AskHarishBijoor

Small is beautiful and Big is cheaper

By Harish Bijoor

Q: What is the real impact of FDI in retail, and when do we see it all happen?

-Kumar K Rajapalayam, Hyderabad

A: Kumar, this question is as contemporary as it comes. FDI in retail has just been announced. This is really a policy intent drawn out and announced as a go-ahead document. Retail in many ways is a “State” subject, and its implementation will depend a lot on what the individual states with their individual political agenda will allow or not.

The road-map for retail in India has however been laid out clearly in this policy announcement. 51% FDI in Multi-brand retail and a 100% FDI (up from the current 51%) in Single-brand retail. This move was first conceptualized 16 years ago, hotted up as a point of debate three years ago, and has today culminated in a decision that simply says “get going guys”!

I am really impressed at the fact that the UPA government took courage to sanction a go-ahead through a Cabinet decision, despite the fact that elections in Uttar Pradesh are round the corner, and despite the fact that UPA-allies have opposed the move. This is a bold move. A move that accelerates the process of liberalization that started trundling on in India 1984 onwards.

This move is good for the farmer and the consumer. The farmer will hopefully have access to a better supply-chain mechanism that gets him to channelize his produce of grain and fruit and vegetables to the big city markets without wastage, and the consumer gets a better variety, a bigger choice of options to shop at, and hopefully better prices. The fact is that bigger chains are able to offer cheaper prices, cheaper by as much as 3-7% over current prices offered by smaller retailers. Scale counts. While small is beautiful, big is cheaper.

I am equally excited by the riders put into the policy. One particular point of excitement is the fact that investments need to be channelized for the benefit of local industry. The fact that retailers will need to source 30% of their requirements from SME’s, is a good one. This boosts the sagging SME manufacturing sector. And I hope this really translates into business for real and existing small scale manufacturing units rather than new ones created just to fill in the blanks of this policy.

The minimum investment of 100 Million USD is another good move. This ensures businesses with serious long-term intent entering the space with adequate back-end infrastructural investments.

I do believe this policy threatens and impinges the 14.6 million small mom and pop retail outlets in India. This policy for sure brings about a kind of Retail Darwinism in the country, where only the fittest will survive and the others will fall by the wayside. This will happen first in the 42 big one million plus population towns of India. And at a later stage, expect this retail revolution to go deeper into the hinterland.

Small retail intermediaries are bound to be hit by this decision, as the effort to make the supply chain leaner results in the small links in the chain snapping to make way for the bigger links to facilitate cost-efficient deliveries.

Kumar, expect to see the real fruits of this policy decision to touch our lives three years hence. Retail investments are low gestation investments in many ways and take time to fructify and deliver.

Q: With a young Cyrus Mistry anointed to head the Tata group, will the Tata group look and feel younger in its profile?

-Rahul P Kolihara, Mumbai

A: Rahul, that’s a loaded question in itself. What makes you think that the Tata Group is “older” in its profile? Look at the profile of the large number of people who work for Tata Consultancy Services, and you will be jolted by the young and the aggressively young.

That apart, if you mean the Tata Group looks older in profile, and will Cyrus Mistry get it looking younger, I do believe all this will take time. This sure is a big move. Cyrus Mistry is likely to be all of 44 when he takes charge of the House of Tatas. That sure is an infusion of young blood. To put it in perspective, Cyrus Mistry and Rahul Gandhi are well nigh of the same age bracket. One is attempting to head this country, and another is anointed to head one of the country’s biggest business empires.

The age of leadership in India is and has to progressively go downwards in its push. The forties is today the age of dynamic and alive leadership. Just wait as you see the thirties capture this slot,  later than sooner.

And what does age bring to the party? A certain degree of dynamism. A certain willingness to take risks. A certain bravado that will have groups make mistakes and learn, rather than depend on sure-shot approaches that are really not so sure-shot anymore in any case. And that again is a paradigm in itself. May or may not be true.

Age is again what you make of it. If you peep into the House of Tatas you will see that some of the boldest and bravest decisions were made by people who were not so young after all. RK Krishna Kumar of the Tatas led the Tetley acquisition brigade when he was not exactly a sprightly forty. Look around the Tata Sons Board and you have names that have done it all aggressively thus far, despite the age counter not being on their side. Age is therefore in many ways a number. Age is also a paradigm. A paradigm of our making.

The author is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc.

90-Minute Cricket?

By Harish Bijoor

Q: Karnataka has its own IPL version, the Karnataka Premier League. Will these options work?

-Rohit Pattanshetti, Bangalore

A: Rohit, the true test of a tournament such as this is the manner in which the first set of fixtures take-off or not. It is therefore in the execution, rather than in the branding and the hype and the glitz and glamour being built around it.

Content is really king. And here, the content is good cricket. If there is good cricket, this will survive. If not, it will sink.

The format of 20:20 cricket is a hit. There is eminent fatigue in all other avatars of cricket of the 5 day and sadly even the 1-day variant.

In this day and age of twitter with 140 character limits, the format in cricket that seems to work is 20: 20 today, and who knows, possibly 10:10 over’s tomorrow.

Remember, in a world that is frenetic in its pace of work, the time-tested format of success in sport is the 90-minute game represented so solidly by soccer. Will we have 9-minute cricket then? Something that will be a big hit?

KPL's regional format is good, because it helps regionalize cricket. It helps knit smaller geographies together in this passion-format. Let's remember, more contiguous and small an area, more homogenous its peoples. Therefore KPL will help harvest local passions for a game. It helps build local jingoism in local cricket.

In the old days, cricket jingoism was national. It was about India versus Pakistan. And then with IPL it became city versus city. KPL brings it to the level of district versus district literally!

The format will work, provided care is taken to build this format with patience and care. God is in the details of doing this.

Remember, ICL flopped. KPL can.

Q: A simple question. How important is it to know your customer? And why?

-Mehul Kataria, Mumbai

A: Mehul, the customer is a very important entity. All business exists and revolves around this entity. The very purpose of all business is the fulfillment of the needs, wants, desires and aspirations of this entity. To that extent, the customer is the central focus of all business activity. The customer is the pivot around which all else revolves.

Having states this basic universal marketing truth, the customer therefore needs to be understood. Not only at skin-deep levels, but at levels that are deeper and subliminal even. Most businesses understand customers as numbers and numbers that contribute volumes and value to the enterprise they run. Most companies however do not believe it is important to drill beneath the skin of it all. If you understand your customers well, and in more ways than skin-deep customer understanding, it is a good insulation of your business. You will be able to predict behavior, predict change and gear up your business to face it all when it happens.

Most businesses however don't do this, and get surprised when their customers articulate new needs and gravitate towards new brands, new processes and new vendors. All of a sudden. Understanding customers in depth is a business-insulation process at the macro-level and a business-enhancement process at the micro-level.

The customer is like your child really. In the beginning when the child is small, it listens to everything you say. You understand your baby as well. As the child grows up and becomes a teenager, you understand it less and less. And when the child is all grown up and adult, you hardly know it possibly. The customer is just this way. It is important to stay in touch, stay contemporary, and stay peer-to-peer with your customer to understand your customer well. It is important to grown up with you customer and not stay where you are and static. The customer understanding process is therefore a science, an art, and a philosophy of its own. Dabble in all of it.

Q: Is the current aviation turmoil bad for the brand of aviation in India altogether?

-Sapna Ramnath, New Delhi

A: Sapna, I do believe the aviation industry has come a full circle very fast. In the beginning it was a commodity in the domestic market. There was just one national airline. It was Indian Airlines. One had no choice. If one had to indulge in air travel, one had to pick Indian Airlines. This was the commodity era of the aviation industry in India.

And then in came the private airlines. In came Damania,  Modiluft and the others. This was the beginning of the brand wars in mid-air. Damania offered excellent service and added in the bells and whistles for branding. Even liquor for a while. These brands invested in building a brand, a color-recall, a service-memory tag and more. Premium was possible in such a market as well.

The brand wars intensified with Jet, Air Deccan (which created its own brand of low cost imagery with the common man as brand icon and more. Premiums were possible here as well. There were multiple choices to pick from. The Aviation industry was a menu of options.

We have now come a full circle. From commodity to brands to commodity again. The current situation of the industry has erased all lines of branding that were created by one and all with much effort, time, energy and money.

Clear positioning stances of the airlines have been erased. Today one chooses an airline basis the price of ticket and convenience of sector. This is the ultimate commoditization of the market. There is a clear decimation of value here.

That then is the sad story of Indian aviation as of now. Is it bad for the brand of aviation at large, yes it is. It shakes up consumer confidence, and that’s bad for any category.

The Business Speaker Tribe

By Harish Bijoor

Q: What’s with the marketing and business speaker? We see you and lots of them on marketing, HR and life-related subjects. Is this a new-tribe? And is there money here to make? And what’s the value they deliver?

-Ravneet Bala, Mumbai

A: Ouch! Ravneet, you strike a raw chord when you call this a “new-tribe”. Because I happen to be one of them. And we are no tribals.

This is really not a new tribe at all. The business speaker has been around for a long-long while now. The only difference is that in the old days the business speaker was largely of foreign origin, whereas today we have a whole host of Indians who live in India, emerging on the world stage as business speakers of repute. I can count at least 6 in this list from India. Good speakers asked to deliver keynotes on diverse sets of subjects.

The Business and key-note speaker fulfils a need. The key need is that of corporate organizations for a start. Corporate organizations tend to call in speakers of every ilk to their formal board meeting break-outs, senior management get-aways as well as for internal Open House sessions that are organized periodically to keep the corporate flag flying higher and higher in terms of motivation, business insight and re-gearing of teams to achievement.

And then there are special occasions when the business key note speaker is called in. These are moments of celebration and launches. When the brand has tired of doing the usual song and dance numbers at the brand launches, in comes the corporate key note speaker who speaks on a subject and keeps the audience enthralled and educated at the same time. The key note speaker is thrown in as a value-add on these occasions.

Is there money in it? And is this a business all on its own?

I do it differently. I do not treat this as a part of my business. I treat this as an avocation that pays, and not the basic vocation itself. This helps. In this manner, you typically wait to be called in. You don’t focus on it as a part of your business revenue stream. It’s good to customize every talk in this sphere. Adds bigger and bigger value, both to yourself and the client, in that order.

I have done talks of every kind. Board sessions where a strategy is wanting and waited to be vetted by you, motivational group sessions with senior management, the “rah rah” sessions at brand launches and annual get-togethers, and simultaneously sessions that are done for sets of key consumer groups. I personally enjoy the strategy sessions.

The market and demand for business speakers has however peaked in recent years. To give you a personal example, I used to do an average of 6 talks a year over the last 15 years. In the last year itself, I have done a total of 31 talks and have had to refuse as many as 20 more, due to reasons of time pressures. What does this mean? This is a good market to be in. If you have something to give, you will be chased to give just that and more.

Is there money in it? Plenty. You charge as per your delivery in business terms. There are really two types of speakers. One is the overt motivational speaking version. Here, the money is scant and low. This is all about creating a gung-ho feel and leaving it there. In many ways, the moment lasts only as long as the speaker is on stage, and maybe a few hours thereafter as an after-glow. The other is the strategy centric business speaking where you deliver not only style and motivation, but strategy as well. This is stuff that can change the way people work and live. Here, the money is deep and exciting.

The business speaker ‘avatar’ has its perquisites as well. You get to travel to the most exotic locations your other formal business involvements would have never taken you to. I cannot imagine going to Cebu islands in the Phillipines on work. Or Las Vegas for that matter. Or the Isle of Wight. But my ‘business speaker’ avatar has taken me all over. On work. Try it.

Q: I am a business management student in Warangal. I got into this field thinking that the way I think will change. Instead I find it throttling who I really am. There is some problem here, isn’t it?

-Shylaja Reddi, Warangal

A: Shylaja, from the long queue of questions I have waiting to be answered, I have fast-tracked yours. I do believe you make for a sensitive point.

Business education in the country has a problem as of now. We are too text-book driven. We have copied every model that works in the West. In the bargain, we do not learn enough of how to tackle problems in our back-yard. Most business education in the country today is all about a teacher teaching a set of students largely in a class-room situation. Add to this a sprinkling of an industry speaker dropping in for a guest lecture. This adds a live dimension to a lot of what is learnt. Apart from that, there is very little of experimentation in this space.

The author is a brand-strategy specialist & CEO, Harish Bijoor Consults Inc.

Let’s Celebrate Imperfection

By Harish Bijoor

Q: What makes imperfect things succeed more than the perfect? Look at ‘Kolaveri Di” for instance. It is as imperfect as can be, and yet it is a success.

-Rohini Mullick, Kolkata

A: Rohini, a very perceptive and intuitive question for sure.

Media and mediums have evolved. In the old days we had mediums which were totally top-down. These were typically television, press, radio and Outdoor. Today, mediums have evolved with the consumer. Today, mediums such as the internet are all about peer-to-peer connect and peer-to-peer communication.

Youtube is one such medium. Any Tom, Dick and Harish can get popular. Never mind that the content is not as perfect as traditional mediums typically expect. The Internet in many ways encourages the imperfect.

Take blogs for instance. They allow anyone and everyone to publish and broadcast, never mind whether you are a good writer or a good thinker or not. There is a certainly a celebration of democracy and a most certain celebration of imperfection.

The same goes for Youtube. There certainly is a strong and vibrant celebration of the fact that the largest numbers of the masses are imperfect, and perfection itself is but a small island. Perfection is a minority, whereas imperfection is the majority. Let's celebrate!

‘Kolaveri Di’  thrives in such a classic environment.

Q: How do you see the gems and jewellery market in India shaping up?  Are we on track?

-P Radhe Shyam, Delhi

A: Radheshyam-ji, this has been an exciting decade. Lots has changed. We have moved on and the industry has largely kept pace with the needs and wants of the Indian consumer at large. The industry has however missed the bus of keeping ahead of the consumer need and want curve. In the arena of customer desires and aspirations, the industry has been a step behind. I do believe there has not been enough investment in trend forecasting and scenario planning in the industry. This is a big missing element, which if bridged, could add sparkle to business volumes and value.

The last decade has seen investments in the back-end and India has been home to facilities that are global in standards. There has been an investment on the front of design as well. The number of jewellery designers of repute has grown by leaps and bounds.  Design studios have emerged in both the organized sector, and individual designers have spawned outfits of repute of their own.

If at all there is a lack in any arena, it is the investment in the arena of forecasting consumer trends. Unfortunately we still do depend on western forecasts, which limits the market and limits imagination and scope at large.

Q: What are the latest trends you see in the space of luxury retail? Asking this as we intend to step into this space in a  big way in 2012.

-PP Johnson, Kochi

A; Johnson, let me list the stop 5 trends I forecast for now:

Q: Dhoni is down for now. What would your advise be to him for now?

-Victor Paes, Goa

A: Victor, Dhoni is typically going through a double-dip recession in his career. Corporate India has plenty to teach him. Just as corporate India has learnt a lot from cricket-India, time for Dhoni to take note of some learnings as to how one re-bounds.

Firstly, leadership is never a given. Leadership is what leadership does. Your team members are really on the morph all the time. There is nothing static about it at all. Times change, and people change. Look within for support, but look for that support with new strategies that promise the earth and deliver the earth for sure. A leader and captain is only as good as what he delivers. It is important for Dhoni to focus on his delivery. Time to be single-minded in this. Time to focus on delivery above all else.

Recession is a cycle. It comes and goes. If you are to push it away faster, you need to be proactive, and you need to have planned for it. Time to focus on the fundamentals of cricket rather than the cosmetics of cricket as well. PR is good when the going is good. When the going is bad, hollow PR gets you nowhere. It is results, results and results. Grab the leadership mantle once again dear Dhoni. By the horns.

Branding Buildings

By Harish Bijoor

Q: I have put together a brand recently. This is a brand of apartments. The first set of 206 apartments is up and occupied. How do I build my brand further?

-Gopi K Geddam, Hyderabad

A: Gopi, the traditional in-the-box marketing and advertising guys will tell you to build a brand and advertise and advertise. I will not.

Instead, there is plenty you can do.  For a start get inclusive. Get inclusive not only about the community you serve as buyers and owners and tenants, but get inclusive about helping out and catering to the community around. Get green as well. Ensure that every opportunity to plant green and save green is capitalized upon. Embrace, adopt and propagate water harvesting with passion. Again not within your complex alone, but all around the local community you build in. Be the most benign name in a radius of at least 3 kilometers from your building for a start. Stretch out and reach out. I do believe the basic mantra of being inclusive, being concerned and being green, is a good universal stance to embrace.

 This will do you good. It will get you the blessings you deserve. In the beginning these are small and quiet little blessings. I know you are a builder or an apartment in business and not a builder in the realm of charity. But be patient. These small little blessings have a way of correcting your brand Karma. They have a sweet little habit of converting into what we call "positive collective goodwill". And this positive collective goodwill has a habit of converting into a positive brand appeal. Your future consumers will come from this very community. Today they may look poor and impoverished. Tomorrow is however theirs! Try it.

Q: In this day and age when your competition comes from everywhere, irrespective of geography, how do you compete?

-Mallika Pishe, Pune

A: Mallika, that is the new reality. Customers come from everywhere.

Customers, in the age-old days (and by that I mean fifteen years ago) had a geography. Today, all that is history. Geography is totally irrelevant as far as your customer is concerned. Your customer is your neighbor, the little-girl who lives down the lane, that stodgy old lady you don't know at all but who lives in your city, that goofy guy who lives ten thousand kilometers away, and whose only identity is his Twitter id and his credit card verification slip that says he is an ok customer to deal with.

Just as the very definition of your market has expanded exponentially, shattering issues relating to geography, access and distance, the very nature of competition has itself morphed. Today, your competition comes not from the neighborhood kirana shop, but might as well come from an e-Kirana on e-bay.  Technology in many ways has evened it all out. We are now nearly touching the theoretical state of Pure Competition all of us learnt in our early Economics classes.

The key prescription for getting customers is the ability to brand and stand out. The first need is brand image. Brand image in many ways is the window through which your customer will peek into your offering. Opening this window wide enough and keeping it open for enough number of customers to peek in, is the primary task at hand.  The prescription to sustain these customers within the brand is that much more complex. It is all about the excellent experience your brand will need to provide against any other. It is about the quality you offer, and the customer delight you wear on the sleeve of your brand. Your brand must not only promise this, your brand must deliver this as well. Not once, but every time. The best and highest norms of customer service excellence is the next cutting edge property your brand must develop, deliver and sustain.

Q: Can exclusivity help a brand? The strategy of making something limited and very inaccessible even?

-P Hari Madhavan, New Delhi.

A: Hari, exclusivity has a purpose. Exclusivity shuts out many from the buying class. Exclusivity creates snob appeal and literally bears a virtual signboard outside to many that says, "Do not enter". This is a tactic really, and not part of brand strategy. It works sometimes. But fails mostly. Gone are the days of snob appeal. Brands need to be as real as their consumers are. Brands cannot afford to alienate themselves into a narrow dark corner of their own creation.

Brands need to be more broad-spectrum and open today. Today is a different day and age. Even snob appeal needs to be broad-based.

Q: What will FDI in retail do to small Mom and Pop stores in India?

-Kevin Mendiratta, Mumbai.

A: Kevin, this is a big question and requires a big, deep and long answer. But I will not do that. Let me cut the chase head right to the end meat of it all.

Very simply put: there is bound to be a progressive aggregation of trade in retail. This means mom and pop stores that operate within a radius of 3 Kms of the big outlet will become non-competitive. But the biggest joy is that India is just too big. We are a nation of 14.6 million retailers. Mom and Pop stores will still remain relevant and will still remain the ones who reach into the gut of the Indian market.

Everyone will therefore survive. Some will thrive more than others, and some will be just snuffed out, but then that is Retail Darwinism at play. Ouch.