HDFC Bank Limited

Posted by Indraneel

HDFC Bank is a commercial bank of India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India.

Tata Consultancy Services

Posted by Indraneel

Tata Consultancy Services Limited s a software services and consulting company. It is Asia's largest provider of information technology and business process outsourcing services. The company is listed on the National Stock Exchange and Bombay Stock Exchange of India

Colgate Palmolive

Posted by Siddharth

Colgate Palmolive is an American diversified corporation focused on the production, distribution and provision of household, health care and perso19nal products, such as soaps detergents and oral hygine products.

Reckitt Benckiser

Posted by siddharth

Reckitt Benckiser (RB) is a global consumer goods company, making and marketing home,health and personal health care products. The comapny's strategy is to have a highly focused portfolio concentrating on its 17 most profitable brands, which were responsible for 62% of net revenues in 2008. The brands which RB refer to as powerbrands are: Vanish, Finish, Calgonite, Air Wick, Dettol, Veet, Clearasil, Gaviscon and Nurofen.

Industrial Development Bank of India Ltd (IDBI)

Posted by Siddharth Roy

The Industrial Development Bank of India Limited commonly known by its acronym IDBI is one of India's leading public sector banks and 4th largest Bank in overall ratings. RBI categorised IDBI as "other public sector bank".

Showing posts with label Marketing Concepts. Show all posts
Showing posts with label Marketing Concepts. Show all posts

BLUE OCEAN STRATEGY

Posted by Siddharth Roy On Monday, September 21, 2009 1 comments



Welcome to the depths of the ocean...an ocean which have been created by strategies. The book Blue Ocean Strategy is the brain child of W. Chan Kim and Renee Mauborgne. The authors tries to segregate the markets into two parts the first being the Blue Ocean and the latter being the Red Ocean. Blue Ocean Strategy is a way to make the competition irrelevant by creating a leap in value for both the company and its customers. The terms red and blue oceans to describe the market universe. Red oceans are all the industries in existence today—the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of existing demand. As the market space gets crowded, prospects for profits and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean bloody. Hence, the term “red” oceans.


Blue oceans, in contrast, denote all the industries not in existence today—the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored. Like the “blue” ocean, it is vast, deep, powerful, in terms of profitable growth, and infinite.
But the question here lies that how does blue ocean strategy fundamentally differ from red ocean strategy?
To sustain themselves in the marketplace, red ocean strategists focus on building advantages over the competition, usually by assessing what competitors do and striving to do it better. Here, grabbing a bigger share of a finite market is seen as a zero-sum game in which one company’s gain is achieved at another company’s loss. They focus on dividing up the red ocean, where growth is increasingly limited. Such strategic thinking leads firms to divide industries into attractive and unattractive ones and to decide accordingly whether or not to enter. Blue ocean strategists recognize that market boundaries exist only in managers’ minds, and they do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. The crux of the problem is how to create it. This, in turn, requires a shift of attention from supply to demand, from a focus on competing to a focus on creating innovative value to unlock new demand. This is achieved via the simultaneous pursuit of differentiation and low-cost. Under blue ocean strategy, there is scarcely an attractive or unattractive industry per
se because the level of industry attractiveness can be altered through companies’ conscientious efforts. As market structure is changed by breaking the value/cost tradeoff, so are the rules of the game. Competition in the old game is therefore rendered irrelevant. By expanding the demand side of the economy new wealth is created. Such a strategy therefore allows firms to largely play a non–zero-sum game, with high payoff possibilities.

Blue and red oceans have always coexisted and always will. Practical reality, therefore, demands that companies understand the strategic logic of both types of oceans. At present, however, competing in red oceans dominates the field of strategy in theory and in practice. Part of the reason traces back to the historical foundation of business strategy—war—where territory is defined and limited and opponents compete to protect and enlarge their share of limited and existing terrain. This focus on beating the competition in existing market space was exasperated by the meteoric rise of the Japanese in the 1970s and 1980s. Faced with mounting competition in the global marketplace as, for virtually the first time incorporate history, customers were deserting Western companies in droves, the center of strategic thinking gravitated further towards the competition. A slew of competition-based strategies emerged which argued that competition is at the core of the success and failure of firms, and that competition determines the appropriateness of a firm’s activities that can contribute to its performance.

What BLUE OCEAN STRATEGY seeks to do is to make the creation and capturing of blue oceans as systematic and actionable as competing in the red waters of known market space. For although blue ocean strategists have always existed, for the most part their strategies have been largely unconscious. Blue ocean strategy seeks to remedy this by not only decoding the pattern and principles behind the successful creation of blue oceans, but also providing the ana lytical frameworks and tools to act on this insight.

Now let us understand the fact that whether this strategy is actually helpful or not in the present context.

Prospects in most established market spaces—red oceans—are shrinking steadily. Technological advances have substantially improved industrial productivity, permitting suppliers to produce an unprecedented array of products and services. And as trade barriers between nations and regions fall and information on products and prices becomes instantly and globally available, niche markets and monopoly havens are continuing to disappear. At the same time, there is little
evidence of any increase in demand, at least in the developed markets, where recent United Nations statistics even point to declining populations. The result is that in more and more industries, supply is overtaking demand. This situation has inevitably hastened the commoditization of products and services, stoked price wars, and shrunk profit margins. According to recent studies, major American brands in a variety of product and service categories have become more and more alike. And as brands become more similar, people increasingly base purchase choices on price. People no longer insist, as in the past, that their laundry detergent be Tide. Nor do they necessarily stick to Colgate when there is a special promotion for Crest, and vice versa. In overcrowded industries, differentiating brands becomes harder both in economic upturns and in downturns.

Is blue ocean strategy applicable to all types industries including businesses that are several steps upstream from consumers?

Yes, blue ocean strategy applies across all types of industries from the typical suspects of consumer product goods to b2b, industrial, pharmaceutical, financial services, entertainment, IT, and even defense. BLUE OCEAN STRATEGY drives this point home by highlighting a rich array of companies creating blue oceans across diverse, and unexpected, industry domains from NetJets in jet travel, to NABI in the municipal bus industry, to Cemex in cement, to Joint Striker Fighter in defense, to Cirque du Soleil in entertainment. Our experience further suggests two interesting findings with respect to businesses several steps removed from the final consumer. First, companies in these industries tend to view their businesses as commodity businesses with little room to offer innovative value. This has effectively created a self- fulfilling prophecy in that the more these companies view their businesses as commodities, the more they treat their businesses as such. Secondly, we observed that the more removed companies are from the final
customer, the more levers there are to unlock innovative value as every company in that chain can be viewed as a customer. If a company can’t see an opportunity to unlock innovative value for the next direct customer in that chain, there are still opportunities to unlock innovative value for that customer’s customers, and so forth.

Last but not the least lest us ask that whether Blue Ocean Strategy new one or not?

Although the term blue oceans is new, their existence is not. They are a feature of business life, past and present. Look back one hundred years and ask yourself, how many of today’s industries were then unknown? The answer: many industries as basic as automobiles, music recording, aviation, petrochemicals, health care, and management consulting were unheard of or had just begun to emerge at the time. Now turn the clock back only thirty years. Again, a plethora of multibilliondollar industries jumps out—mutual funds, cell phones, gas- fired electricity plants, biotechnology, discount retail, express delivery, minivans, snowboards, coffee bars, and home videos to name a few. Just three decades ago, none of these industries existed in a meaningful way. Now put the clock forward twenty years—or perhaps fifty years—and ask yourself how many now unknown industries will likely exist then. If history is any predictor of the future, the answer is many of them.

CUSTOMER RELATIONSHIP MANAGEMENT

Posted by Siddharth Roy On Friday, September 18, 2009 0 comments


Customer Relationship Management (CRM) gained recognition in the mid-1990s, primarily driven by its perception as information technology (IT). However, not enough attention has been given to the fundamental drivers of CRM success: strategy, metrics and its organization.

Successful CRM is about competing in the relationship dimension- not as an alternative to having a competitive product or reasonable price- but as a differentiator. CRM can succeed by being SMART: defined a customer-centric Strategy, use appropriate Metrics; ensurining the organization is Aligned with the objectives of the company itself; Redesign work process as needed; and use appropriate Technology tools as enablers.

At a conference in London in May 2004, business strategy guru Michael Porter delivered a simple but a powerful message. Effective business strategy means being distinctive. How? Business strategy experts say that you can differentiate based on:

1. The core product service offering

2. The price or total cost of ownership; or

3. The total relationship and customer experience.

Staying ahead of competition solely through product leadership is becoming more and more difficult. In an interview with Fast Company, Porter stated, “It’s arrogant for a company to believe it can deliver the same sort of product that its rivals do and actually do better for very long. That’s especially true today, when the flow of information and capital is incredibly fast”.

CRM is a business strategy to acquire, grow and retain profitability customer relationship, with the goal of creating a sustainable competitive advantage. Product/price – based differentiation is waning because of four broad trends: maturing markets, global trade, effective manufacturing and the internet.

Now CRM is emerging as a critical strategy simply because relationships are coming to the forefront of the competitive battleground. CRM should mean creating mutual wins for customers and all the company stakeholders, including employees and business partners.

Frederick Reichheld, author of This Loyalty Effect and Loyalty Rules, found that loyalty leaders grow, on an average, more than twice as fast as the industry average across a wide variety of industries. And they do it more cost- effectively. The reason for this so-called “loyalty effect” is that loyal customers tends to spend more, cost less to serve and refer others. The net result is that loyalty leaders are head and shoulders above their competitors in growth and profitability. Leading examples according to Reichheld range from Harley Davidson to Enterprise Rent-A- Car.

The key question is: How does a company create loyalty relationship? Reichheld and other loyalty experts have studied this issue for years and concluded that loyalty attitude and behavior are driven by the customer’s perception of value, which is an amalgamation of what the customers receives; how it’s sold, delivered and supported; and how much it costs- the price or total cost of ownership. Experts in customer psychology say that customers’ emotional sates influence about 50 percent of the value them percent of the value they perceive.

Loyalty guru Reichheld had found one simple metric to be highly related to growth in most industries: the willingness of a customer to recommend the company (supplier or brand) to a friend or colleague. Using a 0 to 10 scale, a ‘net promoter’ score is calculated by taking the percentage of customer giving the company a score of 9 or 10 (promoters) and subtracting the percentage giving the company a score of 6 or below (detractors).

THE CUSTOMER VIEW OF VALUE

To be successful with CRM, a company must start by understanding and listen to their customers. In most cases the customers do not complain they just abandon the brand, the product, the supplier or the company itself. When a customer is dissatisfied the on an average he tells around 8-10 people about his bad experience thereby effecting the profits of the company. In this situation the customer stops giving any further business to the company and in-turn diverts to the competitor. On the other hand if a customer feels that he is listened to, the same customer might not only go for repurchases but even provide 3-5 referrals to the company. Then there is the third type of customers the ones who are delighted these are ones who helps the company to grow. These are the customers who provides the company with around 17-20 referrals over their lifetime.

Allow Foreign Direct Investment in Retail

Posted by Siddharth Roy On Thursday, September 17, 2009 0 comments

Allow Foreign Direct Investment in Retail.


FDI has been opened up in other sector of industry and the number of government approvals has been on the increase steadily. During the 1st seven months of 2004, there has been a net inflow of Rs. 9503 crores which is approximately 80% of total FDI inflow 2003. 2005 has also seen a lot of reform in this sector. With reforms like the increase of FDI cap in aviation from 40% to 49% the overall growth rate in 2005 has also been on similar lines. Press note 18-the restrictive regulation which required a foreign partner in an Indian joint venture to get the Indian partner’s no objection to start a new venture in the same field, has been abolished. In the retail industry however, the picture is not very rosy. According to an A.T. Kearney report, the market in India is estimated at around $225 billion out of which only a dismal 2% or $4.5 billion amounts for organized retailing. With the demography of IndiaIndia indicating a young population and an overall booming economy the spending power of the populace has increased. The need for new shopping environs and increased spending is bound to fillip the growth in this sector by 15% to 20% in the coming two to three years. Retail in is amongst the largest industries accounting for 10% of GDP and around 8% of employment.

With India on the global map for foreign investors around the world, there is a large amount of foreign capital waiting to pour in. India is listed 5th in the UNCTAD survey of favorable investment locations. In the retail scene, global conglomerates like Wal-Mart from US, Shoprite from South Africa have been eyeing the Indian market keenly. METRO GmbH, the German retail bigwig has opened shop inBangalore. Although fraught with regulatory restrictions, the METRO group with their “Cash & Carry” format has started business selling for resale and corporate purchases. The Foreign Investment Promotion Board of FIPB allows foreign investors to enter the market under the banner of test marketing products for a period of two years. Under these norms the FDI is allowed in wholesale cash & carry but not under the retail trade. With the similarities in the test marketing route to actual retail trading the commerce ministry is hoping to scrap this test marketing route to plug FDI in retail trading.

The entry of METRO GmbH had sparked of protests from the left wing. The company has been accused of starting retail trading directly at their outlets in the name of wholesale. The propaganda machine has been blaming the government of looking the other way by allowing the company to continue operations even when there have been reports of METRO selling products not essentially meant for resale which is stipulated under norms. The Indian retail industries share a large market, which is mainly unorganized. The entry of these large foreign conglomerates is set to usher in an era of large scale organization in this market with modern strategies and newer technology. The left parties are willing to downplay these constructive features by mooting concerns over the so called predatory pricing regimes followed by such companies sounding a death knell to the smaller Indian retail companies.

Predatory pricing practices have been a common feature in arguments against large retail chains around the world like Wal-Mart. Although companies like Wal-Mart have in the past engaged in such practices, it is a case in point to note that such practices have failed and been the bane of these companies. To further allay such misconceptions it might be worthwhile to look into the rates of inflation which are a key index to the struggle in pricing. In fact trying to decrease rates of inflation by practices like monetary infusion, or increase in the stock of country’s money can prove counterproductive. There has been a debate over this issue in economic circles recently with Ben Bernake, the successor to Alan Greenspan as the chairman of US Federal Reserve being in support of such a policy of monetary infusion. The capitalist frame of thought on this issue propounded by none other than Ludwig Von Mises, the famous economist of yesteryear is that trying to increase the stock of money when the inflation rises above a certain level and decreasing it when there is deflation at a certain level, in other words,inflation targeting, cannot be achieved without misleading economy with an illusory boom. This would in simple common sense mean that, practices like predatory pricing will not be successfully possible if there is no indulgence of the Reserve bank of India in socialist practices like monetary infusion.

With India targeting a GDP growth rate of 8% there is definitely a need for more capital investment in retail, it being among the largest industries of the country. The influx of new technology like RFID (Radio Frequency Identification Tags) in the retail industry which is bound to follow any FDI in retail will make businesses more efficient. Also the organization which this capital is bound to bring will actually play in favor of the Indian retail scene. A survey by FICCI indicated that there also needs to be a reform in the FDI policy guidelines set up by FIPB. A whopping majority of surveyed foreign investors have indicated that one of the most obvious deterrents for investing in India is the unstable nature of these policy guidelines. It has to be acknowledged that FIPB has put up online a manual which allays the fears of foreign investors by clearly indicating the guidelines and restrictions to foreign investment in India. But a rethink on increasing the cap of investments is required. Economic policy under socialist pretexts tends to be perfunctory in terms of dealing with illusory booms which lead to recessions by calling for more government control, thereby threatening the ideal of a free economy. The caprice by successive Indian governments with regard to reform in FDI policy is a case of a lack of will to weed out communist influence from economic polity. With countries like China being ranked higher than India in the UNCTAD survey of profitable investment locations one is bound to see that there is definitely a trend in favor of a capitalist economy around the world. Ludwig Von Mises, the noted economist strongly voiced his support for lassiez-faire capitalism as the most advanced economic theory; whether India can move, albeit slowly, towards such a system would in part depend on how it deals with this contentious issue of allowing private capital to flow into one of India’s largest industries.

What is viral marketing or Word of Mouth

Posted by Indraneel On Sunday, September 13, 2009 0 comments

Viral marketing is an idea that spreads--and an idea that while it is spreading actually helps market your business or cause.

Two kinds of viral marketing: The original classic sort in which the marketing is the product and which a self-amplifying cycle occurs. Hotmail, for example, or YouTube. The more people use them, the more people see them. The more people see them, the more people use them. The product or service must be something that improves once more people use it.

A second kind has evolved over the last few years, and that's a marketing campaign that spreads but isn't the product itself. Shepard Fairey's poster of Barack Obama was everywhere, because people chose to spread it. It was viral (it spread) and it was marketing (because it made an argument--a visual one--for a candidate.)

The goal of marketers interested in creating successful viral marketing programs is to identify individuals with high Social Networking Potential (SNP) and create Viral Messages that appeal to this segment of the population and have a high probability of being passed along.

The term "viral marketing" has also been used pejoratively to refer to stealth marketing campaigns—the unscrupulous use of astroturfing on-line combined with undermarket advertising in shopping centers to create the impression of spontaneous word of mouth enthusiasm.
In response to its use, many sites have started up trying to describe what viral marketing is.

Here you can see the one of the popular Viral Ads that has been made by Monster.Com.




For More viral ads visit : WEBCHUTNEY.
Source:Seth's Blog,Wikipedia

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