Building a Sunshine Nation

India has one of the highest Solar potential in the World. Can it tap into it build a sustainable economy?

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Source: The Hindu

India generated 68% of its electricity from coal in the fiscal 2013-14. The inability of Coal India Ltd (the state-owned monopoly) to ramp up coal production resulted in 65,000 MW of installed capacity being stranded, causing a power deficit of 5.4% in the fiscal 2013-14. To plug the gap, imports rose to 152 million tonnes in 2013-14 (20% of total coal requirement) resulting in higher power prices. This situation, together with climate change imperative impels a rapid movement towards greener and cheaper sources of power, primarily solar energy.

Rising dreams and falling prices

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Source: Financial Express

 

The movement is already under way as a result of Government’s ambitious ‘National Solar Mission’ announced in 2009 which envisages 20,000 MW solar capacity installed in the country by the year 2022. The Narendra Modi-led Government raised that target last month to 1,00,000 MW of installed solar capacity, inviting domestic and foreign companies to invest about $ 100 billion in the country’s Solar power sector. The buoyant mood behind this ambitious target is supported by 4 key factors. First is the abundant solar resource availability. India receives about 4.5-7 kWh/m^2 of solar energy on average with 1500-2000 hours of sunshine per year (depending on the location). This is enough to generate power more than 1000 times the current demand. A second factor is the falling prices of Solar Photovoltaic modules. Large-scale production, especially in China, has caused the module prices to drop by 80% between 2008 and 2014, dropping by 12% last year alone. As a result the tariffs for grid-interactive solar power have fallen from Rs.17.91/ kWh in the year 2011 to Rs. 5.73 /kWh in the latest round of auctions held by the Andhra Pradesh state government.

Nearing Grid-Parity

The third factor has been the tremendous rise in efficiencies of solar PV-modules. Over the last 8 years, research and mass-scale production have resulted in rise of conversion-efficiency for crystalline silicon modules from 12% to about 19% and that for thin-film (Cd-Te) modules from 8% to 13%. Companies like SunPower (in USA) are already manufacturing silicon modules with 25% efficiency commercially. Scientists at Fraunhofer Institute in Germany recently developed solar cells modules with 44.7% efficiency. This combination of falling costs and rising efficiencies has resulted in solar power approaching grid-parity. KPMG, a consulting firm, predicts solar tariffs to achieve grid-parity by the year 2018-19. Solar power is already more economical than diesel power with an average tariff of Rs. 7/kWh against Rs. 15/kWh for the latter.

The fourth significant factor has been the Government support to build the solar power sector. The ambitious ‘National Solar Mission’ provided various fiscal incentives like preferential feed-in tariff, excise duty concessions, wheeling-charge concessions, income-tax holiday, an 80% accelerated depreciation on solar-equipment, etc. Besides, off-grid solar plants receive a capital subsidy of 30% of the entire-project cost (and of 70% in North-eastern states and J&K). These factors along with falling prices have resulted in rise in installed capacity from 161 MW in 2010-11 to 2,319 MW in 2013-14.

Sunshine on the horizon

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Source: Aditya Greens

This is however only a small amount of the total potential, which is estimated to be in the range of 7,00,000 to 11,00,000 MW. For the non-grid applications, Rooftop solar represents the most lucrative opportunity. It can fulfil 30% of the entire demand generated during the sunshine hours. The example of Germany shows that with robust and attractive policy, Rooftop solar can be effectively leveraged upon. Out of the total Solar capacity in Germany, 80% is via Rooftop solar modules which can meet about 10% of total demand on a typical summer day.

Apart from using Photovoltaic modules, Solar energy can be harnessed through thermal systems as well. In this domain, Solar cooking and Process-heating are the major segments. Of these, Solar cooking is the most mature category with an estimated potential of 2.6 lakh m^2 collector area and target installation sites like temples, hostels, canteens and prisons. Already, successful examples of mass-solar cooking like Shirdi temple and IIT-Roorkee’s student messes exist. But the most lucrative opportunity (of about 46 lakh sq. Metres of collector area) lies in the industrial heating segment. Indian industry accounts for 40% of the total primary energy consumption of which thermal-form accounts for a massive 70%. Solar process heating can easily replace Diesel, LDO or FO-fired boilers in industries like Textiles, Dairy, Pulp & paper and Food processing.

Clouds spoil the mood

Despite massive potential and Government’s good intentions, severe challenges face the nascent Solar power sector in India. The utility-scale projects through PPA-mode (Power Purchase Agreement) have persistently been under the shadow of poor financial condition of the state-owned distribution companies. The retrospective tariff reduction by Gujarat’s power utility and non-honouring of PPA agreement by Tamil Nadu’s power utility has made the investors apprehensive, lately. The health of the utility-scale projects via REC-mode (Renewable Energy Certificate) is even more precarious. Non-enforcement of RPOs (Renewable Purchase Obligations) by the state-governments has forced the REC prices to tumble by 70% from Rs. 9.5/kWh to Rs. 2.85/kWh. Only 2% of total solar RECs were traded in October 2014 as compared to 18% in April 2012. This has put projects of 500 MW capacity (1/6th of India’s current solar capacity) in a cash-crunch.

For the Rooftop solar industry, the main hurdle has been the indecisiveness in coming up with an effective policy for residential rooftops. In August 2014, a 30% capital subsidy was announced for Rooftop installations but this was applicable to only Government buildings. Moreover, there have severe delays for the last 8-10 months in subsidy payments as the MNRE budget was reduced from US $246 million in 2013-14 to US $72 million in 2014-15. A local rooftop installer, Zolt Energy’s Pradeep Palleli, said “Announcing subsidies and not releasing it in time is really a major hurdle hindering the growth of the rooftop solar industry.” Even the Solar thermal industry has hit a road-block after the Government withdrew the 30% capital subsidy on solar water heaters on October 1, 2014.

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Who will make them?

The weakest pillar in India’s solar industry however is the crippled manufacturing-base. Global over-supply of cheap modules from manufacturers in China and USA has put many domestic-manufacturers out of business. For those who are left, capacity-utilization of factories remains below 30%, putting them on verge of bankruptcy. The high cost of domestic finance has been another major disadvantage. Solar-developers are getting access to loans at 3-4% from US Export-Import Bank (Ex-Im) while domestic interest-rates remain above 13-14%. Solar-developers have taken loans in excess of US $1 billion from the US Ex-Im Bank. But these come with riders to procure modules from US-based manufacturers, thus putting Indian module-manufacturers out of business.

Government to the rescue

To eliminate the barriers and shortfalls in the sector, the Government has to take proactive steps. Foremost among them should be creating an environment of certainty and stability, where in, programs are sustained and incentive-payments never delayed. To reduce the debt costs for developers, funding avenues like long-tenure, tax-free solar bonds. Lastly, the government can also leverage the ‘Make in India’ campaign to create a robust and sustainable solar-manufacturing industry in the country. Solar-sector focused Manufacturing and Investment zones should be set up to provide business friendly ecosystem along with superior physical infrastructure.

Work has already begun on many investment-encouraging initiatives. As a result, India is building the world’s largest solar-power plant in Rajasthan with a capacity of 4,000 MW, which is expected to bring the cost of solar down to retail tariffs (and even lower in some locations). Big business-houses like Tata-group, Mahindra Group, Reliance, NTPC, Aditya Birla Group and others have already planned investments worth thousands of crores to make the best of the solar-opportunity. The US $ 100 billion solar-investment plan by the Modi Government takes India’s commitment to solar technology to an unprecedented level. The sun has begun dawning on India. Combined effort by Government and Businesses can take it up the horizon and shine upon India’s future.

 

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Harsh Jain is a second year student at IIM-Ahmedabad. He completed his graduation in mechanical engineering from IIT-Roorkee. With extensive research exposure in the form of market research projects and industry review reports in the energy sector, Harsh is an environment enthusiast and actively follows the latest trends in the power and automobile industries.

 

Hype Cycle for Emerging Technologies in Digital Marketing

Businesses today have been extensively integrated with digitization, promising convergence of people and businesses, while disrupting existing business models. A new age of digital marketing has arrived where extensive campaigns are pushing new products through platforms such as websites, e-mails, apps and social networks. With over seven billion people and businesses, and a millions of technologies bringing a new world together, digital marketing plays a major role in empowering businesses with the much-needed edge to thrive with the competition.

Digital Business Development Path

 Rapid change is fueling digital marketing. Within the last decade we have seen technology giants driving businesses such as Facebook and Twitter. Mobile marketing and advertising marketers have begun focusing on consistent and contextual without being interruptive.  Change is the one thing that is constant, with changes being made faster than ever before. However, impact due to the change is highly dependent on it’s temporal context. For example, wearable technology like Google glass has gained a lot of news coverage when in fact, Steve Mann had already developed a similar device, ‘EyeTap digital Eye Glass’ in 1999. This is a prime example showcasing the importance of analyzing the visibility of a product with time for organizations to capitalize its technological and business resources to make the best marketing sense.

Hype Cycle

 The Hype Cycle is a branded graphical tool developed and used by IT research and advisory firm Gartner for representing the maturity, adoption and social application of specific technologies (See Figure 1). The hype cycle map how technologies move through different phases of hype and indicate whether certain technologies and products are good for the company in short term and long term. Marketers need to understand how and when to derive value from a product and also when to dispose of it when new things come along.

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Fig 1: Five Phases of the Hype Cycle (source: Gartner)

What’s new in 2014?

Marketing Talent Communities: Marketplaces have come up that support organizations and marketers to find and hire qualified freelance talent on-demand. A lot of time is saved in the process of recruitment of a variety of qualified writers, designers, strategists, data-analysts etc. Bloomberg Institute is one such example which financial employers approach to hire talented college students through a normalized screening test called the Bloomberg Aptitude Test.

Marketing Technology Integrators: The scope of digital marketing has expanded broadly. Digital marketers can’t claim to address the digital marketing needs solely through offering new Web Content and Experience Management or Portal platforms. As a marketer, the time and attention required to solving technological solutions takes time away from their focus on target customer. Thus, marketing organizations are hiring services and products that design and implement software and increasingly integration-oriented implementation data solutions.

Transactional Ads: This is an example trying to connect marketing with productivity and conversion. Online ad units that are activated by gestures, present a secure transaction or coupon. This reduces the time consumption of the viewer by enabling a person to request information or to buy the advertised product without leaving the webpage on which the ad appears. If old companies can figure out a way to associate more with transactions, they can boost their chance of surviving in the online market. [3]

Quantified self: It is a movement to incorporate technology into data acquisition aspects of a person’s daily life in terms of inputs, states and performance. Applications or services on mobiles and wearable technology that provide self-tracking analytics contribute to self-knowledge through self-tracking with technology. Biometrics have been identified that people never knew existed making data collection cheaper and more convenient than ever before. Recently, companies like Google and Zomato have begun to use location data of a user’s phone to recommend suggestions to buy things based on the proximity to various shopping outlets.

Social co-browsing: Collaboratively sharing of the web space with one or more parties from a social network, regardless of the physical locations of the partners. In real-time, multi-user experience isn’t just slapped on top of an application, it’s directly built into the core experience. Companies would have to redesign their user experience to support social co-browsing so as to provide a natural extension of for users to communicate and interact to enrich their real-time, collaborative experience. [4]

av3

Future Implications

Most of the technologies at the peak of their hype cycles today, will plateau in terms of productivity within the next two years. The window to gain competitive advantage in this fast-paced environment is limited. Thus companies must adapt themselves for speed, agility and rapid customer response.

Content marketing can be very resource intensive. Organization should use marketing talent communities and agencies as an escape valve for demand as a way to scale elastically as demand comes online.  The in-source and outsourced roles must be carefully mixed together in order to optimize productivity. Organizations should appoint strong leadership to ensure the success of their elaborate content marketing strategy.

Common view of digital-savvy customers should be kept in focus to ensure tight coordination of marketing activities in sync with the changing customer needs and reactions. Emerging architectures of digital marketing hubs should be carefully reviewed periodically to best utilize resources for most productive outcome.

With increase in social-marketing hype, the social marketing objects should be tied to the corporate vision of the companies. Analysis of how each social marketing activity will support that goal and provide a high return of investment. Gain from adapting to emergent technologies can lead to savings on media from improved efficiency or lift in sales from improved effectiveness of a company’s budget.

B2B management investments should be made into multi-channel, taking advantage of accessible areas in data mining, segmentation and behavioral analytics. Useful analytic results should be incorporated to the marketing strategy to further boost performance.

Criticism about Hype Cycle

Several disadvantages of Hype Cycle have been brought to light. Firstly, it is very difficult to objectively estimate the current location of a technology in its hype cycle. Secondly, terms such as ‘disillusionment’ and ‘enlightenment’ are misleading for people as they give a wrong idea about how exactly and to what extent a technology can be used for an organization. Also, there is no mention of how a technology transitions between phases and what all factors influence the shift. Lastly, several technologies are heavily correlated in terms of advancement through the different phases. The hype cycle does explain the cause-effect relationships between technologies and their impact on acceleration of technology progress and generation of excessive hype for a product.

References:

http://www.gartner.com/newsroom/id/2819918

http://www.theregister.co.uk/2013/03/02/steve_mann_on_google_glass/

http://techcrunch.com/2010/03/07/the-rise-of-transactional-advertising/

https://goinstant.com/blog/collaborative-customer-interfaces-and-social-cobrowsing

The Cause Related Marketing Bandwagon in FMCG

FMCG GrowthThere has been strong growth in the Indian FMCG market over the years. The sector’s revenue reported a CAGR of 17.3% over 2006-2011. Consequently, today’s marketplace is flooded with brands in all product categories of the FMCG sector. With ever-increasing competition, a company is expected to do business in such a way that it stands for not just the financial returns, but for comprehensive social and economic returns to the society at large. Gillete’ Soldier for Women, Dove’s Real beauty sketches, Proctor & Gamble’s Thank you mom and Tata Tea’s Jaago re are a few examples of attempts made by leading corporations to do well financially by doing good socially. These campaigns are launched under a marketing strategy called ‘Cause-related Marketing’.

What is cause related marketing?

Cause related marketing is a marketing strategy wherein a product/brand/company is marketed in association with a ‘cause’. This identified cause is generally an issue that is prevailing in customers’ mindset. It can be social like child welfare, environmental like wildlife conservation or even abstract like uniqueness etc. Cause marketing campaign is used by companies strategically to create brand differentiation by enhancing brand equity and credibility. It can be employed by a company to achieve a number of marketing objectives, mainly, visibility, increased sales, repeat purchases, increased brand recognition, broadened customer base etc.

Now, more than ever, the companies are realizing the potential of aligning themselves with a cause. Earlier it was used mostly to increase sales and profits, but now it is used as a great brand positioning contrivance as it works on vitalizing brand equity and enhancing corporate image with sound economic and community impacts.

Cause-related marketing: differentiated from CSR

Cause Related Marketing and Corporate Social Responsibility (CSR) are often used interchangeably but there exists a vast difference between the two. CSR is primarily the philanthropic activities carried out by the company, generally in domains of social welfare or environment. The essential objective is to project the company as a responsible corporation resulting in positive brand image in eyes of consumer. Cause Related Marketing on the other hand is a marketing strategy done with a sole objective of building profit through goodwill. It is done by associating with a designated cause and is characterized as a profit-motivated giving. Unlike CSR, it is more targeted approach and a less selfless philanthropy.

Cause marketing practices

Cause related marketing is a flexible tool and can be employed in varied ways. Some of the common forms adopted by FMCG firms, of providing assistance to cause organisations are:

Transactional programs: This is the classic form of assistance to cause wherein a company donates a part of every sale of the affiliated product to the cause organisation. Many examples can be cited for this practice, a popular one being ITC’s INR 4 donation for the education of economically underprivileged students for every 4 Classmate notebooks sold.

Propaganda programs: Under these programs, the cause is promoted and contribution, in forms other than monetary, is made by the company. An example is Tata Tea’s Jaago Re campaign where the company promoted anti-corruption and encouraged the youth to vote. 

Time frame of the program

Cause marketing campaigns can be either strategic (long-term) or tactical (short-term). Long-term campaigns are generally found to help with enhancing brand loyalty, improving brand image and lowering apprehensions regarding company’s motivation. Proctor & Gamble’s Shiksha campaign has been contributing to the cause of child education since 2004. However, short-term associations are preferred by the companies at times, as they call for limited costs and bigger impact advantages. Lifebuoy’s ‘Roti Reminder’ at the Kumbh Mela 2013, which promoted the cause of hygiene, falls in this category.

Choice of cause

The fit between the selected cause and the profile of the company is an important variable in determining its impact.  For instance, Maggi’ Atta noodles promoting Taste bhi health bhi has high cause-company coherence, with the cause being health. In contrast Coca-Cola’s Arctic Home has rather low coherence. Generally, high coherence impedes the apprehensions arising in customer’s cognition and hence mobilizing the purchase intent due to higher urge to benefit the cause.

Epilogue

Cause related marketing fills a crucial void in society by giving the individuals an opportunity to contribute to the causes they feel for. If executed creatively, by carefully pairing cause and company, it can emerge as a rare and strong marketing contrivance which would converge social and corporate interests, favouring both equally.

Arushie Mangla is a PGP1 student at IIM Ahmedabad and a member of the Consult Club. She is a graduate from IIT Delhi in Civil Engineering with a minor area specialization in Business Management.

Living in the Era of CRM 2.0

CRM 2.0While sitting in a plush board room, the CEO of a company looks at the performance figures. He announces to the forum, “Ravi has closed so many deals for us this last quarter. Let’s reward him and give him a raise”. The members started whispering and everyone seemed flustered. Then one of the members politely informed the CEO, “Sir, But Ravi is a customer, not an employee”. This is an era where customers are significantly contributing to the way a company is segmented and positioned: the age of Customer Relationship Management (CRM) 2.0 is here.

Companies are struggling to find a trade-off between managing cost and customer satisfaction. While the time has come for them to strategize and make customer experience their foremost priority, they are still focusing on reducing costs. Thus, it does not come as a shock that customers are left wanting. In this age of Web 2.0, where customers have access to Blogs, Wiki, forums etc., they are not afraid to put forth their opinion, and that opinion gets magnified through the magic of Web 2.0. Any small piece of information can spread like wildfire and deteriorates the brand value of the company.

The pattern of customer behavior is changing. The tech-savvy generation uses different modes of communication including phone, e-mails and social forums. They expect to interact with companies using all these tools and be able to switch-over between different modes as and when it suits them. They expect the communication to be consistent across all channels. Customers now demand that organisations, companies, innovations, technology and business methodologies adapt to their requirements accordingly. Thus, CRM 2.0 necessitates a social metamorphosis of the industry. CRM solutions should not only be oriented towards sales, marketing and services but should also focus on customer loyalty, online commerce and the enhanced Web 2.0 guided worth of “social CRM”.

evolution of business process modelling

While traditional CRM was focused on one-to-one communications with customers, using phone, chat, messenger, chats, media etc., social CRM (also referred to as CRM 2.0) has added new and efficient channels to interact with the customer. Engaging the customers over social media, in an unconventional manner is a powerful tool that can replace hours of time and dollar resources spent on gauging an honest, real-time feedback of the customer. The traditional CRM believed in managing the customers but social CRM believes in collaborating with the customers. CRM 2.0 engages customer as an equal partner from the initial phase of product development to the next phase of product improvement. Business orientation in a traditional CRM focussed on products and services as a tool to satisfy customers. In a social CRM, the orientation has been totally changed to a focus to co-operate and co-create with the customer to provide a pleasant ambience and experience.

enter social crm

The real question is how to productively utilize the integration of Web 2.0 and CRM. A social media channel such as a blog can be effectively used as a marketing tool to promote articles written by senior executives of a company and promote leadership, as a sales tool to engage with members of the forum regarding products offered as well as a service tool to keep a real-time check on claims, comments and suggestions offered by the customer. Similarly, personal social networks like Facebook can be used as a launch pad for advertising campaigns within client communities as well as gathering opinions of the product users. Thus, social networks, coupled with the technological explosion of Web 2.0 have the power to significantly influence customer behaviour.

social CRM matrix

The usage of social CRM, whether to enhance customer experience or achieve cross-selling, can be justified only if the businesses are earning profits. With the application of social CRM in sales department, productivity has jumped up by 25 % (Gartner, 2011). It has also lead to better understanding of relevant information about consumer habits. Post-purchase, a customer’s satisfaction can be easily traced using this new alliance of Web 2.0 and CRM. There is an expected hike in global revenues in CRM 2.0 from 820 million last year to the 1 billion mark at the end of 2012 (Gartner, 2011). The success of CRM 2.0 lies in its amazingly high adoption rate among companies, which thus, leads to a high “social Return on Investment”.

While the initial fear of adoption might be understandable, CRM 2.0 needs to be envisaged as a ladder to a communication revolution with abundant business opportunities. Companies need to move in the direction where customer, not the technology, becomes the focus of the strategy. Social networks have transformed the relationship between businesses and customers from transactional to personal. A change is marketing and sales strategy of the companies is warranted. The organizations that sooner rather than later, inculcate CRM 2.0 will surely have a first mover advantage and a competitive edge in the coming years.

Yatin Kamat is a PGP student at IIM Ahmedabad and a member of the Consult Club.

Strategy Digest Vol 1 (Jan)

BMW and Affordability

An affordable BMW sounds like a classic oxymoron. Surprisingly, BMW has gone ahead with a well thought out strategic move to launch the entry level SUV – BMW X1 – in India. The X1’s price tag at INR 22 to INR 29 lakhs puts it in direct competition with the Honda CRVs and Toyota Fortuners of the extremely fast growing SUV segment in India.
The high end luxury car market in India is growing at an astonishing 74%. The playground offers attractive rewards with ever growing sales figures and BMW seems to have played the card just right. The BMW brand tag offers much more value to the Indian customer than a Toyota or a Honda and that is exactly where the BMW X1 scores over the competition.
However, if BMW really wants to conquer the Indian market even more convincingly it needs to capture the depth of the market that extends beyond the metros of India today. It needs to establish a robust after sales service network to make sure that models like X1 realize the sales potential they seem to possess. The X1 is a great launch and it’ll be interesting to see how Toyota, Honda and Hyundai face the new found competition from the grand daddy of automobiles.

The Mobile Store: Ready to evolve

With over 1200 stores and a 45% share of the organized cell phone retail market in India, The Mobile Store has been going great even with a strong pressure on margins. With a drastic shift in consumer preferences towards smart phones and falling price tags, The Mobile Store plans to change the phone shopping experience for its customers.
The Mobile Store plans to develop 300 of its stores across 50 cities into experience stores. These stores will allow users to get a feel of the phone, utilities, apps and new technology. It plans to do away with the cheap plastic dummy phones that we get to see presently. With trained Mobile Store personnel who will help the consumers choose apps and phones according to their needs, it plans to make it interactive for its consumers to make a wise choice while they buy a phone.
This plan undertaken by The Mobile Store is capital intensive and will surely put heavy pressure on the already squeezed margins in cell phone retail. Currently a retailer earns anywhere between 5-8% on the price. Moreover, the market is heavily price conscious and people make it point to get the cheapest deal even after they try out phones at outlets such as The Mobile Store. The implementation of the plan on a massive scale is also an issue with aggressive retailing tactics being employed by a growing number of competitors. 

Bypassing investment bankers in valuations

The selling of Honda’s stake in Hero Honda, Ranbaxy’s sale to Daiichi, Fortis-Wockhardt deal and the $3.7 bn Abbott-Piramal deal among many have a strikingly common story: There were no bankers involved in the valuations. It is a recent trend that has emerged lately when a lot of corporates strongly feel that “No Banker can ever know their business better that them”.
To add to it, more than 80 percent of the banker-madated deals in India are conducted completely by the promoters themselves and the bankers are left to pure mathematical execution. This trend seems to be fully justified and also enhances the confidentiality aspect of the deals. Information leaks have been a major cause of mammoth deals being brought down in a matter of days and bypassing the bankers seems to be a way of avoiding that. Other major examples include the TATA-JLR deal where the valuation was done by Tata’s close team and not bankers advising or executing the deal.
The bankers on the other hands are not losing out on the dealbook business but their profile of work is shifting more towards the financing, fund raising and implementation phases of the deals. It will be interesting none the less to follow the role of bankers in the deals to come in 2011.

Strategy Digest Volume 1 (Dec)

Top newspapers gearing up to make readers pay for online content

Some of the world’s top newspapers including “The New York Times” and “The Times of London” have showcased a serious intent to charge readers for online content. In recent times, the US and UK newspaper industries have been continuously plagued by steeply declining advertisement revenues. The decision to charge for online content comes with its share of serious difficulties that include the possibility of a heavy decrease in online readership which might make advertising through this medium less attractive for marketers. The publishing houses are still sometime away from actual implementation but it is interesting to see the starkly different strategies that they plan to implement.
The Times of London – The Times of London plans to establish an opaque pay wall which will allow readers to access the content for a price of £1.00 for a day or £2.00 for a week. A similar strategy which seemed to work for the business counterpart, “The Financial Times”, in the earlier stages failed to deliver results for The Times which witnessed a grave downfall in readership by almost 90 percent during test runs.
The New York Times – NYT’s plan of going for a “metered” tariff is very different. It plans to charge readers after they have accessed a limited number of free articles on the website. FT has been using this model for the last few years and at present the digital revenue at FT represents about 20 percent of the total revenue.
The publishing houses strongly believe that paid subscriptions allow them to gather valued data which in turn helps fine tune advertising programmes for the target audience. This offers better value to the marketers and increases the efficiency of advertising revenue for the newspapers.

“The Great India Nautanki Company” in China

Kingdom of Dreams, which is India’s first of its kind live entertainment complex, is ready to be established in China. The Great India Nautanki Company (GINC) which controls the Kingdom of Dreams has entered into a JV with China’s leading stage equipment manufacturer Dafeng to setup 10 live entertainment destinations in China at an investment of roughly $100mn each. It is common to hear about Bollywood popularity in the USA and Europe, but GINC’s strategic move into China with its theatrical firepower presents an interesting strategy that has been adopted by the company. GINC is banking on China’s local tourism where more than 30 million people travel each year.
The idea behind Kingdom of Dreams is to deliver an assortment of complete Indian entertainment which would include Indian handicraft, architecture, exotic Indian cuisine and India’s most expensive theatrical extravaganza – “Zangoora”. Wireless interpretation machines and dubbed dialogues will pave the way for our Chini brothers to understand and enjoy Indian art. The move sounds fresh and aims at more than 24 percent ROI.

Dell enters the smart phone market in India

A month after unveiling the Dell Streak tablet, Dell has launched two Android based smart phones, XCD 35 and XCD 28 attractively priced at Rs. 16,990 and Rs. 10,990 respectively. After establishing a strong foothold in the laptop market in India, it is interesting to see Dell exploring the hyper-competitive smart phone market in India.
The smart phone segment in India has seen a dramatic turnaround from being the corporates’ delight to becoming an affordable gadget for the tech lovers. The competition is intense and has proved to be tough to deal with, even for supremely experienced players like Nokia. The segment is growing at an attractive 30 percent. With Apple, Nokia, Samsung and HTC fighting it our hard in this segment Dell is obviously a late entrant and will have to perform exceptionally to make a name.
Dell’s strategy is banked upon a) The upcoming rollout of 3G services in India which will further boost demand for smart phones, b) Dell’s established clientele in the laptop segment and it’s highly rated after sales support network and c) The growing acceptance of Google’s Android mobile platform in India.
Dell wishes to couple this launch with an extension of its retail network in India to enhance sales. The customer is at the winning end with tonnes of choices in the smart phone segment and Dell’s entrance will be another headache for Nokia which has been struggling lately.

Strategy Digest Volume 4 (Nov)

Britannia to enter bridge snack segment
Britannia Industries Ltd. is all set to launch its new product ‘Timepass’ which will mark its entry into the healthy bridge snack segment. Timepass will be a product with double baked bread and is expected to be launched in about three to four months.
Britannia believes that the bridge snack segment will be another foray into the healthy snack segment which is a big market in India now and is growing at a healthy rate. Britannia had recently also launched Nutrichoice diabetic buscuits, to fortify its market share in the healthy snacks segment.
Conde Nast launches 3rd magazine
Conde Nast just launched its third magazine, Conde Nast Traveller. This follows its two magazines, Vogue and GQ, which have been successful in the Indian market.
The reason behind the success of Conde Nast is its proper identification of its target customer. Conde Nast is targetting the affluent Indian, and all of its magazines are prices at over Rs. 100. Since its focus is solely on the upper-class segment, Conde Nast also finds it easier to get advertisers targetting the same segment.
Though it has competitors in the travel magazine market, most of their competitors are licensee brands which have a low focus on brand-building. On the other hand, Conde Nast it trying to build its brand by having high-class events and having a greater digital presence.
Canon India strengthens retail footprint
Canon India has strengthened its retail footprint by launching its first stand-alone store, Canon Image Square, in Noida. This store is an initiative towards its ambition of having 300 exclusive retail stores in India.
The company had previously launched exclusive non-selling stores called ‘Xperience Zones’ and ‘Image Lounges’ in a few tier I cities in India where consumers could experience the look and performance of the Canon Products.
This foray of Canon India is similar to the foray that Sony entered in the form of Sony World, which had worked well for Sony India. Also, exclusive retail stores can be a good supplement to multi-brand stores where consumers can finally purchase a Canon product after experiencing it at the exclusive Canon store.
ONGC to invest in renewable energy
ONGC will be investing Rs. 500 crore in renewable energy R&D to make the country less dependable on hydrocarbon reserves. India currently is highly dependent on hydrocarbon reserves and the non-conventional sources of energy are barely used.
Energy is a major infrastructural bottleneck for India and India’s growth rate is largely contingent upon the energy available. To be self-sustainable in energy consumption, ONGC intends to conduct R&D mostly in the solar, thermal, LED (light emitting diode) and fuel cells, which also result in less carbon emission.