pratibimb september 2012

Pratibimb | September 2012 | 1

FINANCE | GENERAL MANAGEMENT | HUMAN RESOURCE | MARKETING | HEALTHCARE | OPERATIONS | SYSTEMS

The Reflection of Management

A Students’ Initiative

Volume II, Issue XII I September 2012 A Monthly e-Magazine

PRATIBIMB

Flash Mob An exploitable promotional strategy

By Ambili Jayachandran, University of Kerala

Book Review of The Toyota Way

By Prof. Rishi Kesava Ram Velure

Faculty Associate, Healthcare, TAPMI

Exclusive Interview of Mr. Prakash Dadlani

Country Head, Marketing Excellence, 3M

Neuro-marketing Can the power of the subconscious affect consumer choices?

By Pramit Das & Subhamoy Ganguly, IMT Ghaziabad


T. A. Pai Management Institute (TAPMI) is a premier management institute situated in Manipal

and is well known for its academic rigor & faculty-student interaction. The Institute has been

recently ranked amongst top 1 per cent of B-schools in India & 4th in the South Zone by The

Week Magazine.

Founded by the visionary, Late Shri. T. A. Pai, TAPMI’s mission is to provide much needed

impetus to the task of building professional management capability in the country. In the

process, it has also played a role in strengthening the existing educational and health

infrastructure of Manipal.

We are committed to excellence in post graduate management education, research and practice

by nurturing and developing global wealth creators and leaders. We shall continually benchmark

ourselves against the best-in-class institutions. We shall foster continuous learning and

reflection, achievement-orientation, creative interdependence, and respect for diversity with a

holistic concern for ethics, environment and society.

T. A. Pai Management Institute

Manipal, Karnataka

About TAPMI

Our Mission


TAPMI’s e-Magazine - is the conglomeration of the various

specializations in MBA (Marketing, Finance, HR, Systems and

Operations). It is primarily intended to provide insights into the

plethora of knowledge that relate to the various departments of

Management and to give an opportunity to the students of TAPMI

and the best brains across country to exhibit their creative cells. The

magazine also strives to bring expert inputs from industries, thereby

bringing the academia and industry together.

Pratibimb the e-Magazine of TAPMI had its first issue in December

2010. The issue comprised of an interview of well known writer Ms.

Rashmi Bansal along with a series of articles by students and

industry experts like MadhuSudan Rao (AVP-Delivery, Mahindra Satyam) & Ed Cohen who is a

global leader and chief learning officer who led Booz Allen Hamilton & Satyam Computer

Services to the first rank globally for learning & development . It also included a hugely successful

and engrossing game for finance geeks called “Beat the Market” to bring out the application based

knowledge of students by providing them the platform where they were expected to predict the

stock prices of two selected stocks on a future date. The magazine is primarily intended for the

development of all around management knowledge by providing unbiased critical insights into the

modern developments.

TAPMI believes that learning is a continuous process and is not limited to the four walls of the

classroom. This viewpoint is further enhanced through Pratibimb wherein students manage and

contribute to create a refreshing learning environment outside the classrooms which eventually

leads to a holistic development process. The magazine provides a competitive platform and

opportunity to the students where they can compete with the best brains of the country. The

magazine also provides a platform for prominent industry stalwarts to communicate their views

and learning about and from the recent developments from their respective fields of business

which in turn helps to create a collaborative learning base for its readers.

Pratibimb is committed in continuing this initiative by bringing in continuous improvement in the

magazine by including quality articles related to various management issues and eventually

creating a more engaging relationship with its readers by providing them a platform to showcase

their talent.

We invite all the best brains across country to be part of this initiative and help us take this to the

next level.

PRATIBIMB TAPMI’S MONTHLY e-MAGAZINE VOLUME 2, ISSUE XIII SEPTEMBER, 2012


It is always a pleasure to witness that certain efforts of the students are sustained and carried forward;

Pratibimb is one such. The oft-beaten track, “We are here to learn,” ends up as a mere platitude when

there are no visible actions and documentation. Whereas there is no dearth of actions at TAPMI,

documentation is not something that many—other than scholars—choose to engage in; it is normally

viewed as uninteresting, drab and a drudgery. TAPMIans have proved that they are equally capable of

actions and of documentation without losing the intellectual flavour of it.

Scholarship is too important a phenomenon to be left to scholars alone, especially in the field of

management. As future practicing managers who will be engaged in rigorous action in different fields

of business, TAPMIans have manifested both the penchant to produce research works and also get

their counterparts in other leading business schools to contribute their thoughts to this endeavour. In

this regard, TAPMIans have truly demonstrated the evidence for creative interdependence, an

important aspect of TAPMI’s mission.

I sincerely appreciate the students and the faculty of TAPMI who have made Pratibimb a possibility

through their scholarly works, co-ordination efforts and support. I wish the team the very best.

Dr. R. C. Natarajan

Director’s

Message


Editor’s corner

Sushmit Sinha

Manish Mishra

Abhishek Dubey

Namrata Mahapatra

Divyanshu

Varun Anant

Abhishek Raghupungav

Aditya Bhat

Arun Stephen

Devi Kailas

Kannan Venkat

Pallavi Prasad

Rithwik Krishnakumar

Vandna Soni

Prof. Chowdari Prasad Dean (Branding and Promotions)

Prof. Vinod Madhavan Asst. Prof. , Marketing

Prof. Srivatsa H S

Associate Prof. , Marketing

Prof. Vrishali N Bhat Asst. Prof. , Economics & Finance

Prof. Animesh Bahadur

Asst. Prof. , Human Resources

Prof. Sanjay Choudhari Asst. Prof. , Operations

Prof. Mohan Kumar V Associate Prof. , Systems

Editor in Chief

Marketing

Design

Creative & Cover Design

Communications

Sub-Editors

Publishing

Faculty Advisors

Dear Readers,

Pratibimb has imbibed new members!

With a fresh batch at our campus in TAPMI, Manipal, Team Pratibimb has seven innovative new members who now comprise the sub-editorial team. Our latest September issue has seen a colossal number of contribu-tions. ! To aid us decide which entries really merit the cut, we have a con-tinual rendezvous with many faculty members. I, on behalf of the entire team would like to congratulate all who have had their contributions pub-lished We at Pratibimb salute all who have contributed in any manner to augment this magazine.

Our current issue carries special features such as an exclusive interview with Mr. Prakash Dadlani, 3M and another interesting interview with Mr. Ashok Bannerjee, Flipkart which was published by Yourstory.in. We also have our faculty member Prof. Rishi Kesava Ram Velure who has written a book review of the all famous management book The Toyota Way.

Our association with Jaipur Rugs has now advanced a stage. Pratibimb will now partner with the Jaipur Rugs Foundation to sponsor t-shirts to contributors of published articles. Not letting too much of the cat out of the bag, let’s maintain the hint of anticipation. A second major progress is that we will brusquely be distributing certificates to winners of various contests. The approved design of tees and certificates will be also re-leased through our page on Facebook at

http://www.facebook.com/pratibimb.reflecting.management.

I urge all readers to like the Facebook page to stay updated with the lat-est. The hub of the page is not just the content from the magazine but also trending articles from diverse sectors of management.

Lastly, we would like to thank all faculty members who have provided their valuable feedback to help maintain the the standards we have strived to attain. Also, send in your valuable suggestions or feedback to [email protected]

Enjoy Reading!

~ Sushmit Sinha

http://www.facebook.com/pratibimb.reflecting.management

mailto:[email protected]


Contents Functional Beverages: Industry Analysis 7 by Divya Bhatia, Welingkar, Mumbai

Flash Mob — Prospects as an Exploitable Promotion Strategy 11 by Ambili Jayachandran, University of Kerala

Below the Line Advertising and the Changing Trends in Advertising 14 by Shashank Srivastava and Sarbaswarup Mohanty, IIM Lucknow

Interview: Mr. Prakash Dadlani 17 Country Head, Marketing Excellence, 3M

Interview: Mr. Ashok Banerjee 19 VP Supply Chain and Data Platform, Flipkart

Book Review: The Toyota Way 21 Prof. Rishi Kesava Ram Velure, Faculty Associate, Healthcare, TAPMI

Riding the Technology Wave 23 by Shreesha Ramdas and Harish Reddy

Yellow Metal, Yellow Fuel causing Economy Blues 25 by Vibhu Gangal, SCMHRD

Neuromarketing: The power of the subconscious 28 by Pramit Das and Subhamoy Ganguly, IMT Ghaziabad

Indian Corporate Bond Market 32 by Siddharth Pal, IIM Rohtak


Functional Beverages: Industry Analysis

by Divya Bhatia, Welingkar Institute, Mumbai

INTRODUCTION

The first functional beverage which was launched was to

hydrate the body. But today large numbers of functional

beverages are available for various lifestyle problems

ranging from anxiety to sleep to weight loss etc. Coca Cola’s

Shock and Red Bull were the early entrants in the industry

and are the ones who give chance to late entrant to think

about the industry.

Functional beverages can be defined as ready to drink

formulation with ingredients such as herbs, vitamins,

minerals, amino acids and raw fruits to provide additional

health benefits beyond nutrition. Various products which

are categorized as functional beverages are sports drinks,

energy drinks, ready to drink tea and coffees, yoghurt, fruit/

vegetable smoothies and even enhanced water. These

functional beverages satisfy need of consumers of

hydration, energy, enjoyment or simply having fun.

The global functional beverages market grew by 3% in 2010

to reach a value of $48,186 million. In 2015, the global

functional beverages market is forecast to have a value of

$62,151 million, an increase of 29% since 2010. Projections

for functional beverages are that market will grow by 103%

in between 2010 and 2015 and total annual sales exceeding

$78 billion in 2015. The Indian functional Beverage Industry

was estimated to be around Rs 11,159 crores in 2010 with a

CAGR of 21% in the last five years. It is expected that the

industry will cross Rs 19,000 crores sales in 2015.

Functional beverages are becoming popular due to their

specific health benefits and are appealing to consumers

because of changing lifestyles. Consumers purchase these

products for both convenience and specific health benefits.

FUNCTIONAL BEVERAGE INDUSTRY

Functional beverages sector can be said to be subsector of

non-alcoholic industry and is fastest growing sector. The

faster growth of sector is also because of saturation of

market by carbonated drinks. The industrial trend is

changing; the consumption of carbonated drinks is

decreasing while that of functional beverages is increasing.

The industry can be broadly divided into four market

segments:

Hydration:

Antioxidants, vitamins and fruit extracts are the

ingredients which hydrate both inner and outer side

of skin. The various vitamins commonly found in

energy drinks for their specific benefits are:

B vitamin: For energy metabolism

E vitamin: Has antioxidant property

C vitamin: To activate people

Gatorade is well known hydration drink for athletes.

Energy and rejuvenation

Red bull, Adrenaline rush, 180 and many more are highly

caffeinated and high energy drinks. These drinks

include stimulants such as taurine, caffeine, sugars, anti

-oxidants and creatine. Although these ingredients are

approved by FDA, some health experts still say that all

these ingredients are not beneficial to health.

Health and wellness:

This segment is about the health conscious people. So they

have introduced less sugar and less caloric beverages to


target this segment.

Weight management

Due to changing lifestyle there is an increase in obesity and

consumers are looking towards fast and easy methods

to reduce weight that can be easily adopted for their

lifestyle. So various calorie burning beverages,

metabolism boosting effect, fat burning beverages are

launched by companies that go well with people

convenience to reduce the weight.

MAJOR PLAYERS

The players in this category are divided into four types.

One is non-alcoholic beverages companies including

PepsiCo Inc. and Coca-Cola Co. Another type consists of

major food companies such as Nestle, Kraft food, General

Mills etc. The third group is small scaled companies like

local companies. Other segments are traditional medicines

companies products like Patanjali products, Asaram Bapu

products etc.

Various companies which are coming into new energy drink

segment are Dabur, Amul, Britannia, Danone and Rasna. All

these companies want to woo the health conscious young

Indian consumer. Even traditional companies who never

tried hands in such products are also trying.

Dabur will launch beverages under real brand.

Amul Company has come up with Prolife lassee and

buttermilk,

Rasna is even planning to enter into the segment

with a new subsidiary. They are looking for brand

licensing and technical collaboration.

Amway launched Amway XL energy drink which

comes in two flavors of citrus blast and tropical blast.

This product is launched as quick and healthy

solution to stress and fatigue.

ENVIRONMENT ANALYSIS

PORTER’S FIVE FORCES

PRODUCT

The functional beverages has wide range of product like

energy drinks, functional juice, juice drinks, enhanced

water, relaxation drinks, functional soy, rice and almond-

based drinks, coconut water, functional tea, functional

yogurt drinks and smoothies.

The products of functional beverages offer wide variety

targeting different health concerns. One major product is

hybrid drink with combination of vitamins and other

nutrients which has thirst quenching ability. The other is

probiotic or active drinks which have ability to enhance the

power of immune system. The other is for enhancing

memory and mental sharpness. Children are also targeted

by these energy drinks and Nestlé’s Boost is taking the lead

in this segment.

The other categorizations of the products are on the basis

of sports drinks, health drinks, beauty drinks, energy drinks,

weight-loss drinks etc. In the energy drink segment Red bull

is growing considerably fast.

Dairy products are even extending themselves to

more than flavored milk.

Various functional beverages which are available in

the market are Rhino's, Bullet, Cloud 9, Amway XL,

power house, XXX.

XXX has two variants Rejuve and Nicofix. SRK is

brand ambassador and even brand is associated with

KKR as principal sponsor. Nicofix is formulated to

decrease the urge for nicotine and Rejuve is

formulated to rejuvenate mind and body and

http://economictimes.indiatimes.com/topic/Rasna


enhance immunity.

SoBe Adrenaline Rush which is priced at Rs 75 for a

245 ml can.

Coca Cola has a global portfolio of five energy drink

brands Vitamin Energy, Full Throttle Fury, Powerplay,

TaB Energy and burn (Shock's global avatar).

GROWTH DRIVERS

1. There are various benefits of functional beverages

which interest consumer. Consumers are interested

in natural ingredients and beverages which are free

from artificial ingredients. As a result this market has

huge attraction for people who are concerned about

health. Diet drinks are low in caloric content and

with less of sugar content. Some drinks contain anti-

oxidants. These drinks have inherent energizing

benefits of fruits and are natural sources of caffeine.

Market of functional beverages is increasing because

people have been become proactive in disease

prevention and control.

2. Energy drinks used in combination with Vodka: In

some cases energy drinks can be used to boost sales

of alcoholic drinks or vice versa. Due to high caffeine

content energy drinks are compatible with alcoholic

drinks especially like premium Vodkas. And another

important point is that both energy and Vodka are

targeted to consumers around thirty years of age.

3. Energy drinks are good source of energy without

providing excessive calories and sugar. A majority of

Indians are now becoming aware about malnutrition

and under nutrition. They are looking for convenient

source of energy and functional drinks are fulfilling

their need.

CONSUMER PROFILE

Typical consumer of functional beverages is well educated,

in between 25-45 years old, having highly disposable

income, belong to upper middle and middle class. Females

consume or try functional beverages more than males.

These consumers are willing to try something new.

Companies are trying to surprise them by coming up with

new products. Surprise can be in form of color, taste and

aroma of product. By surprising customers the purpose of

companies is that consumer won’t get a chance to compare

product with cola or juices. Large consumption of functional

beverages is due to perceived health benefits of product.

CHALLENGES BEING FACED

1. Energy drink segment still remain a new category

with only few established players such as Red Bull,

Cloud-9, Power Horse and Sobe.

2. High price of these drinks are concern for the

company.

3. Food and drug administration (FDA) regulation due

to high amount of caffeine in some of the drinks.

4. Health concerns are associated with drinks. As some

of these drinks contain large amount of sugar and

caffeine which thus increases caloric intake and

further increase the case of heart attack, blood

pressure and other heart risks. As heart rate

automatically increases after exercise, so

consumption of energy drinks may further increase

it. High sugar content increase the chance of dental

carries. Concern is there about consumption of these

drinks in large amount. Some of these drinks are

even found to contain carcinogenic substances.

Various health experts claim adverse reaction using

these energy drinks.

5. The popularity of sports drink is limited to sports

people. Sports drinks are used only by sportsman

before and after performance. Challenge is to make

its presence on casual basis.

6. Though energy drink are more famous than sports

drinks. Their popularity is among night clubbers, long

distance drivers or by people after working long

hours.

7. There is consumer distrust on the claims made by

the beverages.

8. Competition from beverages which are much lower

priced than functional beverages.

9. Some energy drinks have been reported to be

misused by college students because of high content

of caffeine in them.

FACTOR FOR SUCCESS OF FUNCTIONAL BEVERAGES

Product: Drink must taste good and have element of

something new in it. Packaging should be attractive enough

as these drinks are single serving beverages so people want

to get notice when they are consuming these drinks. User

must feel that product works. All the claims behind the

product must be proved by scientific study and have

evidence of testimonies.

Price: Product should be launch in small packs at less price.

NourishCo launched glucose-based drink “Tata Gluco Plus”

in a 200 ml cup priced at Rs 6 and launched nutrient water

under “Tata Water Plus” at Rs 16 for a 750 ml bottle.


Place: Product should be available at all retail outlets.

Some of the products launched by companies are only

available in night clubs etc.

Promotion: These drinks are promoted with benefits such

as healthy heart, improved immunity and digestion and

energy boosting. Brands need to focus on mass segment.

Product can be promoted by sampling in the modern retail

where consumers are more receptive to product.

Competition: A clear differentiation of one’s product from

the competitor’s product is there in term of ingredients and

their health benefits. As the segment is continuously

increasing the companies are exploring new areas of

industry.

WHAT’S NEW

Energy drink segment is increasing where as natural juices

segment is decreasing. The growth of energy drink segment

has increased even during the recession. What is noticed

that segment is fairly able to maintain its consumer base

but is not able to add more of consumers. More than 800

sports and energy drinks were launched in 2010 all over the

world.

Protein drinks are also much in demand. These drinks are

targeting to consumer looking for basic nutrients such as

protein and fiber. These products reduce the weight while

maintaining the general lifestyle as these is convenient on-

the-go snack. The problem with this segment growth is that

people still think that drinks cannot be good source of

protein. Protein can only be provided by bars and powder

formulation.

Traditional products with ingredients such as caffeine,

vitamins, herbs and anti-oxidants are replaced by

ingredients such as protein, omega 3 fatty acids. Range of

products has broadened to sugar free, caffeine free and

organic products.

The companies are launching products with less of caloric

contents while retaining the same taste of products.

Pepsico introduce Pepsi Next, which has same taste as of

original cola but caloric content is decreased in product.

Pepsico also launched Trop50.

Other line of extension is natural teas. These beverages are

simple with all natural ingredients. Beverages companies

are pushing their functional beverages along with increasing

consumer demand.

FAILURES

Coke came up with energy drink Shock which was

positioned as lifestyle drink in 2001 with tagline ‘unleash

your wicked side”. The product was not able to produce

good market response. Similarly PepsiCo's energy drink

SoBe, GlaxoSmithKline Consumer Healthcare's sports drink

Lucozade and Tata Global Beverages's tea-based wellness

drink T!ON are not able to generate good response in

market.

The reasons behind these failures are pricing and most of

foreign companies have launched their product as such

without any local customization. Gatorade which was

initially introduced in Indian markets at price of Rs. 150 but

now product is manufactured in India only and is available

at price of Rs. 30 only.

Other drink launched by coke is burn which is high caffeine

drink and available in three various sizes 250ml, 300ml and

500 ml cans. The product is made not to be mass

distributed through various retail channels, but product will

be available in pubs, selected modern outlets, gym etc.

FUTURE OUTLOOK/RECOMMENDATION

Relaxing drinks have to look for negative claims and FDA

regulation in this segment of beverages.The content of

caffeine, sugar, other health supplement etc in most of

drinks amount need to be regulated, as excess of everything

is bad whether it is health supplement.

References

Business wire India

Nutraceuticals World

Foodlink US, Volume 7, N0-4

Wikipedia

Good management is the art of making problems so

interesting and their solutions so constructive that everyone

wants to get to work and deal with them."

—Paul Hawken, Natural Capitalism


Flash Mob — Prospects as an

Exploitable Promotion Strategy by Ambili Jayachandran, University of Kerala

Introduction

Guerrilla Marketing was discovered in the late 1970’s. Till

then the aim of marketers was to sell the product by

creating awareness about it. Advertisements adopted the

push strategy by bombarding the customers with

information about the product, through all Medias

available. This was successful in the initial years but later on

it lost its effectiveness. Advertisements did educate the

public but failed to engage or entertain them. It was in

1984, through the publishing of his book, that Jay Conrad

Levinson gave Guerrilla Marketing its form, definition and

recognition. He describes Guerrilla Marketing thus:

"I'm referring to the soul and essence of guerrilla

marketing which remain as always -- achieving

conventional goals, such as profits and joy, with

unconventional methods, such as investing energy

instead of money.”

All that it needs is to think out of the box and have loads of

creativity. It is not preachy or educational but actually

makes the viewer surprised, entertained and even part of

the campaign. The more creative the campaign is the more

attention it captures.

Picture 1:- This is one of the simplest examples of Guerrilla

Marketing and may be the cheapest. All it would

have taken for Nestle is a can of paints, and of

course permission from the city corporation, to

market this product.

It is not necessary that Guerilla Marketing to be used only

for commercial purposes.

Picture 2:- When garbage dumping became a problem,

the Auckland City Council replaced the

regular black rubbish bag into a bushy

hedge, sending a message in itself.

The main success of this marketing strategy is that it is

useful for small business enterprises with small budgets, to

market or promote their product. In the words of Jay

Conrad Levinson, “Guerrilla marketing has been proven in

action to work for small businesses around the world. It

works because it's simple to understand, easy to implement

and outrageously inexpensive. Guerrilla marketing is needed

because it gives small businesses a delightfully unfair

advantage: certainty in an uncertain world, economy in a

high-priced world, simplicity in a complicated world,

marketing awareness in a clueless world.”

Many companies, small or large have used this marketing


strategy and have achieved a great response in the form of

increased sales and market share in many countries. It is

still used widely but not as frequently, relative to other

forms of advertising or promotional strategies.

Guerrilla Marketing takes different forms such as Graffiti,

Sticker bombs, Flash Mobs and anything or everything

creative.

Flash Mob

Suppose you are in a mall and suddenly regular shoppers

(or so) come together and do something out of the blue,

don’t be shocked. You are witnessing a flash mob. They

might dance, sing, do a tableau or simply do something

together in perfect sync and disperse into different

directions once the act is complete. This is done either as an

advertisement campaign, as a social awareness act, as a

protest or for entertainment.

Picture 3:- Hundred actresses got dressed as Maria

Bello's Jane Timoney character in the

rookie NBC drama in Canada to market

this U.S. network series.

The first flash mob took place in 2003 in New York Macy’s,

where hundreds of people entered a store searching for a

“love rug”. The first flash mob in India took place in

Mumbai’s Chhatrapati Shivaji Terminus, a day after the

third anniversary of 26/11. Shonan Kothari organised this

flash mob as a tribute to the victims of the terror attack.

She was successful in getting permissions from the Mumbai

police as well as the railway authorities and most

importantly, bringing in two hundred youngsters to practise

and dance together for ten minutes. The commuters were

taken by surprise and this was what the mob wanted out of

their performance.

Even though India has gone through a lot of development,

majority of the public are very conventional and traditional.

They are new to this concept and might take some time to

accept it whole-heartedly. Still, this phenomenon has been

taken up and performed in various parts of India such as,

Noida, Vishakhapatnam, Vadodara, Kochi and Hyderabad. It

is safe to say that Flash Mobs are rapidly gaining popularity

and acceptance.

Picture 4:- Flash Mob at Mumbai’s Chhatrapati Shivaji

Terminus, a day after the third anniversary

of 26/11

“It’s the new rage. It’s fun, it’s entertainment and it’s an

effective vehicle for social messages.” This is how Neha

Malude described Flash Mobs in The Hindu’s Sunday

Supplement “Magazine”, published on June 17, 2012.

Current Market Condition

India has a highly competitive market where there are many

enterprises selling the same or similar products. Consumers

are rational and have full access to information about

products (with the advancement of technology and

Internet). So, it has become an absolute necessity for

enterprises to satisfy consumers for their survival. In such a

scenario, the only way in which a firm can have a fair

market share is by creating product preference or loyalty.

This can be done by increasing the product utility and

backing it up with heavy advertising and promotional

strategies. Almost all promotional strategies have become

common and are slowly losing its effectiveness in catching

the attention of the public.

As mentioned earlier, advertisements only educate the

consumers and fait to engage or entertain them. This is

where companies can utilise the concept of Flash Mobs,

which has already started gaining popularity among the

crowds. Flash Mobs have been successful as a social vehicle


for spreading social messages; in other words, they have

been able to draw attention. So this could be the new

promotional strategy which can be exploited by different

firms.

Prospects of Flash Mobs Being an Exploitable Promotional

Strategy

Flash Mobs seek fun and get it too. So participation can be

ensured; but the main task is to manage or coordinate

them. This of course, is not a Herculean task keeping in

view that there are people like Shonan who have been able

to gather, manage and co-ordinate a two hundred member

flash mob and turn it into a huge success.

On the flip side, Flash Mobs are performed in metros and

malls. This is comparatively a very small portion of the

target market. If a company takes up flash mob as its

marketing strategy, it may not get the coverage that a mass

communication media such as a Television or Radio would.

There might be a little amount of work to do such as getting

permissions or paying rent for the space used and even the

mob (if the concept gets wide acceptability then the mall

authorities might also try to exploit the same).

Most important of all; is its acceptability itself. It is too early

to say if “Flash Mobs” are a fashion or a fad. The difference

is that, fashion may stay for a long time but fad ends as

soon as the novelty of such a phenomenon fades.

Picture 5: - Fashion Picture 5:- Fad

Conclusion

Flash Mobs are new in India and have become the talk of

the town. It has definitely created popularity. The concern

is whether it would gain acceptability in this traditional

society. If it does, it could be the next promotional strategy

exploited by companies to market their products. Being the

most cost–effective (in comparison to other marketing

strategies), at the same time crowd-engaging phenomenon,

its ability in promoting a product is almost undisputable. It

has created positive results as a social vehicle in India, it still

needs to be seen whether it would do the same as a

promotional strategy.

References

Philip Kotler, Gary Armstrong, (2008), Principles of

Marketing, Pearson Education, Inc, Twelfth edition.

Jay Conrad Levinson, Michael W. McLaughlin, (2005),

Guerrilla Marketing for Consultants, Breakthrough

tactics for Winning Profitable Clients, John Wiley

and Sons, Inc.

Neha Malude, The Hindu’s Magazine, Weekly

Edition, Sunday, June 17, 2002 issue.

http://www.ndtv.com/video/player/news/watch-

flash-mob-in-mumbai-wows-commuters-at-

cst/217228

http://urbanpeek.com/2011/06/10/flash-mob/

http://www.hollywoodreporter.com/news/nbc-s-

prime-suspect-promoted-239161

http://weburbanist.com/2008/06/03/the-history-of-

guerrilla-marketing/

http://en.wikipedia.org

http://www.proprofs.com/flashcards/

cardshowall.php?title=ksu-marketing-400-quiz-2

"Management is efficiency in climbing the ladder of success;

leadership determines whether the ladder is leaning against the

right wall."

— Stephen R. Covey

http://www.ndtv.com/video/player/news/watch-flash-mob-in-mumbai-wows-commuters-at-cst/217228



http://urbanpeek.com/2011/06/10/flash-mob/

http://www.hollywoodreporter.com/news/nbc-s-prime-suspect-promoted-239161

http://www.hollywoodreporter.com/news/nbc-s-prime-suspect-promoted-239161

http://weburbanist.com/2008/06/03/the-history-of-guerrilla-marketing/

http://weburbanist.com/2008/06/03/the-history-of-guerrilla-marketing/

http://en.wikipedia.org

http://www.proprofs.com/flashcards/cardshowall.php?title=ksu-marketing-400-quiz-2

http://www.proprofs.com/flashcards/cardshowall.php?title=ksu-marketing-400-quiz-2


Below the Line Advertising and

the Changing Trends in

Advertising by Shashank Srivastava & Sarbaswarup Mohanty, IIM Lucknow

In a market rapidly adjusting to changes in technology,

available information and heightened consumer demand,

traditional and brand oriented advertising is no longer the

primary driver of customer behaviour. Its reflected in the

dwindling print newspaper circulation and the stagnant

market of network television commercials, focus of

marketers has now shifted from an “above the line” focus

on reaching a broad population with emotionally oriented

appeals , to a “below the line” approach that stresses

targeted customer centric communications and concrete

returns on investment.

Below-the-line methods are very specific, memorable

activities focused on targeted groups of consumers. They

are under the control of the organisation. For example Kia

Motors uses these techniques to target clearly defined

consumer groups rather than a mass audience like its above

-the-line activity. The purpose of these activities has been

to develop the brand by creating awareness and building a

brand profile. Below-the-line methods include:

Sponsorship

Sales Promotions

Public Relations

Personal Selling

Direct Marketing.

CHANGING TRENDS IN ADVERTISING:

Consumers are faced with a barrage of advertisements

every day in their lives. People are starting to lose interest

and even despise the mass advertising being followed

through traditional channels of mass advertising like – TV,

radio, newspapers, magazines, etc. Consumers are using

technology to counter the entry of ads into their personal

lives.

TV viewers are resorting to digital video recorders

and on demand technologies to fast forward through

advertisements.

Some people use mobile devices to download

commercial free versions of popular television

shows.

Internet users are using software to block spam and

popup advertisements.

Marketers have been tempted to follow one to one

advertising or targeting niche customers. But the practice of

targeting “niche” customers can prove to be costly for

organizations.

Sometimes also the costs of advertising are more than the

costs allocated in the budget for promotional purposes.

Four specific techniques have been identified where

marketers can reach broad segments of people without

overshooting their advertising budget.

Catching people in the bottlenecks: Though people can

easily screen advertisements when they are in their homes

but people every day spend time outside their homes

where they lack the required control. The examples of

bottlenecks can be – waiting in an airport lounge , travelling

in elevator , going up in an escalator in a mall or it can be

travelling in a taxi. In these bottlenecks of life, advertisers

can reach people with acceptable messages.

The purpose of advertising on taxis for advertisers can be

many. The taxi owner gets revenues from space which

could not have been utilized for a better purpose. And the

advertiser gets better visibility since the taxi can roam from

place to place with different customers aboard. This can

prove to be beneficial for marketers than billboard ads

which are fixed and whose effectiveness depends on the

billboard location.

Also on elevators, companies have installed a wireless

digital screen which broadcasts short news and

entertainment programs. The recall rate increases with

frequent travel. Mastercard provided complimentary


snacks, movie headphones , puzzles and games to travellers

on American Airlines and the flight attendants publicized

the benefits. Even seats on aircrafts and taxis in developed

countries are fitted with small screens which displays ads

and for consumers using the means of transport, they can’t

avoid it altogether. Companies have also advertised in

public restrooms and toilets.

Using

a

Trojan Horse: The concept of “sneaking” ads is familiar with

product placement in films, television programs and even

in video games today. Considering the example of “coffee

cups”, Millions of office goers use insulated coffee cups

everyday during office hours at their desks or in board room

meetings, etc. Normally the companies won’t allow

advertisers to advertise to people inside the office, but the

concept of placing small ads in the coffee cups helps in

gaining visibility for marketers without burning a hole in

their pocket.

Other unique ways can include advertising on pizza boxes,

or advertising on pay checks in restaurants and deposit

slips in banks or on the rear of an airlines ticket.

Also recently garbage truck advertising has come to the

fore. The municipalities can get revenues from unused

spaces on trucks and companies on their parts get huge

unused places to advertise.

Advertising on Garbage Trucks

FedEx Ads on Coffee Cup

Use of Mahindra Flyte in 3 Idiots


Omega watches in Bond Movies

Targeting People at play: People generally don’t like to be

bothered when they are vacationing or doing some leisure

activity like playing golf. But advertisers have realized that

giving people something they can use is a more thoughtful

approach to brand building than the tactic of pushing more

and more messages when people are glued to the television

or computer. Since this kind of advertising doesn’t disrupt

the people’s activities it is seen as less intrusive for people.

For Example: Golf Carts are being fitted with GPS systems.

Ads can be placed and shown in the GPS system when

player is moving from one hole to another hole. In Hotels,

People can be given trial kits of Razors, toothbrushes or

body wash of some reputed company like Gillette or Oral B.

Getting people to play interactive games:

New technologies help marketers to interact with

consumers in public spaces without employing massive

sales teams. For example: Nokia when it launched its 3300

model contributed a quarter of its advertising budget on

interactive posters. An Adidas Ad replicated a virtual

football field wherein customers could play by passing a

virtual ball to each other.

Many people interviewed after these experiences were

enthusiastic about the whole process which included fun

events and planned to tell others about it.

Hence in the above examples we have seen how the focus

of marketers is shifting from the traditional modes of

advertising to the other newer modes of advertising. Also

direct mails, print response ads and telemarketing are

coming up in a big way to open up new avenues in

advertising and leading to heightened competition among

companies.

REFERENCES:

Nunes Paul F. & Merrihue Jeffrey, “The Continuing

power of mass advertising”, M.I.T. Sloan

Management Review

Paper on – “Tracking the trends : A comparison of

Above the line and Below the line Expenditure

trends, V12 group & Winterberry Group, 2006

http://businesscasestudies.co.uk/kia-motors/using-

sports-marketing-to-engage-with-consumers/above-

the-line-and-below-the-line-promotion.html

http://www.business-standard.com/india/news/

belowline-advertising-onroll/339587/

http://businesscasestudies.co.uk/kia-motors/using-sports-marketing-to-engage-with-consumers/above-the-line-and-below-the-line-promotion.html



http://www.business-standard.com/india/news/belowline-advertising-onroll/339587/

http://www.business-standard.com/india/news/belowline-advertising-onroll/339587/


Mr. Prakash Dadlani

Country Head, Marketing Excellence, 3M

TAPMI had an opportunity to interact with Mr. Prakash

Dadlani, Country Head, Marketing Excellence at 3M. In an

exclusive interview with Sushmit Sinha and Aditya Niyogi

for Pratibimb, Mr. Dadlani shares valuable insights on

Branding which would strike a chord with any Marketing

student. Excerpts: [The views expressed are his personal and

not the views of 3M or any other organization he has

worked for]

In the balance between master brands and sub brands –

what are the key factors that a manager must take into

consideration while coming up with new products? What

are the associated risks and advantages?

A very important question that should be asked by any

Brand Manager to his Marketing Head at a very early stage

of branding a new product. The call needs to be taken in

sync with the values of the Master Brand and the upside or

downside the product positioning can cause to the

Masterbrand and indeed to the product itself.

In most cases the Masterbrand and Product would benefit

from an association, but the degree of association

should vary depending on the exact current positioning as

understood by customer research and not the 'feelings' of

the brand team.

How does Asian and Indian style of innovation differ from

the western trends? How are products tiered as A, B and

C?

The basics remain the same as to the process of innovation,

which begins at the customer and ends with the customer.

Sometimes macro trends play a huge role in identifying

trends which the customer may not relate to today, but

these are picked by sharp observers of Consumer Behavior

and Tech experts who begin preliminary work on them and

then check with consumers.

Traditionally Asian and Indian techniques and methods

would follow the West, but now the trend of 'frugal

innovation" seems to be originating in India and then going

back to other countries including some Western ones. Here

the traditional Bottom of the Pyramid approach has worked

well for some companies. Here too, however, the entire

mix, i.e., manufacturing, route to market, marketing and

sales support have to be in line with the tier under

discussion to make it a viable and sustainable option.

Let’s say a gap has been identified to launch a prospective

product, what are the basic criteria that we should

evaluate be we go ahead with the development?

The capability of the organization to make ROI is primary.

Hence, it needs to fit the criteria of the support required in

all the above aspects important for the product to reach

and sustain in the market.

What are the challenges involved in sustaining a highly

innovative culture?

Not easy to give a single answer, but allowing a certain time

for people to devote to a project of their own choice,

promoting diversity in terms of educational background and

qualification, interaction with other industries, institutions

and a meaningful reward and recognition platform.

How can a brand strategy be aligned with a company’s

business strategy?

There’s is no option but to make the brand strategy a

INTERVIEW


driving force for business strategy. For that the definition of

'Brand' has to expand to include all the touch points of

business, Brand is something all functions, HR, Finance,

Sales, Supply Chain, all help build and hence they need to

analyze which of their actions impact Brand and hence

business and work on those actions

What is the test of a successful brand awareness

campaign? Are there relevant metrics that can reflect its

performance to help in brand strategy?

Traditionally we have limited this discussion to Brand

awareness only, however the better measures are the

quality of brand recall, whether the relevant and desired

attributes have set targets and how they fare over a period

of time, setting targets to those attributes in sync with the

brand positioning and measuring them in conjunction with

the sales performance can help understand the impact of

Brand on sales over a period of time. Along the period of

time, mapping of ad campaigns, sales promos and external

factors will help clarify the impact of brand vs. other factors

How can B-school grads maintain a competitive edge in

marketing when they step into the industry?

Interaction with Industry in a proactive basis is the only way

to achieve this. At such interactions both industry and the B

school both get the benefit. Summer Internship is another

good area where students can come in touch with reality.

In many companies technical team, production team and

finance team/purchase team are given individual targets.

Often the goals are conflicting, with production team

wanting a better product and purchase team aiming to

reduce cost. Under such conditions what approach do you

suggest a sales person take?

There are various mechanisms to tackle it. The most

common one is creating of cross functional teams. Over a

period of time the teams understand each other’s pain

points and evolve into a close knit unit. Having a cross

linked goal sheet like a Balance Score Card or a Hoshen

Kaniri System also helps.

In today's market, innovation obsolescence is high

compared to previous decades. How can companies make

buyers adopt their product at a premium on a sustained

basis?

The basis of any product has to be the satisfaction of a

genuine need of a customer. This need may be a felt need

or otherwise. Till the time this is the case a company can

get a decent ROI.

Often new technology in not adopted either because

people do not wish to re-train or they are uncomfortable

with new technology. Does "Client Education programs"

yield benefits?

Client education is an important element of the Value

Selling concept and there is no way this can be avoided. In

fact this is a service many clients seek form their suppliers

as a given. The real benefit is actually when some

companies pay their suppliers to train their larger

organization.


Mr. Ashok Banerjee VP, Supply Chain and Data Platform, Flipkart

(Courtesy Yourstory.in)

It’s not often that you come across a person who’s had

experience working with the biggest and hottest companies

across the globe – Oracle, BEA Systems, Google, Twitter and

now Flipkart. Meet

Ashok Banerjee, a data scientist who is currently the VP of

data platform and supply chain at Flipkart. More of a

personal decision of moving back to India from the bay

area, Ashok had offers aplenty but he chose Flipkart

primarily because it is the most promising company in India

that is on an exponential growth curve. We got in touch

with Ashok to learn more about what excites him as a data

scientist and the cultural differences of working with great

companies across the world.

YS: Hello Ashok, you have a very interesting profile! A

mechanical engineer who did his masters in Computer

Science and went on to become a data scientist; how did

that happen?

AB: Yes, it has been an amazing ride. Doing my graduation

in mechanical, I realized that I liked the mechanics part of

what I was studying but not the part which involved being

on the shop floor and putting in muscular power doing

Smithy, Carpentry and the likes. Mechanical engineering is

definitely much more than that but Computer Science had

always intrigued me. Even for my post-graduation, I had a

very memorable incident. I had to get a research

assistantship for paying my tuition fees. Having a different

background, it was going to be an uphill task for me but I

did everything in my capacity to get that place. I took a CS

subject as an elective which I topped and for the place of

RA, I chased the professor like anything! I waited for him for

hours and made sure my resume reached him anyhow; I

even flew in a paper plane version of my resume, through

his open office window to make sure he notices my

application.. And eventually I did land the role. Persistence

pays off.

YS: Wow, that’s quite a story in itself! After your post-

graduation, you went to Oracle and subsequently Google

and Twitter. How was the transition?

AB: Well, Oracle was a prestigious job at that time and it is

what makes me proud. They wanted someone proficient in

CORBA and that is how I landed up there. Oracle is a large

organization and is very well structured. BEA Systems which

was a smaller company taught me a lot. It had a much

stronger coordination and communication. Here I saw and

learned a lot from a really strong Management team.

Moving to Google was a very pleasant surprise! I was

amazed at how disruptive Google was and is. Some of the

best innovations in the modern age have come from Google

and it shows! The culture is just phenomenal but one thing

that I can point out as a bit of a negative from a personal

point of view is that Google has a complete stack of its own.

In my 4 years Google changed and felt much more

structured and a larger company feel to it. Twitter was

different as a smaller company. It was still much more of a

startup and involved more pragmatic decision making

around costs/constraints and tradeoffs. Twitter is what

made me think about social networks, growth and

exponential growth. As a company grows exponentially

INTERVIEW


culture changes dramatically. Employees joining at $2

billion valuation is very different from someone joining it at

$8 billion valuation. As a company grows, communication

models change, the room for misinterpretation increases as

people know each other less. The growth phase at Twitter

was very exhilarating.

YS: Your role at Twitter was very interesting indeed; “User

Growth Initiative”. Tell us about it.

AB: User growth is all about experimentation and

recommendations specially for the new user. Where should

you place an element on the page, what colour it should be

and all such details are a part of it; and these factors have

importance to the customer. A user may never return after

the first interaction so if we cannot connect the new user to

interesting personalized content he may never come back.

The first visit may well be the last. For example, take in very

few details from the user but make the most of it. The first

name, Last name and IP can tell you a lot! First name gives

the gender, last name gives the place of origin and the IP

gives the current location. Clubbing these, a lot can be

known. These helps you make targeted recommendations

and helps you know what a user might want. This is a

glimpse about how the “User Growth Initiative” goes on.

YS: Data is huge. And so is the hype behind it. Is this

validated?

AB: I think it is. The rate at which the amount of information

is growing in unimaginable; traditional databases will be

found lacking. Taking an example, number of pages are

increasing , number of queries are increasing but a person

searching on google would expect a result in less than 0.5

seconds. Similarly on Flipkart the number of items we sell is

increasing the number of customers is increasing but site

must be equally performant and more performant. The

technologies start to become NoSQL and custom systems.

YS: Okay. So, why Flipkart? Why did you decide to make a

move to India?

AB: There were multiple reasons for this. I had personal

reasons and desire to be closer to my mother. I had heard a

lot about the growth story back in India and it excited me. I

wanted to see a growth curve and an even earlier stage

than Twitter. Looking at India, Flipkart satisfies the

exponential growth great technology and culture. This

growth story is what has lured me into Flipkart. I could have

joined any other company but I also wanted to be present

at the Headquarters because for any company, the HQ is

where the core work happens.

YS: So, how has it been at Flipkart?

AB: Oh absolutely fantastic. I was skeptic as to how the

work culture would be because this is the first time I was

going to work from outside the Bay Area but it has panned

out very well. Culturally, I think Google, Twitter and Flipkart

are very similar.

YS: What are your views on the startup ecosystem in

India?

AB: The ecosystem is still maturing and US has more senior

people.However the scarcity of senior talent also opens up

bigger, bolder opportunities for those who are ready and

willing to step up.

We at Yourstory.in would like to thank the organizers at the

Fifth Elephant Conference where we first met Ashok. We

wish Ashok all the best for his new stint with the poster boy

of India’s startup ecosystem, Flipkart and hope for many

good things to come.

http://cloudstory.in/2012/07/the-fifth-elephant-a-conference-on-the-big-data-ecosystem-in-india-27-28-july-bangalore/


The Toyota Way by Prof. Rishi Kesava Ram Velure, TAPMI

The Toyota Way unleashes the exclusive 14 Management

Principles followed in the world’s largest automobile

manufacturing company, TOYOTA. Liker has succeeded in

describing the blue print of Toyota’s management

philosophy in a well defined manner. The author

acknowledges his 20 years of companionship with Toyota to

authenticate his work. He elaborated the understanding of

cross cultural management learning and openness of

Toyota to share its source of competitive advantage with

the rest of the world, which is highly laudable. It highlights

the holistic approach of considering all the elements as a

part of system and consistent practice of organizational

principles across the company irrespective of the

geographic location. The author was successful enough to

present the practical application of lean thinking and lean

production along with various workplace systems.

The book is divided into three major parts in which, the first

part deals with the uniqueness of the Toyota Way. In this

part, the author explained how the Toyoda family

succeeded in differentiating themselves from the rest of the

world through their Toyota Production System (TPS). The

second part is critical, dealing with the basic principles of

the Toyota Way. In this part, the author has divided all the

14 principles into four sections and explained them in

detail. Finally, in the concluding third part the author

elucidates the application of the Toyota Way in an

organization in making it a lean learning enterprise. Here,

he describes building and transforming a service

organization by burrowing the Toyota Way.

Part I: Using Operational Excellence as a Strategic Weapon

To simplify, the author has classified all the 14 principles in

to 4 categories, namely Philosophy, Process, People/

Partners and Problem solving (constitutes the “4P” model

of the Toyota Way) correlating to the Toyota’s terminology

of Challenge, Kaizen, Respect, Teamwork and Genchi

Genbutsu. This is the foundation for the Toyota Production

System (TPS) founded by Taichi Ohno, is often known as

“Lean” or “Lean Production”, the core principles being

jidoka and One-piece flow. Asking the question “what does

the customer want?” is the way TPS gets started. And,

eliminating the eight wastes is the heart of the TPS, which

are Over-production, Waiting (Time on hand), Unnecessary

transport or conveyance, Over processing or incorrect

processing, Excess inventory, Unnecessary movement,

Defects and Unused employee creativity.

Fujio Cho, a disciple of Taichi Ohno developed a simple

representation of TPS in the form of “TPS House” which

depicts the two pillars of Just-in-Time (JIT) and Jidoka with a

strong foundation of Visual Management, Stable and

Standardized Processes, Leveled Production (heijunka). And,

the roof is made of Best Quality, Lowest Cost, Shortest Lead

Time, Best Safety and High Morale. Waste Reduction,

Continuous Improvement, People and Teamwork are

integral part of the house which runs the entire system,

implying TPS is not just a tool kit but management

philosophy. And, former President, Shoichiro Toyoda gives

the three C’s of Toyota company as Creativity, Challenge

and Courage, in the development path-breaking model

‘Prius’ in 15 months time, which is an industry record.

Part II: The Business Principles of the Toyota Way

The first section is about Long-term philosophy (principle 1)

highlighting the guiding principles of Toyota Motor

Corporation, which include Honor, Respect, Dedicate,

Create, Foster, Pursue and Work. The author has brought

out the uniqueness in the mission of the company to create

constancy of purpose and place in history with three

exclusive elements of contributing to the economic growth

of the country, contributing to the stability and well-being

BOOK REVIEW


of team members (internal stakeholders) and contributing

to the overall growth of Toyota.

The second section enumerates how right processes will

lead to producing the right results through creating

continuous process flow to bring problems to the surface

(principle 2), where the author explains takt time and One-

piece flow. Using “pull” systems to avoid over-production

(principle 3) elaborates on Kanban system. Leveling out the

workload- heijunka (principle 4) discusses the three M’s

(Muda- waste, Mura- Unevenness, Muri- Overburden).

Building a culture of stopping to fix problems, to get quality

right the first time (principle 5) deliberates on jidoka.

Standardizing tasks are the foundation for continuous

improvement and employee empowerment (principle 6)

emphasizing the need for enabling bureaucracy and

standardization as ‘Enabler’. Using visual control so no

problems are hidden (principle 7) describes application of

five S’s (sort, straighten, shine, standardize and sustain)

and A3 reporting. Using only reliable, thoroughly tested

technology that serves your people and processes (principle

8) signifies how a new technology must support people,

process and values on adoption.

The third section is about adding value to the organization

by developing your people and partners. Growing leaders

who thoroughly understand the work, live the philosophy,

and teach it to others (principle 9) impressing on the

leader’s view of TPS with people through Technical,

Management and Philosophical dimensions and the

interesting Toyota leadership model. Developing

exceptional people and teams who follow your company’s

philosophy (principle 10) explains typical Toyota assembly

operation and holistic approach towards employee

motivation. Respecting your extended network of partners

and suppliers by challenging them and helping them to

improve (principle 11), demonstrates mutual learning and

supply chain hierarchy at Toyota.

The last section of part two, discusses continuous solving of

root problems driving organizational learning, by going and

seeing yourself (principle 12) to thoroughly understand the

situation (Genchi Genbutsu). Making decisions slowly by

consensus, thoroughly considering all options, implement

rapidly (principle 13) describes, empowering junior

employees to take decisions slowly by consensus and

implement rapidly (Nemawashi), Deming cycle, and

alternative Toyota decision making methods. Becoming a

learning organization through relentless reflection (Hansei)

and continuous improvement (Kaizen) (principle 14),

explains about application of five Why’s to identify the root

cause for a problem at the workplace and typical Toyota’s

seven step practical problem-solving process. It emphasizes

on Process vs. results orientation: the role of metrics and

directing and motivating organizational learning (Hoshin

Kanri) - the Toyota’s policy deployment process. Thus, it

concludes how the Deming cycle can be applied at all levels

of the enterprise.

Part III: Applying the Toyota Way in Your Organization

This explains how to understand the reactions for lean

change and identifying problems in the flow of service

organizations. The author illustrates the success of Canada

Post Corporation (CPC) with repetitive service operations.

He further describes developing and improving value

stream maps through Kaizen workshops with key indicators

like the task time (TT), time in system (TIS), and the value

ratio of value added to total lead time (VR). And, concludes

with real time examples of Northrop Grumman Ship

Systems Service Process Kaizen event and Visual Control of

Engineering at Genie Industries.

In the concluding chapter, build your own lean learning

enterprise, borrowing from the Toyota Way, the author

explains the importance and factors influencing leadership

“commitment to lean” journey. He clarifies the myths and

reality of TPS and the difficulties in changing culture. Thus,

the book ends with 13 tips for transitioning your company

to a Lean Enterprise.

Book The Toyota Way

Author Jeffrey Liker

Publishing Date 2004

Publisher Tata Mcgraw Hill

Education Private Limited

Number of Pages 352

Language English


Riding the Technology Wave by Shreesha Ramdas and Harish Reddy

When we started our company LeadFormix, we resolved to

not seek venture funding for product development.

However, we were open to the idea, particularly for

expanding sales and marketing at a later stage. So, we

started as a services company and named it Outerjoin.

Using the revenue that Outerjoin generated, we evolved to

become a product company. Companies that have evolved

from a similar path include Rhapsody Networks which was

sold to Brocade, as well as Tibco. We started as Outerjoin in

2007 with three co-founders. By 2008, we started to talk

with Outerjoin customers to first test their acceptance of a

social media monitoring solution; then we tried B2B

analytics.

From B2B analytics, we created what’s now known as the

Daily Leads Report. Our early success was an indication that

our business model could scale. Hence, we sought angel

funding. We were fortunate to get early backing from the

founder of Brocade (Kumar Malavalli-http://

en.wikipedia.org/wiki/Kumar_Malavalli) who believed our

‘intent algorithm based’ analytics had a strong value

proposition. Once angel funding was secured, we then

focused on building a customer base.

Soon, our customers asked us to add email and workflow

automation which made our platform useful to marketers.

Before we knew it, we backed our way into what’s now

known as a “marketing automation” solution and

transformed it from a mere analytics tool. We worked on

developing our marketing automation solution and

launched it at the end of 2009.

It took until spring of 2010 before we were sure that we

were competing in the marketing automation space. By

March of 2010, we started to run into marketing

automation competitors, and we started to talk with CRM

companies in order to integrate our solution with theirs.

Having transitioned from a start-up, we set our sights on

expanding our footprint and moving towards establishing a

market leadership. We realized that it was time to seek

venture funding in order to expand marketing and sales and

taking our brand to the next level. Before long,

CallidusCloud swept us away. (http://

techcrunch.com/2012/01/03/calliduscloud-acquires-

leadformix/)

http://techcrunch.com/2012/01/03/calliduscloud-acquires-leadformix/




Shreesha Ramdas

VP of Enablement, CallidusCloud

Currently VP of Enablement at CallidusCloud, Shreesha

Ramdas was the co-founder & COO at LeadFormix, a

marketing automation 2.0 platform, where he raised the

initial funding, built the company and contributed to the

successful acquisition by Callidus in January 2012. Prior to

LeadFormix, Shreesha was a co-founder at OuterJoin, an

online marketing services company that helped B2B and

B2C customers develop and execute effective online

marketing. Before that, Shreesha drove new business

development at Catalytic Software, where he was

instrumental in developing key accounts including Viacom,

Countrywide and Orange. He has also held key

management positions at MW2 Consulting and Yodlee,

where he held the role of General Manager of Yodlee’s

center.

Harish Reddy,

VP – India Operations, CallidusCloud

Harish has a specialisation in Strategic Marketing, Paid

marketing, Media Planning, Search Engine Marketing,

Product Management, Channel management, Affiliate

Networking and Brand Management. Harish has more than

a decade of experience in brand and marketing

management, as well as a background in sales. Prior to

joining LeadFormix, he worked with the Saud Bahwan

Group as their marketing director and before that held a

key marketing position with Tata Motors and was

responsible for Tata’s entry into the branded public

transportation sector. He holds a Post Graduate Diploma in

Business Administration, and a Bachelor's degree in

Engineering.

AUTHOR PROFILES


Yellow Metal, Yellow Fuel causing

Economy Blues

by Vibhu Gangal, SCMHRD

The demand equation states that the aggregate demand

(and the national income at equilibrium) is an algebraic sum

of consumption demand, investment demand, government

expenditure and net exports. The moment we say

'demand', it is backed by money and indicates a destination

where people roll out the money they possess. If this

money is spent to fulfill any of these demands which add up

to the national income, it’s a positive sign. The more this

happens, the more the country grows economically, the

more is the national income, the stronger is the home

currency. One scenario, where possession of money with

individuals of a nation can harm the economy, is when the

money possessed gets expended big time towards imports,

which makes net exports and overall national income

negative, leaving the investment demand of the nation

unquenchable. A similar thing seems to have happened in

India. Let’s take a closer look at its causes and implications.

Consider an analogy, where we have a dam constructed

with an aim to irrigate fields. It has some water collected in

the reservoir. This water flows to the fields through

channels. Thus, it’s the channels which ensure that the

water in the dam gets utilized for growing crops and not for

domestic purposes of farmers' households. Had the

channels being broken and had the water been routed to

households instead of fields, crops could never have grown

due to lack of water and the production of the territory

could have taken a severe hit. The water is equivalent to

liquid rupee with the Indians, crops to the GDP, and

channels to the government regulations and policies. In

India, a major part of money (water) is spent in buying

volumes of gold by families (household demand). If gold

was available in India, the tendency of buying gold would

have created better circulation of money and the multiplier

effect would have done well to the economy.

Unfortunately, out of 902 tones of domestic annual gold

demand, India produces only two tones and the rest 900

tones is imported.

More the demand for gold, more are its imports, more is

the payment in dollars, more is the influx of rupee in forex

market, more is the outflow of dollars from forex market,

more depreciates the rupee, more expensive becomes any

imported item including gold. This self-feeding spiral

continues and raises ringing-alarm-bells when it reaches a

stage where RBI cannot save the rupee by ad hoc

workarounds like selling dollars and "trying" (rather

struggling) to induce more FII participation.

Indians have imported gold worth $61.5 billion (or around

Rs 341,000 crore) in 2011-12, recording a growth of 44.4

per cent during 2011-12. Same is the case with petrol. A

consistent surge in demand eventually causes the same

vicious circle of events. Together, gold and petrol are the

biggest burden on trade deficit and have worsened current

account deficit badly, causing the sharp decline in value of

rupee vis-a-vis dollar. The trade deficit during 2011-12 was

recorded at $184.9 billion than $118.7 billion during 2010-

11 mainly on account of large imports of fuel, gold & silver

accounting for 44.4 per cent of India’s imports. Reports

suggest that gold imports contributed to almost one third of

the incremental rise in Current Account Deficit over the

2008-2011 period.

Directly, gold contributes 0.36% to inflation index.

Indirectly, it makes all imports including crude oil costlier

fuelling input costs for all industries ranging from plastics to


automobiles. If the input costs rise, so have to be the prices

of finished products. Eventually it’s the inflation which kicks

off. The time lags between rise in gold demand, rise in

import prices and rise in end product prices make the three

events appear disconnected to the general public and as

the "safest" option, we end up blaming the government

without any knowledge of ground level proceedings.

Arithmetically, every dollar reduction in international oil

prices translates into a cut in product price by 33 paisa. But

every time the rupee depreciates against the US dollar by

one rupee, it translates into a requirement to raise prices by

77 paisa.

Another aspect is, with booming inflation, with industrial

products being costlier than earlier, why would a buyer in

international market prefer buying Indian expensive goods

when the same is available at a lower price in other

countries? Together, with imports already being

discouraged due to sharp depreciation of rupee, this fall in

exports due to inflation exacerbates the trade deficit

causing further decline in rupee value. It all gets again into

the self-feeding loop discussed above.

So, where do we break this infinite-loop of events where

every step, every action has a well justified reason behind

it? But somewhere, somehow you need to break this to get

things in place. Weakening or breaking one block might give

a temporary relief to figures, but in long run, this would

cease growth. Instead, if every link in the chain is made to

melt down in terms of its prominence, it’s just a matter of

time; the whole chain shall cease to be prominent. What I

wish to convey is instead of unplanned adhoc and short-

term steps like giving subsidies on fuel prices and making

efforts to attract hot money sources, this nation needs to

plan for a durable strategy which would 'subtly' and

'indirectly' bring about relatively stiff and lasting changes in

the economy. Here’s what I mean to say…

Whenever individuals hold disposable rupee, government

should ensure that substantial part of rupee gets either

invested into banks, corporate bonds, government

securities and the share market or it gets to quench

'domestic' consumption demand of goods and services.

Let’s remember in a dam, it’s the channels which ensure the

usage of water in desired way and ultimately govern the

production. Whenever it’s expected to have an enhanced

liquidity among individuals, it should be THE time for

government to make capital investment attractive. This

would trigger the multiplier to take effect and eventually

translate liquidity into growth. As far as demand for gold is

concerned, it can be discouraged by raising customs duty

exorbitantly. Buying gold should be made at least half as

tough as buying a scooter was in late 1980s... Even if the

demand for gold reduces partially, this would mellow down

dollar appreciation and prevent further damage.

On the other hand, the consumer which demands gold and

oil so excessively needs to understand that if he chooses

deliberately to intensify imports, he is fuelling inflation to

such an extent that he himself is going to get in trouble. A

major reason for S&P indicating to downgrade India in

terms of its investment-grade rating was a drought of

investment opportunities in India. With Indian businesses

borrowing big-time from foreign sources, with other events

increasing imports and causing rupee to depreciate, Indian

borrowers will now pay more for every dollar borrowed.

With every firm borrowing millions of dollars, the rupee loss

is going to be phenomenally huge and shall reflect on a cost

-cutting approach by companies' management which shall

also include a cut in salaries. Eventually, a self-check on

surge of gold demand can help prevent a number of

significant things.

Recently, after a lot of hue and cry on oil price hike, the

government declared a subsidy on petrol price. I say why?

As a long term plan, the government should let the petrol

price rise so that vehicular usage takes a hit, even though

the hit is marginal. Towns, where bikes and cars are

favorites for personal transport, should be picked up and

transformed into towns with a quality mass public

transport, quality in terms of speed, frequency, availability,

ambience, approachability, grievance handling mechanisms

and any and every aspect which makes mass transport well-

preferred and equal in status vis-a-vis individual vehicles.

This shall help in fading the rise in demand for crude oil and

so shall prevent the rest of the spiral.

One may say that it’s the gold which facilitates loans and so

fosters investment. But one misses to note that at the time

of repaying the same loan taken against gold, the value of

the money repaid plummets so much that the good done by

the investment gets offset substantially by severe inflation,

the root cause for the good and the bad being the same.

One may say that if investment in India is on a backseat,

why doesn't the government invest? But one misses to note

that it would be dumb on the government's front to do so,

as it is already burdened under a budget deficit of 5.19

percent and any further disbursement of money would

widen it more. One may say that subsidies on fuel shall be

continued for some more years as the inflation is cost-

pushed and not demand-driven. But one misses to note

that it’s the demand which drives the entire spiral discussed


above and it’s the drive of this demand which ultimately

coverts into a cost-push inflation. Thus, it’s high time now

that the administration of the nation gets into a patient and

consistent mission of correcting the fundamentals of

economy at a macro-level with an aim to bring about a long

-term change.

References:

Analogy of dam and liquidity (quoted in second paragraph

of article) referred from knowledge sessions of a mutual

fund firm.

"If you are the master be sometimes blind, if

you are the servant be sometimes deaf."

— R Buckminster Fuller


Neuromarketing:

The power of the

subconscious

by Pramit Das & Subhamoy Ganguly, IMT Ghaziabad

“Now, my experience is that most of the time, people have

no idea why they are doing what they are doing”

—Clotaire Rapaille, Market Researcher and author of

“The Culture Code: 7 Secrets of Marketing in a

Multi-Cultural world”

Well, he is not alone. Malcolm Gladwell in his celebrated

book “Blink: The Power of Thinking Without Thinking”(2005)

draws on examples from fields of science, sales, advertising,

medicine and music to accentuate his idea of “thin-slicing”-

a concept that some mental processes work rapidly and

automatically from relatively little information. Author and

marketing guru Martin Lindstorm’s bestselling book

“Buyology - Truth and Lies About Why We Buy” (2008)

claims from his experimental studies that subconscious

mind plays a major role in people’s buying decisions.

Psychologist Daniel Kahneman, 2002 Nobel Prize winner for

Economics, in his book “Thinking, Fast and Slow”(2011)

throws light on the ways in which we make choices—most

often, automatically and not necessarily in line with our

best intentions. The authors seem to be mystified while the

marketers still try to unravel the gap between the consumer

intention and action.

As said in a Forbes article, neuromarketing is about making

the intent-action gap visible in a consumer, showing how

different parts of the brain are made to take part by cues

such as branding (for example, Coke vs. Pepsi) or by facing

a spend-or-save choice between whether to indulge for

pleasure now or delay gratification for some later date.

While neuroscience has been around for decades, it is only

recently that it became part of the marketing parlance.

Neuromarketing involves application of cognitive

neurosciences in the field of marketing and marketing

research. It uses a brain mapping medical technology

known as fMRI (Functional Magnetic Resonance Imaging) to

study blood flow and blood oxygenation in the neuron

activity of consumers at the time of selecting and buying a

product. Though it started with the application of

neurosciences, over the years it gained entry into the

traditional methods of doing marketing research. As

research proceeded, it was applied to promote sales and

research organizations such as BrightHouse Institute was

set up to serve corporations eager to reap the nascent

developments in the field.

The term “neuromarketing” was coined by Ale Smidts in

2002, a marketing professor at Erasmus University in

Rotterdam, the Netherlands. But there is a more interesting

story about the public attention to the term. Throughout

the 70’s and 80’s blind taste tests had shown that Pepsi was

the winner when consumers were told to choose between

Pepsi and Coke without knowing which one they were

consuming. Dr. Read Montague, a neuroscientist, was

however intrigued by the fact that in spite of these results,

Coke dominated the market. Montague decided to repeat

the tests with fMRI in what was known as The Pepsi

Challenge, 2003. The results were astonishing. He found

that when blind folded, consumers liked the taste of Pepsi

but when the names were revealed three fourth of them

switched loyalty to Coke. It was observed that the

knowledge that they were drinking Coke increased activity

in the medial prefrontal cortex, an area of the brain

associated with thinking and judging. The experiment

showed that while people liked something in their

subconscious brain they express something else. The

example became a classic to be used later on in marketing

case studies worldwide.

From The Pepsi Challenge, 2003 it was brought out that

brand and image could affect the customer’s choices more

than the product. This encouraged neuromarketers to use

the neuroimaging techniques to identify decision making

triggers among shoppers to help companies directly click

the “buy button” on the customer’s brain to boost sales.

On 17th Feb, 2010 an article in the Wall Street Journal

carried the caption “The Emotional Quotient of Soup

Shopping”. It dealt with how the Campbell soup company

had applied neuromarketing techniques in a two years

http://www.smartcompany.com.au/neuro-branding/the-power-of-the-subconscious.html

http://www.smartcompany.com.au/neuro-branding/the-power-of-the-subconscious.html

http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/etc/neuro.html

http://www.thedailybeast.com/newsweek/2011/10/30/the-new-science-behind-your-spending-addiction.html

http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/etc/neuro.html


study, intending to get consumers to buy more soup. It

drew a lot of public attention at that time and encouraged

debates on whether the studies on skin moisture, heart-

beat and biometric by Campbell soup company was really

worth it. In the process, more than 1,500 subjects were

interviewed and tested using multiple methodologies—

ranging from traditional consumer feedback to

neuromarketing techniques. The same subjects also

participated in a deep interview process called ZMET (The

Zaltman Metaphor Elicitation Technique) which helped the

Campbell's team to contextualize the biometric measures

that were used. According to the company itself, the end

results of the expensive neuromarketing efforts offered

many insights that the company needed to work on and

which traditional methods could only partially arrive at. The

alterations which, among others, included different colour

packaging for different lines of soup and a new logo proved

beneficial for the company as it went to increase its bottom

line.

So how is neuromarketing implemented in real life? Starting

with, say the fMRI scanners(other technologies are used

too), the consumer’s brain is scanned which help the

neuromarketers to find out how consumers react

subconsciously to advertising, brand and products. This will

tell the neuromarketers what the consumer reacts to,

whether it was the shape of the packaging, the colour of

the packet, the sound the box makes when shaken, and so

on. This rare ability to watch inside the mind of consumers

and noting how sensory inputs like image, smell and touch

culminate to reach decisions enables the advertisers and

marketers to optimise their advertisement, campaigns and

product or service features to make them more acceptable.

fMRI is not the only technology that is used. While fMRI is

chiefly used for refining the product attributes,

Electroencephalography (EEG) measures fluctuations in

response to advertisements, Magnetoencephalography

(MEG) measures the fluctuations but with greater accuracy

than EEG and Transcranial Magnetic Stimulation (TMS) is

used to measure causal roles.

EEG frequency

It should be noted that neuromarketing is not exactly the

same as subliminal marketing. The latter is only a subset of

the former and focussed on the application part as

implemented by the marketers. Neuromarketing involves

much more such as involving the test subjects, using the

biometric and physiological sensors to carry out

experiments, studying the brain’s reaction (sometimes also

heart rate, breathing, and skin response) to the social

triggers and so on. Application in the real world to boost

sales or acceptability (say, of presidential speech) is the end

result of neuromarketing. An important part of

neuromarketing which is more related to subliminal

messaging is "priming" which refers to subtle suggestions

made deliberately to the subconscious mind, without the

subject's knowing, which could influence his/her

subsequent behaviour.

Various companies had adopted the services of

neuromarketing research organizations successfully in the

last decade. They include, among others:

Proctor & Gamble (in launching of Febreze room

freshener)

Motorola (in product positioning)

Hyundai (in changing exterior appearance of a car)

Paypal (in identifying what turns people on more in e

-shopping: speed or security)

Microsoft (in knowing the engagement of Xbox

users)

PepsiCo’s Frito-Lay (in testing packaging in the U.S.

and overseas)

Buick Motors (in enhancing dealers’ experience with

customers and increase in sales)

Yahoo’s 60-second television commercial which shows


happy and dancing people around the world was pre-tested

with neuromarketing. Before rolling it out and spending

money to air the advertisement on television and online,

Yahoo had run it on EEG-cap-wearing consumers. The brain

waves from them showed stimulation in the limbic system

and frontal cortices of their brains, where memory and

emotional thought occurs. The advertisement surfaced in

September 2009 to attract more users to its search engine.

More recent inductees such as Kimberly-Clark, Johnson &

Johnson and Unilever are using three-dimensional

computer simulations of both designs and store layouts

along with eye-tracking technology to deduce how to

improve sales.

In March 2011, world’s largest world's largest

neuromarketing research firm Neurofocus (now part of

Nielsen) had launched Mynd, a full-brain

wireless EEG sensor headset. Using this market researchers

would be able to capture data on consumers’ subconscious

responses in real time wirelessly thus opening up new

testing environments beyond the lab such as home. The

data would be streamed to platforms such as iPad, iPhone

and other smart devices. Another recent article

“Neuromarketing Proof? UCLA Brain Scans Predict Ad

Success.”(2012) voices that scientists using UCLA fMRI

facility for the prediction of 3 anti-smoking advertisements’

found the prediction from brain mapping more correct than

the self-reports given by the subjects. The researchers

focused on a seeing activity in the region of brain called

medial prefrontal cortex (MPFC) while showing the 3 ads

and found that the ad campaign which created the greatest

activity in that region generated significantly more calls to a

stop-smoking hotline. The below figure illustrates it.

With this rate of development and participation by the

corporate giants, it is hard to call neuromarketing a flash-in-

the-pan and the future could be beyond traditional focus

groups, dominated by mind-reading technology for

understanding the consumers.

However neuromarketing is not without its share of

criticisms. While some groups claims that the research

institutes are exploiting the corporate clients, some non-

profit organizations and customer advocacy groups

maintained that the concept was unethical, being

intervening with the customer’s privacy when practiced

without their knowledge. These groups have coined a new

term for this practice carried out by corporations, calling it

“brandwashing”- from branding and brain washing.

Many research papers hold that the findings of fMRI are not

revelatory and only reconfirmed some rules that marketers

had known intuitively. As for example, co-author Michael

Deppe in his paper “Bias-Specific Activity in the

Ventromedial Prefrontal Cortex during Credibility

Judgments" (2005) says that when consumers faces

credibility doubts, brand information played a major role in

decision making as seen by increasing activity in the area of

brain where attraction occurs. But brand loyalty was

traditionally always a factor on such occasions. Other

concerns include that the benefits received might not

outweigh the cost incurred and the accuracy of the findings.

Regarding the latter, critics assert that it is inexact science

as body movements such as breathing could distort or

disrupt images and there are multiple interpretations of a

mapped image unless assumptions are taken.

References:

Gladwell, M. (2005). Blink: The Power of Thinking

Without Thinking. Little Brown and Company.

Kahneman, D. (2011). Thinking, Fast and Slow.

http://www.engadget.com/tag/eeg

http://www.google.co.in/search?tbo=p&tbm=bks&q=inauthor:%22Malcolm+Gladwell%22


Farrar, Straus and Giroux

Lindstorm, M. (2008). Buyology - Truth and Lies

About Why We Buy. Doubleday.

Vidyasagar, T.P., & Babu, S.S. (2012).

Neuromarketing: Is Campbell in Soup? IUP Journal of

Marketing Management

Owano, N. (2012, July 16). Consumer product giants'

eye-trackers size up shoppers. Physorg. Retrieved

from http://phys.org/news/2012-07-consumer-

product-giants-eye-trackers-size.html

Shayon, S. (2012, July 17). Eye-tracking helping

marketers boost shelf awareness. Brandchannel.

Retrieved from http://www.brandchannel.com/

home/post /2012/07/17/Eye-Tracking-CPG-

071712.aspx

Williams, J. (2010, Feb. 22). Campbell's Soup

Neuromarketing Redux: There's Chunks of Real

Science in That Recipe. FastCompany. Retrieved from

http://www.fastcompany.com/article/rebuttal-

pseudo-science-in-campbells-soup-not-so-fast

Burkitt, L. (2009, Nov. 16). Neuromarketing:

Companies Use Neuroscience for Consumer Insights.

Forbes. Retrieved from http://www.forbes.com/

forbes /2009/1116/marketing-hyundai-neurofocus-

brain-waves-battle-for-the-brain.html

Troni, N. (2012, July 17). Marketing the gap between

intention and action. Forbes. Retrieved from http://

www.forbes.com/sites/onmarketing/2012/07/17/

marketing-the-gap-between-intention-and-action/

Dooley, R. (2006, Apr. 6). Priming the customer.

Neurosciencemarketing. Retrieved from http://

www.neurosciencemarketing.com/blog/articles/

priming-the-customer.htm

Dooley, R. (2010, Feb. 23). Neuromarketing: From

Soup to Nuts. Neurosciencemarketing. Retrieved

from http://www.neurosciencemarketing.com/blog /

articles/neuromarketing-soup-nuts.htm

Olenski, S. (2011, Sep. 21). Is Neuromarketing The

Future Of Marketing? BusinessInsider. Retrieved

from http://articles.businessinsider.com/2011-09-

21/tech/30183631_1_campbell-s-soup-soup-cans-

neuromarketing

Geisweiller, B. (2010, Sep. 10). Healthy Manhattan:

This Is Your Brain on Coke or Pepsi. NewYorkPress.

Retrieved from http://nypress.com/healthy-

manhattan-this-is-your-brain-on-coke-or-pepsi/

Veronica, B. (2009, Nov. 15). Brief history of

neuromarketing. The International Conference on

Administration and Business. Retrieved from http://

www.itchannel.ro /

faa /119_pdfsam_ICEA_FAA_2009.pdf

NeuroFocus reveals Mynd™ the first wireless full-

brain EEG headset. Neurogadget. Retrieved Mar. 21,

2011 from http://neurogadget.com /2011/03/21/

neurofocus-reveals-mynd%E2%84%A2-the-first-

wireless-full-brain-eeg-headset/1416

Deppe, M., Schwindt, W., Krämer, J., Kugel,

H., Plassmann, H., Kenning, P., Ringelstein, E.B.

(2005, Jul. 25). Evidence for a neural correlate of a

framing effect: Bias-specific activity in the

ventromedial prefrontal cortex during credibility

judgments. Brain Research Bulletin. Retrieved from

http://www.mydelphi.gr /uploads/bias-specific%

20activity%20during%20credibility%

20judgements.pdf

Singer, N. (2010, Nov. 13). Making ads that whisper

to the brain. The New York Times. Retrieved from

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business/14stream.html

Neuromarketing Proof? UCLA Brain Scans Predict Ad

Success. SCN Lab: Papers - UCLA. Retrieved Apr. 27,

2012 from http://www.scn.ucla.edu/pdf/

Neuromarketing_April_2012.pdf

http://en.wikipedia.org/wiki/Farrar,_Straus_and_Giroux

http://en.wikipedia.org/wiki/Doubleday_(publisher)

http://www.fastcompany.com/user/8

http://phys.org/news/2012-07-consumer-product-giants-eye-trackers-size.html

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http://www.brandchannel.com/home/post%20/2012/07/17/Eye-Tracking-CPG-071712.aspx




http://www.fastcompany.com/article/rebuttal-pseudo-science-in-campbells-soup-not-so-fast

http://www.fastcompany.com/article/rebuttal-pseudo-science-in-campbells-soup-not-so-fast

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http://www.neurosciencemarketing.com/blog%20/articles/neuromarketing-soup-nuts.htm

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http://nypress.com/healthy-%20manhattan-this-is-your-brain-on-coke-or-pepsi/

http://nypress.com/healthy-%20manhattan-this-is-your-brain-on-coke-or-pepsi/

http://www.itchannel.ro

http://www.itchannel.ro

http://www.ncbi.nlm.nih.gov/pubmed?term=Deppe%20M%5BAuthor%5D&cauthor=true&cauthor_uid=16216688

http://www.ncbi.nlm.nih.gov/pubmed?term=Schwindt%20W%5BAuthor%5D&cauthor=true&cauthor_uid=16216688

http://www.ncbi.nlm.nih.gov/pubmed?term=Kugel%20H%5BAuthor%5D&cauthor=true&cauthor_uid=16216688

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http://www.nytimes.com/2010/11/14/business/14stream.html

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http://www.scn.ucla.edu/pdf/%20Neuromarketing_April_2012.pdf


Indian Corporate Bond Market by Siddharth Pal, IIM Rohtak

India is a bank-dominated market and the relative

importance of bank assets as a percentage of GDP has

continued to grow—partly as banking penetration has

deepened with financial liberalization, and partly as a result

of the ongoing need for deficit financing. The Indian bond

market is, however, less well-developed. While having seen

rapid development and growth in size, the government

bond market remains largely illiquid. Its corporate bond

market remains restricted in regards to participants, largely

arbitrage-driven (as opposed to driven by strategic needs of

issuers) and also highly illiquid. The article will analyze the

challenges faced by corporate bond market and suggest

reforms for the same.

Indian Debt Market

Let us compare the debt market of India with other

countries.

Source: RBI (as on Dec, 2011)

Indian Debt Market is only 34% of GDP which is very less

compared to other nations. India’s government bond

market has grown steadily—largely due to the need to

finance the fiscal deficit—and is comparable to many

government bond markets in the world with around 30% of

GDP. The major investors in G-Sec are Commercial Banks

and Insurance companies. But the corporate bond market is

relatively underdeveloped with only 4% of GDP. The

presence of corporate bond market in India is barely

perceptible as compared to other economies.

Need for Corporate Bond Market?

The role of a healthy corporate debt market as a channel

that links society’s savings into investment opportunities is

of vital importance for several reasons. For the issuer it

provides low cost funds by bypassing the intermediary role

of a bank. Presence of bond funds gives the corporations an

alternative means of raising debt capital and thus

ameliorates any potential adverse effect that a bank credit

crunch may have on the economy. For the investor, there

exists a yield premium opportunity in comparison to

traditional deposits at banking institutions. It also increases

the investment opportunities in different type of

instruments and tailors risk reward profile according to his/

her preferences. The basic philosophy of developing a

diversified financial system with banks and non-banks

operating in equity market and debt market is that it

enhances risk pooling and risk sharing opportunities for

investors and borrowers. Given the huge funding

requirements, especially for long-term infrastructure

projects, the private corporate debt market has a crucial

role to play and needs to be nurtured. From the perspective

of developing countries, a liquid corporate bond market can

play a critical role in supporting economic development as it

supplements the banking system to meet the requirements

of the corporate sector for long-term capital investment

and asset creation.

Why Indian Corporate Bond Market Lags?

Now that we have established there is a need for a vibrant

and liquid corporate bond market in India. Let us analyze

the reasons that impede its growth. Major factors inhibiting

its development are:

Regulatory restriction on institutional investors.

Non Uniform stamp duty

Majority Issues being Private Placements and not

Public Issues

TDS in Corporate Bonds


Absence of sub-investment grade securities

Low Retail Participation

Absence of Market Makers

1. Regulatory restriction on institutional investors

Banks:

Statutory Liquidity Requirement (SLR) requires

banks to hold one quarter of their assets in public

sector bonds primarily government securities. Only

holdings in excess of the SLR requirement can be

traded and repurchased.

They are prevented from investing in unrated debt

instrument.

They are also restricted to invest only 10% of their

total non - SLR investments in unlisted debt papers.

Further only investment grade securities are

eligible for subscription by banks. This prevents

banks from investing in bonds of lower rated

corporations which may include infrastructure

companies.

Insurance Companies and Pension Funds:

Internationally institutional investors like insurance

companies and pension funds play an important

role in the corporate bond market as the

investment time horizon for these institutional

investors and the bonds are long. In developed

economies, huge amounts of stable, long-term

funds were channeled into capital markets by

pension funds and the insurance sector and these

funds facilitated the emergence of very liquid bond

markets in those economies. In India, the

involvement of insurance companies in corporate

debt market so far has been limited. Insurance

companies and pension funds have huge potential

to play a bigger role and contribute to the

sophistication and deepening of the bond market in

India.

Chicken And Egg Problem: There is a lack of supply of

suitable long term bonds which suit the need of

insurance and pension firms. Also there is lack of

demand due to regulatory restrictions on

investment in corporate bonds.

Infrastructure Debt Funds: The Reserve Bank of

India allowed banks, non-banking finance

companies and mutual funds to set up IDF in

September 2011.The existing guidelines of IRDA

and PFRDA does not permit insurance and pension

funds to invest in the proposed Debt Fund.

2. Non Uniform stamp duty: Stamp duties are typically

0.375% for debentures and, as they are strictly ad-

valorem, there is no volume discount. The rate of duty

varies depending upon location (various states have set

their own rates). Currently, if the bond is being sold in

one (state) jurisdiction, but the asset has to be

securitized in another, then the stamp duty as

applicable in the latter is levied.

3. Majority Issues being Private Placements and not Public

Issues: Public issues are bonds offered to a wide range

of investors and which conform to the regulatory

standards required of public issues of bonds. They

require a prospectus approved by SEBI, and have to be

open at a fixed price for a month to allow investors

particularly retail investors to subscribe. Private

placements can be made to a maximum of 50

“Qualified Institutional Buyers” (professional investors).

SEBI in its Annual Report 2010-11 said “Although the

year has seen a number of public issues, private

placements have also remained as one of the preferred

modes of raising debt funds. The rise in funds mobilized

could also be possibly attributed to issuers preferring

the domestic debt markets as a primary source of

corporate debt. The issuers raised an amount of

2,18,785 crore by way of private placement during

2010-11 as compared to 2,12,635 crore in 2009-10.”

4. TDS in Corporate Bonds: In case of corporate bonds, TDS

is deducted at source for resident and on non-resident

investors as per prevalent tax laws.

5. Absence of sub-investment grade securities: In

developed markets like USA, UK, Japan there is a

vibrant market for sub investment grade securities.

While in India regulatory restrictions prevent

institutional investors from investing in such securities.

This limits issuance of lower rated bonds.

6. Low Retail Participation: Indian retail investors have not

shown interest in the corporate bond market. This may

be due an illiquid secondary market and the low

confidence (low risk appetite) in the corporate world.

Retail investors prefer PF and Post Office schemes and

other alternate investment avenues. Less investor

knowledge and awareness about such products may be

one of the reasons for their low participation.

http://economictimes.indiatimes.com/topic/Reserve%20Bank%20of%20India

http://economictimes.indiatimes.com/topic/Reserve%20Bank%20of%20India


7. Absence of Market Makers: There is a need for general

market for corporate bonds to be developed for the

market participants. Market Makers can address the

issues of price discovery and liquidity in the corporate

debt segment.

How it can be improved?

There is a need for developing an efficient and vibrant

corporate bond market. To meet the needs of firms and

investors, the bond market must therefore evolve. The

policy recommendations should focus on designing a self-

sustaining ecosystem for investors, issuers and market

makers. The following reforms are recommended:

1. Life Insurance Co.’s: Minimum investment required in

respect of approved securities (GOI, State Government

& Securities granted by either GOI or State

Government) should be reduced. Minimum investment

requirement should be investment grade only i.e. BBB

-. It may be stated that in United Kingdom BBB- is the

cut off for investment by insurance or pension fund.

IRDA (Insurance Regulatory And Development

Authority) should allow insurance funds to trade in

Govt. securities (currently they are required to hold

until maturity) to improve liquidity and depth to

secondary bond market. IRDA should allow insurance

firms to invest in IDF by declaring such investments as

eligible investments.

2. Pension Firms: In order to accelerate the flow of

pension funds into infrastructure, Upper limit for

investment in Government securities or Government

guaranteed securities or gilt funds be reduced. PFRDA

(Pension Fund Regulatory and Development Authority)

should allow pension firms to invest in IDF by declaring

such investments as eligible investments. PFRDA

should allow pension funds to trade in Govt. securities

(currently they are required to hold until maturity) to

improve liquidity and depth to secondary bond market.

3. Foreign Institutional Investors: Income Tax

Department, Ministry of Finance should do away with

or decrease withholding tax rate to encourage

investments in bonds. Same has been done to attract

off-shore funds into IDFs by reducing withholding tax

on interest payments on the borrowings from 20% to

5%. Republic of Korea had also scrapped this tax

leading to threefold increase in FII investment.

4. Rationalizing Stamp Duty: There should be a uniform

low rate across all states and that the maximum

amount payable should be capped. Fix stamp duties

based on tenor and issuance value to encourage public

offerings of corporate debt. Department of Revenue

(DOR) and State Govts need to act on it.

5. Removal of TDS on Corporate Bonds: TDS was viewed

as a major impediment to the development of the

Government securities market and was abolished

when the RBI pointed out to the Government how TDS

was making Government securities trading inefficient

and cumbersome. Same could be done for corporate

bonds as also been suggested by CII.

6. Creation of Market Makers in Corporate Bond Market:

There is a need to set up institutions that will perform

the function of buying/ selling bonds. (By creating a

network of dealers which provide two-way quotes). As

India already has an established system of Primary

Dealers, it should utilize the same for good corporate

bond. As a pilot project some PSU debt paper could be

assigned to the existing PDs for market making. Once

this gets established the list could be expanded. Dr. C.

Rangarajan, Chairman PMEAC has also suggested that

there is need to set up dedicated institutions like DFHI

and Securities Trading Corporation for the purpose of

development of corporate bond market needs

consideration.

7. Risk Mitigation Steps: To address the risks associated

with investment in corporate bonds, GOI had

introduced CDS (Credit Default Swaps), IRF (Interest

Rate Futures) and Repos on corporate bonds but they

have not taken off. Initiatives should be taken to

popularize these instruments.

Conclusion

A vibrant bond market can ease financing constraints both

in terms of cost of funds as well as ease of access to funds.

Considering the size of Indian market, India’s proportion of

corporate bonds is insignificant. Policy and regulatory

measures need to be taken to increase the breadth and

depth of corporate bond market in India. Measures need to

be taken for domestic insurance and pension firms and

foreign Institutional investors to invest in corporate bonds.

There should be uniformity in the stamp duty levied across

the states. Initiatives should be taken to encourage public


issues and not private placements. Govt. of India had

introduced different risk management tools like Interest

rate Futures, Credit Default Swap and Repo in Corporate

bonds to encourage the investors to invest in corporate

bonds. But these tools have not taken off and very few

transactions have taken place. The issues need to be

identified and initiatives should be taken to popularize

them.

References

The Patil Report. 2005. The Report of the High Level Expert

Committee on Corporate Bonds and Securitization. Delhi. 23

December.

The World Bank, South Asia Region. 2006 Developing India's

Corporate Bond Market.

Reserve Bank of India. Annual and Monthly Reports.

Securities and Exchange Board of India. Annual and Monthly

Reports

IRDA, Annual and Monthly Reports

"If you pick the right people and give them the opportunity to spread their wings—and put compensation as a carrier behind it—you almost don't have to manage them." —Jack Welch


Introduction

`Does the stock market overreact?' De Bondt and Thaler in 1985 gave start to a new wave of thinking

known as behavioural finance. Weak form inefficiency of the stock market was discovered by them after

analysing how people are systematically overreacting to unexpected and dramatic news events which were

surprising and profound. The Efficient Market Hypothesis as proposed by Fama (1970) asserts that the

stock prices reflect the relevant information. The asset prices follow a random walk path i.e. they are

merely random numbers. The study conducted by Caginalp G. and H. Laurent (1998) by the predictive

power of price patterns finds patterns and confirms that they are statistically significant even in out-of-

sample testing and report.

The pattern of the stock index might help in predicting some of the effects of the various events. The

calendar anomalies tends to exist which goes against the efficient market hypothesis. The researchers have

used Gregorian calendar to investigate the calendar anomalies. There are various countries and societies

which follow their own calendar on the basis of their religion. For example, the Hebrew calendar is

followed by the Jewish society, which is strictly based on luni-solar, the Christian society follows the

Gregorian, which is based on solar, and similarly Hindu and Chinese follow their own.

The Hindu calendar is called “Panchanga” and it is based on both movements of the sun and the moon.

The festival of “Diwali” is typically occurs at the end of October and beginning of November.

The special ritual called “Mahurat Trading” can be observed on major stock exchanges like NSE, BSE,

NCDEX to name a few lasts for about an hour. It is performed as a symbolic ritual since many years. It

marks a link with the rich past and brokers look at it on a positive note. It marks an auspicious beginning to

the Hindu New Year. The investors place token orders and buy stocks for their children, which are

sometimes never sold and intraday profits are booked, however small they may be. Thus, it is widely

believed that trading on this day will bring wealth and prosperity throughout the year.

It is interesting to observe the behaviour of trading activities during the period preceding and succeeding

Mahurat Trading. The purpose of this study is to know the effect of the festival prior and post diwali on the

the returns.

Econometric methodology

I have measured stock return as the continuously compounded daily percentage change in the share price

index (S&P CNX NIFTY) as shown below:

Rt = (lnPt – lnPt-1) x 100 …………………… (1)

Where, Rt = return at time t

Pt, Pt-1 = closing value of the stock price index at time t, t-1.

I have used S&P CNX Nifty as it has got the most liquid stocks in its portfolio. Further, the National

Stock Exchange is largest in terms of Market capitalisation and Volume. I have used the data of the

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