market share, because the consumer usually purchases what is available at the outlet, influenced very largely by the retailer.

Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever began with the coverage of villages adjacent to small towns. The company's stockists in these towns were made to use their infrastructure to distribute products to outlets in these villages. But this distribution mode could only be extended to villages connected with motorable roads, and it could cover about 25% of the rural population by 1995.

Therefore in 1998, Hindustan Lever launched Project Streamline to further extend its distribution reach. Under this initiative, the company identifies sub-stockists in a large village, connected by motorable road to a small town. This sub-stockist in turn distributes the company's products to outlets in adjacent smaller villages using transportation suitable to interconnecting roads, like cycles, scooters or the age-old bullock cart. Hindustan Lever is thus trying to circumvent the barrier of motorable roads. As a result, the distribution network, as of now, directly covers about 50,000 villages, reaching about 250 million consumers. The company simultaneously uses the wholesale channel, suitably incentivising them to distribute company products. HLL has in the recent past established a common distribution system in rural areas for all its products. Given the number of brands and their packs the rural retailer usually requires, one HLL representative can take all the products from the company portfolio that he needs. This common distribution system is now fully operational, under one Regional Sales Manager exclusively dedicated to rural markets of each region of the country.

Over time, Hindustan Lever will further strengthen its rural distribution through mutually beneficial alliances with rural Self Help Groups (SHGs). Over the last five years, financial institutions, NGOs and government organizations are working closely to establish SHGs, whose objective is to alleviate poverty through sustainable income-generating activities. Since 2001, Hindustan Lever is implementing Project Shakti, whereby SHGs are being offered the option of distributing relevant products of the company as a sustainable income-generating activity. The model hinges on a powerful win-win relationship; the SHG engages in an activity which brings sustainable income, while Hindustan Lever gets an interface to interact and transact with the rural consumer. HLL's vision for Project Shakti is to scale it up across the country by 2005, creating about 25000 Shakti entrepreneurs, covering 100,000 villages, and touching the lives of 100 million rural consumers. Begun with 50 groups in Nalgonda district of Andhra Pradesh, with the support of local authorities, the project has been extended, as of now, to about 50,000 villages in 12 states. A typical Shakti entrepreneur conducts business of around Rs.10,000 - Rs 15,000 per month, which gives her an income of about Rs 700 - Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income. The full benefit of Project Shakti will be realised after some years.


Lifebuoy is India’s largest selling soap brand and has been so for a long time now. It is the only soap brand to have ever crossed 100,000 tons in sales in a single year.

The brand has a mammoth user base of over 600 million consumers in India and is one of the most recognizable symbols of health.

The advertising and communication for Lifebuoy has been recognized as one of the most effective at the advertising effectiveness awards ‘Effies-2003’.

The Lifebuoy jingle, synonymous with health and hygiene, has become a classic – indeed, it can be considered as part of the Indian social fabric.

The Brand Equity Survey 2003 ranked this mega-brand as one of the Most Trusted Brands in India.


Since 2000, major changes have been made to the classic Lifebuoy soap bar to ensure that it provides improved hygiene protection and a more enjoyable healthy washing experience for its billions of consumers.

· Lifebuoy soap's classic hard red brick shape has been replaced with a new signature Lifebuoy shape. The new shape makes the bar easier to grip and use

· The Lifebuoy Brand team have developed a new formulation providing even better germ protection which creates a rich lather on the skin

· Lifebuoy soap's characteristic medicated, carbolic smell has been replaced with a more enjoyable and contemporary 'health' fragrance

Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families, including a range of bar soaps, hand wash liquids and liquid shower gels. The most recent Lifebuoy innovation addresses the number one skin hygiene and health concern for teens and tweens: oily and acne prone skin. Lifebuoy Clear Skin is a bar soap formulated using radical new technology that is clinically proven to reduce even severe acne, by 70% in 6 weeks. Regular use, twice a day is proven to prevent and reduce the recurrence of acne
Key facts

Today Lifebuoy is mainly sold in Asia and parts of Africa. It is market leader in every Asian market where it is sold Lifebuoy soap has been proven in laboratories to provide 100% more effective germ protection than ordinary soaps To date, 70 million people in rural India along have experienced the pioneering, Lifebuoy sponsored Health Education programme – the single largest private hygiene education programme in the world In 2005, Lifebuoy was awarded a 'Citizen Brand' accolade in Indonesia in recognition of the work the brand has undertaken in hand wash education Nearly half of the Lifebuoy brand's consumption is in rural Asia, where most of the population live on less than US$1 per day.

Some Variants of Lifebuoy

The company has launched Lifebuoy in four variants:
· Lifebuoy Total
· Lifebuoy DeoFresh
· Lifebuoy Nature
· Lifebuoy Gold Care.

Lifebuoy Total is for all those mothers with active kids who constantly fear hygiene threats from germs leading to stress and anxiety for the mothers and is available at Rs 12 for 125g, Rs 10 for 100g and Rs 5 for 55g.

Lifebuoy DeoFresh has been introduced especially for young adults who lead active lifestyles. It is available at Rs 10 for 100g.

Lifebuoy Nature, on the other hand, comes with neem and tulsi and is available at Rs 10 for 100g.

And, Lifebuoy Gold Care is specifically designed for sensitive skin and is available at Rs 10 for 100g.

Lifebuoy Brand Extension

Lifebuoy soap,Lifebuoy hand wash, Lifebuoy shower gel, Lifebuoy Clear Skin
FMCG major Hindustan Lever has stretched the equity of its largest selling soap brand,
Lifebuoy, to talcum powder. Close on the heels of launching the Fair & Lovely talcum powder, HLL has decided to include Lifebuoy in the same category, thus adding yet another brand into a declining market for talcum powders.

Lifebuoy Family Talc has been launched on the platform of health and has two pack sizes, pegged at Rs 28 for 100 gm and Rs 68 for 400 gm.

Positioned as a `complete family health' talc, Lifebuoy Family Talc is expected to provide `All day protection' and meant to fight body odour causing germs all day long, according to the communication on the purple and white packs of its talc.

Manufactured at HLL's manufacturing unit at Silvassa, its talc is meant for the entire family and the graphics include a family portrait on the pack, to depict its target consumers. According to industry data, talcum powder as a category has been registering a 13 per cent degrowth in 2002 in spite of achieving a 100 per cent penetration level in the market.

HLL's talc brand Ponds dominates the category with a volume share of 56 per cent, followed by Johnson & Johnson at 11 per cent and Denim at 4 per cent.

"More than cracking the category, HLL is looking at having as many deliverables as possible to cater to the standard needs of households. The company believes that rural health is a concern it can address through the equity of the mother brand of Lifebuoy," states an analyst tracking the company. Considering most of Lifebuoy's soap sales come from the rural market, HLL is hoping that the strong `health' equity of the mother brand will have a rub off on its talc as well.

Meanwhile, apart from its Ponds talc with variants such as Dreamflower, Magic, Light N Easy and Sandalwood, HLL, as the market leader, has already stretched the franchise of most its other brands such as Axe, Denim, Liril, Vaseline and Fair & Lovely to talc, filling the category with negligible shares.

Industry observers feel that talcum powder in India has always been looked upon as a cosmetic offering with a fairness proposition. "HLL is hoping that in spite of the category stagnating, consumers will not perceive its latest talc as a cosmetic product and hopefully re-evaluate the health offering associated with the Lifebuoy brand," says an industry observer. A new campaign for the `New Lifebuoy Talc' has already been developed by Lowe to highlight the `healthy' connotations associated with the Lifebuoy brand of soaps.

HLL relaunched the Lifebuoy brand last year and currently it has variants such as active red, active gold, international plus and international gold and continues to be the largest selling popular soap in its category.


“Healthy and hygienic soap”

Lifebuoy's goal is to provide affordable and accessible hygiene and health solutions that enable people to lead a life without fear of hygiene anxieties and health consequences.


Initially a macho brand - Lifebuoy - was repositioned with great success. All of us are familiar with Lifebuoy, its advertising featuring men playing outdoor games such as football and volleyball.
The brand was an effective anti-bacterial soap. The recent campaign featuring a `little Gandhi' is a dramatic shift from its macho image. The brand now addresses children and the family as well. The advertising differential was to give a twist to the `germ-free' by saying "you can live without fear."
The lesson for us again is that positioning statements, however potent, can remain mere words. It needs creativity to lift them to a different plane that will help beat the clutter. Lifebuoy demonstrates that - aided as it has been by a new formulation and packaging.

Complexity, People and work.

Complexity, People and Work.
Human beings and the way they interact are extraordinarily Complex.
Successive generations of statisticians have made many attempts to define that complexity in a numeric way.

There seems to be two approaches to this kind of analysis.

There is the modern Digital approach where every action and interaction is controlled at the microscopic level by single bytes of information.
We use this information to control and predict outcomes.
Below this level of data it is not possible to go because a single byte of information is not divisible.
But we know from chaos theory that below the level of that single byte of information there is a whole world of complexity that has huge and unpredictable outcomes.

The problems occur when we begin to realise the limitations of the start point digital data.

When the UK Weather Centre at Bracknell decided to tighten up its long range forecasting ability with the purchase of their first computers the reaction of the computers was completely unexpected.
The computers told the forecasters that they should stop issuing long range forecasts because the probability of a correct forecast was no better than chance.

Natural events are far more complex than a digital approach can ever define.

We can take a digital picture that looks great but when we blow it up we start to discover the limitations of the digital approach.
By trying to try to define complex systems in this way we are building in errors that become evident in the variation we encounter and are magnified massively whenever one complex system encounters another.

The second approach is the analogue approach.

In nature the interaction of complex systems occurs all of the time without any trouble at all because when a wave hits a beach what happens, just happens.

If we try to analyse what happens to the wave, or the beach, in a digital way we will probably end up concluding that either the beach or the wave is at fault because the digital model will not be able to reproduce the level of complexity of the real world.

The digital approach to managing process’s and operations will always have the same built in errors when it contains these complex natural components.
The component that causes most trouble is the human being whose actions and interactions may be the most complex on the planet.
When treated in a digital way the complexities of human behaviour cannot be resolved.
The human being has to be treated in natural way which instead of trying to define the complexity of the individual condition simply creates the environment that allows humans to interact and come to their own natural conclusion.
In this way we avoid the impossibility of trying to define a complex system and the further impossibility of trying to predict what will happen when that model interacts with another.

Instead we concentrate on the desired result when the two systems combine and allow the natural behaviour of the systems to achieve that outcome.

Try to define sex.

What is it, what starts the thought processes that lead to it, what are the physical changes that must precede it, how do we feel during and do we have to smoke afterwards, what about the partner, what appealing characteristics, body type, skin tone, hair colour etc.
There are an enormous number of questions to be asked before we can even begin to define the act itself in any sort of meaningful digital/analytical way and an even bigger number of answers to those questions.

The complexity of the analysis puts us off the act itself.

If we appreciate the possibility that sex may take place and we want it to happen then we just have to create the right environment, and it will happen.
Ignore the complexities because it is what people want to do, their natural behaviour will make it happen, all we have to do is create the right environment.
In this case, just turn off the light and walk away.

If you keep coming back to check on progress, there won’t be any.

In the same way at work, to allow people to perform to their full potential, give them the space that they need to do their job, and don’t keep coming back to check on progress.You will be amazed at what happens because people actually want to do a good job, they want to be proud of what they do.

To summarise, people are very complex, when several people interact the situation is even more complex.
When we try to control people we will always fail because we have no way of controling their complexity.

If however we find out what it is that they want then with very little effort we can create the environment that makes it easy for them to achieve their goal.

Most managers spend their time and effort trying to force the workforce to do what they want.
If they found out what the workforce wanted, to be proud of what they do, and spent their time instead creating the environment that allowed them to become proud, then the difference in their performance would be astonishing.

By continually interfering and trying to control the workforce, management are actually destroying their ability to do their jobs.

By doing less, management can achieve so much more.

Peter A Hunter – Author, “Breaking the Mould”

Sunday, July 29, 2007

Business Intelligence-Session3

To view the previous sessions click on the following:
Session 1
Session 2

Why BI?

Recent surveys and articles in a variety of magazines, both the USA and Europe, suggest that up to 25% of Enterprises are at some stage of a Business Intelligence deployment, and that the figure for those intending to deploy in the near future may take this up to more than 60%. Given the relatively sluggish levels of activity in the technology market these seem to be remarkable figures, so just why is there such interest and enthusiasm for Business Intelligence?

ITToolbox Survey:

The 2007 ITToolbox Survey on Business Intelligence & ETL Purchasing was conducted from March 19 to April 11, 2007.
IT and business professionals worldwide were recruited directly from the ITToolbox community to participate in this online survey.
Of the IT and business professionals who participated in the survey,
over 89% indicate that BI solutions are taking on a greater role in their organizations;
over 60% expect their organization’s BI budget to grow by 15% or more;
40% indicate that erroneous data is one of the most significant ETL-related challenges.


Business Intelligence Tools assist organizations to improve their overall performance by helping them to plan, track, monitor, analyze and report the business activities. These tools improve customer relationship management thereby increasing company's profitability significantly.


A Business Intelligence Dashboard visually represents the key organizational performance data in a near real time, user friendly manner that can be understood instantaneously. Technically speaking, a Dashboard is a visual representation that reflects the Key Performance Indicators(KPIs) of interest for managerial review and not only that it enables them to drill-down further. Business Intelligence Dashboard is similar in function to a car dashboard in that it displays and provides access to the powerful analytical systems and key performance metrics in a form enabling business executives to analyze trends and more effectively manage their areas of responsibility.

Features of Dashboard:

A typical web based Business Intelligence Dashboard encompasses the following features:
Web based Interface: Managers can gain broad visibility into the real-time key measurements of a business with the help of this multi-window, intuitive and interactive interface.

Role Based View: Executives can clearly track their organization's overall performance against its goals.

Reports: Configurable, user-level as well as management-level reports.
Charting and Graphing: Dashboards are better known for their easy one-click charts and graphs that gives instant access to complex solutions.

Pre-defined Performance Metrics: All the Dashboards are built with the common pre-defined metrics by default which eases the business user in tracking the regular yet important performance metrics.

Benefits of using Business Intelligence Dashboard:
· Dashboards quickly convert and communicate the complex corporate data into a meaningful display of charts, graphs, gauges and other formats concurrently. ‘
· A dynamic, intelligence Dashboard will allow the managers to drill-down data to go deeper into the analysis. It eliminates the need to go through several reports, in one shot
· Dashboard gives a clear picture about how a company is performing in its critical areas.


Scorecards are similar to Dashboards in a way that it provides easy-to-understand, summarized, at-a-glance data for the managers and top officials to tell them about their company's present and past performance. Scorecards thus help to monitor the Key Performance Indicators accurately and to communicate the goals and strategies across the organization in an efficient and elegant manner. In a Business Intelligence environment, Scorecards allows managers to set metrics or targets and monitor them to see their impact on every department.
Balanced Scorecards:

A methodology created by Drs. Robert S. Kaplan and David P. Norton in 1992, is a management concept which helps managers at all levels monitor results in their key areas, including financial performance, customer knowledge, internal business processes and learning. It has been implemented in thousands of corporations, organizations and government agencies worldwide.


An electronic means to store a large amount of reference or historical data typically used to support the decision-making and information retrieval needs of an organization.

A data warehouse consists of three major components:
Tools to extract, transform, and load operational and external data sources, e.g., Oracle software and tools produced by Evolutionary Technology, Inc.
A warehouse in which to store the data.
Tools to reference and analyze the data in the warehouse.

Planning Process

There are several methods, techniques, and products that will take an organization through the data warehouse planning process. Each method is composed of four phases:

Phase 1 - Strategic Information Analysis.

Assess the scope of the system lifecycle effort by identifying its impact on the business. This phase defines the road map for subsequent phases.

Phase 2 - Planning and Design.

Effective planning relies on capturing the knowledge accumulated during the analysis phase. Armed with this information, system development team leaders can make intelligent design decisions.

Phase 3 - Constructing and Implementing.

Implementing a data warehouse is a tedious, labor-intensive effort. Close attention should be made on buy vs. build decisions to capitalize on commercial industry's knowledge. This phase articulates the delivery aspect of the data warehouse.

Phase 4 - Operations Support.

After the data warehouse environment is implemented, the tools must be tested and procedures developed to accommodate operation support. For example, this phase may consist of system management efforts related to systems growth, performance characteristics, and capacity requirements.

Next session we discuss Business Intelligence and Data Warehousing combined.....

The man behind Globalization and Marketing Myopia

Theodore Levitt

The term globalization was coined by Theodore Levitt through the article he wrote in the Harvard Business Review by the name "Globalization of Markets".He was an American Economist and a professor at the Harvard Business School.The term was in existence before also and used by various economists but it was popularized by Levitt and was full fledged brought into the business world.

Marketing Myopia(1960)

The Harvard Business Review paper written by Theodore Levitt was a landmark in the field a marketing.It gave the companies a broader outlook .The concept said that certain companies were so restricted in their vision.It recommended companies to be practical and that they must reconsider their vision and redefine the markets.It gave a new direction to the strategies executed by the companies.

Publications and Books by Levitt:
1. The Marketing Imagination
2. Marketing for Business Growth
3. The Third Sector: New Tactics for a Responsive Society
4. Marketing: A Contemporary Analysis
5. The Marketing Mode (1969)
6. Industrial Purchasing Behavior: A Study of Communication Effects (1964), and Innovation in Marketing

The Lifebuoy Brand-Session1

Launch of Brand and its evolution

The year: 1894. The place: United Kingdom. The person: Lord Leverhume.

Large quantities of Sunlight soap had begun to be manufactured at the original Levers soap factory in the UK. A large part of the residue was soap, good in quality. Lord Leverhume added rich red colour to it to produce a germicidal soap. Little did he know that his ‘new born’ would one day become one of the world’s most recognised brands.

Lifebuoy first came to India in 1895 in Bombay. It was an instant success.

Remarkably, over the next 109 years the brand has never veered away from its original platform. It has consistently stood for ‘Washing away germs to keep you protected and healthy’.

Constantly evolving and keeping pace with the times, the brand has undergone huge makeovers and still delivers a distinctive, compelling promise of health for the whole family.
Making a billion Indians feel safe and secure by meeting their health and hygiene needs is the mission of Lifebuoy.
The brick red soap, with its perfume and popular Lifebuoy jingle, has carried the Lifebuoy message of health across the length and breadth of the country.

The 2002 and 2004 relaunches have been turning points in its history. The new mix includes a new formulation and a repositioning to make it more relevant to both new and existing consumers.

The product moved from being a hard soap to a high Total Fatty Matter (TFM) soap that delivered a significantly superior bathing experience. While the higher TFM delivered greater lather, the fragrance, too, was changed to a warm, refreshing one that was rated significantly better on all parameters by consumers. The testing done prior to finalizing the perfume was one of the largest ever carried out in the history of Indian marketing – a sample size of approximately 6,000 consumers. The packaging was comprehensively changed in line with the brand positioning and moved from being a masculine, rugged looking pack to a softer, family pack. A well conceived advertising campaign supported the re-launch. The campaign was flagged off with an ad single-mindedly communicating that Lifebuoy had changed. This was followed by a series of ads highlighting how Lifebuoy fights germs better than ordinary beauty soaps.

The new Lifebuoy is targeted at today's discerning housewife with a more inclusive "family health protection for my family and me" positioning. Lifebuoy has made a deliberate shift from the male, victorious concept of health to a warmer, more versatile, more responsible benefit of health for the entire family.

At the upper end of the market, Lifebuoy offers specific health benefits through Lifebuoy Gold and Plus. Lifebuoy Gold (also called Care) helps protect against germs, which cause skin blemishes, while Lifebuoy Plus offers protection against germs, which cause body odour.

Green (with the goodness of neem and tulsi) and Lifebuoy Active Gold (with the goodness of milk cream). This is of course, in addition to Lifebuoy Active Red and Lifebuoy Active Orange, which are the trusted choice of millions. There is also the Lifebuoy liquid soap that ensures that hands are protected from germs.

Now Lifebuoy also has a talcum powder, efficiently delivering a promise of ‘All day protection from body odour, by fighting germs’.

The Lifebuoy franchise, through each of the products, has stayed true to its promise of meeting health and hygiene concerns.


The Indian soap market is huge, diverse and constantly evolving. In terms of benefits sought by consumers, the market can be divided into four broad segments – health, naturals, beauty and freshness. Within these there are three price ranges – discount, popular and premium.

Add to that the fact that there are over 300 brands in the market, with a plethora of ‘local’ players in each state and the marketing maze that emerges begins to look very daunting. Given this multi-dimensional, fragmented market, it is indeed, very hard for any one brand to become a clear leader.

But successful brands rely on continuous innovation to maintain their competitive advantage. Lifebuoy has been a pioneer in this market and has constantly innovated to keep it in tune with changing market needs. But even as it has evolved Lifebuoy has stayed true to its vision.

In spite of operating in a crowded market, this power brand has a chunky share of around 21% of all soaps sold, underlining its universal appeal.

Making a billion Indians feel safe and secure by meeting their health and hygiene needs is the mission of Lifebuoy.

Delighting consumers everywhere

Indira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just back from the nearby jungles, collecting firewood. After attending to her baby son, she will go to the village well to take a quick wash. Yesterday her husband brought her a red lifebuoy soap. Indira had requested him to buy one, for the festival later this evening.

Indira is among millions of consumers in rural India who use Hindustan Lever's products. She came to know about lifebuoy through the TV set at the community centre. It is not very costly, and also available nearby.

Home to over 700 million people, rural India comprises not only over 70% of India's billion-strong population, but also over 12% of the world's population. The rural population already accounts for substantial consumption of Fast Moving Consumer Goods and also consumer durables. About 50% of the sales of soaps & detergents are generated in rural India.

To Be Continued in next session

Saturday, July 28, 2007

What is Entrepreneurship???

What is the Entrepreneurship???

That is the question that has been pounced on me many times. Most of times by professors. But more than the times it was pounced, I got the variety of definitions from them. Some of them are :

  • Its about risk taking capacity

  • Its about vision

  • Its about craving to do something different in life

  • It’s a lust to earn money

  • It’s a need to be your own boss

  • Its all about luck

  • Its …………………………

But, according to me
“It’s a mental disease, which masses are suffering from. The only unlucky ones are the few on whom the antibiotics doesn’t work.”

Yes, that is what I have realized till now. It’s a pure mental disease.
From the very start of the life, we are taught to be disciplined, to be good worker, to be good employee, to earn enough in the life.
But, this very teachings are the antibiotics I am talking about.

Our environment, forces us to be what we are not supposed to be. We go to schools. But question is why??? Is it education.

The answer is big NO

The reason behind putting up the schools, originated in Industrial Revolution times. The very reason behind setting up schools was not to educate, but to tame the free man we were. Yes, the industrialists wanted the tamed human slaves for their boring, repetitive and fruitless jobs. But lemme clarify one thing here, Job Means Security. But, so it means chains.

Yes, that is the pretty notion of mass slavery via schools till date. One can get better insight into it by the classic work of Alvin Toffler ‘The Third Wave’.

But, then again what are the ingredients of Entrepreneurship:

  • Courage

  • Courage

  • And only Courage

Here I will like to quote one line “ Your Heart is born free!!! Have the courage to follow it” by William Wallace
I think that is entrepreneurship all about.

I have seen all the entrepreneurs start with one cynic Junoon i.e. to follow their heart. They are called Psychos, Crazies, Unfit for society, and sometimes even evil. But, that’s just the start. The moment they become successful, the very terms used by the people for them just transforms in the meaning. They say yes one needs to have Junoon to be entrepreneur.

So, if one digs deep into the lives of the great Entrepreneurs like Dirubhai Ambani, Bill Gates, Akio Morita, L N Mittal, one will find the common element they were having. It was the mental disease, nothing less nothing more.

And then the fancy names like Intrepreneurship, Social Entrepreneurship, Technopreneurship comes into picture. But again, if we get into lives of Intrepreneurs like Jack Welch, we will find the same element of mental disease there.

Now the question is, whether this disease is good or bad. I will say here, its fatal. And only the people with the more fatal craving then the disease can bear it. So, think ten times before even thinking of going for it.

At last I will say, Entrepreneuship can’t be taught, it can only be experienced.

Have a disturbing Diseased Sleep

The Growth Prospects & The Role of Non-Banking Finance Companies (NBFCs) in financing commercial vehicles/ construction equipments-Continued

To view the previous sessions on the topic click on the following
Session 1
Session 2

I understood why he failed and became a defaulter. He failed because he chose wrong vehicle for his transport business. But the question is – how an experienced transporter like him could make a mistake in choosing a vehicle? I tried to find out the answer from him. He told me that Tata Dealer had given huge discount on this vehicle and Tata Finance had financed 90% and took 10% only towards down payment. Probably the discount given by the dealer lured him to buy the vehicle. Dealer certainly had achieved its sales target by selling the vehicle to this transporter but what Tata Finance got from this business transaction? In my opinion, Tata Finance failed to appraise the loan proposal and they themselves converted one of their good customers into a defaulter.

I decided to finance this transporter on one condition that he will buy the vehicle, which I will select for him. He had no option but to agree. When I financed this transporter, many of my friends in NBFCs including Tata Finance were surprised. In fact, the Tata Finance official when he met me in our association meeting asked me how I could finance a sick party. I told him that the transporter did not look like a “Sick Party” to me. I considered the transporter as “Sikh Party” and therefore approved the loan. My assessment about this transporter proved correct later on. This transporter not only paid all instalments on time, he took loan for four more vehicles from us. I helped him grow from a small transporter to a large fleet owner while we made profit all along. Later on Tata Finance approached him and offered him loan at lower rates with 90 days moratorium period but the transporter refused to accept the offer. I would like to draw your attention to the learning outcome of this case. If you want to do the business with customer then you must understand customer’s business first. Please remember if you provide your customer a “win-win” situation, you will never fail in your business. You will grow with your customers.

I will now talk about the marketing strategy for how NBFCs can compete with banks. You all have studied marketing, and therefore I need not tell you how to begin. I think it would be appropriate to understand the business environment prior to formulating the marketing strategy. Cumulative sales of commercial vehicles in the domestic market for the fiscal year were 1,07,745 nos., an increase of 57.8% over the corresponding period last year. Cumulative M&HCV sales stood at 62,201 nos., an increase of 52.8% over the previous year while LCV sales for the period were 45,544 nos., an increase of 65.4% over the previous year. Export of Commercial Vehicles increased by 36% to 40,581 units in the 2005-06 as compared to 2004-05.
According to the Economic Survey of Government of India, the Automobile Industry is growing very fast. Commercial vehicle market is also likely to grow very fast. Let’s consider some of the factors that may affect the growth of commercial vehicle market. Golden Quadrilateral project, which is near completion, will certainly enhance the demand of HCVs particularly the multi-axeled heavy vehicles. On the other hand Indian Railways Freight Corridor project will reduce the demand of HCVs particularly the multi-axeled heavy vehicles. According to the proposed project plan, the first phase of freight corridor (2,800 kms) will connect New Delhi – Mumbai and New Delhi – Howrah. The proposed freight corridors of second phase are Howrah – Mumbai, Howrah – Chennai, Mumbai – Chennai and New Delhi – Chennai. If both these projects (GQ & FC) are implemented by the year 2010, what would happen to commercial vehicle market? New Delhi-Mumbai is one of the high-density transport corridors of India, and rail as well as road capacities are fully stretched on this route. On an average, a total of about 9,000 loaded trucks move over this corridor every day. The proposed dedicated freight corridor would support 15,000-tonne trains with 30-tonne axle loads. This will affect the HCVs demand adversely. However, the main constraint of the proposed system is that the freight corridor network will neither be connected to centres from where goods originate nor will it be linked to their final destination points. In other words, to be successful, the freight corridor network will need feeder services to connect it with both goods originating centres like ports or factories/ market and final destination points where the goods are consumed. Therefore, the demand for HCVs will be affected but not drastically. Freight corridor is least likely to affect the demand of LCVs & MCVs. As a matter of fact, I would like to tell you that the freight corridor project provides huge business opportunity to NBFCs to finance an “integral component" of this project and make profit but I will not go into the details of this. I think I should discuss the topic given to me.
Now, let’s come straight to the STP. Which segment NBFCs should target? Segment A - established fleet owners who have access to the bank finance or Segment B – Individual operator/ small transporters (one/two vehicles owners) who do not have access to the bank finance. NBFCs may choose to operate in a particular segment or both the segments. I think you do not need any tips from me, if NBFCs decide to operate in segment B only. If NBFCs decide to operate in segment A, then we need to discuss the strategy. How they can compete with banks? How they will position their products (loan/finance) in this segment? Can an NBFC match the rate of interest offered by the banks? The answer is NO. So, how to sell the finance/loan to segment A? I am asking you, can we use differentiation here? Can we apply the concept of “total value approach”? Yes you are right, we can, but it is not all that easy. NBFCs will have to do a lot of homework to prepare the ‘total value” of finance so that they can differentiate their offering with that of their competitors (banks). NBFCs need to identify something, which their competitors (banks) cannot do but an NBFC can. Banks can sell the finance only whereas NBFCs can sell finance as well as vehicles. When I was working with MGF I realized our core competence – our expertise to market commercial vehicles. Using our core competence we successfully created sustainable competitive advantage (SCA) in the finance (loan) market. Besides being an NBFC we were Telco dealers also. We not only marketed Tata commercial vehicles but we financed them also. In a sellers market this was a great competitive advantage for us. It takes the same amount of efforts, time, energy and cost to sell the finance (loan) and the commercial vehicle. NBFCs can become the marketing arm of the commercial vehicle/ construction equipment manufacturer through a strategic alliance. The financial gain from the manufacturers can be used to structure the offering (finance/loan) to customers at competitive rates and probably can be matched with banks rates in terms of total value. Signing an alliance agreement with a manufacturer is easy job but the implementation of this is not all that easy. NBFCs will have to develop a marketing team of professionals who can sell commercial vehicles (construction equipments/ capital goods) as well as finance in a highly competitive environment. Developing, motivating, managing (retaining), and leading a technical sales force is a highly skilled job. Selling commercial vehicle/ construction equipments finance/loan is like selling projects. One must have the knowledge of commercial vehicles/ construction equipment, its standard operating condition, cost & return, operating condition, cost & return under the given business situation, and viability in terms of ROI. Accordingly, commercial vehicles & construction equipments loan appraisal & disbursement decisions are made. I would to share with you my experience as an example that will help you understand importance of product knowledge in financing. We had financed a Tata-Hitachi excavator to a Mumbai based construction company for their project in Karnataka. This company got another Tata-Hitachi excavator financed from us for its new project (gypsum mining) in Rajasthan. Though I had approved the loan proposal, I told my branch manager that this party will have difficulties in making repayments during the period May – July and therefore he should inform the party in this regard. He got little surprised and asked me had I seen the party’s horoscope. I told him I had not seen the party’s horoscope but I had seen the excavator’s horoscope. My prediction came true and my branch manager asked me how I could predict so correctly. Then I explained him the meaning of excavator’s horoscope (i.e. operation manual). Those days Tata-Hitachi excavators were fitted with simple 697 turbo engines which had many limitations. During the period May-July temperature around the gypsum mines area (near Sikar) goes up to 48-50 C which affects the hydraulic mechanism of the excavator. Therefore this excavator can be operated at nights only during this period. Obviously, this limitation of operation had great impact on party’s earnings from this excavator. It is clear from this example that the expertise in selling excavator facilitated the loan proposal appraisal & management process. Many NBFCs (like MGF, SFL, CFL etc.) have been doing this and are successful.

Wednesday, July 25, 2007

The Next Battle Ground Of Business

Hello friends

Gone are the days when the people used to ask professors the questions. Gone are the days when the teenagers used to ask the questions to the parents about sex. Gone are the days when there was something called confidential. Gone are the days when we were rooted to paper. Gone are the days when degree was essential for the job. Gone are the days when Management was all about manpower. It’s the Information Age. And if Information is the power then Google is God.

But is it so???

Is the Google, unchallenged or can be remain unchallenged???

Is it the end of human evolution????

Is it all???


Anybody will today might feel that we are the best human generation ever lived. We are having the best resources, best lifestyle, best of best. But the question is how long???

Is it all about information?????

The answer is again NO.

It’s all about feeling. By internet I can tickle only three senses of mine i.e. visual, typing and audio.

But, wat if I want more? I want to feel the world. I want to be wat I can’t be. I want to do, wat I can’t do. I want to look, wat I can’t look.
The answer is simple. It’s Possible.

The answer lies in SECOND LIFE.

Being a management student, I have been taught different communication channels, different strategies, 4 P’s. But, I always asked one thing- Wat about Feelings????

The answer has finally come in the form of VIRTUAL REALITY.

I m not talking about Matrix. Or I might be. But it’s not the matter of narration; it’s the matter of experience.

Go to www.secondlife.com and see it yourself. Yes, it’s the virtual reality world finally created. And, the companies are after it. Now, the new dimension is being added to management i.e. Virtual Dimension.

The companies are already fighting here for land, for people, for employees, for businesses and above all impressions. Yes, the companies like Reebok, Adidas, are already there. They are fighting cut throat to capture the business there.

Is it all about feeling???

No, it’s all about money!! Honey!!!

The site statistics

Total Residents: 8,360,141

Logged In Last 60 Days: 1,682,527

Online Now: 35,222

US$ Spent Last 24h: $1,502,626

LindeX Activity Last 24h: $220,674

It has its own currency known as Linden Dollar. 1 US $=250 Linden Dollars

It has its own stock exchange Linden Exchange.

Is it all???

Big No.

The Business Opportunities available here are:

  • party and wedding planner
  • pet manufacturer
  • casino operator
  • tattooist
  • nightclub owner
  • automotive manufacturer
  • fashion designer
  • aerospace engineer
  • custom avatar designer
  • jewelry maker
  • architect
  • XML coder
  • freelance scripter
  • game developer
  • fine artist
  • machinima set designer
  • tour guide
  • party and wedding planner
  • dancer
  • musician
  • custom animation creator
  • lottery operator
  • theme park developer
  • real estate speculator
  • vacation resort owner
  • advertiser
  • bodyguard
  • magazine
  • publisher
  • private detective
  • writer
  • gamer
  • hug maker

And these are very few of the possibilities.

The revolution has just started, and Linden Labs are the first movers, but I don’t think it will stop here. It will be next battle ground for Business Giants like IBM, Google, and Microsoft. Let’s see who will win. But it doesn’t matter who wins, ultimately the glory will be ours.

Am i saying it by reading some magazine????????

Big NO

I m saying this by actually going and living in the second life for more than 100 hours. I m saying this by marrying a french lady in second life. I m saying this after earning as private detective in second life.

Now its up to you whether You ignore it or embrace it. But one thing is for sure You can't avoid it.

The Permission Marketing—The Way to Make Advertising Work Again

Using the concepts of Permission Marketing, we can turn the clutter to our advantage. In fact more the clutter increases, more profitable permission marketing efforts become. Switching to Permission Marketing can change entirely the business model of the company and its profit structure.

We are running out of time
In any era, the profit is made on that resource that is scare. Great industrialists earned their millions by providing what the market demanded. We need two things in
order to have an economy: first one is the people who want the goods, and secondly there should be the scarcity of those goods. Without scarcity there is no basis for any economy.

There is one resource that is in chronically in short supply. This scarce resource is Time. And light of today’s information glut, which means there is a vast shortage of attention.
This has created a unique situation, where consumers are willing to pay more to save time while marketers are ready to spend more to get more attention.
Thus Interruption Marketing is the enemy of consumers who are trying to save their time. The alternative is Permission marketing, which offers the consumer an opportunity to volunteer to be marketed to. And it ensures that the consumers pay more attention to marketing messages. It serves both consumers and marketers in a symbiotic exchange.

Permission Marketing is anticipated, personal, and relevant.

Anticipated- People look forward to hear message from us.
Personal- The messages are directly related to the individual.
Relevant- The marketing is about something the prospect is interested in.

Permission marketing turns strangers into friends and friends into lifetime customers.

Five Steps to dating the customer

1)Offer the prospect an incentive to volunteer.
2)Using the attention offered by the prospect, offer a curriculum over time, teaching the consumer about our product or service.
3)Reinforce the incentives to get even more permission from the consumer.
4)Offer additional incentives to get even more permission from the consumer.
5)Over time, leverage the permission to change consumer behavior towards profit.

Permission is an investment

Nothing comes for free and that is true for permission marketing as well. Acquiring solid, deep permission from targeted customers is an investment. Most of the marketers to their chagrin have found out that cost of generating new customers is coming close to net present value of that customer. Thus they are responding by increasing the number of customers.

Permission Marketing cuts through the clutter and allows a marketer to speak to prospects as friends, not strangers. This personalized, anticipated, frequent and relevant communication has infinitely more impact than a random message displayed in a random place at a random manner.

Strategy & Human Behaviour

Hi friends,
This article is just an attempt to understand how strategy plays role in the human behavior. I don’t know whether I will succeed in this attempt or not. In any case do comment on this article, which will act as a feedback to me.

If we go back to the genesis of the modern strategy, we can’t miss the classical Article by Michael Porter. Its summary can be found here. The first perspective of this is that its about choosing different activities. So, if we see different people they either do different things or they do the things differently. Example: Somebody is a businessman, somebody is a social activist, somebody is an artist. Again in the category of businessman, activist and an artist we can see that different people act differently. In the case of businessman, some are silent movers, some are aggressive, some are hybrid. So why all this variation? The variation is due to the choice made by these humans either consciously or subconsciously. If we recall the Maslow’s hierarchy or needs then we will see at one hand human is having need for power and on the other need for affiliation. Now, the action of humans are driven by the dominant need. So, if somebody is having higher degree of need for power, the person will act accordingly ie. Aggressive manner. While if somebody is having higher degree of need for affiliation, the person will act in a slow pleasing manner.

Now what we can infer by this example is that the two needs are mutually exclusive. They can’t go hand in hand. So, in other words it’s a tradeoff. That is another critical element of strategy i.e. tradeoff.

Then the element of fit comes into the picture. One can’t exercise power if the whole set of chosen activities are not aligned into a strategic fit. Now, here it means one can’t be good and bad at the same time. The person needs to align all his activities to position himself in a particular manner in a particular field of work. For getting the work done in the shopfloor environment of production, person needs to be tough and dominant. And one can’t be perceived dominant, if at one place the person is liberal and easy going and on the other hand he is bossy. They are two different set of activities. So, normally the production guys need to align all their activities in order to position dominant perception. It can be reached by the type of hair style and moustache one keeps, the type of clothes the person wears, the way the person walks, the way the person talks, the way the person frowns, the way the person aligns his body language.

So, what we can understand by the article is the human behaviour when seen in the particular environment is the strategy the person has chosen. The sooner we understand it, better we can understand the corporate environment and better we can adjust into it.

So, friends it was just an attempt and I will wait for your feedback.


the growth prospects & the role of Non-Banking Finance Companies (NBFCs) in financing commercial vehicles/ construction equipments-Continued..

To view the first post on the same visit Session 1

Industrial slowdown and low agricultural output affected the sales of commercial vehicles adversely. Around this period CRB scam was unearthed which resulted in the downfall of NBFCs in India. People lost confidence in NBFCs and started withdrawing their deposits from them. These deposits were put with the banks though the banks were offering lower rates of interest. Many NBFCs could not refund the deposits to their customers and they disappeared suddenly. RBI intervened and set guidelines for NBFCs for refund & closing of NBFCs. Almost five lacs people working with/for NBFCs lost their jobs. Banks were flooded with funds. Eventually, Interest rates went down. Many professionals who had experience of working with NBFCs joined banks, and banks started financing commercial vehicles at lower rate of interest.

1991 Liberalization policy of Govt. of India fueled the process of industrialization in India. As a result, the demand of commercial vehicles further increased. Many automobile companies have now started manufacturing commercial vehicles. The business opportunity is so huge that a Tea Estate Company from the eastern part of country diversified and has set up manufacturing unit in Gujarat to manufacture commercial vehicles. Presently there are nine commercial vehicle manufactures in India producing a wide range of commercial vehicles. Banks have started financing the commercial vehicles in a grand way. Very few NBFCs have survived. Earlier the competition was among NBFCs, but now the competition is among the banks. Now, money lending (vehicle finance) is the main business for most of the banks.

How NBFCs can compete with the banks? The banks offer lower rates of interest, which NBFCs cannot match. Today, it is very difficult for an NBFC to sell finance to potential customers (fleet owners/ transporters) who have easy access to bank finance. Why should a transporter take finance from an NBFC at a higher rate when he is able to get the same from the bank at a lower rate? In other words, only those transporters will take loan/finance from an NBFC who are unable to take any loan/ finance from the banks. Now, the question is – if an NBFC has to continue in this business, which customer segment should it target and how it should market (sell) the loan/ finance?

I think it would be appropriate for you to first understand what is commercial vehicle financing? How does it differ from other financing say car financing for an example? Then I will talk about marketing strategy for NBFCs. Commercial vehicle finance is more or less like industrial finance. The borrower is primarily concerned with the “commercial value” of the loan/finance. Commercial vehicle or construction equipment is like an industrial unit. The borrower will make the profit first from the unit/ vehicle and then he will repay the loan/ finance from the profit. In case of car finance, the borrower repays the loan/finance from the savings. The car customer may seek “social and/or convenience value”. In business management language, a transporter takes the loan (financial resource) to buy the commercial vehicle/ construction equipment (technical resource/ machinery), and he operates the vehicle (combines these resources with his capabilities) to make money/profit. Therefore, in order to be successful in transport business, a transporter must have the adequate financial (loan/ finance), appropriate technical (vehicle/machinery) resources, adequate capabilities, and the expertise to combine the resources with his capabilities in a unique manner to make profit. We as financiers have to consider four things while appraising a loan/finance proposal for commercial vehicle/ capital equipment.

Whether the financial resources (loan/finance amount) are adequate or not?
Whether the technical resources (commercial vehicle/ capital equipment) are appropriate or not?
Whether the hirer (transporter) has the required capabilities (can operate the vehicle) or not?
Whether the hirer has the expertise (experience in transport business) to combine the resources with his capabilities in a unique manner to make profit or not?

I have practiced this method of commercial vehicle loan appraisal and I have never failed in my assessment. As an example, I would like to share with you my experience that I have on this issue of loan/ credit appraisal. There was a small transporter who had three Tata vehicles and the Tata Finance financed all these vehicles. He purchased another Tata multi-axled vehicle through Tata Finance but he was unable to pay installments in time. He became a defaulter and ultimately the Tata Finance repossessed his vehicle. He sold one of his vehicles to settle the loan account with Tata Finance. After sometime he again approached Tata Finance for loan to buy a new vehicle. Tata Finance rejected his proposal considering his track record and declared this transporter as “Sick Party”. This transporter approached other NBFCs but no one was willing to finance this transporter because of his image as a defaulter. One day he came to see me in my office. He showed me the proposal file with remark “Sick Party – Proposal rejected” written on it by the Tata Finance official. He explained to me his situation and requested me to consider his case. I appreciated his honest approach, as he did not hide anything from me. I heard him and then analyzed his case (failure to repay the loan) on the following four criteria:

1) Whether the transporter had adequate financial resources (loan amount) or not?
I found the amount of loan/finance given to him by the Tata Finance was sufficient.

2) Whether the transporter had appropriate technical resources (commercial vehicle) or not?
I found that the Tata vehicle that transporter had purchased was not meant/ suitable for the application transporter had used for. Commercial vehicles are designed for specific applications and therefore careful selection of right vehicle is very important for the success in transport business.

3) Whether the transporter had the required capabilities (can operate the vehicle) or not?
I found that the transport belonged to a community, which dominates transport business in India. People belonging to this community usually have high entrepreneurial skills.

4) Whether the transporter had the expertise (experience in transport business) to combine the resources with his capabilities or not?
I found that the transporter had the expertise to manage the transport business.

Next Session(Session 3)

Tuesday, July 24, 2007

Managing Brand system

Managing brand is the very strategic and grueling task. Deciding whether to introduce a new brand name involves gauging the trade-off between the value that the brand might create and the cost that it might incur. Any organization must explore on the following questions before doing so:
1. Is the brand sufficient different to merit a new name?
2. Will a new name really add value?
3. Will an existing brand be placed at risk if it is used on a new product?
4. Will the business support a new brand name?

A house of brands is like a family and each needs a role and a relationship to others. The brand role can be described as:

Driver Roles: A driver brand is a brand that drives the purchase decision; its identity represents what the customer primarily expects to receive from the purchase. The brand that plays the driver role represents the value proposition that is central to the purchase decision and use experience.

Endorser role: In the endorser role, a brand provides support and credibility to the driver brand’s claims.

Strategic brands: It is very important for the future performance of the organization. There are two main reasons why the brands are considered as strategic, first is it represents a meaningful quantity of sales and profits in the future and the brand could also be a linchpin of other businesses or of a future vision of the firm.

Subbrand roles: A subbrand is a brand that distinguishes a part of the product line within the brand system. The subbrand should be consistent with and support the parent brand’s identity.

Branding benefits: The problem facing many brands is that their identity is difficult to communicate because it lacks distinctiveness, credibility, or memorability. The solution for these lies in branding features, components or service programs that provide customer benefits.

Silver bullets: A silver bullet is a subbrand or branded benefit that is employed as a vehicle for changing or supporting the brand image of a parent brand.

The Growth Prospects & The Role of Non-Banking Finance Companies (NBFCs) in financing commercial vehicles/ construction equipments

I am publishing the excerpts of a speech by Prof B Raj on his permission and recommendation.

About the Author:
Mr. B. Raj has worked with leading NBFCs and automobile companies in India & abroad. He has done extensive research (at doctorate level) in the area of marketing (automobile consumer behaviour). He has been associated with leading business schools in India & abroad.

The Article:
I have seen closely and felt the rise and fall of NBFCs in India. There was a time (in the ‘80s) we used to lend money at 40% IRR and operated in a sellers market i.e. there was acute shortage of commercial vehicles and non-availability of finance from the banks. Those days the credit appraisal was limited to assessing the hirer’s ability to make the down payment (usually 20% of value) only. Customers (hirers) would sign blank agreements, pay hefty service/ finance charges, and were made to visit the financier’s office to collect the D.O. (Delivery Order) everyday. After making a numbers of visits, customer would get the D.O. from the financier’s office. This was the time when banks were reluctant to lend money to the transporters. NBFCs had taken full advantage of this situation and made above average profits by financing commercial vehicles. I would like to mention at least two NBFCs, MGF in New Delhi and GNB in Kolkata (Calcutta), which could identify this opportunity and developed expertise to make money by taking calculated risks in financing commercial vehicles. The supply and demand gap and the resulting price hike helped these NBFCs to set off their risk in lending money to transporters (mainly the one/two vehicle owners). If a hirer became a defaulter, the NBFC would repossess the vehicle and refinance it to another customer or would sell the vehicle to recover its dues. NBFCs never incurred any losses in selling a repossessed commercial vehicle due to the shortage of vehicles in the market & price hike. Many of you will not believe what I have experienced in a sellers market. Can you imagine reputed vehicle manufacturer like Telco (now Tata Motors) could deliver the heavy commercial vehicles with four wheels and many a times without battery/fuel pump/spare wheel? The customers were at the receiving end and had no option but to accept the situation.

The two Heavy Commercial vehicle manufacturers (Tata & Leyland) both realized the situation and augmented their production capacities to meet the demand. While Telco focused on medium commercial vehicles, Leyland concentrated on heavy (multi axled) commercial vehicles. In the mid ‘80s, the arrival of Japanese LCVs in India inspired both the domestic manufacturers to produce LCVs. This not only affected the freight market, but redefined the commercial vehicles market also. The demand for medium commercial vehicles started shrinking and the demand for LCVs & HCVs started growing. Initially Telco capitalized on LCVs and Leyland on HCVs. But soon they realized their mistake. Telco introduced multi-axled vehicles (2213 range) and Leyland introduced LCVs (Cargo series). This accelerated competition in the commercial vehicle market. Severe marketing war started between the two manufacturers to gain the leadership in commercial vehicles market.
The availability of finance/loan has always been the key factor responsible for sale of commercial vehicles. Accordingly Telco made a strategic move to make the finance/loan available to the transporters through its four channels. First, Telco started its own finance division (known as Telco-BHPC), Second Tata Finance, Third a joint venture NBFC with its leading dealers (known as TDLF), and fourth a joint venture with MGF (known as JCL) mainly to finance Tata-Hitachi excavators. This strategy worked successfully and Telco could retain the major chunk of the market share in LCV & MCV segment. On the other hand, Leyland could manage its sales through its own NBFC (known as ALFL) and its alliance with NBFCs like Sundaram & Cholamandalam finance. Leyland lost LCV & MCV competition to Telco. The market share of Leyland was not enough for Sundaram & Cholamandalam to justify their existence as NBFCs, therefore these NBFCs also started financing Tata vehicles for their own survival. Being the only manufactures of multi-axled heavy vehicles Leyland could maintain its leadership in this segment. The other technical reason for transporters preferring Leyland multi-axled vehicles was that Telco multi-axled vehicles had dummy axles, which were not popular among the transporters. Many NBFCs continued to grow during this period. I know of two senior executives of Citi Bank who left the bank and started an NBFC (known as 20th Century finance), which was also successful.
Continued in Session 2 and Session 3

Monday, July 23, 2007

What is Balanced Scorecard?

The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."

Human Resource Management-HR-Quality of Work Life

Quality of Work Life


The success of any organization is highly dependant on how it attracts, recruits, motivates, and retains its workforce. Today’s organizations need to be more flexible so that they are equipped to develop their workforce and enjoy their commitment. Therefore, organizations are required to adopt a strategy to improve the employees’ ‘Quality of Work Life’ (QWL) to satisfy both the organizational objectives and employee needs. The strategies could be to reflect the differences, the gaps, between the hopes and expectations of a person and their present experience; it could be measuring the extent to which people's 'happiness requirements' are met or the degree to which a person enjoys the important possibilities of his/her life. In general, Quality of life is about feeling good and being satisfied with things in the work life.

What is Quality of Work Life?

The defining of quality of work life involves three major parts

Occupational health care

The safe work environment provides the basis for the person to enjoy working. The work should not pose a health hazard for the person. The employer and employee, aware of their risks and rights, could achieve a lot in their mutually beneficial dialogue.

Suitable working time

The working time has to be established by the state according to legislation. The standard limits on overtime, time of vacation and taking of free days before national holidays have to be separately stipulated. The differences regarding the working time have to be established for the persons less than 18 years of age, pregnant women, breast-feeding mothers and the person raising the disabled child.

Appropriate salary

The appropriate salary has to be agreed upon by the employee and the employer. The Government should establish each year the rate of minimum salary & the employer should not pay less than that to the employee.
Work Life Balance
Work-life balance is different for everyone. For some it may mean more work, for others less. It may be that organizations want productive workers, responsible workers but the ultimate aim must be at providing a high quality of work life to its employees. It means a work that liberates, rather than limits, the individual. Contemporary society offers plentiful opportunities for freedom of expression, choice of lifestyle, and individual consumption patterns. But on the work front, progress towards freedom has been patchy. The quality of work in human development needs to be urgently re-evaluated. For most people, work is not just a way to pay the bills but an opportunity to associate with others in a joint endeavor, to define ourselves and develop new skills. Having won freedom in most areas of life, the fight for occupational freedom is the last liberal battle.

In order to have a high quality of work-life a work life balance should be maintained. Work-life balance is a person’s control over the conditions in their workplace. It is accomplished when an individual feels dually satisfied about their personal life and their paid occupation. It mutually benefits the individual, business and society when a person’s personal life is balanced with his or her own job. The quality of work-life is affected by stress at workplace. The major causes for stress at the workplace are:
Ø Foremost, the type of tasks an employee is engaging in can create job stress. For example, hectic and routine tasks have little inherent meaning and offer little sense of control for the employee. Heavy workloads, long work hours and infrequent rest breaks also create stress.
Ø Secondly, a lack of support or help from supervisors and coworkers creates a poor social environment and consequently, greater job stress. Physical isolation also reduces an employee’s ability to interact with others, thus diminishing a person’s ability to receive help.

Ø In addition, if an employee has little input in decision making processes and the job environment lacks communication between the employer and the employee, an individual is more likely to experience job stress.

Ø A person’s individual role in a business can also create stress if their job expectations are unclear or they have too much responsibility. It might be difficult to satisfy the customer’s needs and the company’s expectations simultaneously.

Ø Additionally, if an employee feels there is a lack of opportunity for growth or promotion, job stress might result from their inability to advance in the workforce.

The physical conditions of an individual’s job can also create job stress. For example, crowded, noisy or polluted locations are unpleasant and dangerous conditions that would most likely lead to job stress.

More on this in the next posts.....
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