Selling vs Marketing

DIFFERENCE BETWEEN SELLING AND MARKETING

In general we use ‘marketing’ and ‘selling’ as synonyms but there is a substantial difference between both the concepts. It is necessary to understand the differences between them for a successful marketing manager. Selling has a prod¬uct focus and mostly producer driven. It is the action part of marketing only and has short – term goal of achieving market share. The emphasis is on price variation for closing the sale where the objective can be stated, as “I must somehow sell the product”. This short – term focus does not consider a prudential planning for building up the brand in the market place and winning competi¬tive advantage through a high loyal set of cus¬tomers. The end means of any sales activity is maximizing profits through sales maximization.

When the focus is on selling, the businessman thinks that after production has been completed the task of the sales force starts. It is also the task of the sales department to sell whatever the production department has manufactured. Ag¬gressive sales methods are justified to meet this goal and customer’s actual needs and satisfaction are taken for granted. Selling converts the product in to cash for the company in the short run.
Marketing as a concept and approach is much wider than selling and is also dynamic as the fo¬cus is on the customer rather than the product. While selling revolves around the needs and in¬terest of the manufacturer or marketer, market¬ing revolves around that of consumer. It is the whole process of meeting and satisfying the needs of the consumer.

Marketing consists of all those activities that are associated with product planning,pricing, promoting and distributing the product or service. The task commences with identifying consumer needs and does not end till feedback on consumer sat-isfaction from the consumption of the product is received. It is a long chain of activity, which comprises production, packing, promotion, pricing, distribution and then the selling. Consumer needs become the guiding force behind all these activities. Profits are not ignored but they are built up on a long run basis. Mind share is more important than market share in Marketing.

According to Prof. Theodore Levitt ‘The difference between selling and marketing is more than semantic. A truly marketing minded firm tries to create value satisfying goods and services which the consumers will want to buy. What is offers for sale is determined not by the seller but by the buyers. The seller takes his cues from the buyer and the product becomes the consequence of the marketing effort, not vice versa. Selling merely concerns itself with the tricks and techniques of getting the customers to exchange their cash for the company’s products, it does not bother about the value satisfaction that the exchange is all about. On the contrary, marketing views the en¬tire business as consisting of a tightly integrated effort to discover, create, arouse ad satisfy customer needs’.

SELLING

1 Emphasis is on the product
2 Company Manufactures the product first
3 Management is sales volume oriented
4 Planning is short-run-oriented in terms of today’s products and markets
5 Stresses needs of seller
6 Views business as a good producing process
7 Emphasis on staying with existing technology and reducing costs
8 Different departments work as in a highly separate water tight compartments
9 Cost determines Price
10 Selling views customer as a last link in business

MARKETING

1 Emphasis on consumer needs wants
2 Company first determines customers needs and wants and then decides out how to deliver a product to   satisfy these wants
3 Management is profit oriented
4 Planning is long-run-oriented in today’s products and terms of new products, tomorrow’s markets and   future growth
5 Stresses needs and wants of buyers
6 Views business as consumer producing process sat¬isfying process
7 Emphasis on innovation on every existing technol¬ogy and reducing every sphere, on providing better   costs value to the customer by adopting a superior technology
8 All departments of the business integrated manner, the sole purpose being generation of consumer    satisfaction
9. Consumer determine price, price determines cost
10. Marketing views the customer last link in business as the very purpose of the business

Smarketing’to the rescue

TV tech supplier tunes up its sales and marketing teamwork and reaps instant rewards.

Businesses with mature sales and marketing organizations are seeking ways to improve their efficiency and generate more leads and customers. A big step in achieving this involves improving sales conversations, moving beyond price, brand and product quality.

That was the objective set by Kevin Joyce, Chief Sales and Marketing Officer at Montreal-based Miranda Technologies, a supplier of hardware and software solutions to the TV broadcasting companies. After arriving at Miranda Technologies in 2010, Joyce set out on a mission to accomplish three key objectives:

•  Move from a products company to a solutions company.

•  Move from a transactional company to a strategic company.

•  Move from “products and technology” to “customers and markets.”

“We were a solid company — in the top three to five in most categories in terms of sales — but we needed a new energy to take us to being a top performer,” Joyce says.

The Shift to ‘Smarketing’

Once he analyzed how Miranda engaged with its market, Joyce says it was evident that the sales team was “too transactional.”

“If somebody needed a screw, we gave them a screw. If they needed a nut, we gave them a nut. We fulfilled the transaction as opposed to taking a far more strategic engagement where we’re looking at the challenges of our customers over a longer period of time, engaging with them much earlier on,
and solving problems.”

A first step was to pull sales out of its silo. To accomplish this, Joyce embraced the concept of “smarketing,” or making sure that sales and marketing teams are well aligned and communicating with each other.

To lead training on its new approach, Miranda Technologies enlisted Corporate Visions, a globally recognized provider of marketing and sales training. The Miranda sales and marketing teams were put through Corporate Visions’ system of “power positioning” and “power messaging.” The result: improved communication between marketing and sales, which ultimately produced better conversations between sales reps and customers.

As Joyce explains it, the power messaging system gave Miranda’s marketing team a better understanding of the conversations sales reps needed to have with prospects to improve their performance. Sales calls were less about what Miranda’s products do and more about what they mean to the customer.

Miranda Technologies incorporated the power messaging and power positioning system into its sales and marketing process in January. Corporate Visions had a third-party company measure the impact of its training through surveys of Miranda’s sales and marketing teams (82 percent responded). The follow-up showed that within three months of the training, 91 percent of respondents said the new process made a difference in their performance.

Joyce says his reps attributed $7 million of revenue on the books since the training directly to the power messaging training, and another $19 million in new opportunities. (Miranda Technologies reported $181 million in revenue last year.)

“Being able to speak the same language is rare for three divisions,” Joyce says, referring to his sales, marketing and product management teams. “All three feel they can do their job better.”

The training integrated marketing into the sales process and empowered the marketing team to expand its role beyond producing brochures and planning tradeshow strategy.

“It rewired everyone’s brains to tell why [our products] matter to customers and not what the product does,” Joyce says. “It sounds so basic you’d think sales and marketing would have evolved on their own. In the end, it was all about making the company more efficient.”

Microsoft takes on Gmail with new email service

With Hotmail no longer 'hottest' email service in the town, Microsoft has launched Outlook.com, a new web mail service, to take on Google's extremely popular Gmail. The new email service comes with "virtually unlimited" storage and integrates Skype, the popular video chat service that Microsoft bought last year.

Just like other email services, Outlook.com too will serve advertisements to users. Though Microsoft is saying there would not be display advertisements. This seems to be in response to the complaints from people who use Hotmail, which serves banner advertisements.

Incidentally, Outlook is the name of the native email client that Microsoft has bundled with Windows operating software for years. Microsoft claims that Outlook is world's most used desktop email client.
Chris Jones, Microsoft's corporate vice president of Windows Live services, said that Outlook.com is available to users in preview form from today. "It offers the first major improvement to cloud mail in eight years," he said. "We think the time is right to re-imagine personal email, from the datacenter to the user experience."

Currently all Hotmail or Microsoft Live users can log into Outlook.com using their existing ids. Microsoft said that for now, Hotmail would continue to be available.

"Hotmail users can upgrade to Outlook.com and will get the new user experience but will continue to send/receive mail from their @hotmail.com address. Hotmail users that upgrade will use the same username/password to login; all their mail, contacts, and calendar items will still be available in the new user interface. Sometime in the future, we'll upgrade all Hotmail users to the new Outlook.com user interface," the company said.

Outlook.com has been designed using Microsoft's Metro users interface. "The fresh, clean user interface gets the clutter out of a user's way. The header has 60% fewer pixels and there are 30% more messages visible in inbox than the webmail most people are used to. And there are no display ads or large search boxes that take up extra space," said Jones.

Building respect in an age of truthiness

Most businesses today consider themselves to be trustworthy, and by yesterday’s standards they are. But by tomorrow’s standards, trustworthy won’t be nearly good enough.  “Extreme Trust: Honesty as a Competitive Advantage.”

Technology is ushering in a world of increased transparency, Peppers and Rogers argue. “Things that companies, governments and other organizations never meant for people to know, they will know. Any business that fails to prepare for this new reality will soon be driven out of business by rivals who figure out how to do a better job of earning the trust of their customers.”

Trustability already has eked into some businesses marketing strategies; it will be a best practice before long, they predict.

“Even if it were to cost billions of dollars in real money, trustability is still going to become a dominant characteristic of business competition, because the rise in expectations with respect to trust and trustworthiness is being fueled by the steady, irresistible drumbeat of technological progress,” they state. “The world will become ever more interactive and transparent, and competitive pressure will compel companies to adjust their business models to be more trustable.”

The key to understanding trustability as a competitive advantage is recognizing that many of its economic benefits — increased customer loyalty and referrals, for example —don’t come immediately. Unfortunately, the authors say, companies’ tendency to focus on short-term profitability produces untrustable, self-destructive behavior.

Not only is technology driving trustability, but the authors hold up high-tech giants Google, Facebook, Amazon and more as companies that from their origins placed long-term customer satisfaction above short-term financial gain.

“The overall conclusion of our research is that although the financial benefits of earning the trust of customers may or may not show up in current-period results, there can be little doubt that trustworthiness and its higher standard, trustability, have the potential to return significant benefits over the long term,” say Peppers and Rogers. They promise more research to come, and invite readers to check for updates and future studies online at trustability.com.

From Sales Competency to Sales Fluency

What if you could walk into a negotiation or a sales presentation equipped with a better game plan? Getting the maximum out of any presentation involves truly connecting with a client or prospect, communicating with them on a level where both parties walk away feeling it’s a win-win. Talking about things that are actually of interest to the client is a great way to start the process.

Moving beyond sales competency to sales fluency (greater retention and proficient use of acquired skills) can be a key element in sealing the deal. New technology and software applications have made it easier in some respects to attain that fluency, but it starts with listening to the client and observing clues they are transmitting about their communication styles. Most salespeople like to discuss things that interest them about their product or service, not what their clients need to hear in order to make a buying decision because, in many cases, they just don’t know.

Sales Performance Technology

Sales performance software available now for handheld devices can be used in sales and management environments to help sharpen interpersonal communication skills. Picture a sales process. On an initial visit or phone call before the serious negotiations begin, the user looks and listens for clues about the demeanor (behavior) of the prospect: Are they rushed for example or are they offering a generous time slot, perhaps centered on an invitation to lunch? What seems to be of interest to them? Are they quiet or very talkative? Are they detail-oriented or do they see the big picture?

Before the next meeting with this prospect, those observations are loaded into a program which can be updated before each subsequent meeting as further clues emerge about a prospect’s communication style. The application then produces a handful of specific key points that should be employed while dealing with a client – information delivered “just in time” (JIT).

Call it simplified, focused communication: one application available at the touch of a finger will produce in 30 seconds five product benefits that would appeal to a particular prospect or client. After all, everyone hears, sees, thinks and acts differently. Not surprisingly people are motivated by different factors too.

JIT is a term that some associate with the manufacturing world, but the concept is valid in many fields through mobile learning and communication support software applications. In this case, it is information about a client or a prospect delivered just before a negotiation begins that can be the deciding factor in the sales process.

Those details will also help build quality business relationships. The competitive advantage is realized when the salesperson builds trust and can actually predict how the client or prospect will react in a negotiation or sales process.

That same technology can also be used as a tool to help managers communicate more effectively with those reporting to them. Asking someone to change a course of action, to try a different approach to their job, is often met with resistance or even fear on occasion. Recognizing and meeting someone’s interpersonal needs can help overcome that hurdle. People are more likely to change if they can see what’s in it for them.

Rupee falls by 4 paise

 

The rupee fell to 55.65 against the dollar at close after the Reserve Bank of India left key policy rates unchanged.

The domestic unit opened higher at 55.44 against the dollar from previous close of 55.61.

The central bank kept repo rate and CRR unchanged due to “persistently high inflation.”

The rupee has fallen by over 20 per cent in the last one year reflecting the slowing growth and visibility on reforms in Asia’s third largest economy.

Experts have indicated that the Government must push big ticket reforms like FDI in retail, insurance, aviation and pension to get the rupee back to 50-level mark.

Assembly elections in key states next year leaves the Government with a very narrow window to act.

Demand for commercial property down

The commercial property market has seen its rental outlook slip again after a short-lived rebound. While investor and occupier demand has fallen on account of slowing economic parameters, rental values are also turning negative. According to a report by RICS India Commercial Property Survey, sentiment in the Indian real estate market has been adversely affected in the second quarter of the calendar year, as the economic picture in the country continues to remain bleak with the declining value of the rupee and growth forecasts being revised lower, along with a deteriorating global climate. Demand from tenants has slipped in Q2 as compared to Q1, where demand was more buoyant. The survey suggests that the desire to take up space has been affected in three of the last four quarters. This trend is very different from the previous nine quarters before that, when tenant demand was on the rise. The turnaround is most visible in the office sector. The investment market is also witnessing a similar trend with investors shying away from the market on account of economic situations. Both investment enquiries and future capital value expectations have fallen as a consequence, the report said.

Maruti plans customer campaign to stay in the competition

Maruti Suzuki is planning an extensive public relations campaign to reassure potential buyers. Under this, it expects to give some clarity on the situation at Manesar and give a new tentative delivery schedule for cars that have already been booked.

With no indication as to when the Manesar plant would restart production, it hopes the campaign will help keep customers within its fold and not lose out to competition. This is important because the festival season (bookings start by August) demand is around the corner and a month-long expected plant closure is likely to push waiting periods on diesel models – such as the Swift – to six months, from four.

In the first stage, the car market leader is directly contacting those who have already booked those models which are made at Manesar. Meanwhile, sources added that a following campaign through media advertorials is also being considered.

Mr Mayank Pareek, Managing Executive Officer (Marketing & Sales) at Maruti Suzuki said, “We have a database of customers, those who have booked cars. We’re starting the process now where we’ll directly contact them.”

Another company official added that sales executives at dealers are also being trained to convey the situation to new customers.

“This was done last year as well when we faced the strike. Also, in 2003-04, we had taken out an advertisement when WagonR bookings were building up after a strike at a supplier factory in Chandigarh,” he said.

With fresh bookings for the Swift and Dzire continuing and production halted for 12 days now, orders are piling-up fast. Meanwhile, the existing inventory of 26,000 ready cars at the Manesar plant stock yard has already been dispatched to dealers.

Mr Deepesh Rathore, MD at IHS India, said that about 40 per cent of the customers could walk away to competing production from carmakers such as Hyundai, Ford or Toyota.

Bank Nifty slips as RBI leaves key rates untouched

With the Reserve Bank of India leaving key interest rates untouched other than trimming the Statutory Liquidity Ratio (SLR) by a percentage point to 23 per cent from 24 per cent, the bank stocks drifted lower in the exchanges today.

The biggest losers were SBI, BoB and PNB among the PSU banks and ICICI Bank and Axis Bank among the private sector banks. But the shares of HDFC Bank, Canara Bank, United Bank of India and Bank of India suffered lesser damage.

But the investors’ mood was one of disappointment, though the RBI’s stance on relaxing interest rates was reasonably evident, particularly after the apex bank came out with its document on macroeconomic and monetary developments yesterday.

SBI again slipped below the psychologically important Rs 2,000 level to dip to Rs 1,972.55, a loss of Rs 58.90. BoB, which bounced back yesterday along with many PSU bank stocks, shed Rs 23.90 to Rs 648.50.

PNB was another major loser, slipping to Rs 717, a fall of Rs 13.60. Canara Bank which shed Rs 4.80 at Rs 353.10, Bank of India which lost Rs 5.25 at Rs 291.10 and UBI which was down by Rs 3.35 at Rs 166.50, relatively were able to limit the damage.

Leading private sector banks came out with a mixed fare. HDFC Bank was down by Rs 5.85 at Rs 581.40. However, ICICI Bank shed Rs 11.20 at Rs 953.30, Axis Bank slipped to Rs 1025.50, a loss of Rs 14.85 and IndusInd Bank was trading at Rs 327.90, a loss of Rs 6.15.

Among the 12 Bank Nifty stocks, only YES Bank was in the green, up marginally by 50 paise at Rs 360.60.

The Bank Nifty was down by about 130 points.

Mr Motilal Oswal, CMD, Motilal Oswal Financial Services Ltd, responding to the RBI decision, said that the “policy inaction continues to send negative signals’’ with hopes of near-term easing nearly ruled out.

He said “RBI has made a rather big bet on sacrificing growth in the hope of near-term stability’’, somewhat ignoring the stability risk that a lower growth can possibly endanger.

He felt that growth risks were only compounding further with investment cycle getting no help from either fiscal or monetary side and warned that “coupled with policy paralysis, this might endanger a rating slippage’’.

31st July,2012- Sensex ends 93 points higher

 

The stock markets managed to rebound and close in the green on Tuesday despite the substantial intra-day fall following the RBI's credit policy announcement leaving rates unchanged.

According to analysts, this bounceback was owing to improved stability in the European markets ahead of the crucial meeting by European Central Bank this week.

The Sensex closed at 17,237, up 93 points or 0.54 per cent, while the Nifty ended the day at 5,229, up 30 points or 0.56 per cent. The rally was led by movement in oil and gas and realty sectors. However, consumer durables, banks, power and infrastructure sectors were worst hit at the bourses on Tuesday.

The central bank kept repo rate and CRR unchanged but cut SLR by one per cent as part of its cerdit policy announcement on Tuesday.

The Head of Equities, Kotak Life Insurance, Mr Hemant Kanawala, said: "The market had already priced in the status quo on rate cuts and managed to rebound later in the day because of the expectation that the upcoming US Fed meeting and ECB meeting would have a positive outcome that would impact our markets positively as well."

Volatility was down with the India VIX closing at 16.01, down 3.55 per cent.

Grasim, ONGC, DLF, Sterlite and ACC were the top Nifty gainers while Bharti Airtel, Bank of Baroda, Hero Honda Motors, Jindal Steel and Reliance Infrastructure were the top laggards on the Nifty.

Govt to woo more foreign investment in coal sector

The Union Coal Minister, Mr Sriprakash Jaiswal, and the Coal India Chairman, Mr S. Narsing Rao, are expected to meet investors and companies in Singapore and Hong Kong next month as part of efforts to attract much-needed foreign investment into the sector.

“There are many opportunities in the coal sector such as setting up of washeries and contract mining, which would be highlighted. We want to bring more expertise and the latest technology to India,” said an official.

Industry watchers say contract mining is one of the ways to involve foreign companies. Mid-sized companies may be interested in Mine Developer and Operator (MDO) contracts. However, global mining giants such as Rio Tinto and BHP Billiton do not engage in such jobs, they say.

Currently, foreign investment in the coal sector is negligible. “This is because we have a captive policy regime. Only if a foreign investor joins a power project that has been given a captive mine, can it get involved. Such a scenario is rare,” said Mr Dipesh Dipu, Director in Consulting at Deloitte Touche Tohmatsu India.

Coal India plans to engage private companies for contract mining by paying them a fixed amount for every tonne extracted, Mr Narsing Rao had said in a recent interview.

The former Secretary and advisor to the Coal Ministry, Mr Alok Perti, and the Joint Secretary, Mr A.K. Bhalla, will accompany Mr Jaiswal at the road shows organised by IDFC.

Gujarat tops in investments, says Assocham

Out of the 20 emerging industrial States in India, Gujarat tops in terms of investments, followed by Maharashtra, Andhra Pradesh, Odisha and Karnataka which, together, attracted 54 per cent of all investments in India during the last seven years, according to an Assocham report, released here on Tuesday.

Clocking a share of 13.52 per cent in the total ‘live investments’ — that is, projects in various stages of development and execution — worth over Rs 120 lakh crore, Gujarat cornered nearly Rs 1,62,812 crore crore, the study “Investment and Growth Patterns Across 20 Major Indian States”, jointly released here by the Assocham Secretary-General, Mr D.S. Rawat, and Gujarat Council Chairperson, Ms Bhagyesh Soneji.

The study, which Mr Rawat told presspersons was based on data available with the Centre for Monitoring the Indian Economy (CMIE), suggests that, out of the total proposals, Gujarat attracted 39.2 per cent in electricity, 24.2 per cent in manufacturing, 16.2 per cent in services, 14.3 per cent in real estate, 5.2 per cent in irrigation and 0.9 per cent in mining.

Across India, the highest amount of investment has gone into electricity (35.9 per cent), manufacturing (25.3 per cent), services (21.8 per cent), real estate (11.8 per cent), irrigation (3.1 per cent), and mining (2.1 per cent).

Gujarat was followed by Maharashtra with investments worth Rs 14.14 lakh crore, Andhra Pradesh (Rs 12.09 lakh crore), Odisha (Rs 12.09 lakh crore) and Karnataka (Rs 9.85 lakh crore). The remaining 15 States attracted total investment proposals worth Rs 55.89 lakh crore.

He regretted that the services sector did not seem to be a priority in Gujarat which attracted more capital investment than human resource investment.

Investment in the primary sectors such as irrigation had the highest share in Andhra Pradesh, followed by Gujarat, Karnataka, Madhya Pradesh and Maharashtra. However, Chhattisgarh, Jammu and Kashmir, Haryana, Uttarakhand and Assam gave the least priority to investing in irrigation development.

While Haryana proved a major destination for real estate with attracting 49.7 per cent of the total investment proposals for the State, Uttarakhand received 75.1 per cent of the total investment proposals of Rs 1.07 lakh crore for electricity sector.

BAJAJ CHETAK- IF U LOSE FOCUS ON YOUR PRODUCT, THE CUSTOMER WOULD LOSE THE FOCUS TO

The brand which ruled the Indian roads have been laid to rest. Bajaj has officially stopped the production of Bajaj Chetak from December 2005. The stocks will last may be upto March 2006. The company says that the product no longer have any relevance to the customer. To quote Rajiv bajaj " Any one who clings to the past is a failure".

I owned a Chetak: a gift from my father for having secured admission to MBA program. It was in the year 1996. Later I exchanged it for a bike in 2001. Still Chetak lingers in me ( or rather haunts me) in the form of " Back Pain".

The brand which was launched in 1972 virtually owned the two wheeler segment. If reports are to be believed, Chetak was an unavoidable dowry in 1970's and 80's. 

The brand which was named after the legendary stallion of the Rajput king Maharana Pratap, was known for the reliability and sturdiness. The brand thrived during the license raj with virtually no competition. It was during 1990-91 that the brand began the journey to the end.

Bajaj Chetak had a huge brand equity . The brand had the persona of a " work horse". With reasonable price and the low maintenance cost made this product a huge hit among the middle class Indians.

Promoted along the base line " Hamara Bajaj", this was the Indian Family vehicle - a position now owned by Maruthi 800.

But then How can a brand that was so popular and successful fail?

The primary reason is that the Brand forgot the customers. Another case of Marketing Myopia. The company failed to understand the changing perception of the customers towards scooters. Rather than looking at the customers, the company focused on influencing Government to block the opening up of economy. Bajaj never did anything with the product. For 40 years Chetak had the same look, same quality and style.

During the mid nineties the company realised lately that the segment has shifted to motorcycles. Scooters were no longer the option. But did the company made a mistake in discarding the scooter segment ? Looking at the way the share prices are going, the market thinks that Bajaj Auto made the right decision. But I think that they made a mistake in leaving the scooter segment completely. Contrary to expectation, the scooter segment has not died. It has only changed.

Chetak lost its identity some where during the nineties. What should be the future of the brand : no body knew. It was only in 2004 that company made any change in Chetak. In 1994 Bajaj introduced Classic another scooter with same style as Chetak, but failed.

Bajaj never was serious about product development. The R&D spent for a long time was a miniscule 1%. The average cycle time for the new product development was 4-5 years compared to 2-3 years of Japanese competitors.

Even after the opening up of economy, the scooter segment did not witness much competition.

The players like Vespa did not had much of success in this segment. Kinetic Honda managed to carve a niche with its gearless scooters. Another segment which was growing was the scooterette segment which was dominated by TVS scooty.

Bajaj never seriously looked at customer perception about Chetak. The product had serious problems like starting trouble and riding comfort. The " Tilting the chetak to the side for starting " was a common joke. Did the company do anything for that ? no

There was nothing wrong with the Promotion. " Hamara Bajaj " and " No one can beat a Bajaj " were famous base lines. There was nothing wrong with distribution and the pricing was very reasonable. The major problem was in the first P : Product.

So without addressing any problems regarding the product , can you expect the customer to buy the product ?

Bajaj was never a leader in technology ( now they are !!!). They never bothered to and paid the price . Had Chetak pioneered Electric start, had it provided more riding comfort, it could have survived.

Somebody have just beat the Bajaj........ the customer!

HERO HONDA STREET- A BRAND IS NOT ONLY IMPORTANT, WHAT MATTER'S IS A GOOD PRODUCT TO

This case highlights the overconfidence a reputed company had in the power of it s brand and under this self confidence, it forgot that it is not just the brand, but a good product also which makes it successful..

Hero Honda Street was the first venture of Hero Honda to the the scooter category. Street is not a scooter but a step through bike. The product category lies between a Scooterette and Scooter. Street launched in 1997 died a slow and quiet death. 


The product was launched as a step thru bike was not entirely new product category. There was a step thru bike running in the Indian roads named Bajaj M80. Street wanted to create a market for itself or perhaps a new category. But the product failed because it was haunted by M80.


Street was the Indian version of the world famous Honda Cub series of stepthrus. Honda Cub was the world's largest selling single model bike which has sold more than 2.5 crore units. But how come such a product fail in India.
The case is about marketing mistake.The product failed in all aspects of marketing mix except the distribution.

The product was not good enough. It looked like a glorified M80 which was used by Fish vendors and the like. M80 was the cheapest and rugged step thru from Bajaj aimed mainly at the vendors who had bought this product not for its looks but for the price and utility. Since Street exactly looked like M80, it put off all the urban buyers.

The brand was priced extremely high. Hero Honda thought that because of the success of its bikes, they can charge the Street a premium but this price around 30% higher than M80 failed to show value to the customers.

The campaign was also not successful. The initial campaign tried to teach the customers the new Clutch less gear system and its efficacy, the customers was not impressed with this feature. Infact this gear system is famous elsewhere in the world but in India it did not click.

I wonder why Hero Honda ventured into bringing this model to India fully knowing that an exact replica is selling here that too at a lower price and quality ? It is plain arrogance or myopia trying to sell such a product with out any design change. Hero Honda thought that the brand name Honda will differentiate the product but it didn't happen. More over the product did not offer any value proposition to the customer except that it has a unique gear system.

The brand was also not sure about the target segment ,whether it aims at the gender or any specific category. Kick start mode eliminated the entry chance to the Ladies category and the lack of styling repelled the guys.

Brand Report Card for Street ( Dr Kevin Lane Keller)

Delivering on Customer's desires : Negative . The brand failed to understand the need for the customer in the aspect of design of the vehicle.

Relevance : The category had some relevance since the customers were looking for a powerful scooterette. Most of the mobikes were sub 60 cc. But the brand failed to capitalise on this opportunity.

Value: Negative. The high price of the brand did not offer any value proposition to the customer. Although the product was of high quality

Positioning : Negative. The brand was not positioned on any sustainable and important feature. This prevented the effective communication of value to the customer. This was one of the major cause of this brand's failure. Besides the Points of Parity with M80 created problems for the brand. The owners failed to foresee this problem.

Integrated Marketing Activities: Since the problem was with the basic design of the product, there was not much the other activities could do. The marketing activities was bound to fail.

Street could have been a success if it had changed its design. Indian consumers are very discerning and value conscious. This brand failed to understand that.

ITC's e-choupal- A strong distribuiton and Rural Development Initiative scheme

When ITC recently declared that it had cut losses in its non-cigarette portfolio of personal care products and packaged foods by a record 35% in fiscal 2012, it raised hopes of a faster breakeven as against an earlier target of fiscal 2017. If the tobacco giant does succeed in making its fast-moving consumer goods (FMCG) operation profitable in less than five years, it may just be the less glamorous agri-business team at the back end that raises a toast.

n fact, that team has enough reason to celebrate even today, what with ITC lowering its FMCG losses quarter-on-quarter despite high investments in new launches. This is possible thanks to smart sourcing by the agri-biz division's e-Choupal network.

ITC's agri-business division flagged off e-Choupal more than a decade ago as an IT-driven marketing channel to align farm output with market demand. The agri-business arm, which runs the e-Choupal network, serves as the back-end source of raw materials that go into ITC's personal care products and packaged foods. The web-based e-Choupal network has now become a key driver for the FMCG business that comprises brands like Sunfeast, Aashirvaad, Vivel and Fiama Di Wills.

The non-cigarette FMCG business pared down losses from Rs 349 crore in 2009-10 to Rs 297 crore in 2010-11 to Rs 195 crore in the last fiscal. During this period, ITC invested on its basket of brands, with Rs 2,000 crore being pumped into the personal products and packaged foods business in fiscal 2012 alone.

Today, ITC internally evaluates its e-Choupal capabilities before foraying into any new category with a differentiated offering. For example, Aashirvaad multi-grain atta was launched after such an assessment.

Of ITC's agri-business division revenues of Rs 5,695 crore in 2011-12, internal sales for supplying commodities to the FMCG business stood at Rs 2,282 crore as per the latest annual report. ITC says the non-cigarette FMCG business is growing at a compounded annual rate of 40% since 2005-06. While chief executive (agri-businesses) S Sivakumar, says it will be difficult to quantify the profit implication e-Choupal has on the FMCG business, he reckons it will be significant.

What's more, ITC has started to monetise its e-Choupal network, which has 20 million rural consumers according to ITC estimates (the market-led model reaches 4 million farmers, each of whom on an average is part of a five-member household). The company is leveraging this captive base - few marketers can boast of such a sizeable one - by offering the platform to 160 companies who want to tap rural markets; it is also offering newer services like private healthcare and rural headhunting.

The network has also become a big rural sales and distribution channel for ITC. The company has started to sell its FMCG products in rural India through e-Choupal.

"e-Choupal is helping ITC build a strong relationship with the rural populace, which is one of the biggest growth drivers for the FMCG industry," says Anand Mour, senior FMCG analyst at Ambit Capital.

e-Choupal enables ITC to source commodities at a much lower cost than competitors. This is because it buys directly from farmers, which eliminates intermediates and multiple handling, thereby reducing transaction costs. Direct sourcing from farmers has enabled ITC to preserve the identity of the commodity. This, Sivakumar says, has allowed ITC to create differentiated premium products like Aashirvaad multi-grain atta.\

Says Kurush Grant, ITC's executive director who is responsible for the FMCG business: "The ability of the e-Choupal network to preserve product identity from farm to factory is invaluable for all of ITC's agri-based FMCG businesses. These identity-preserved products enable us to give differentiated offerings based on varying consumer preferences across the country."

ITC officials point out that such benefits give the company room to manage product pricing; and this has enabled it to gain market share. A case in point: while almost all FMCG companies increased prices more than five times in the last 15 months, ITC increased prices just twice.

The e-Choupal network comprises 24 Choupal Saagars (rural hypermarts), which are owned by ITC, and 70 warehousing hubs outsourced through service providers. Choupal Pradarshan Khets act as demonstration and selling points for agriculture companies; and companies sell their products and service through Choupal Haats. ITC typically organises 60,000 Pradharhan Khets and 6,000 Choupal Haats in a year.

Today, more than 160 companies ride on the e-Choupal network including Bayer, BASF, State Bank of India,Bharat Petroleum, Nokia, TVS Motors, Maruti Suzuki India, Tata Motors and Monster.com.

Although ITC is investing in its FMCG portfolio, analysts tracking the company say it is going slow on creating physical infrastructure for e-Choupal. "Firstly, ITC is already present in key states for raw material procurement; and, secondly, the e-Choupal model is a high-cost structure," said an analyst with a top brokerage firm requesting anonymity.

ITC set up its last Choupal Sagaar in 2008. The company, however, attributes the slowdown in expansion to poor agri-reforms. "Rural infrastructure costs money, but that is factored into the e-Choupal business model and the return expectations. Slowing down in expansion is primarily due to the slowing down in agri-reforms after 2007," says Sivakumar. He adds that a few clauses in the APMC Act, Essential Commodities Act and Forward Contracts (Regulation) Act put sourcing restrictions on companies.

What is 'Lewis turning point' and its importance for China

A spate of worker unrest and rising wages in China suggest that the world's fastest-growing country is very close to what economists call the 'Lewis turning point'. The International Monetary Fund has predicted that China would reach this stage somewhere between 2020 and 2025.

What is the Lewis turning point?

It is based on a development model created by Nobel prize winning economist Arthur Lewis, who looked at the dual aspect of a developing economy.

The first is represented by its agricultural sector, which engages a major part of the labour force, and the second by the modern market-oriented sector, which is primarily engaged in industrial production.

The growth of the economy is driven by the modern sector with the support of unlimited supplies of labour, which is mainly drawn from the agricultural sector. This migrant labour force accepts low wages corresponding to the living standards prevalent in farming.

The modern sector (also called the capitalist sector) is able to reap profits and—helped by low labour costs—generate savings. The growing savings finance the capital formation for expansion.

However, a point is reached when no more labour is forthcoming from the underdeveloped, or agricultural, sector and wages begin to rise. This is known as the Lewis turning point.

Why is it important for China?

China has continued to grow for the last three decades due to the cheap labour it gets from its vast rural hinterland, which is still a traditional, or subsistence, economy.

But due to various administrative measures taken by the government, such as the one-child policy, their demographic structure is changing and the amount of surplus labour is also decreasing.

China has also experienced labour strikes and shortages and wage increases in the past two years, prompting many researchers to debate whether the Lewis turning point had been reached.

What happens to growth?

For any country that reaches the Lewis turning point, its industrialised sector slows down as cheap labour is no longer available and consequently its growth too starts declining.

Online retailers perk up offerings to click with women

Women shoppers are the next big thing in online retail. Boosted by the tremendous growth in orders placed online, e-tailers are now trying to attract women with niche offerings. These include women-only platforms, virtual trial rooms, celebrity endorsements and easy return policies.

“Online retail is a growing phenomenon in India. Lack of time, changing lifestyles and the convenience to buy things online has paved the way for a consumer friendly and hassle-free online shopping experience,” Mr Amit Gugnani, Senior Vice President, Textile, Technopak said.

The market for non-store retailing is estimated at $3.2 billion, registering a growth of 23 per cent annually. Even though currently men account for 60 per cent of the buys, the women’s business is growing significantly.

Mr Rajesh Kamra, founder and MD, Koovs, a women-only online platform, says, “The kind of purchases that were happening online made us realise that there was a market for women’s only online shopping portal. Also we were getting specific queries from customers in places such as North East and even tier 2 cities.” He said the average ticket size for an online women’s purchase ranged from Rs 800-Rs 1,000.

Platforms such as Myntra.com, Fashion&You, Zovi.com also offereconvenience in terms of variety of apparel, display, choice, discounts and ease of delivery.

Mr Mukesh Bansal, Founder, Myntra.com, notes that, “Women are influential shoppers. They start with low-risk and low value items such as an accessory and from there move on to bigger purchases such as dresses and bags, among others.” Myntra has tied up with Bollywood actor Kalki Koechlin for celebrity endorsement. The actor will write blogs and share style tips to prospective buyers. Myntra said it will continue such association with new style icon every two months.

Another online player Zovi last year introduced a feature called Zovi Eye, a feature which will simulate the touch-and-feel experience. Mr Monappa Nalyanda, Marketing Head, Zovi, says, “Buyers, especially women, want to see how the products look on them. The feature allows women consumers to make a purchase decision as they view themselves in their desired apparel via an interactive web-cam application. This feature simulates offline customer behaviour of trying out the apparel in front of a mirror.”

A Technopak report on apparel industry said that denims, innerwear, western wear and t-shirts are expected to demonstrate relatively higher growth in the coming quarters.

The report also points that the growing number of online channels can be attributed to the fact that there is very little real estate cost, high target group reach and no manpower and staffing issues.

“The most important investment required is in software technology, which can give the consumer a comfortable virtual experience, equivalent or better than an in-store experience,” it adds.

Indian carriers allowed more international flights

From Guangzhou in China to Dar-es-Salaam in Tanzania to Riyadh and Jeddah in Saudi Arabia and Male in Maldives will soon see Indian carriers operating regular flights.

This follows the Indian Government allowing Indian carriers to start operations to these and many more cities around the globe.

Official sources told Business Line that the Chennai-based low-cost airline SpiceJet has been allowed to start operating 35 weekly services, including a daily service to Guangzhou, Riyadh and Hong Kong.

The Delhi-based low-cost airline IndiGo has been allowed to operate 63 weekly flights, including a daily service to Kathmandu and Jeddah.

Jet Airways has been permitted to launch seven weekly flights to both Dhaka and Chittagong and Dar-es-Salaam.

Taking advantage of the granted international traffic rights, some airlines have already started flying to some of these destinations. SpiceJet has announced that it will start a three-times-a-week service to Kabul from August 14. It will also launch a daily flight connecting Dubai and Delhi. Similarly, IndiGo is to launch a second daily service from Delhi to Bangkok and a daily flight to Dubai from Delhi. Both the services are to begin in August.

“The airlines need to launch these flights during the ongoing summer schedule that finishes at the end of October. The Government will soon hold a review meeting to see what their implementation schedule has been,” a senior Government official said.