The Chuckling Chaebol cheats!

They ignored the potential of ‘Clean capitalism’ ; they were wrong...

Capitalists often wonder why South Korea was nicknamed the ‘Land of the Morning Calm’; there’ve been wars, invasions & power conflicts over decades… So what exactly defines ‘calm’? Alright, for being the capitalists that we are, let us overwrite the follies of the South Korean nicknamers, and move ahead… calling South Korea, the ‘Land of Chaebols’. Yes, we’re talking about those capitalist armies, represented by names like Samsung, Hyundai, LG, Daewoo, SK Corp et al, which are neck-deep into making money, but totally submerged when it comes to attaining power. Now that admixture often leads to one final potion – corruption! And that’s what this tale is all about; about their ride down the path of ‘crony capitalism’... Over the past five decades, as the South Korean economy grew like wildfire, the Chaebols too expanded, gaining great control over almost all the sectors in world economy and today, are proud about being names that control codes to many treasure boxes [or Pandora’s boxes?]. Of course, diversification was most definitely the ‘magic’ key for the Chaebols, with all the big names enjoying multiple feathers in their caps: Samsung, has 63 companies under its umbrella; LG has 51; SK Group has 62 and Hyundai Group has 9. So how did these conglomerates dare to launch a full-fledged attack on Global Inc.? The answer is simple – under the garb of ‘crony capitalism’. 

This confluence of capitalism and policies became the breeding ground for ‘dark secrets and financial manipulations’ by the Chaebols. Dr. Van Jackson of the University of Maryland, who is also the global authority on East Asian History explains how Chaebols should rather be blamed for holding back the South Korean economy, and eroding away fairplay by posing two grave dangers – unstable concentration of capital & corruption. “Both these dangers scare-off risk-averse international investors, which naturally limits FDI. In this sense, it is reasonable to blame the Chaebols for ‘holding back’ the Korean economy,” he asserts. 

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 Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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How does thumbs up keep stealing the thunder !...

In 1993, when Parle sold off a typically domestic brand to Coca Cola for $60 million, industry watchers thought that the Chauhans had hit an unanticipated jackpot – many had even believed then that the precocious brand would die in the short run... 17 years – and some portentous stymieing attempts – later, the brand Thums Up has not only become prodigiously iconic, but has spawned a staggering legacy that is spoken of with unanticipated awe. In a first of its kind series, 4Ps B&M maps the legacy of the brand Thums Up, with live inputs from the top honchos of Coca Cola and Parle

The year was 1977. Eight years had passed since Parle had purchased brand Bisleri from Italy’s Felice Bisleri and just one year since the launch of an unknown lemony drink called Limca. Ramesh Chauhan, along with brother Prakash and CEO Bhanu Vakil, were counting the days for the launch of their flagship soft drink – a carbonated cola drink. The brothers knew their job was tough. Per capita consumption of cold drinks (then) was worse than expected for an anyway below average market. But Ramesh Chauhan wasn’t that worried. He’d seen tougher times since the day he had started his career as an employee in an Indian post office. He knew he could work it out...

The American soft drink giant Coca Cola’s headquarters had just left India following the introduction of Foreign Exchange Regulation Act (FERA) whereby it was asked to reduce its equity stake to 40% even in their technical and administrative units (Coca Cola refused, and exited). And as the black cola market was bereaved by the sudden absence of Coca Cola, the Chauhan brothers, taking advantage of this void, launched Thums Up, which was an instant hit in metros (It was later launched on a pan-India basis in 1981). Since then, in 33 years, the brand has dethroned the leaders, outpaced the laggards, walloped the upstarts, horsewhipped the substitutes, and even changed hands (as is perhaps too well known, Ramesh Chauhan sold brand Thums Up to arch rival Coca Cola in 1993 for $60 million – a decision he doesn’t regret till date).

Circa 2010: Thums Up is India’s largest selling carbonated cola drink with a market share of 16.4%. Much has changed in the years that have gone by, but what has remained unchanged is the fiercely competitive battle between the major soft drinks makers. If today the warring factions include PepsiCo and Coca Cola, the late 1970s and early 1980s era saw the combatting battalions of Campa Cola (from the stable of Pure Drinks Ltd., which later also introduced Campa Orange) and Double Cola (a US-based soft drink). Despite that, the brand Thums Up still remains the market leader with Pepsi commanding 13% share and Coke 8.2%. Thus, from 1977 to 2010; from Parle to Coca Cola; from Sunil Gavaskar to Salman Khan to Akshay Kumar – ‘thunder’ has remained a durable proposition, outbeating many product life cycle theories by decades. And that’s the crux of this cover story – how in heavens does Thums Up keep stealing the thunder?

If Wal-Mart became iconic for ‘Always Low Prices’, there’s no doubt where Thums Up saves its hyperbole in ‘Taste The Thunder’, exemplified contemporarily by an ad campaign of Thums Up where Akshay Kumar (its brand ambassador since 2003) performs the extreme sport of ‘parkour’ to grab his bottle of Thums Up from a suggestively attractive lady. “Taste the Thunder has been the most breakthrough communication campaign for the brand. It stands for masculinity that has constantly been redefined over the years, yet keeping the execution relevant to today’s times,” says K. V. Sridhar, National Creative Director, Leo Burnett (the agency which handles Thums Up’s account) to 4Ps B&M. But then, the acutely bewitching punch-line of Taste the Thunder did not come about so easily. Some would know this, that when Thums Up was launched in 1977, Ramesh Chauhan unabashedly played to the galleries by tagging Thums Up with the caption Happy days are here again that indicated that the market was free from the ‘capitalist international companies’ (PepsiCo and Coca Cola) and an Indian cola was available in the market. That’s when postcards featuring Gavaskar and Imran Khan were released. However, 1980s saw Campa Cola, which was owned by Pure Drinks Ltd (bottling partner of Coca Cola in India) giving tough competition to Thums Up by cornering a staggering 30% market share. That was when Ramesh Chauhan approached Ashok Kurien and Elsie Nanji (partners at Ambience Advertising) to not only devise a new communications campaign for the brand, but also strategise a complete business plan to market the product. And so were born the legendary taglines: Toofani Thanda and Taste the Thunder in 1987. Campa Cola was also launched in the 1970s and had a taste similar to that of Thums Up – strong, fizzy and high on carbon dioxide levels. However, contrary to the taste of Campa Cola, its positioning was that of a drink for good times. Explains Neeta Wali, Director, Brand Talk, “1980s was an era when the Indian youth was more rebellious & flaunting in nature. It believed in showing off its machoism and Thums Up fitted nicely with the then youth ideology as opposed to the ‘fun-time’ positioning of Campa Cola. Campa Orange made the same mistake and failed.”

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Source : IIPM Editorial, 2012

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

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The spirit of challenge

Yamaha R15 One Make Race Championship, which started on June 3 this year, came to a thrilling and exciting halt as the fifth and final leg of the league concluded at the Madras Motor Race Track, Chennai last month. The racing track was set abuzz with roaring excitement as hordes of racing fans turned up to witness the three day event. Yamaha had organised this championship as part of the National Motorcycle Racing Championship 2011 being organised by the Madras Motor Sports Club and approved by The Federation of Motor Sports Clubs of India (FMSCI). In fact, this year, the championship was open for both Yamaha and Non-Yamaha customers. Motor sports has always been an integral part of Yamaha’s corporate culture since the company’s incorporation and this year’s championship was nothing but yet another way of expressing the ‘spirit of challenge’ that Yamaha values so highly.

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Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
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IIPM's Management Consulting Arm-Planman Consulting
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“We have created a niche”

Dabur has had considerable success with Balsara. And Sanjay Singhal is certain that the Fem acquisition will also deliver for them despite their late entry into the skin care space

When it comes to Indian FMCG companies, and their manufacturing presence beyond the national boundaries, Dabur definitely steals the show. Recently, it strengthened its presence in the SAARC region by setting up a export oriented manufacturing unit in Sri Lanka. Interestingly, however, apart from two overseas manufacturing units, all the other manufacturing units spread in countries like Nepal, Bangladesh, Dubai, Ras-al-Khaimah, Nigeria, Egypt and Turkey; are for personal care. Like other players in its industry, personal care is a cash cow for Dabur, and within the category, the company seems to have the most optimistic projections on the skin care range. With the Fem acquisition (which was completed in 2009) and several other marketing initiatives including new product launches, the company is battling the well entrenched incumbents head on.

“We may be relatively new entrants in skin care. But we have – in a short period of time – created a niche for ourselves and a validation of the same is seen in the fact that Dabur has, within a couple of years, become a strong Number 3 player in the cold cream market. In fairness bleaches, Dabur is already the market leader,” replies Sanjay Singal, Marketing Head, Skin Care, Dabur India Ltd. who is leading Fem’s brand initiatives from the front.

Dabur has had considerable success in terms of minting the synergy effects from acquisitions. Its 2005 acquisition of Balsara’s home products in FY 2006, recorded a revenue of Rs.1.685 billion, a growth of 42% over last year. In the same league, acquiring Fem enabled Dabur to dive head first into the high potential segment of skin care and Dabur immediately catapulted to the top league, competing with the likes of HUL, P&G and ITC. Apart from acquisitions, Dabur unleashed a number of skin care products under its flagship brand Dabur Gulabari and maintained an edge over competition with it’s natural heritage positioning. Affirms Sanjay Singal to 4Ps B&M, “We remain true to our heritage and are continuously working to update our portfolio in line with the changing consumer demands and aspirations. Dabur has highly differentiated brands in the market, and most of its products are based on natural and Ayurvedic ingredients.”

To be sure, a lot of companies today offer Ayurvedic and herbal products and many of them have forayed into the service industry with their Ayurvedic products. But although Dabur enjoys the consumer’s trust because of its herbal heritage and has a strong brand equity as an Ayurvedic brand, it has no intention to foray into service industry. One of the main reasons for the same is that the group believes it’s not logical to venture into the service industry until you have your own real-estate presence. This ‘ look-before-you-leap’ approach seems to have paid off as it’s the real-estate problem that’s propelling HUL to hive off it’s Ayurvedic service business – Ayush. Instead of following this route, Dabur is blending service with its retail foray and is taking all of its skin care range to its health & beauty stores. Christened as New U, Dabur has 47 stores and targets to earn revenue of Rs.17 billion by the year 2013 through its 350 stores. These stores are also emerging as a platform to nurture and propagate the lesser known brands like Dabur Uveda. Elaborates Sanjay, “For Dabur Uveda, the penetration is slightly lower and that too is a conscious effort on part of Dabur as we are selling Dabur Uveda only through selective cosmetic outlets and through a network of beauty advisors. The idea here is to have a personal interface with the consumer, wherein the beauty advisors interact with the consumer, understand their skin type and their specific needs and then recommend.” So while this is not a pure play service format, Dabur has given a value added offering to its consumers that can help build loyalty in a market where this precise customer trait is in short supply.

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Source : IIPM Editorial, 2011.

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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Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
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IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
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IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS
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International Curry

They moved Media, minds and Marketing Initiatives in ways that few other Global Campaigns could. 4Ps B&M brings to you The Best International Campaigns for The Fortnight ending February 19, 2011

Wikipedia.org
Ad Title: Don’t keep it to yourself
Category: Print
Agency: Jandl, Bratislava, Slovak Republic

4Ps TAKE: Wikipedia, the online encyclopedia which exists by virtue of visitors contributing and editing content, has come up with a new print ad campaign. The creatives are a series of three ads which inspire visitors to share their vast array of knowledge from three distinct themes (music, wars and animals). Not only is the campaign creatively visionary but also manages to deliver a strong message. Wikipedia ads have so far been known for their soberness, but this time around, they break away from the clutter by undertaking a more colourful approach. A powerful ad altogether which scores a perfect 10 on creativity, appeal and communication.

MTV Exit
Ad Title: “Planet Better”
Category: TVC
Agency: Young & Rubicam New York

4Ps TAKE: The music video, which is a short TVC, narrates the story of a girl who is tricked by a man to follow her hopes and dreams across borders in search of a better life. The video aims to highlight the horrors of human trafficking (a global menace) and calls attention to the plight of young girls who are lured and forced into prostitution. The fusion of subtle music with MTV’s pro-social messaging coupled with a hauntingly animated film makes it a winner in every sense. Premiering across MTV properties, the ad definitely succeeds in raising awareness about the issue of human trafficking.

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Source : IIPM Editorial, 2011.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS

RS.10 BILLION ALREADY IN! SONY’S KBC ON AN UPSWING

With only a few months to hit the screen, KBC is the biggest bet for Sony this year with mega star Amitabh Bachchan returning back to the small screen exactly where he started. Media reports state that KBC pulled about Rs.1.5 billion from its last season hosted by Shahrukh Khan. This year, apparently, it is expected to garner even more. The much hyped speculation about Aamir Khan hosting KBC4 has finally vapourised into thin air as Big B has been confirmed. Brand KBC worked as the biggest cash cow for Star Plus in prime time for three earlier seasons since KBC’s launch in 2000, which not only proved to be a panacea to Big B’s financial woes a decade back but also catapulted Star Plus to the the top in the General entertainment Channel (GEC) category. Now, after three years, will Sony be able to bite the bullet in the same manner? “It’s still a very big brand in the programming space. Hopefully, one of the biggest and one, which has been very hard for any program to copy. It’s a very big property which doesn’t have any negative conversation associated to it till date. It should be able to gain the same attraction as it did previously. I probably believe it will achieve even more of the ad revenues,” says Jehil Thakkar, entertainment analyst at KPMG. Reportedly, brands like Cadbury and Idea have already tied up with the channel bringing in sponsorship worth Rs.10 billion for the fourth season. If the going remains the same, this could well be the biggest season ever.


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Source : IIPM Editorial, 2011.

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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