I have been a admirer of Mr. Kishore Biyani since the time I first met him some 7 years ago. Over the years, I have had the chance of sitting with him in a group, hearing him speak at close quarters and agree with some of his comments about consumers.

Whilst I am not privy to how the group functions, what are the SBU and who makes what money, I am definitely sure that Big Bazaar after constantly being fine tuned has turned into a good money making machine which probably at times is supporting some of the smaller SBU’s.

Recently Big Bazaar celebrated its Anniversary Sale. Whilst at the Gym in Mega Mall last Monday, I received a call from my wife, requesting me to pick up some stuff. In my enthusiasm I replied in the affirmative & proceeded to the basement where it is located.

No 1 - There was a sea of Black Humanity extending right up the escalators. Looking at my confused state, one of the gaurds asked me if I wanted to Shop - ‘Of course, otherwise why am I here’ ; he gestured to me to use the right side & come down. On reaching there, I understood that the Q was for Gelato (Special offer Rs.9/-) Chaat (Rs.10 -15/-)   Learning: It is still possible to bring in people with a lead in that has no/little relevance to actual business done. Here the marketing write off may just be the space!

No 2 - Going inside, saw families treat the store as an Pre School Outing. Clothes, Stationery, Linen, Groceries all where ever there was a deal - it was being dumped - in trolleys with shouting across aisles ‘Kaun sa color’ ‘4 ya 6 lena’ Learning: Timing - Anniversary, school opening, related offers, price points, complete volume & value game.

No 3 - The vegetable & fruit side was nice & cool with practically no body really shopping. Answered soon enough by the staff - Wednesday everything will go off with the offers.                                                                                              Learning: Specific, Constant, Consistent ensured people & staff were clued in & ready.

No 4 - There were some good to great deals going on - some from the FMCG companies, some from Big Bazaar it self that are definitely not available anywhere else.                                                                                                                             Learning: Whilst Private Labels introduced & were gaining ground, the volume game or marketing tactics ensured that other Brands did not suffer, but were still in play.

No 5 - Cash Counters manned & opened all across, with Express ones making exceptions also.

Some Negatives that can be overcome immediately -

• Cleanliness - No housekeeping visible at any place whatsoever.
• Customers allowed to drink water, soft drink inside leading to problems.
• Staff whilst friendly, need to be neatly dressed or rather cleanly dressed
• The internal banter amongst staff, gaurds need to be controlled.

However, all said & done the consumer pulse & reaching into their pockets is what matters at the end. AND here Big Bazaar straddles the right spectrum, integrating itself completely with the needs of the consumer. It bridges the gap from the small, neighborhood kirana store & a hypercity, something which Subhiksha was also keen on doing, but failed. It provides half or more of what common man aspires - AC environment, in a mall, ability to look, touch things, decide on their own without push - all at probably less than the Kirana store (OK not all items). This leads to most of the consumers focusing on Value that they end up buying Volume, thus helping Biyani laugh all the way to the bank.

Eventually, some of these consumers would graduate to the next level and try Hypercity, Star Bazaar and be replaced by others - very similar to Gopinath’s Deccan Aviation and what I love to call the “Funnel Theory”

I received a call from vodafone a while back. The young lady spoke to my wife, who after the first couple of questions dumped the phone in my hands & walked off to do whatever wives do during lunch hours!!

The young lady started with a bang —–

• Sir, May I have your name (If you have called me, then you would have it)
• Sir, Company only gives us series of numbers (Huh! By just connecting to the computer & MTNL directory this problem should be solved)
• If you have 3 vodafone post paid numbers, we shall give you 1 more free & change all to a new plan where for Rs 160 each all 4 of you can speak unlimited to each other. AND we shall change your billing plan to .60p for within circle & Re. 1 for national for phone & text yada yada yada (Duh!!! Hold on madam, why would I want to do that? I am currently on a plan where it is .50 p circle & national for both voice & text.)
• OK no problem sir, then how about the offer of Rs. 160 (We do not speak worth Rs. 640 in either case)
• OK no problem sir, we have another offer for senior citizen yada yada yada (Sorry not interested, can you offer me something better than my current plan for data & voice?)
• Sir, we are not authorized to offer anything other than this.

Phew!! I have not understood what kind of marketing does Vodafone expect to achieve with this. Because I think this is the old tried & tested funnel theory. Call as many as you can, speed talk them, pick up documents, issue activated card, bill them. Repeat next day, week, month AND the DSA (direct sales agents get Rs. 100 - 150 per subscriber)

The past couple of months have been trying to understand the debate of Social Media which suddenly has taken over the web, agency & young marketers.

Whilst meaning to attend one of the media summit, bar camp or whatever it is called at different locations, previous commitments have interfered but never mind I shall make it a point some time soon.
Mahesh Murthy & Nethra Parikh recently organized a discussion on Bridging the Social Media Divide
As the post says: A good beginning is always made when both sides accept that there is a disconnect. Being from a client’s side & not even a marketer, having dealt with agencies, marketers & SM guru, some points that seem relevant to me are:

1) Medium does not matter, Performance criteria, fixed parameters linked to deliverables maybe not
always immediate ROI is a necessity.

2) Whilst Mavens are required, particularly for some industries, it is a reality that typically clients are wary
about the % of budget to be devoted there & hence the short shift to #SM

3) Marketers are great at asking Q as are Agencies in answering them but the fact remains that except
for the top 5% of companies/brands who understand quantifiable data that has quality linked to it,
accept it and the most IMP ACT on it. e.g every talks CRM; tracking customer thoughts on their
product etc. but finally not doing anything about it since there is always a serious disconnect internally
where the marketer’s ability to sell to internal clients is suspect.

4) Instead of harping on Marketing, platforms, Media - social or otherwise & pushing examples of the
American Social Media that mostly does not have relevance in the Indian context or scenario, the way
to win win situation would be to
a. All Social Media Guru’s to become Shishyas first, share in layman terms what they mean without
using jargon which is difficult for anyone & everyone to understand.
i. With due respect to everyone who had gathered
ii. With all learning’s I have gleaned on the web in the past couple of years
iii. And meeting passionate web marketers, SEO, bloggers, now Tweeples & Social Media
enthusiasts
Most of them are extremely passionate but keep spouting something they have either read in the
blogs of so called American experts or collected & believe in short term gains.
E.G. I need one client a month to take care of my expenses….brilliant….there’s a sucker born every
minute!
OR
Use the funnel theory…..pitch to every tom, dick & harry…you’ll soon find one Chandru

Every couple of months they re invent themselves with the new mantra of the quarter.

b. Once the Social Media aspect is laid down for a layman; convert/adapt/apply it to the Indian
perspective AND mind you here the approach has to be across industries, because the idea is
the more difficult the industry segment, the easier it is for them to understand. e.g. applying it
to a retail store chain is easier whereas applying it to a CFL or LED manufacturer is difficult
initially but would pay rich dividends. Also they are more adaptive to change as they are also
trying to change the industry.

c. Once you have a couple of solid diverse industry examples or even when you are applying it
there, broadcast, share the case on an ongoing basis….basically do everything you speak about
i.e. should be used to influence, call to action etc.

d. Finally the bridge is more or less getting there; the disconnect is reducing slowly & soon it shall
be integrated.

5) All of the above is something that is vital. Even today in India 90% of the agencies (large ones top
10)have a web marketing, presence, social media division, company BUT except for those 10-20 people
working there, no body else has a clue & it does not form a part of the pitch.

6) Rest of the agencies would not even have that. Besides this there are the whole list of
specialists….boutique agencies, designers, buyers.

7) AND of course the PR agencies who except 1 or 2 (and believe me I have dealt with a lot of them)have
no clue about what you are talking except Page 3 tactical ideas.

ASK any one of them - Is PR really understanding & harnessing the power of social networking sites, blogs to help Biz generate strategic mindshare & presence. And you will see blank faces.

So to get Social Media really Social & acceptable, do not rely on marketing or PR only but let it act as an Integrator which helps the client to really understand all 3 in one go once applied in tandem.

With everyone talking about economy, recession, job cuts & what have you; the scenario sounds depressing, whereas it actually is not.

Talking about this with friends from various industries, though primarily from the Jewelery business, advising them, I decided to pen down the basics, because even in such times a winning strategy can be executed, keeping the fundamentals of business in mind always.

Some basic mantras that can help tide you over:

1. PRODUCT - stick to the basics

i. Focus on profit, not volumes - The time is to rein in the volume push, concentrating on profits. It would be better to maintain profitability on existing volumes, rather than grow volumes.

ii. Innovate within existing Formats - Take cognizance of the different formats of sales/distribution. Aligning & offering more products, offers at a S-I-S (shop in shop) may be much better than trying to push a high street/stand alone store during these times.

iii. Maintain standards - Continue maintain laid standards, do not start switching off AC’s, lights (instead tone them down; use reflective visual merchandising to help). Do not compromise on service levels, staffing drastically.

iv. Let product innovation take a back seat - Continue investing in innovation, but do not invest time, effort, money into completely new products that may only be on the shelves after a couple of months or next season.

2. Promotion - Focus & Creativity

i. Do not blindly take decisions on cutting down advertising & promotion. Take a step back, analyze & implement.

ii. Yes all experiments may be held in abeyance OR better still targeted at niche, catchment areas before being rolled out.

iii. Above all do not get into deep discounting, just because everyone is doing so. It is the worst decision to get into herd mentality.

3. Price - Be determined.

i. Sure, create a lead in price but always keep competition in mind. Studies, Analyze but never blindly follow them.

ii. A good idea would be create closer price ladders in similar products, designs.

iii. And create, increase opportunities for standard pricing across designs, sub brands, collections.

4. Proposition

i. Communication is the key here. During tough times, customers look for a tangible benefit & hence imperative to give them a good - great value proposition.

ii. Also deliver a much higher perceived value by add on and other related adjacencies.

5. People - recognize, own, connect, cherish, celebrate, reward - This goes for consumers as well as own people.

i. Take the lead in identifying changes of consumer behavior.

ii. Keep a constant & consistent dialogue about brand, product, and industry.

iii. Consolidate distribution

iv. Continue investing in the team; creating a sense of joint ownership.

v. Celebrate people’s (own & consumer) achievements.

vi. Infuse pride in people.

I am sure, there would be more points & would welcome inputs, thoughts.

I had become a member of ryze.com way back in 2004 after receiving umpteen invites as is the wont when some new fad takes over.

Whilst I am not completely technologically challenged, I prefer my Networking to be off line, face to face….you probably get the point.

However, I attended a couple of Business Mixers as they are called offline, the first one being in Bandra on the corner of hill road opp. Globus. There were some 70+ people (if my memory serves me right). Meeting them, exchanging cards & more improtantly thoughts, views the evening flew past - never managed to try out the starters & just barely managed to have a drink.

Over the next 2 years, attended other mixers - bindas bol; rum mixxa - but they were more fun evenings rather than really networking so to speak.

Business Networking Mixers happened pretty regularly & attended them, never for a moment looking at them as a business opportunity, more to socialize, observe people, understand the entrepreneurial bent of mind - since most of them were that..

Met people like Unni, Rajesh, Ranten, Ian, Soeb, Sailesh the SAI, Jiten, Venkatesh, Lalit, Ivan, and others too numerous to name, though remember most of them except the ones I don’t need to.

As we became friends, maybe did business together, if relevant, started an informal off line network MNDFCK - read about it here & here. BUT they became an important part of my Rolodex.

2006 onwards till March 20, 2009 I was completely off Ryze, its Mixers & what have you. There were a variety of reasons for this:

• Too many mixers - most of them sub sets - you ended up meeting the same people, chewing the same fat - not worth the time & effort.
• Too many groups, sales pitches & not enough substance.

AND my personal Peeve!

As one of the few people who worked for an Organization, I became the target - the moment I walked in - a lot of people became extremely pushy - trying out their aggro sales pitch - give them your card finally & they immediately asked for your mobile number/direct number etc. And then without even understanding the position would start badgering you for something you already had, did not need or could not help them.

• Just a presentation about something completely irrelevant (hello! first research the needs)
• Use your name, when they met someone in the organization (don’t allow my family to do this)
• Used you as a reference without checking with you (the bane of my existence)
• Friend, Relative introduction to you or for you (Don’t I have enough of my own???) And so on.

All this was as if they were doing you a favor!!! (as if I need one without asking for it) When you did not entertain, promptly start bad mouthing you.

During the time I went off Ryze also; I heard, learnt from the Network Owners of the losses they incurred because of people who promised, did not turn up & did not pay!! irrespective of the announcement etc.

A couple of weeks back, I received a message on FaceBook from Unni about a Mixer. Ignored it for the most, though circulated it around. Got some responses also….I have urgent meetings; Flying that night; travelling; is the price not too expensive; how many will come….most of these I ignored:)

How many will come? Go register & find out!!!

Expensive - Yes! for those who are going to measure ROI instantly. Attending for the first time with lot of expectation. For others, who commit & never attend how does it matter? And because there has to be a commitment on number of people to be given, the expense goes up!

A couple of days, speaking to Unni on some other matter, he said why have you not registered?? forcing me to get off the fence & say AYE…..

And so the evening began…..Pictures tell the story…..but some observations……

40 confirmed & 22 maybes = 32 attended, (out of which 8-10 were gate crashers) with a variety of out landish excuses thrown in or phone un reacheable, by the others.

Felt like a Private Party.

Quite a number of new people around, some of them extremely enthusiastic, so much so somebody had printed special visiting card.

Were unable to understand some pitches.

Guess food could be had at leisure & there was enough for everyone.

AND YES! the organisers made a substantial LOSS

Some offered to share the losses which was gracefully refused!

However, this has not diminished Unni’s passion! He has committed himself to a June Mixer that has some value proposition & would like it to be smaller.

History of gold prices (in rupees):

1930: 180 per 10 gram
1940: 360 per 10 gram
1950: 1000 per 10 gram
1960: 1110 per 10 gram
1970: 1840 per 10 gram
1975: 5,400 per 10 gram
2000: 3,000 per 10 gram
2006: 5,400 per 10 gram
2009: 15,700 per 10 gram.

The above example whilst may not be perfect in prices suffices to illustrate that Gold surprisingly gave 300% returns from 1970 to 1975 when the world suffered worst ever recession after great Depression. Will history repeat? That is the reason behind current “Mad Gold rush”. But if you invested in the Gold in 1975, your investment gave negative returns for the next 25 years.

Two things to remember:

1. Gold generally trades in the lower range around March and July. Generally, it is the best time to buy gold and marriage season is the best time to sell God.

2. Below 11,000, Gold is a safe investment but above 15,000- it is only for traders but not for investors.

Future of Gold:

When stock markets were down in 2002, Gold was at Rs 5,400 per 10 gram. Don’t forget that Gold traded below 9,000 per 10 gram till 2007 means you might have got routine returns from Gold investment.

But investors who made investments in gold in mid-2007 are now making 70% returns in just 20 months. But I don’t know what will happen to gold investors who bought it at above 15,000 but they remain in loss even after 3 years. Why?

Gold will recede to 11,000 levels once equities make comeback. What happened to crude oil will repeat in case of gold also. Don’t forget that Gold is not even an essential
commodity. But Gold is a less volatile investment.

Examples:

1. Crude oil prices moved to $147 per barrel and Goldman Sachs people gave $200 per barrel target. It is now trading below the fundamental price at $35 per barrel.

2. Sensex moved to 21,000 and analysts and analysts gave 30,000 target. It is now trading at 9,000 levels.

3. Real Estate prices reached astronomical levels in 2007 but people bought land as if there will be no land available for purchase in future.

So what do you want to do with your accumulated GOLD?:)

It was quite a pleasant shock to receiving money back when one handed over a large note for 2 tickets at a nearby multiplex.

Whilst I guess there are numerous reasons for the price reductions & why not? If everyone can do it.

However I have always been curious to know, why do the multiplex chains not weave in the loyalty factor, so to speak.

A couple of examples may illustrate this point -

A couple of friends are always keen to either watch a movie on thursday night (paid preview) or friday night i.e before any review clutters the mind. It is painful to find out if there is a paid preview, when would booking open (thanks to yashji undecided whether to release in multiplex etc) amongst other. Can there not be a card with the prefixed seat number for a month/quarter/year that one could buy (this could be for 1/2/4 seats) so that one is assured of the seat, the multiplex is assured of income in advance, which overcomes the problem of discount being offered. Here there can be variants…..such as days; combos etc. that could be introduced.

And now cutting prices - at 40% why not try out the 1:1 for people, movies, timings what have you. Take a leaf off the pizza guys.

And yes I know, some of them do have offers, unfortunately the conditions are so constraining that you just decide to give up.

AND MY FAVORITE - Just like the airline, pizza, mcdonald etc. Why can you not offer the add on/Up sell in the beginning, when tickets are bought - Sir would you also like to order your coke, popcorn, samosa to be brought to your seat…..this can work on internet, tele booking & of course the counter.

This keeps customers happy; allows logistical planning & more important adds revenue!!

Multiplex owners write into me for more nuggets:)

Multiplexes cut movie ticket prices by 40%

Bombay, Bangalore, Delhi, Ahmedabad, Baroda…..high street, shopping centers, malls..et all…There is a discount everywhere for every thing!

And surprisingly Retailers say that Sales are higher by discounts. Whilst this would be obvious, “who can resist a sale?” it also raises a couple of questions ~

Did they have such large margins earlier?
Are they doing this just to ensure cash flow?
Can they afford to continue doing this, given the fact some of the retailers have had sale from Divali onwards?
What is the difference in product on Sale & without it?
Will this price become the benchmark once the discontinue the Sale?
How long is this really going to last?
Does Sale give value to the consumer & volume to the retailer?

Some of these questions do have answers, that are revealing about the strategy adopted.

Discounting is normally related to inventory management as well as the revenue sharing agreement that the retailers strike with the original equipment manufacturers to keep products rolling on a faster rate. The technical term “Velocity”.

Here you have apparels, consumer durables, electronics etc. BUT most of the discounts normally come from  “PRIVATE LABELS”.

For example Big Bazaar with at least 25%+ of its sale coming from private
labels can afford to keep giving deep discounts, for a much longer time.

Private label allows a retailer to make at least 60% of
the cost of the product sold, whilst the rest can be passed off to manufacturers & transporters.

And yes this can be good for both retailers & consumers; however the standardization is the issue here. In an effort to keep squeezing, the first lot in Apparels is US size, whilst the 2nd lot is UK size. The material gets thinner or the buttons, there is a variety of things that can happen, which 80% of the consumers are not concerned about.

However, INDIA which is practically 6-8 different countries in one, the most critical element of discounting which involves planning of geographical & festival sales is still
very much in the evolving stage.

AND this is when the consumer planning to shop shall come into its own!

The Art of Jewellery magazine did a study in December 2008 trying to find out from industry as well as people who had brought organized retail to the industry.

I was one of them & was quoted extensively in the article.

Some days ago, I met up with Hemant Shah an outsider, but veteran of the Jewelery business who had started his own business of Jewelery Retail - casual, chic, semi precious, precious.

He wanted some input on how this would be received via his unique ‘Jewellery on Wheels’ idea as well as the website.

My instinct reaction was - Brilliant idea, who is going to execute it? On hearing his answer that they would do it internally, my heart sank.

Since he had asked as a friend, I did not really push it much, but cautioned him about the pitfalls in terms of Consistency, Change, Coverage of area, backup.

Then, whilst I saw the enthusiasm that he was brimming with, wished him all the best!

Hemant Shah with his proud Vehicle

They launched it with 3-4 custom made vehicles by Dilip Chhabaria. Worked on the novelty value for a while & then due to other factors also, had to shut it down.