Sunday, October 31, 2010

Innovation & Fooling at the same time...

“Jeevan Suraksha Ka Naya Nazariya” or "Redefining Life Insurance" is what Bharti Axa is trying to position itself as, through the very recent campaign on claim settlement. Is claim settlement that easy a thing so that every claim can be settled within 48hours?? Or Is Bharti Axa investing in the almighty bonds/stocks of the companies floated by the gods that gives them a returnof more than 365% per Annum to guarantee 1% per day as interest??

I think the answer for both would be an absolute 'NO'. If not, then are they trying to fool around with customers or Are they innovating across the claim settlement process in the sector?? Do we call it Finnovating or Foolovating??

There are two sides for an Ad always. 1.What the Ad exactly says? and 2.What does the customer perceive out of the Ad? There is always a difference in both these many a times. But, it is not always as different as it is in this case. Difference between fund value of a ULIP and the claim settlement process.

Fund Value in a ULIP is the current market value of the money invested in Equity/Debt/Mixed funds after deduction of all the charges from the money that a customer pays as premium. Sum Assured is the Life Cover that the customer has in a certain plan which was typically around 5-20 times the Annual premium prior to Sep 2010(post Sep 2010, it has become around 10-20 times due to change in rules). And most of the ULIPs have a death benefit equal to the highest of Fund Value or Sum Assured and comparatively very less number of ULIPs have a death benefit equal to Sum of both Fund Value and Sum Assured(Illustration in the 3rd image below).

On death of a customer, once all the documents are submitted by the nominee (claim is raised) the company decides upon payment of the claim and then pays the death benefit. The Claim might take more time if the company feels that there is some form of fraud either surrounding the death or while taking the policy. If the company finds that the customer/advisor has done a fraud while taking a policy (not disclosing any pre-existing illness, other health problems etc. while taking the policy which might have caused the death) the company can with hold payment of Sum Assured but will pay back the Fund Value as it is something the customer has invested and there is no cost involved to the company in it.

Now, most of the times fund value is less than the actual Sum Assured on Death unless, customer has used features such as top up(a process of adding extra money to only invest without increasing Sum Assured prior to Sep2010. Post Sep2010, the rules have been changed by IRDA to mandatorily increase Sum Assured on every top up), fund value grown at huge pace (i.e., 3Lakhs invested over 3years growing into 7Lakhs which is above a nominal 5Lakhs of Sum Assured/Life Cover).

Now, coming back to the Ad: 1.What does the Ad say exactly? - It shows a very much disturbed lady trying to get a claim settled upon death of her husband which is not taken in right sense / snubbed by the company executives. Meanwhile, Bharti Axa adds an emotional touch on claim settlement and the background voice says "the company would settle the fundvalue within 48hours of claim documents being received" with the executive telling the lady that the cheque would reach her in 48 hours. And the screen shows that it would pay 1% interest per day on fundvalue for every day above 48hours. This doesn't speak of Death Benefit being settled in 48hours or any timeline for the same and it doesn't speak about the term plans(plans with high cover with a very minimum premium), endowment plans(plans where death benefit is always very high compared to what customer has paid till date).

2. What does the customers perceive out of the Ad? - Looking at the financial literacy in India and that too in a sector predominantly dominated by LIC agents for 50years without educating the customer, the perception for even an above average customer is very different from what the Ad actually says. This is because of the backdrop on which the Ad starts(Problems with claim settlement), Bharti Axa executive shown as coming to help to understand and saying the cheque would reach within in 48hours, no clear disclaimers or lound signals in the Ad saying this is only to guarantee a fundvalue in 48hours and not the whole of death benefit, term and endowment plans etc. The perception for most of the customers seems to be that the Death Benefit would be paid or the claim will be settled in 48hours or else with 1% interest per day for the delayed period. Ofcourse, there are all those disclaimers that this is only for a ULIP and only the Fund Value etc, on the website but, how many customers would log into the website to check the details on disclaimers??

So, Are they trying to fool around with customers or Are they innovating across the claim settlement process in the sector?? I say innovating because, the company needs to pay the fundvalue to the family irrespective of fraud or genuinity of the policy holder's statements while taking the policy. Then, why should the companies take so many days to process the fund value as well?? They can definitely redeem the units and settle the fund value within 2days and then continue their investigations or further processes to settle the rest of the claim amount which is definitely not the case with the Life Insurance industry in India today.

They receive a claim from the family. Once, all the documents seems to be in place the process of looking into the claim starts and it might take anywhere between 7 to infinite days to complete the investigation process in case of any problem. So, it would be better to lend a helping hand to the family with the fundvalue with in 2days which might help many families on immediate costs incurred. Then, why not settle the fundvalue in 48hours??

Can, other Life Insurers in India learn from them or atleast do something that they are always good at(copying the products from other companies products most of the time) by copying the process of Bharti Axa... Or Can IRDA mandate companies on such issues??

But, still the small corner of ethics asks, Should we call it Innovating or Finnovating??


Open for Comments

Sunday, October 17, 2010

Some things never change...

Over the past weeks, there have been new branding campaigns for LIC and Indian Railways.. So, what's the similarity in both apart from the image or reality that they are government organizations??

I have seen the website of LIC over the past 2years. Till a couple of months back, it had remained the same slow, erroneous, semi-updated kind. The premium calculator that gives quotes whenever it feels like, the speed is definitely so slow that can make you sleep by the time a brochure opens up. But, I have seen it yesterday post the new campaign from LIC about the online services, payments etc and the change is amazing. It's a perfect 10 on 10. LIC has definitely got it right on making sure that, it is in line with what it has been advertising.

But, there was another campaign too. That's about it's wonderful polices and why go anywhere else?? when you have LIC... Yes, it has some of the best policies in the Life Insurance space.. Yes, it might have had or not in reality but, yes, definitely deep inside the layers of some customers brain/

memory/mind.. whatever you call it. The campaign makes sense and this would have worked better off a couple of years back but, might not be in today's changing India.Financial Literacy ratio in India had been on an upward slope since the past 2years and many of those who never understood A,B,C of Insurance and Investments today would explain different concepts of planning better than those number of trained Agents. Ofcourse, the ratio we are speaking of is still low. But, we need to understand that it is on an upward slope and especially with the fighting regulators the pace will grow further. Hence, it is very important for you to understand what have you been suggesting the customer today. Else, once he/she is educated in the next 4-5 years he will look back and say

what crap am I holding since past years?? This is what many say today which they held due to pressure from Dad, Uncle or friend. Obvioulsy, after 4-5 years a person might understand that a term plan would make a better Insurance and he would be satisfied if the ULIP he would have held has given atleast comparable returns within it's peers and Endowments would be nowhere on that day. If not exactly 4-5 years, it will happen 10years down the line depending on how fierce would the regualtor and companies battles are..

A similar mistake was done a couple of years back by a player called Aegon Religare. It has come out with what a financially literate customer would love and is in line with reality..

A lovely and superb campaign "KILB?? Kam Insurance Lene ki Beemari.." This has educated many customers to a certain extent on understanding how much cover should they have and why??

But, the company should have understood that a person whose Human Life Value would have been 50Lakhs would not have enough income to pay 3Lakhs a year to take an endowment plan or ULIP that can give 50Lakhs cover. And term plan would be the only solution available at 10,000 per Annum to give a 50Lakhs cover. What happened next is a disaster for the company but, an easy sale for the industry without advertising. The term plan sales picked up across the industry and better off than what Aegon could sell

.. Why??

1.Aegon is relatively a new player in the Indian market, 2.Term plans are always compared on premium as there is no return of premium in pure term plan and Aegon is not the cheapest. If it's not the cheapest why should I go with a new player. And the first thing many customers did was to check quotes from LIC as well as other major palyers and settled on one. Yes, this campaign gave Aegon a really good brand coverage but, the brand image it gained versus the potential business it lost doesn't seem too good for me. What should have been the strategy??

It should have built up a decent brand name and then post that come out with KILB offering the cheapest term plan or atleast a competitive quote.Coming back to LIC, neither does it have low quotes for term plans nor does it have the best or competitive returns on it's ULIPs?? What would the customer be happy for 4-5/10 years down the line. For paying higher premium on term or for not getting comparative returns on ULIPs or for holding those endowments with least returns?? And is it worth to come out with a campaign "Why go anywhere else?" in such a situation similar to that of Aegon 2years back. It could have definitely come up with better products and offerings before saying, "why go anywhere else??"

And the same goes with Indian Railways.. With it's new campaign on cleaner and better railways to attract tourists during CWG is wonderful.. But, is it cleaner and better. The reality doesn't seem to be so. And should the tourists really carry back an image that was quoted by an Indian official last month, "Everyone has different standards of cleanliness.." And Mr.tourist, the wonderfully red colored pan marks and the over dumped garbage can are the extra cleaner and better railways and this is our standard of cleanliness???

If it comes to a new branding exercise within the country, apart from cleanliness are those train accidents / derailments once in every week as well as the controversy surrounding the ad that “No female is included in the human train”, “The ad is copied from an old ad for Hong Kong railways”

Why can't the LIC come on with better solutions and advertise or Why can't Indian railways cleanup and then advertise it as cleaner and better?? Why are they getting on to the same levels like BSNL (the broadband campaign & the agony of Internet connection) that takes 10days to a month to get a broadband connection but, advertises as the superior one with a bad quality??


Might be some things never change...


Open for Comments

Wednesday, September 08, 2010

Some reasons why CXO's pay needs to be capped..


Our great ministers/MP's have been of the opinion that the pay of CXO's need to be moderated and a cap to be set for the same. Yes, the pay for CXO's should be definitely capped because:

1. The speed at which they take decisions and set the processes right is definitely infinite times less than the time CBI or any bureaucratic committee takes to decide if something wrong has happened or not. (Bofors, Babri Masjid,…)

2. They don't bill for their family trips or if they take someone along on business trips to other countries the way our bureaucrats do.

3. Because, the teams in their companies try to co-operate and co-ordinate rather than trying to unnecessarily poke at rules like the way our regulators do.

4. They don't hold such huge Swiss accounts like our so called MP's, MLA's and bureaucrats have.

5. They don't ask for the sales / employee MIS to be prepared as per caste, religion, etc like the census of India.

6. They don't call for strike / bandh in office for every silly reason or any reason.

7. They don't go to office or meetings daily followed by 20 vehicles filled with people shouting slogans.

8. Our MP's can't occupy their place because the CXO's aren't appointed by elections that can be perfectly rigged.

9. They never behave like hooligans in meetings / walk out of meetings without understanding the logic of other team members, like our assembly/parliament.

And if you start writing, the reasons would never end. And most importantly, they don't try to copy such foolish ideas from people like Obama without thinking twice on whether does it suit the Indian corporate world or not. This qualifies as the biggest reason for Salman Khurshid to try and push aggressively for a Cap on CXO's salaries.

Some of those who are gonna read this would think how can we link the beauracrats or the MP's working style to that of the CXO's. But, these bureaucrats are those who are controlled directly through the rules influenced by the so called MP's. And if they are not able to implement something efficient which is directly under their influence, how can they expect to change something that's functioning perfectly?? which brings us to a conclusion which might sound like, "Why don't you MP's (who behave like kids in thinking and Hooligans in functioning) leave the pay cap to the board as well as share holders.."


Open for some more reasons....

Tuesday, August 31, 2010

Pepsi Max is here; It's fizzier, Black & sugarless


I saw an email some days back and immediately remembered my project of IMT days as well as the below post on my blog around March 2009.

"Yes, there are negative effects too if you introduce a new brand or some objections to it too. The cost of launching a new brand, the cost to company if the proposition fails in the market, etc.. But, if the product fails wouldn't it affect the image of Pepsi to an extent even if they withdraw fizzier Pepsi later on?? And if the cost of launching a new brand is too costly for Pepsi in these recession times why can't they start it with a limited edition which might have been called "Pepsi+" or "Pepsixyz"?? This might have helped them in covering up the extra costs to launch a new brand, etc and make sure that the product is placed well in the market", the post says.

This was what I felt strongly when Pepsi tried to replace Pepsi with a fizzier pepsi under the same name in the AP market an year and half ago. And, I strongly felt ans still feel that if pepsi can come with a new brand for the new variant(which it is experimenting with) it would benefit over replacing the drink in the same brand. This will make sure that atleast consumers of the drink Pepsi remains with it mostly and consumers of the drink ThumsUp or Coke would get attracted to the new brand. This is if the new variant clicks. And what if it doesn't?? Simple, Pepsi can always write-off the loss like a bad decision similar to the way they wrote off Pepsi Blue during one of the Cricket World cups...

And the mail said, "Hi Rajiv, We thought you might find it interesting that Pepsi Max is here. Pepsi Max offers consumers a great tasting Cola, with more strength, fizz, punch and an added advantage of no sugar designed for those seeking the ‘Maximum Kick, No Sugar’ experience! Check out the eRelease at Warm regards,..."

And finally, here is Pepsi Max which is a fizzier variant of Pepsi which is out in the delhi market to try and grab consumers of it's enemy Coke towards it rather than, the consumers of it's sibling Pepsi. And this makes me again feel that, sometime my brain really works and that too in a direction something that we can name as "Practical logic"...


Open for Comments...

Sunday, August 22, 2010

From an Era of No-service to ignoring service


If a mobile connection can be de-activated within a couple of minutes then, why can't it be restored in a couple of minutes??

If a telemarketing agency of a bank can reach the customer about some bullshit offers 5times in a day, then why does the same customer's mobile be in a "not reachable" state for the same bank's service team throughout the day??

Marketers argue that Customers should not be made kings in India. They complain on various grounds like customer's asking for too much.. But, they forget that it is due to the gap created by the same marketers in between the service provided in reality Vs the expectations created..

In the 90's, it took us months and years to get a telephone connection. And worst than that was a service requirement. You can forget about someone coming down to resolve a problem with your line/connection. Despite knowing these, people have applied for the connections and waited for months.. Similar logic applies to the banking sector w.r.t a bank account maintenance, cash withdrawal, deposit booking, etc., But, people still opened accounts and waited in queue for hours to get their turn.. and same is the case with almost all the related sectors.

The cost of the product was high, Focus of companies on service was very low, they exhibited as if they are willing to only provide low service and the customer's expectations are also on the same levels as the companies focus. Though we knew of this and the problems that we need to face with engineers of the telephone department or the long queues at the bank, we still went ahead to face it. This was done for different reasons like Comfort that you get out of having the service, pride, Lifestyle, etc.,

Later on came the new era(mostly private sector) companies, promising wonderful service in terms of speed, efficiency, comfort, Low Cost.. They started of well attracting customers with better than expected service delivery. We were able to get a telephone/mobile connection in a day's time. Any problem is solved over days rather than months. Different counters for different activities to reduce the time in a bank and so on.. The cost of product was medium, Focus of companies on service is good, they exhibited as if they are willing to provide medium/good service and the customer's expectations were raised to the medium levels. Though there were certain lapses at times, we adjusted to them seeing the change that has taken place. Service was a main focus area for companies at that time since, it attracted more customers and vice-versa apart from the cost structures..

This led to a huge belief in the these new era companies by more customers and this was followed by companies promising even further better and efficient services.. This led to attraction in huge numbers and in the process of ramping up the facilities and increasing the market share, the amount of focus on service has not moved up to the required levels. It's better to say that focus has been lost w.r.t the amount of expectation level created in the minds of customer. There came a huge mismatch between the expected levels and the actual experience. It, might not have been a active decision on part of the companies but, they still think that the amount of service being provided is the best that can be provided within the cost structure available. Which means that, they will never accept this truth and stop over-promising but, would still go ahead and neglect the over-promised service delivery. The cost of the product is low, Focus of companies on actual service remained on the medium levels, they exhibited as if they are willing to provide over-promised service and customers expectations increased to higher levels. Here the actual service delivered to the customer and the company’s display towards customer in the public had a wide gap w.r.t the expectation levels.

And, the cost structure never allows the client to compromise on service because, he/she has been promised all that huge service as a part of the low cost product. And it never really matters to him/her about how hard is your customer service executive working because, they never know the inside functioning. And to this were those companies coming back to same customer's with similar over-promising stories..

But, is everything related to only extra cost to be borne by the company to provide those extra services. In many cases, it doesn't mean so.. The burden of extra service to the customer has come along with the extra benefits provided by the same old product. Hence, many of these can be definitely avoided by the same smart marketing or activation techniques used by companies. But, only if they are willing to do so and if they are not, gods save them from the growing percentage of educated population in India. If we can answer some of the questions below in a positive tone, the work's half done.

If a mobile connection can be de-activated within a couple of minutes then, why can't it be restored in a couple of minutes/an hour/ during night hours??

If a telemarketing agency of a bank can reach the customer about some bullshit offers/cards 5times in a day, then why does the same customer's mobile be in a "not reachable" state for the same bank's service team throughout the day??

If an instruction is given to the service team on timings, how come the engineer on ground visits arrive at a time of his ease to leave a note saying "we missed you"??

Let's consider the telecom sector: Why can't a de-activated connection be activated immediately? We can simplify the process to activate immediately if payment is made through any mode and other back-end processes, checks be done at a later stage to make sure everything's alright. Why should the customer's suffer due to the low knowledge levels of front end executives in the store? We can implement a process to only allow the customer to suffer in absolute mistakes made by them rather than for errors made on part of the company executives / customer care like missing documents, signatures missing, etc., Vodafone is the best example for this.

In banking/logistics, why can't we centralize the systems or information across departments rather than each functioning on their own directives rather than on what customer wants? If we can buy/sell a mediclaim/insurance over a recorded telephone line, we should be able to cancel the same over a recorded telephone line rather than asking the customer to run behind our offices. These services are more applicable and prevalent with sectors such as telecom, financial services, electronics & equipment related, etc.,

As of now there are ways to solve issues related to service but, the process to take it to higher levels is cumbersome, and many are not that well aware, educated enough on the processes or to understand the same. Once, the educated population forms a huge chunk, the processes would be simplified over demand of customer's and it will become easy for a customer to sue the companies like other countries across the globe. Will they change themselves or wait for the process to get simpler to sue them??

Open for Comments..

Sunday, April 18, 2010

Parle Vs Britannia : Parle takes a dig at Britannia

Not long after HUL and P&G were engaged in a court battle over comparative advertising, another category seems to travel in the same direction - Biscuits. Both the categories and campaigns have similarity with major players taking a dig at each other for market share in the respective category.

In a product category, that customers are unable to identify a major difference in features, it doesn't affect the brand (using comparative advertising) to a large extent though the product isn't up to the mark. i.e., the detergent category.. A category hard enough for the customer to identify which gives better whiteness, better smoothness to hands, etc. But, if the same kind of comparative advertising is used in a category well enough for the customer to understand the difference in features, it might kill the brand altogether as the customer may not try the brand again in the future. i.e., the biscuits category.. A Category good enough for even a kid to understand the taste as well as the taste compared to another brand(which you can call as perceived difference in value).

So, when you go for comparative advertising, you need to make sure that your product is the best in terms of perceived value.. And not to forget, perceived value in terms of the customer and not the manufacturer/company.

Parle's 20-20 Cookies competes with Britannia Goodday in both butter and Cashew categories. This category is perceived to be not the lower range like glucose/salty but, is a premium category. In this category, the customer's perceived value depends more on taste, quality rather than the cost unless until, there is a huge difference in the cost.

That's exactly where Parle has been on the wrong side of perceived value, when it came out with a comparative print ad campaign against Britannia Goodday in telugu dailies in the Andhra Pradesh market.(Couldn't verify if it has done the same in other markets too and couldn't find such ads in many verified markets..)

Headline of the Ad says, "Parle 20-20 Cookies only give proper value for your money. All other remaining will insert a flower in your ear(Insert a flower in the ear : A phrase in telugu meaning, "making you a fool") followed by a table comparing Britannia Goodday with Parle 20-20 Cookies in both butter and Cashew categories w.r.t the MRP, weight of the pack, number of cookies in the pack.

And this ad focuses on saying that Parle 20-20 pack comes with more weight(27 grams, etc.) and more cookies(8cookies).

This sort of comparision can hardly make any difference to the customers in this category from buying Goodday which has been there since long time with a very good perception in the category. The major reasons for the same being, the customer in this category hardly gives a preference to the small price difference advertised, as well as the number of cookies. Because, the price, number of cookies, weight are not that significantly different in this case. At the maximum, it can make a customer try out Parle 20-20 Cookies instead of Goodday when he/she is buying it next time. But, will this process of trying out a new brand make the customer choose his preferences from Goodday to 20-20. Maybe Yes, if it seems to be far better in taste, value perception as said in the ad.

I buy 4-6 packs of Goodday every month. But, this time I took a couple of 20-20 packs just to try it. My comparision of 20-20 and Goodday with a couple of friends says, "Parle is far behind in the Butter category and it is slightly below in the Cashew category." At the end, I feel like, I should have brought Goodday only.. and there ends my preference for 20-20. And obviously once tried out, it will take huge efforts from Parle if it needs to convince a customer who has a disliking already. And hence, hardly does it make any difference to a customer buying Goodday and the brand Goodday but, it ends up making a good negative impact on 20-20 for sure.

Hence, comparative advertising can turn into a huge negative for the brand, if the customer can perceive the differences that are being advertised... Whiteness in detergents, smoothness with Lubricant Oils, effects due to branded petrol etc are some categories that may not suffer if compared too.. But, something like 20-20 can turn dangerous for the brand.


Open for Comments


Sunday, April 11, 2010

SEBI Vs IRDA : SEBI cries over ULIPs like a kindergarten kid

Suppose you have been working with an organization for the past 15years. And your HR/Rewards department has taken a decision, to allott/gift 10employees in your office a mercedes benz each from it's allocated budget 10years back. Today, the HR and Finance departments had some ego clashes on their authority as well as who is big types. And today, 10years after the decision was taken and implemented Finance department wakes up and says something that seems to shock you.. Let's consider 2 different scenarios here.

In the first scenario, your finance department in front of the whole office comes to some of you 8employees and asks you to stop using the mercedes and says, "You cannot have it because, you didn't take permission from us for a mercedes." And leaves off 2employees without saying anything about the mercedes given to them and that too without any logic for differenctiation between the 8 and 2employees.

In the second scenario, your finance department sends an email to the HR/Rewards department or sends a show-cause notice to why a mercedes was gifted to you and keeps you too in the loop of communication without making a show off in front of the whole office. And, if they don't get a proper response, move the matter to the higher authority and ask them to take necessary action against or guide against.

This is what has been happening exactly with IRDA (HR), SEBI (Finance department), you (Insurance companies) and the Mercedes (ULIPs). 2employees is the LIC.

ULIPs were offered for the first time around 2001 in the Indian market. Insurance companies have taken the required permissions from IRDA (Insurance Regulatory and Development Authority) to launch the same as it falls under their purview. Off Late, there have been some ego clashes between regulatory bodies in India and a month ago SEBI started behaving like a kid by sending notices to all the life insurance firms asking, "Why did you eat my chocolate in Kindergarten without my permission??" ("why they haven't taken permission from SEBI before launching ULIPs ??")

This led to companies sending some replies to SEBI and IRDA coming into picture with a couple of meetings with SEBI to solve the issue. But, it is really hard to find out on to whose purview do they fall under due to the complex ways what a regulation says. Indian financial regulations are similar to a traffic signal and a traffic constable where drivers interpret signals and directions in the way they want to and the constable acts as he likes to rather than giving preference to logic.

And as per the latest news, SEBI has proved that it is a kid by sending letters to Insurance companies banning them from selling ULIPs. (Notice from SEBI)

All this raises certain questions to prove the childish acts of SEBI:

1) What do you call the behaviour of the finance department in first scenario?? - Definitely Kiddish, childish..

2) What do you call the behaviour of the finance department in the second scenario?? - Responsible, Logical..

3) Where was the Finance department and the people in the department sleeping with for 10 long years??

4) If Finance department acts as in the first scenario, can the CEO ask HR and Finance to sort out the matter in between them?? - No, because the same CEO has given certain powers to the HR department saying it can reward a person in the way it wants within the budget allocated.. And CEO is our great Finance Ministry that asks the regulators IRDA and SEBI to settle it between them.

5) Can the finance department pull off the mercedes from 8employees and leave 2employees without saying anything without a proper explanation and logic?? SEBI has done it..

6) Let us assume, it hasn't come to a conclusion in the meetings with IRDA on, whose purview does ULIPs fall under?

Then, it should have gone back to the finance ministry or the other higher authorities that have set up the regulations to clear it off rather than sending letters with a one-sided view that ULIPs fall under their purview. This let to IRDA, like the underworld don come into picture immediately and say "Main Hoon Na.." asks the insurance companies to ignore the SEBI order and do business as usual.

7) And let us assume, ULIPs fall under the purview of SEBI.. It should have acted responsibly as in the second scenario.. By bringing out some timelines that companies should take permission within the next ‘x’ months of time as well as should have come out with the application guidelines for the permission?? But, SEBI chose the other way round to prove that it is a kid and it is not at all suitable to be called a regulator because, regulator needs to act responsibly rather than childish..

8) Let us assume that SEBI is right in it's stand that ULIPs fall under its purview.. Why didn't it regulate the market since last 10years?? Why did it allow companies to sell ULIPs for 10years. Do we need regulators that sleep for 10years without acting in time?? Why can't Life Insurance companies/IRDA sue SEBI in the court for defamation that they didn't take permission where as, it was SEBI's inefficiency that took 10 years for them to recognize??

All these questions though many remain unanswered at least confirms one thing.. “SEBI has screwed up big time like a kid”..


Open for Comments

Sunday, March 28, 2010

Flying out of Delhi: Pay more for someone else's mistake

It's become very common these days to pay for the mistakes of someone else. The increase in cost estimates by DIAL (Delhi International Airport Ltd) re-affirms the same.

Suppose, you own a company"A" and you have outsourced some work to another company"B" at a certain cost through bidding process. Both the companies agree upon a target date for completion of works with a certain quality at a certain cost when done through bidding. And if, costs increase all of a sudden due to less time to complete or increase in raw-material costs... Who is responsible for this scenario??

1. Either of the parties involved A/B or both A&B haven't calculated timelines properly. 2. Party"B" hasn't considered the risk of increase in raw-material costs, capacity addition in the process of bidding at a lower price than the competitors and later on realised the same..

Because, it was bid at a certain price, if you haven't communicated the timelines properly to the company"B", obviously you are the person to be blamed for this mess-up. If you have communicated the timelines properly then Company"B" is to be blamed for the mess-up and is required to take up the extra costs as a loss on it's balance sheets.

Here, "A" is the government of India and "B" is the consortium that has won the bid for modernisation of Delhi Airport{(i) GMR Infrastructure Ltd., (ii) GMR Energy Limited, (iii) GVL Investments Private Ltd., (iv) Fraport AG Airport Services Worldwide, (v) Malaysia Airports (Niaga), (vi) Sdn. Berhad, (vii) India Development Fund}.

India has won the bid to host 2010 Commonwealth games way back in 2003. And the government has signed up agreement and awarded the bid for modernization of Delhi Airport in 2006. DIAL consists of representatives from both, the government (AAI) as well as the private companies who have won the bids (GMR and other partners). The estimated cost of the project was almost doubled to Rs.8,900 Crores in 2007 and now finally goes up by another 42% to Rs.12,700 Crores as per the latest reports by some newspapers.

When India has won bid in 2003 and has given the bid in 2006 for modernisation by 2010, where did these multiple increases in cost come from?? Either government hasn't communicated it's timeframe properly at the time of bidding.. or else, the consortium hasn't planned it properly for time required as well as increase in other costs to complete by 2010. This results in a possible increase in the Airport development fee on passengers flying out of Delhi who are already paying Rs.200 and Rs.1300 for domestic and international flights.

AERA (Airports Economic Regulatory Authority), responsible for coming out with capping the charges and other regulations related to charges is yet to finalise the methodology. If it might have been your own private company"A", Will you let the company"B" charge you extra or increase the price of your products in the market due to such an increase in input costs?? Obviously, No is the answer. You would sue "B" for not completing works in the time and costs stipulated in the bid. This throws a number of unanswered questions..

Will AERA consider such mess-ups by government or the consortium and make sure that passengers are not charged for the mistakes done by someone else?? And if it by mistake works in the independent manner it is supposed to(opposite to the way independent authorities work in India as of now) and suggests a roll back in the charges as it was the fault of government/the consortium, Will they pay back the customers charged in the past?? If it decides in the favour of consortium and gives nod to increase the charge under airport development fee and DIAL gets into profits in the future, will it give back customers Rs.200/1300 booking tickets henceforth or would it pocket the profits?? And to what extent can it pocket the profits?? Lots of questions await AERA to answer...

But, as of now you and I pay for the mistakes of government/consortium (either or both) and get ready to pay more for the future while government & AAI (Airports Authority of India) makes a mockery of PPP model similar to the way toll tax being collected for years and years...


Open for Comments..

Wednesday, March 24, 2010

MiD DAY chooses Chai Ki Tapri : Breaking the clutter II

Outside Cititowers, my office in Parel is a small , typical 6ftX3ft Chai ki Tapri.. You can see such small ones outside almost each and every office in Mumbai. Can you imagine how can you use this as an advertising medium?? MiD DAY has done it.

It’s trying to reach to those who are in a very much free state of mind smoking with a glass of tea in the other hand. And MiD DAY has chosen the glass in other hand as their medium.

Printed across the upper brim of this small glass is the logo of MiD DAY with lines, “Take a MiD DAY break. MAKE WORK FUN.” Another amazing way to break the clutter for the brand and to reach the target segment of customers, that too at a pretty low cost. The Cost of glass would work out to 2rupees per piece and 20glasses a tapri gets into at least 500hands in a day.

Sunday, February 28, 2010

Rin Vs Tide new Ad campaign Hungama...

Who says HUL crossed the lane?? Who says HUL's new RIN vs Tide advertisement is illegal?? And it is misleading customers?? I feel P&G has tried to mislead the customers and HUL is trying to educate them...
I didn't believe my ears.. Came almost running from Kitchen and re-confirmed what I heard with my friend who was watching the television and waited for the ad to appear again... Main tho Chaunk gaya.. stood absolutely stumped in front of the TV... Couldn't believe my eyes that HUL has gone for such a direct attack against P&G's Tide.. Kept on thinking what might be the reason only to guess after watching the ad on youtube closely for some 9-10 times. But, defenitely the Ad agency as well as HUL didn't get the customers perception right.. atleast definitely not as of now If the reason that I think of, is true behind this campaign.

There's a huge buzz in the blogging arena about Rin taking on Tide directly in its new campaign. Rather than questioning HUL's ideology behind the campaign, people started crying foul over the campaign and expressing their concerns that it will be off the screens very soon... How does taking off the screens make things better for Tide??


Already the damage is done to an extent although not to the extent HUL is expecting it to. As far as the legal or the ASCI rules are concerned HUL has played it safe with it's small disclaimers and notes below the ad as well as at the end of ad.. "As tested by Independent Lab" and "Issued in the interest of Rin Users". But still what's the logic behind such a campaign?? Definitely not the normal Rin Vs Tide attack.. definitely HUL tried to convey something which is not getting on to the customer's mind as easily as they expected it to get on...


It's a well known fact that HUL and P&G have been trying to gain market share through price cuts although this has reduced their revenues for FY09-10. Recently in the month of January2010 P&G introduced an extension on it's brand line "TIDE" with the name of "TIDE NATURALS". This at a lower price. And around the end of January itself, HUL has brought down the prices of their detergents RIN, Surf Excel by 10-30%.

Remind you!! P&G haven't cut the price of other versions of Tide to the price levels of Tide Naturals. But, In reality what the customers have started seeing in the supermarkets is Tide available at such a low price. Most of them never realized that it's Tide Naturals and not all versions of Tide are available at same price. As per relativity, If prices of actual RIN and Tide versions have come down by same extent the volume levels will not show much of a movement from RIN to Tide or Tide to RIN. But, there came a new entrant called "Tide Naturals" which started pulling the volumes of RIN. But, what's customer thinking while picking up a packet of Tide Naturals is..
"I am getting Tide at a very low price" which is what the lady in the ad says, "Tide hain, Khushbhu bhi aur safedi bhi".. She has taken a Tide Naturals pack and she still feels She has taken Tide.. which is not true and who has mislead this customer?? P&G or HUL?? HUL is just trying to educate the customer by saying indirectly in a respectable manner, "You can compare Tide with RIN my dear.. But not Tide Naturals with RIN." It is not saying RIN is better than Tide w.r.t the cost but, it is trying to say it is definitely better than Tide Naturals w.r.t the cost.
And HUL is also to be blamed one fourth for this confusion and the Ad agency that did this Ad for them for the rest three fourth. The concept of direct attack is wonderful and awesome but, I think the customer isn't able to get this right message from the Ad as expected by HUL and the Ad agency.. The customer feels RIN says, "RIN is better than Tide".. I think it would have been better if the Lady might have been shown in the ad picking up Tide Naturals instead of Tide original version and RIN.. This might have emphasised the effect of Tide Naturals in a better way..
But still, this campaign is definitely a tough one to crack for P&G and their agency. Either HUL needs to bring more sense to this ad asap or else, if P&G comes with a campaign in reply (though it will be very difficult to counter the argument) HUL will definitely suffer huge volumes...
I had to view the ad nearly 10times with my eyes glued to TV at 1cm distance to get the blurred disclaimer that appears in the bottom twice during the TVC that says... " Schematic representation of superior whiteness is based on Whiteness Index test of Rin Vs Tide Naturals as tested by Independent lab"
Open for Comments

Tuesday, February 02, 2010

Bajaj Allianz Life Versus Fixed Deposits…. (The best way to design a worst portray of universally disagreed reality)

You need to be very strong at logic as well as the differentiated features of a product being compared to, when you decide to collide head on with a strong belief that has made it roots strong since years deep in the mind of a customer. And especially this becomes a basic necessity when your target group itself are these set of customers with strong belief. And if this necessity is not addressed by a brand then, it's a pure waste of effort in terms of money, time and talent with respect to the ad agency as well as the brand in picture. And I think Bajaj Allianz had just done it by not addressing the necessity in it's new campaign targeted at the customer's going for Fixed Deposits.

Fixed Deposits have been one of those products whose roots are buried into the financial planning of Indian since years. It is believed to be one of the best instruments that gives safe and secure returns. Though with time, we have moved money into other instruments like bonds, direct equity, insurance, mutual funds.... Still, there is a huge chunk of population that believes in FD's as the instrument to be put into. Customers who put their money into FD's can be broadly put under 2 categories. First category comprises of those who plan their wealth in a disciplined manner (either through their RM's or self) or those who fix amounts to be put into different instruments in the ratio they like it to be. Second category comprises of those who put their money only in FD's or bonds type of instruments and they have been like that since ages and they like to be like that only.

The new ad from Bajaj Allianz Life Insurance shows people in a bus making fun of a person investing his money into FD's. And starts questioning if his FD will give him "170% guaranteed returns, Life Insurance cover, Tax benefits ...” This is not targeted at any specific customer category we spoke of but, it is targeted at the money both these categories have been investing into FD's. Why will this concept not work for Bajaj Allianz???

The First category of customers have already planned their wealth in a disciplined manner or as per the ratio decided earlier and they believe that they are diversifying their wealth (although many of them are not diversifying in a disciplined or in the required ratio). This category of customers don’t agree to move money from FD into any other market linked product though you try explaining them on a face to face meeting. Hence, this category giving a thought about moving their money from an FD into any other products is a rare possibility.

The Second category of customers are those who belong to "We are like that only" category. It's nothing to blame them about their behaviour but, it's just their way of looking at managing their wealth. And their behaviour is well expressed by their modes of investments. A person investing only into an FD or bonds related products is a very low risk taker, very careful before investing into any product, will consider multiple options, re-check the details of product they would invest into.

The Logic that is used to collide head on with an FD is fine to an extent in terms of less returns, a Life Insurance attached (although at an extra cost) and is actually true in reality.. but it doesn't make much of a difference to this customer. I don't think this customer segment is financially illiterate to an extent that they are not aware that FD's give lower returns compared to equity linked instruments. And although if it makes a little sense to this customer to give it a thought, the way it is being advertised 170% returns makes the customer search for that * mark around some corner of the ad... And this customer already being a very careful evaluator, the only way he/she finally agreeing upon taking up this financial instrument is "mis-selling" by the agent/sales person.



The best way to design a worst portray of Universally disagreed reality.....


Open for Comments…..