Branding losing its relevance?

Throughout the second half of the last century, Branding was used as the product differentiator. Most of the products were manufactured in house, with very limited outsourcing. This ensured that the Firms could tweak the product features to match the Brand perception. Thus Merc was known for its style and engineering perfection, Nikon for its unmatched quality of the Camera, and Sony for its vivid picture quality.

But with increase in competition leading to thinner margins, Organizations took the easier route of outsourcing to keep the price tag competitive. This resulted in many leading brands becoming marketing organizations rather than manufacturing organizations. The products were manufactured in remote China or Vietnam or Korea to leverage the cost advantage. The joke is that a IBM Laptop is made 100% in China and the only thing American about IBM is its brand name on the Laptop. Well! even that embedded logo is made in China!! This is true of all the other Computer manufacturers and products manufactured by organizations in other sectors.

The brands started losing control over their product features and process advantage, leading to them being forced to market the product based on Product features than on Brand equity, built over a period of time. Thus we have a scenario where consumers buy a laptop based on the product features like RAM, HDD capacity, Processor, Screen Resolution etc than on whether it is manufactured by HP, IBM, Compaq or Dell. Their refrain was "Well, it doesnt make any difference what the brand is, as all of them are manufactured by the Chinese".

The same is true of the Automobile industry. Toyota lost its competitive advantage of producing cars of quality, when they failed to control the quality at their outsourcing units forcing them to recall millions of vehicles and plunging the company into deep trouble. Many of the leading car manufacturers have a history of vehicle recall to replace defective parts, all of them outsourced.

The move to outsource non critical component manufacturing has started to bite the leading brands, as consumers are quite unwilling to pay a premium for a differentiation that actually do not exist.

So we are back to the pre branding era, where all products were commodities.

Midnight Madness

Why did Congress and UPA swooped down on Baba Ramdev in the middle of the night but allowed Anna Hazare to take the fast to its logical end? Surely, Baba Ramdev was not resorting to violence?

This is because the cause which Baba Ramdev was fasting for hit the Congress where it hurts most - Sonia and Rahul - who and their cronies are at the top of the list of black money hoarders having accounts in Swiss Banks. The Government will do anything to protect their interests.

Baba Ramdev has a huge following, that is essentially lower middle class in nature and hindu. This is not the western biased, candle light protesting so called pseudo secular 'intelligentia' whos is dumb. This is the real India, that is burdened with high inflation and struggling to make both ends meet. This mad action by the Government is bound to have serious repurcussions. Frankly, would the Government have dared to do something similar if it were a fast organized by a Christian Priest or an Imam? Look at the weak kneed response of the Government to the sedition speeches made in Delhi publicaly by the Kashmir separatists?

The Government is taking the Hindus for granted. We are seeing the first signs of Hindu consolidation in Kerala, and it has already happened in Gujarat. Maybe, just maybe, yesterdays high handedness of the Govenment might result in the law of unintended consequences coming into play and lead to a change in the mindset of the people.

Let us wait and watch how the scenario unfolds. 

Congress Fascism?

"If we are scared of Baba Ramdev, he would have been in jail by now" - Digvijya Singh was quoted as making such a statement by the leading TV channels.

Does this mean that Congress will put everyone whom they see as a threat in Jail irrespective of whether there is a case against them or not?

If this is not Fascism, then what is?

Product Strategy for the second decade of the millenium

Prior to the Japanese flooding the market with electronic goods in the 1970's and 1980's, consumers world over looked for durability and value for money while making purchases, of electronic goods in particular and other products in general. The marketing mantra was to provide technically durable products that were durable, relatively expensive, once or twice in a life time purchase (a radio was expected to last a life time, ditto a watch. Father bought a HMT watch for my brother, who is 8 years elder to me, in 1971 on his passing the 10th standard. This was passed down to me, and I wore it till mid 1990's!!!) and more important repairable. It was sufficient for the product to perform adequately.

The Japanese changed all these. It was also partly due to technological advances in the field of electronics and later on digitalization. Masters in the art of miniaturizing, the Japanese went ahead with the concept of focusing on high performance, quality, and less and less on durability. This had its roots in their culture and the terrain they live in, which is seismologically extremely unstable. The Japanese never wants anything to last a life time, for they are not sure when the next earth quake will strike. What they want is to enjoy high performance while it lasts, before the next quake hits them. But their emphasis on quality and performance meant that the products were technologically and performance wise far superior to those of the Western Competitors', albeit expensive. The product life cycles were also much shorter. More importantly, they were more keen on the customer replacing the product with a new one, than getting it repaired in the event of a malfunction. But these products were at least repairable.  Most products lasted 3-4 years at best. Thus, the products did not just have the high initial cost, but also had high usage per day cost, for it depreciated very fast. This was not a sustainable model, as the Japanese found out soon.

While Japanese focused on the differentiation strategy, the Chinese quickly found the achilles heel of the Japanese - the customers seething dissatisfaction as to having to pay a high usage per day cost. Using their competitive advantage of cheap labour and government controlled capital, the Chinese flooded the market with products that does work adequately, but is ridiculously cheap. They took away the concept of repair and mainternance totally out of the equation, and encouraged customers to go in for newer, cheaper, not necessarily better products every 6 months or one year, and discard it once it is used. Customer's fed up with having to pay a high price for the Japanese products, found the low usage cost per day concept very appealing, which led to high levels of initial purchase. But what about repeat purchase? This is one area which the Chinese ignored, much to their peril. Most customers of the Chinese products were one time customers, who never returned to make the repurchase, forcing them to seek out new customers as a strategy, which is very expensive as compared to retention of customers. Add to this the cost of customer dissatisfaction, and we are reaching an era of customers totally shunning chinese products. And as Nirma found out in their battle with Surf, once  you get the tag of a low priced, low quality product, it is extremely difficult to change the perception even if you come out with a high quality version. Chinese will struggle in this decade to maintain their market share, as customers will turn their face away from them.

So what is the alternative? It could be a combination of good quality, reasonable price, slightly longer product life cycle and less rapid technological changes. I suspect customers are getting tired of adjustments they have to make with rapid technological changes that lead to newer gadgets at very frequent intervals. What they would like is for a relatively frill-less product, sans unwanted features (most gadgets have features which one never uses! just go to the menu of your mobile, list down all the features you see there in a piece of paper, tick all those you have used during the past one month. I just did, and the % was less than 10!!!) which will bring the cost down, but retains the quality of the main features. Better,efficient functioning of the core functions at affordable prices with the manufacturer taking a reasonable margin will be the way forward. The add ons can be made optional and at a price.

Still skeptical? Type http://www.google.com/ and see what I mean. The home page is totally uncluttered, and it does its core function - searching - very very efficiently. Ditto with gmail or gtalk or for that matter most google products. And no one can deny that Google is very successful, both technically and commercially!

Of criticisms and meaningful debate

Problem with Indian Education System, which in turn defines the culture of the country, is its inability to introspect or to accept well meaning criticism. This is not limited to Education sector, but is almost a national trait. When one doesn't view criticism positively and introspect, one falls into the trap of mediocrity. And the negative reaction to criticism stifles intellectual debate, that can open the doors to new avenues.

Debate about the shortcomings of the existing system, and about future directions is a mark of a healthy society. We, as a nation, have become so immune to any comment that is even minutely critical. And to make the matters worse, there is section of the intelligentia and the media that rams down the throat of the nation their views on what is right, which is mainly status quo.

India gave a list of 50 wanted terrorists to Pakistan, but some of them are found to be residing in India. This embarassment should have led to a thorough debate on the effectiveness of the co-ordination amongst various intelligence organizations. Something good would have come out of it. Instead, the Home Ministry treated the matter with utmost disdain, and even refused accept the blame for the goof up. If you dont have the heart to accept your mistakes, you will never improve.

(I was fortunate to be brought up by a father who encouraged criticism. I had the right to call him an idiot. He will look at me sternly and say "Fine. Now either prove it or withdraw your statement", which means I have to defend my criticism of him. This led to two things. On the one hand, I was not restrained from criticising something which I felt need to be criticised, but on the other hand, I know I cannot get away by making wild criticisms or allegations (as Rahul Gandhi made in UP the other day) without backing it up. And he was a fair man. If he finds merit in my criticism, he will sit down and correct himself, though he will sulk for a couple of days. That was more out of vanity, for he was a proud man

It is why it is so sad that the Central Minister Jayaram Ramesh's remarks about the quality of IIT and IIM staff was met with so much derision by the academic circle. There is much merit in JR's remarks. Our top Engineering and Management faculty need to contribute much more in basic research and not just be satisfied with imparting their knowledge alone. They should look for new frontiers and in turn should inspire their students to have more social awareness and to find workable solutions to nations problems

Project Ass Kicking

There is an apocryphal (meaning 'unauthenticated') story about how the Bureaucrats in the Defence Ministry in Delhi sat on requests for Defence personnels personal equipments and accessories needed to survive in Kargil. When the new Defence Minister tood charge ( if my memory serves me correctly, it was George Fernandez), he was quietly seething about this delay, and promptly arranged a Kargil trip to the non performing bureaucrats, comfortably sitting in Delhis A/C offices. On their return from Kargil, where even breathing in the cold high altitude climate is a torture, the files were cleared lighting fast.

I was reminded of this story when I heard the laughable parameters set by the apex body Planning Commission of India to describe those who are poor.

According to the Planning Commission, any family earning Rs 20 or below in the urban areas, or Rs 15 or below in the Rural Areas only can be construed to be Below the Poverty Line!!!. If urban family earns Rs 21 or the rural family earns Rs 16 per day, then they cease to get the benefit that accrues the BPL families.

This when the UN is talking about setting the cut off for poverty as $ 2 per day or Rs 90 approx., per person!

All I can recommend is to kick Montek Singh Ahulwalia and his team, who dreamed up the new definition of poverty, to the street and ask them, with their family, to live for a month on Rs 20 per day in Delhi. When they come back, the poor will get the justice they deserve. Sometimes simple direct action makes a huge difference.

I am more than willing to finance this project ass kicking.

Who wants an enemy when we have ministers and politicians like these!

I would have laughed out loud if it were not such a serious issue.

India, with great 'care', and after 'much due diligence' and with much fanfare hands over a list of 50 most wanted terrorists who are supposed to be hiding in Pakistan, to the Pakistan Government. Then cries hoarse that Pakistan is not doing anything about it.

Now, it has come to light that at least 2 in that list is in our own country, one running a shop in Mumbai and other, hold your breath, already behind the bars, arrested by the very same agency that prepared the list !!

Pakistan has always pooh poohed our dossiers, claiming they are figments of imagination. Now, they dont even have to be defensive about it. Everytime we open our mouth on the wanted criminals being sheltered in Pakistan, they will ask us, with s snigger, to look in our own backyards.

The tragedy is that no one at the Home Ministry or External Affairs ministry feels he is responsible for this. This is being passed off as an insignificant issue. Well, the nation losing its moral advantage over Pakistan and losing face internationally is indeed insignificant for our Congressmen.

The other joke is that while the number 1 in the list is Dawood Ibrahim, his brother, a noted don, is merrily roaming around in Mumbai, as witnessed by him being shot at by other gang members recently. Surely, we can arrest him and send him to Tihar jail?

The role of Indians in the 26/11 mumbai attack was never investigated thoroughly. We are adopting an ostrich liky policy to terrorism. Blaming Pakistan is easy, but we do have home grown terror cells. Kerala is the breeding ground for many such. But there the Congress is in power with the Muslim League, which harbours many of these criminals.

God help our country from our own people.

Who wants an enemy when we have ministers and politicians like the UPA, Congress and Muslim League Ministers?