iPhoney

So the big news of recent times was the launch of the Apple iPhone 3G in India less than 11 weeks after its glonal launch and the big shocker was the price point - 31,000 for the 8GB model and 36,100 for the 16 GB model - roughly 4 times the US price.

Frankly speaking they got it wrong. India is an extremely price sensitive market. People here no matter how affluent will always look for value for money and will not splurge good money on things like design. Its in our DNA. Let me state that its not the question of price for the indian consumer but if the price is justified at all. Thats the moot point. Once we are convinced that its worth the price, only then we'll go for it. Thats why all the companies around the world have a special strategy for India because we are firm about things and what they are supposed to cost.

Thats why the iPhone strategy is baffling. Are they really asking the Indian consumer to pay 4 times the price of what consumers pay in the US after not being able to avail the 3G facilities because (this is classic) 3G is not functional yet in India. Are these people for real? The folks at Vodaphone are defending their strategy by saying that they wanted to position this product as an aspirational product rather than as a mass product. When did mass become a bad thing anyhow?? and how does a product which does not have facilities to forward an SMS become an aspirational product??

Apple doesn't have cult status in India. They don't have frenzied fanboys who'll wait in freezing cold for a midnight launch. They can afford to be arrogant in the US because they have managed to cultivate a loyal legion who'll lap up whatever Apple offers and be its evangelists. Not in India. They don't even have an India office. What they needed to do was create that loyal base in India to ensure that they had some presence in the fastest growing telecom market in the world. Granted in the US, AT &T heavily subsidizes the price of the phone by keeping the user locked to the service for 2 years but I hear in India too its on similar lines. One needs to pay activation charges and the sim is locked to the phone.

The telecom operators could have played it in a smarter manner. I'm sure if the price was attractive enough, people would not have minded sticking on with the same service provider. They've lost a brilliant opportunity to control a captive market. The ones who are gaining in this mess are Nokia and Sony Ericsson. All they have to do is come with a phone which costs half the price and double the features and they can pretty much kick IPhone's butt. They really don't get the indian consumer do they??

Long tales and other good reads

So things have been good. Been reading a lot of good reads lately. Few of the really good ones for your perusal & consumption below:

Chris Anderson's Book - The Long Tail
I know, I know i'm behind the curve on this one. The Long Tail: Why the Future of Business Is Selling Less of More (2006) by Chris Anderson, the Editor-in-chief of wired magazine (the favourite read of this blog) is a stellar book and must be read by everyone who is remotely interested in economics. Yes Economics and not just the internet. Anderson in this book talks about the remarkable manner in which the internet has re-written traditional retail that focussed solely on "hits" due to the constraints of supply chain and inventory costs. The main focus is on how, due to the internet, the market is moving towards the "non hits" as people are moving from mass consumer products to more customized niche products.

I knew about the Long Tail theory pretty much when the book released but this book has given me an insight on Search Engines that I never noticed before. The sieving quality of search engines to negotiate all the clutter on the net.That, methinks, is the saviour of the long tail. Yes there is significant choice out there thanks to the internet and the availability of information. But choice is useless unless you can get to it. Search Engines sift through the internet to get you what you want. That's why a Search Engine on the web portal is crucial.

Most companies do not pay attention to the search engines on their own web portal because they think their own portal is a small universe and people will get to the content any way. But regardless, navigating any portal can sometimes be overwhelming. I personally hate it when search queries within a site don't work and give out odd results. Especially when its at odds with Google. The big takeway for me personally from this book was that marketing to the long tail because of its niche drive preference is going to be difficult and sometimes not feasible but if one has an elaborate website, investing in good search engine technology and a recommendation alogorithm will ease things up significantly.

One of my favourite lines in the book tho, is when he describes Fiona Apple as "Delightfully Unhinged". I'd like to wear a T-shirt that says that! More on the book here. Also read the Long Tail blog here

There's a blogging exchange of words going on in Harvard Business Review between Chris Anderson and Anita Elberse, a harvard prof. Elberse is arguing on if one should take the long tail seriously and invest in it. Its an extremely good read and besides its greatly stimulating to see two intellectuals argue. Register on the HBR site and you'll get access to it. Can't link to it unfortunately :(

More shameless Wired Plug Alert
Yes well, what can I say I'm like a wired groupie these days. Wired is celebrating its 15th anniverssary this year and because of that one is able to access a lot of past gems. I chanced upon a wired article on the landmark US Vs Microsoft anitrust case. Th article, all of 45 pages, was published after the judgement to break up Microsoft was delivered in 1998. The article brilliantly narrates the events leading up to the case and gives inside scoop on all the players involved especially the Department of Justice (DoJ) and Microsoft.

The article reads like a salacious saga and is completely absorbing. Besides that it gives one valuable insights on US anti trust laws. By the end of this article, one gets to know the Sherman Act better than one's right hand. You also get know the ugly side of Microsoft. I'm not sure if the article was particularly biased against Microsoft but its not flaterring in anyway. I don't really get why people in tech hate microsoft so much. It may be vehemently dominating and they may not make the best of products but hey nobody out there has an OS that matches Microsoft. I use MS products evryday and I don't think I should crib particularly when I have not seen a better product to rival it. Read the article here

This made me wonder if India has Antitrust laws? Anyone know? Also I don't particularly think its a good idea, not right now any way. We've just become a free economy, what we don't need right now is a regulatory law. Besides, the ambanis and tatas of this country would never allow it

*end shameless plug*

More bounty
The Economic times recently had a great article on Leadership. In an article called "Four fundamental laws for CEOs racing against time" the author, with good examples, illustrates the 4 guiding principles that CEOs, who are pressed for immediate results, should adopt.

Another article in ET talks about the importance of customer advocacy. The author makes the case about why one should always invest in building a loyal community of users as the latter could come to the rescue during bad times. Read the Article here

McIdea

I'm often amazed at how McDonalds has this uncanny knack of making me buy what it wants me to buy. As a marketer, in my book, thats a bloody coup. Marketers are generally wont to begin with the matching the cutsomer's expectations. This is what you want, this is how we'll match the need - very rarely do we go on the path of telling the customer what he should have instead, because in our world, the customer is king. But MacDonalds has the gall to tell you what you should have. I'll tell you how

I generally go to MacDonalds to have a quick bite when I'm in a hurry or if I'm not too hungry. I have a set preference - Chicken Mexican Wrap. Always. Unless MacDonalds is running some special offer and then my world goes topsy turvy. The special offers on combo are generally the high priced combos and with them you get a free something that's really attractive and tempting. Right now there's a Fear Factor offer going on and one gets a penknife free with every combo. Now do the math please. Initially I was going to spend Rs 65 but because of the combo offer - Burger+Fries+Coke I pay Rs 117. Thats Rs 52 more than I intend to spend. Now consider that MacDonalds buys these penknifes (If they do that at all!) on large volume discounts from its supplier, so its fair to assume that each costs Rs 10. But since a joint promo is paid for by the company doing the promo - in this case - fear factor, we can negate the Rs 10 that Macdonalds had to shell out. Plus the extra food might be considered at Rs 25 extra. So net profit for MacDonalds from this offer - Rs 27. and thats just me. Multiply this by millions and you know why they call it the Golden Arches.

Sheesh! these buggers (or burgers?) are geniuses. Instead of looking down on cheap fast food. We should be genuflecting in front of these people. I have learnt a big lesson today.MacDonalds has learnt succesfully to tap into the culture of the mileu they operate in. They have low price entry barriers, playing very well in the Indian Psyche of low prices and then they upsell through the combos. The upselling usually takes advantage of the mood of the market. During Diwali, MacDs had a combo offer where they were giving out Daandiyas!!. And these things were literally flying off from the shelves. People were falling over themselves to get one of these. And again I'm sure the profit per person must have been something close to Rs 40. MacDs has been successful because they've adapted themselves to the Indian Psyche. No just talking the language but reflecting the culture in the menu too - Tikki, Tikkas and what not. I hear the they even have an all vegetarian outlet in Ahmedabad. Thats the one lesson MNCs need to learn from MacDs. Adapting the brand to the local culture but yet maintaining the brand identity. Who knows once we perfect this we may we even develop the gall to do what MacDonalds does - Change the customer's mind. I'm sure then we'll be lovin it too!

Publishing Assembly Line

I Continue to be amazed by Futures Group, India's Retail Giant, owned by the Retail King, Kishore Biyani. Now we all know that Depot is a future's group retail foray into books, music, stationary and gifts. But what you didn't probably know (atleast I didn't!) is that it is also involved in something known as "Self Publishing"

Now Self-Publishing means that Depot provides end to end solutions in publishing for a price. So Basically if you've always harboured notions of becoming an author but thought that you were prolly not the prize catch of the big publishing houses, then depot comes to your rescue by charging a small fee for publishing your book!! whoah! So if you decide you want to write a 200 page book with roughly 40,000 words in it, depot charges you for the cover design, proofing, editing, lay-outing, and printing. It calculated that it would cost me 2.5 lakhs to publish my book if I took all their services. Now the best part is that they also promise you a snazzy "book launch" through their retail platform and if it has a potential to be a hit, they'll even retail it for you!

Wow, so now writing a book is like a business investment. I invest 2.5 lakhs, price it competitively and if it sells like hot cakes, I rake in the moolah? and all this without the disappointment of rejection letters from publishing house and without agency cut and tiresome editors. Sounds too good to be true, but I wonder if this will work. There's too much of an aspiration element here, but considering it is coming from Biyani, I'm sure he's thought this true.

What do you think? would you invest to publish your book? I don't know actually. The old fashioned way of being cherry picked by publishing houses has more credibility to it. But this new method has to it the very agressive retail arm backing it. So if your book has potential you can be sure Depot will aggressively market it in their stores.

Read more at http://www.depotindia.in/self_publish.php

I said "Sit Down!"

Well, apart from marketing and writing, we have another obsession - Shopping. Yes, My name is Ashanka and I'm a shopoholic. I love the shopping experience, I love being in a mall. It's such a crazy weird world. Trippy with all the music, in-store activities, perfume scent wafting across mixing with the food court aromas. Yes being in mall warms the cockles of my heart but sometimes I'm amazed that Mall designers miss out on the basics

The basic metric for any mall is footfall correct? but I think one needs to measure two other metrics to determine total success. One is time spent and the exit rate. Time spent is difficult because visitors to a mall are not Id'ed seperately but I'm sure exit rates can be measured if you have seperate entrances. So I guess going by the above points the paramount importance for any mall is to keep all the people that it attracts within the mall for as long as possible. Because, duh, the more time they spend the more they are likely to spend.

So, going by this rather obvious logic, I fail to understand why most malls have few to none seating arrangements inside the mall. Seats are vital to a mall's success methinks because shopping, as most people will agree is a tiring activity. The constant activity wears out the legs and after a point you want to quit and go home. I see this all the time, when my mom/aunts/friends shop. Everybody I know becomes impatient after a while because their legs are killing them and they'll sooner drag you out than let you try out the awesome looking dress. This is such a common occurence that I'm surprised that nobody thought of putting seating whever possible because that is what will keep people inside the mall. I'm convinced that malls are designed by men who have no idea about shopping.

Yesterday I was at Central and I spent a good two hours there and my feet were killing me. And surprise, surprise no seating whatsoever, except at the foodcourt which does not really count because you gotta make a purchase there and you can't really sit and relax. People also forget that women, the most prolific of shoppers, often shop in shoes that are less than comfortable like heels, platforms etc. Isn't is logical to make your prolific, high spending shopper comfortable?

But, there's a rub in providing seating in some kind of stores like book stores for example. If I was a store manager at a book store I wouldn't provide any seating whatsoever, simply because, seating gives a reader ample time to savour and read atleast 4-5 chapters of the book. I believe that the more time you give a person to decide on something, the more they're gonna narrow things down. Like say, somebody wanted to by 6 books but on reading a bit most likely than out they'll pick 3. I don't have logic to prove this but this I say by experience. Besides I knwo tons of people who visit bookstores on multiple occasions and finish a book piecmeal. But this logic again flies in the face of conventional wisdom because as we all know book stores are rife with seats, couches, cushions, coffee and what not!

Somebody please explain it to these guys! Please!

Vintage Idea

I was just browsing the book stores and caught sight of the Vintage Twins - A wonderful idea of bundling two books for a combined price. What makes this combination really cool is that there are themes to this twin bundling - Crime, Fantasy, Fear, Lies, Love, Lust, Monsters, Satire, Sin & Youth.

The idea behind this bundling is in pairing a modern classic with an established Classic. So you have crime and punishment being bundled with Ripley's game. There's so much thought behind this idea that we surely must dissect it.

Firstly, the "why", may be someone in Vintage saw that their established Classics weren't selling as much as their contemporary classics, and thought, bundling the two with a theme binding both the books was a good way to ensure sales. But the "story" being weaved through some good branding is the message of revival of established classics.

"The Greatest Books of ALL time twinned with the greatest books of OUR time"

Furthermore, they say "the books have been carefully selected to provide a thought-provoking combination". fair enough. I personally think its a very clever idea. Most established classics, if they aren't classroom prescribed reading material, are rarely read, because of the perceived old-fashionedness of language. Established classics need a revival because this is the era of best sellers. Infact Anna Karenina had a mini revival after Oprah put it on her book club.

But bundling itself is an interesting concept that can be applied in any line of business - be it FMCG or in a Tech Product Market. Any product manager will tell you that bundling is a great way to test new products in a market or to up sales of a product that is showing sluggishness. What bundling does is offer a path of of least resistance to the customer.

3 important aspects of bundling methinks:
1. Bundling can only be successful if one of the products in the bundle is a hugely successful product. No point bundling two weak selling products together or 2 strong ones for that matter. the former is ofcourse, obvious, both together will never sell and the latter is a sure fire way of cutting your margin down
2. Another important aspect for a bundling strategy to work is that the combo has to be complimentary to each other. Bundling a shampoo and conditioner makes sense where as bundling Tea and conditioner does not.
3.The consumer defintely must feel like the combo is worth it. It must be value for money

These are my 2 cents worth on the concept of bundling, I would sure love to hear other views on this!

Shopping fundaes

Well apparently there's a science to it. One of the aspects that intrigued me while reading Kishore Biyani's Book It happened in India was his obsession with the Indian shopper. At various instances he mentions how he meticulously studies his shopper, noting dislikes, preferences, reaction to various stimuli etc. Infact the future group has taken retail to the next level, through their inhouse design agency - Idiom that researches consumer reaction to signages and other communication outlets within the store

Shopping is one of my favourite activities and I was surprised that it can actually be categorized! According an article by Anand Narasimha of Bates David Enterprise, there are infact four types of shopping- Recreational, List, Item and Impulse shopping. According to him,

"This classification is based on two factors: the planned versus spontaneous
nature of the shopping trip and the focused versus open-ended nature of the
purchases made"

Recreational Shopping is pre-planned but open ended and might not even result in a purchase. Here shopping is a means of relaxation. Window shopping also belongs to this category. Apparently as recreational shopping serves as a sort of "retail therapy" more often than not, it does lead to a purchase

List Shopping is pre-planned that leads to a purchase. Like shopping for grocery basically. This is a must do sort of shopping as opposed to recreational shopping

Item shopping is shopping that is triggered by a need for a specific item. Like buying woolens for a trip abroad, or a special dress for ones birthday. That's why one sees retail stores in what I call a "Ever-Party" mood. Its no wonder they are celebrating women's day, mother's day etc. A year long party makes the consumer come back for more

Impulse Shopping basically shopping that occurs on a whim. Like buying chocolates for example. Its unpredictable and according to the article two of the largest impulse categories in a store are women’s footwear and cosmetics!!

Read the complete article here