Tuesday, July 24, 2012
The Garments Business
The Rag Trade
By Harish Bijoor
Q: I come from the textile industry. What went wrong with us? Today we are largely captive cloth-makers and exporters with wafer thin margins.
-Raghu Siyal, Mumbai
A: Raghu, many things really. The world is changing today. Companies need to investigate and re-invent themselves. Gone are the days when the competence of manufacturing was one, and the competence of retail and marketing was another. Today, companies are seamlessly integrating the two to derive better values from what they manufacture. Manufacturing and spinning companies are therefore today aspiring to own and run their own brands as well in the retail market. Organized retail is set to boom in the future. Everyone therefore wants to take a piece of the possible pie. The advantage for companies that intend to do this is the advantage of being in the thick of marketing action. This action can create better values for what was hitherto a commodity, or what was hitherto an OEM offering.
It is important for companies in the textile industry to understand one basic fact. The new business of retail cannot be run with old managers of manufacturing. The mindset, the competence and the abilities to run these two business segments are totally different. At times, even diametrically opposed. Most companies made the first big mistake of appointing their in-grown managers to manage the retail business vertical. Retail is a different ball-game altogether. The competence of retail is about consumer-facing competence. This competence is normally not ensconced in managers who are back-end and manufacturing and trading oriented.
That mistake apart, most of these companies are very conservative in the way they allocate budgets for front-end activity. The branding mindset is missing in most cases, and what was dominant was the trading mindset. This is a disaster.
Q: Branding a State is taking center-stage attention today with Gujarat, Karnataka, West Bengal and more. What’s the point here? How does it benefit? And what’s wrong with WB?
-Gargi Jain, Kolkata
A: Gargi, my definition of a brand is a simple one. The brand is a thought. A thought that lives in people's minds.
Let’s take Brand West Bengal. Brand West Bengal lives in people’s minds. And these people live in two locales: people who live in WB and those who live outside it. It is important to appreciate that the brand image of WB is therefore intrinsic and extrinsic. It is also important to understand that the extrinsic brand image of WB is very important to invite investments from India and overseas.
The Indian market with our several states is a competitive one. Every State vies with another to attract investments to it. Investments mean jobs, and jobs mean a robust consumer environment. WB needs to gets its act together on the count of its extrinsic brand image.
It is important to erase memories of a Nano. It is important to establish a new and vibrant brand image for WB that shows that it is investor friendly. And this means not only single-window clearances, but this also means that the business mindset needs to rule over the political mindset. This means that he WB government needs to take bold decisions on the front of creating an exciting environment to attract investments in the State.
The CM is the real brand-ambassador of a State. ‘Mamata-di’ needs to manage and wear this hat with elan. Mamata has a very positive and matter-of-fact image outside of WB. This means that people look at her as a person who calls a spade a spade. This is a very good attribute that business people like. Mamata needs to direct this to the positive benefit of the State at large. WB can most certainly compete with Gujarat, Bihar, Karnataka and more! And that’s the reason why the State needs aggressive branding.
Q: What’s the overall investment mindset on India as far as the foreign investor is concerned?
-Tim Rolins, New Delhi
A: Tim, India is an idea whose time has come.
Foreign investors find India an exciting destination to invest in at the moment in the core sectors that relate to food, beverage and entertainment, fundamentally because India is a nation of numbers.
We host the second largest numbers of bellies and bladders among other body parts. This means that India is a nation of 1.2 billion stomachs that eats up 3.6 billion meals every day. This is an exciting food opportunity. This also means that 1.2 billion bladders demand bladder fluids of every kind. This is an exciting beverage opportunity. Add to it the latent entertainment needs of the nation at large. We are a nation that is bored and looking for entertainment options all the while. This is an exciting media opportunity.
On the whole, foreign investors find India an excellent investment opportunity that relates to the arena of "needs and wants" marketing, as opposed or "desires and aspirations" marketing. For desires and aspirations marketing, China is an excellent destination, and not India.
------------------------------------------------------------------------------------------------------------Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.
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