Monojit Lahiri evokes the spirit of 3 of the greatest masters of their craft... and lays it on the line!

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If advertising is truly a business of ideas, then the creative process – which really means ideating – must be hounded, invoked, ruthlessly pursued and celebrated every day, right? Boy, is that a tough call? The (late) distinguished writer Dorothy Parker once described creativity as that magical fusion “of a disciplined eye and wild mind!” Point is – how disciplined… and how wild?!

To most creative people (in adbiz and outside) the moments that are easily the most painful, traumatic and nerve-wracking are the start-up! Beginning is always a nightmare! Invariably this curtain-raiser (or what colourful, flamboyant creative hot-shot George Louis calls foreplay!) is filled with a zillion nervous, useless, irrelevant (sometimes even superstitious) rituals! That last ciggie must be smoked. That last cup of coffee has to be consumed. That last call has to be made. The windows have to be closed, opened or adjusted. The chair must be placed just-so for inspiration and comfort (whichever came first!). The comp must be dusted and re-dusted. This tortuous game of procrastination carries on and on until someone blows the whistle (Publisher? Client?) to signal: Buddy, your time starts NOW!!

Chillingly familiar, right? In this kind of a scenario, everyone has their own method of tackling this bugaboo. It would be interesting to do a checkout on how the legends and gurus and Dada’s tackled it, right? Let’s start with the acknowledged Big Daddy of the creative revolution on Madison Avenue, the one n’ only Bill Bernbach! Pragmatic and unromantic as it may sound, the creator of timeless masterpieces like ‘We’re number 2, so we try harder’ believed that that the most important inspiration while writing an ad “is the product itself! I can’t say that often enough. Looking for ways to make the people want it… that is crucial.” He was also very critical of questions like what makes a good writer. “I don’t know! You can’t be mathematical and precise in this calling. This attitude leads to a dangerous worship of research where the primary preoccupation seems to be the load of facts got… and not how provocatively and engagingly we present those facts to bored & uninterested consumers.”

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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CURSE OF FINANCIAL INTEGRATION

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However, the so called ‘short-term’ impact is also looking quite heavy on the Indian market as after an unexpected slide on September 24, before the expiry of derivative contracts on September 25, Indian share market turned out to be the second worst performer in Asia. Still, analysts are arguing that the market will not be impacted highly as Indian firms do not have meaningful exposures to sub prime assets. Interesting! Perhaps they are looking deep into various sectors. Analyse the real estate or the banking sector and you will get to know it immediately. True, they are not exposed to sub-prime assets in a direct manner but they are definitely closely related to the companies who are biting dust under the ongoing crisis.

Sudip Bandyopadhyay, Director & CEO, Reliance Money avers, “The real estate sector will be hit badly since American investment banks in trouble had made commitments for investment to many private players in this sector. And now it doesn’t seem to materialise given the present state.” In banking too the situation is no different as banks like ICICI Bank ($80 million), Bank of India ($30 million including $20 million in a Lehman Brothers subsidiary) and Bank of Baroda ($10 million) had some major investment in Lehman Brothers. Now Lehman Brothers’ bankruptcy would put some pressure on these banks in terms of additional reserves.

Also the demand slowdown from US financial services companies will dent the top line growth of Indian IT companies. As per Bandyopadhyay, “Few IT and BPO/ KPO companies would get temporarily affected since a significant part of their income is from BFSI segment in US.” As another aftereffect we might see is, this credit crunch might put pressure on the big ticket acquisitions. With global meltdown in equity markets, risk appetite would see a huge contraction and there might be a period of lull in the Indian companies’ global acquisition spree.

With three of India’s sunrise sectors feeling the heat on collapse of Wall Street giants analysts who are still confident that Indian market is insulated enough to escape with little dent may soon need to chew their words. And if that happens investors will have to wait for a longer period before they feel after hearing ‘Good evening.’

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Advertising agencies are inward-looking

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Prem Kamath,
Vice President, Marketing, Star India

“Advertising agencies are inward-looking”

“In India, the advertising industry is incredibly inward looking. For most agencies the focus is not ‘how do I add more value to my client’s business; the focus is on how do I make better advertisements. And the definition of those better advertisements is also extremely questionable. There is the entire awards culture that has permeated Indian advertising, which is doing more harm than good. The awards are certainly a motivation to do better work, but they are not an end in itself. And it is common knowledge that what finally wins an award in most international or Indian shows is something that most people cannot relate to. More energy is being spent within agencies in India on these things rather than on ‘How do I add value to my clients?’ And therein lies the answer. If an agency does add value to the client’s business, the client would not be inclined to change agency and would be even willing to pay them more than what they are being paid today. And that is perhaps what is needed for agencies to emerge from being a mere commodity to create value for their own brand.

While I don’t subscribe to changing agencies too often, the trend comes from a specific client mindset. Either the client is over reliant on what the agency is doing for them; or else clients don’t value their agency’s work/ creativity at all. Both are not good. Over reliance on agencies means that you call for a review and a multiple-agency pitch only to ‘fish’ for new brand building ideas. This can only happen if the client itself is heavily dependent in a particular agency for ideas, business plan, strategy, new insights, et al. Alternatively, if the agency is adding no value at all, the client is perhaps still taking agency services as a commodity and in calling for a pitch, is taking the brand it to the market again, to see if there is a better bet to get new ideas.”

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Will the low-priced pizza invite similar reactions from competitors? Angshuman Paul writes...

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‘30 minutes’ is all it takes to lay your hands on the supremely tasty Domino’s pizza (take you pick)... Well aware of this fact, last Sunday, I walked into one of Domino’s ‘sit & dine’ outlets in one of the prime locations in Delhi. And there I happened to share the table (for lack of empty seats) with one Naina Ahluwalia, an architect by profession and one ‘big’ Domino’s ‘order-at-home’ fan ( I disovered these details later as we conversed). She was already busy with her ‘chicken tikka pizza’ slice by the time I ordered mine, and as the conversation went, I asked her how her experience was so far... “The pizza is one of the best ever I’ve had, anywhere. However, the ambience is far from the best and I am also feeling claustrophobic in here...” “Also, the pizzas were ready almost precisely 30 minutes after we’d placed the order,” she added. That was it! Too much for a huge Domino’s fan. I cancelled my order... and walked away. But as I walked out, I had only one thing in mind – “I have to speak to Ajay Kaul about this...” Clearly, as the lady opined, in the ‘sit & dine’ category, Domino’s still cuts a sorry figure; with Pizza Hut (from the stable of Yum! Brand) being the clear leader in this case.

The next day, I caught up with Ajay Kaul, CEO Domino’s India and after explaining the whole incidence, questioned him as to why Domino’s makes its customers wait for ‘exactly’ 30 minutes?! The Quick Service Resturant (QSR) chief casually gave his explanation, “That’s an exceptional incident and is happening only in those stores that are 2-3 years old. Visit our latest stores and you’ll realise that it’s actually much better...”

What more. He also revealed strategies that Domino’s was mulling over – starting from penetration to pricing – to get ahead in the competitive times. Domino’s had laid out plots to adopt all the ‘Ps’ and was also chalking out big plans for India. Thankfully, this experience wasn’t anywhere similar to the one at the outlet adn I pretty much liked the person I spoke to this time round! :-)

Industry experts estimate that more than 25,000 pizzas are sold per day in the country and in the QSR category, the pizza market is brimming with sizzling hot opportunities. But at the same time there is the pressure of inflation that is hitting their bottom lines hard. Like most players (Yum! Brands for example, which responded to inflation by hiking its prices, both for KFC and Pizza Hut), everybody expected Domino’s to follow the rule of increasing its price. But shockingly, this QSR agent reverted to a strategy of rolling out pizzas that are easy on the pocket! Yes, during August 2008, this pizza-maker unleashed pizzas for just Rs.35 (lowest in the branded pizza segment). It therefore becomes obvious that Domino’s is hoping to rope in even those consumers who could not previously afford pizzas which were priced above Rs.100. However, the million-dollar question here is: when its rivals are battling with market forces, finding ways to reduce costs, how did Domino’s manage to push its price southwards? “The concept was finalised eight months ago and pre-planning enabled us to absorb the increase in ingredients’ costs. This nano model can be a substitute to dosa, chole batore,” replies a belligerent Ajay.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Correction for whom?

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Sources close to Unitech confirm that “the real estate market saw a correction in 1996-1997 when the prices crashed after going up by 1,000%. In India, investment in residential property is considered safe, so prices of residential properties rise but with inflation and bank rates soaring high there’s bound to be some correction.”

If the words of DLF, the largest real estate player in the Indian realty circle are to be believed, the price correction will not affect the conglomerate at all as the spokesperson from the company asserts, “First of all we don’t believe that there is any slump in the Indian real estate industry and if at all there is, we will not be affected by it at all as we are established as a trustworthy brand among the country.” The healthy interest coverage ratio and position of debt on the balance sheet is making the company so optimistic. Though the realty major faced a minute liquidity crunch when it delayed the Singapore REIT listing, PE players are still more than willing to invest in the company, as they consider it to be a good bet even in the midst of the current downfall in the sector.

Moving over to Parsvnath, as per Pradeep Jain, Chairman, Parsvnath Developers, the correction is not a major hurdle in the growth of the company as he avows, “We can expect correction on the projects offered by small developers, who had unreasonably priced their projects at locations, which are not easily accessible and hence not finding customers.” But he feels that the crunch won’t affect them either, since their projects are appropriately priced and in proximity to customers. On the other hand, if we look at the data of land bank of the company it shows that the company has 16% of their project portfolio devoted to residential and only 2% of their portfolio stands for commercial land. Even though residential projects earn high ROEs due to the negative working capital, with the current interest rate scenario and escalating rates of raw materials, investment made in developing residential land seems to be a loss making proposition at least at this point.

“The construction and infrastructure sector is (also) feeling the heat of rising steel and cement costs as a steep increase in the prices of these two primary inputs, as steel contributes about 15-20% of total cost whereas cement contributes about 10-12.5% of total cost,” adds Jain, citing the 10-12%rise in the prices of Cement and 20-25% steel price increase. This is surely going to challenge their ability to cater to the middle and low income groups.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
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