Monday, April 21, 2008

Sify's SCM initiatives

Sify's SCM initiative
Forum, Sify's supply chain management solution, has enabled organisations to fine-tune their inventory management and streamline their distribution. Venkatesh Ganesh reports

Since its inception in the early nineties, Supply Chain Management (SCM) has become an important factor in an increasingly global marketplace. With companies under intense pressure to reduce costs, expand into new markets, and develop new products, every manufacturer's supply chain is growing in size and becoming increasingly complex. However, complexity is not an enemy of the supply chain, and if it can be effectively managed it can even be an asset. This is where Sify's Forum-a supply chain management solution-comes into the picture.
Flashback to 1994. Dell was a struggling second-tier PC maker. Like many other OEMs, the company ordered its components in advance and manufactured PCs. Then it began to implement a new business model. Dell converted its operations to a build-to-order process, eliminated its inventories through a just-in-time system, and sold its products directly to consumers. The results were spectacular-because Dell had developed a supply chain process that went far beyond the pursuit of efficiency and asset productivity.


Rapid growth
A part of the corporate services initiative that contributes about 50 percent of Sify's revenue, Forum has grown by 100 percent annually (it has completed five quarters now), already has more than 2,000 installations, and has about 4,000 more to execute. What's more, it has a presence in about 300 towns all over the country.
Says Debjyoti Paul, Deputy General Manager, Forum, "Companies need to integrate data from the distribution chain with their own information. A supply chain should equip a business to earn more revenue by ensuring the constant availability of stocks, and let it act on this feedback by coming up with timely inputs."
A solution that can be deployed for thousands of partners in a typical distribution ecosystem is not an easy task. Sify's apparently found the way to do it as it has installations in more than a thousand locations across India. Clients include GlaxoSmithKline (GSK), TotalFinaElf India, Perfetti Van Melle (India), Pidilite, Gillette India and several SMBs.
TotalFinaElf, the world's fourth largest oil and gas company, deployed Forum to manage its distribution operations in India. The project is expected to cover about 100 distributors this year, followed by another 200 in later phases. These distributors will be able to connect securely via the Internet at the end of each day to exchange information online with their customers. The distributors will use Forum for their sales, distribution and inventory management functions, including billing, inventory monitoring and generating goods receipts and sales reports.
Similar is the case at GSK, where Forum has been deployed at more than 400 distributor sites. The pharma giant uses Forum to manage its purchases, inventory, and financial accounting. Apart from this, it generates MIS reports.
Gillette has deployed Forum at 50 distributor sites. The company needed to address out-of-stock situations by improving product availability. It was also looking for greater visibility into its sales pipeline, and wanted to manage stock placement in retail outlets. Also on the agenda: how to reduce inventory costs and improve efficiencies in distribution management. Forum helped Gillette address these issues. At Pidilite, the first phase of implementing Forum has just been completed, and the company has decided that the second round will commence in Kerala a few months from now, followed by Tamil Nadu and other states. All the implementations are for 700-1,000 users. Explains Zoeb Adenwala, Chief of IT at Pidilite, "We wanted to automatically collate stock and sales information from branch offices, distributors and retail outlets through a simple, user-friendly online process." The organisation was also looking at increasing the profits of its supply chain partners by implementing a solution for the continuous replenishment of goods and creating a two-way communication channel between itself and its distributors. Also, the issue of effectively connecting new applications of trading partners to their legacy applications was handled well by Forum.
The SMB market
SMBs have also noticed the value of Forum. Distributors are using it to improve their efficiency, integrate the operations of their branches, and interact with their principals.
Take Chennai-based Sri Lakshmi Agro Foods, which produces and supplies pulses to over 30,000 retailers in Tamil Nadu. Says Paul, "They use Forum for managing invoicing, debtors, inventory and sales order booking at their head office." This is the first phase of the implementation. In the second phase, which commenced in April 2005, Forum has been installed on the sales force's laptops. "We currently run a night shift to manually enter details about the orders and collection receipts. There was no escaping the night shift since the next day's dispatches had to be scheduled on time," explains Sudhakar, Director at Sri Lakshmi. The company felt that once the sales force was empowered, it would be able to take orders and even issue cheque and cash collection receipts, thus speeding up the process. The idea was that sales reps could periodically connect to the Internet and upload details about the status of cheque and cash collection to the head office. Sri Lakshmi felt that this would do away with one of the biggest bottlenecks in its supply chain.
Forum will also be deployed by retail organisations such as Inside Trading, which deals in apparel and fashion accessories. Says Glenn Trotman, Director at the company, "We use Forum in six of our retail stores, a warehouse in Hong Kong, and the head office in Delhi. It is used as a point-of-sale (POS) tool to manage inventory, and communicate with the head office and warehouse." The solution has found takers in the pharmaceutical sector too. A case in point is Palepu & Co, a large Chennai-based distributor that deals with several large principals and services thousands of retail pharmacists. Says P S Gopal of the company, "We use Forum at our two branch offices and head office for sales invoicing, inventory monitoring and debtors' management." Stock transfers between branches are also handled through this system. Even clearing and forwarding agents (C&FA) have adopted Forum. Saheli Pharma, a C&FA for pharmaceutical company Acron (which supplies products in the east), uses it for billing and inventory management.
The licence situation
Sify has developed two licencing models for Forum. The first is a one-time payment model that is called the standard licence. This involves an upfront payment that ranges from Rs 11,000-20,000. There's also an ongoing service charge of Rs 2,500-3,000 per year for support. In case of multiple users, charges are based on the number of nodes connected. The second model is subscri- ption-based, and involves a service fee of Rs 800 per month plus a one-time software licence fee of Rs 4,000. A user can choose the modules he needs. For example, he can pick the financial accounting model or opt to do without it. Forum also has retailer and distributor versions so that a company in a particular vertical can choose the solution it really needs-and not anything else. Forum is sold through a network of 200 channel partners plus 180 support personnel (of which eight are from Sify) who work with channel partners.
Legitimate question: there are other system integrators (SIs) who do the same, so how is Sify different? Paul has a ready answer. "The others are hardware guys and have more of a box-pusher mentality. They have not yet got into the solutions model, and that is our strength." Further, Sify has taken steps to set up a nationwide network of training partners to educate businessmen and students in SCM best practices. Paul adds, "The potential to realise more from our supply chain solution is immense." Forum uses XML data standards for information exchange, and enables connectivity with supply chain partners. All it takes is dial-up Internet connectivity, and it can be integrated into back end ERP applications of enterprises through standard application interfaces.

examples of SCM

Predicting the future with SCM
Supply chain management goes beyond inventory management and streamlining of supply processes. It is being looked upon as a tool for predicting the future by retail and FMCG organisations. Priya Jain reports
Supply chain efficiency in an FMCG or a retail company is essential, as stock-out situations (wherein a company’s stocks are not available with a particular retail outlet) are unacceptable. According to the March 2005 IMRB-Express Computer survey, 26 percent of respondents in this sector have listed ‘increased supply chain efficiency’ as their top business priority. Besides stock-outs, monitoring and tracking the movement of goods is important as it helps record the shelf life of products and reduce pilferage.
"Supply chain costs will constitute at least 20 percent of the overall costs by the time a product is delivered to the end consumer"-Mani MulkiVice-president, ISGodrej Industries
Supply Chain Management (SCM) is now the buzzword for innovative thinking. Traditionally, it was a mechanism for companies to cut costs and boost efficiency levels. Most retailers and FMCG companies that have deployed SCM are now looking beyond management to customise their supply chain strategy. The aim is to go beyond meeting the customers’ present needs and predict their future demands.
Organised retail is but a drop in the ocean of Indian retailing which is dominated by the unorganised sector. To attract consumers, organised retail has to first understand their buying patterns. Mani Mulki, Vice-president, IS, Godrej Industries remarks, “Though brand loyalty is present, it is waning. Often products are purchased on an impulse. In such a scenario prediction can fail. It is important for me to know what a customer is buying and why. The system that we are building for Godrej consumer products is fulfilling that objective.”
Tracing the trend
Before the SCM system can allow decision-makers to predict future demand, it has to be integrated with all levels of a business. V V R Babu, CIO, ITC believes that SCM can help in predicting future demand. To this end, ITC is embarking on the SAP Upgrade project, which will help the company build advanced forecasting and statistical planning tools.
"It is feasible to plan for future demand if an SCM solution is used as a collaborative platform amongst all the key players of a supply chain"
- Chinar DeshpandeCIO Pantaloon Retail
Chinar Deshpande, CIO, Pantaloon Retail feels that it is certainly feasible to plan for the future demand if an SCM solution is used as a collaborative platform amongst all the key players of a supply chain (internal and external). He adds, “It helps our key suppliers plan for future demand when we transparently publish the information on sales of their merchandise in our stores. Moreover, they can see all the stages of goods movement from the time the goods reach our distribution centre till they reach the stores.”
Whether SCM can help predict future demand is yet to be proved. What is certain is that it can gather real-time information and help solve numerous problems. Mulki feels that the key to success of an SCM solution is not so much its ability to predict but the capability to react quickly. “The ability to react on a real-time basis is when you have reached Nirvana,” he adds.
He explains, “What I mean by Nirvana is that if you buy a soap from a retail outlet, does it translate into an order to the supplier on a real-time basis? If this happens on a day-to-day basis, you would know the buying patterns of consumers.”
According to Mulki, an improved SCM solution will help get data from all these areas in as close to real-time as possible. Such a solution should reflect market realities.
Sampark to Sampurna
Godrej had earlier hooked up its distributors through an initiative called Sampark. Now in an effort to connect its retailers, the company is working on an initiative called Sampurna that will consist of Windows CE handhelds connected to Sampark. Sampurna is expected to improve Godrej’s relationship with its retailers and keep a retailer’s inventory to a minimum with only those products well stocked that sell. Once Sampurna is deployed, all SCM segments in Godrej’s pipeline will be integrated.
Presently, the company has 32 CnFAs, five factories, four warehouses in each region, about 1,200 distributors and half a million retail outlets that are directly billed. They have completed 60 to 70 percent of system building and connected 400 ‘A’ class distributors who constitute about 70 percent of the company’s sales by means of Sampark from Botree. Godrej has implemented a customised ERP solution for these distributors who use it for their daily accounting, material receipts, billing and inventory. At the end of each day, the system at the distributor’s end handshakes with the central server via the Internet. In this handshake, the details of the delivery channel are uploaded and the latest price lists downloaded to the distributor’s system.
Responsive systems wanted
"SCM aids in decision-making such as the what and how of production, transport and warehousing—on a daily, weekly or monthly basis "-V V R BabuCIO, ITC
A responsive SCM that provides real-time information is the key to a better decision-making process. Explains Babu, “SCM covers aspects such as capacity planning, supply chain network, layout planning, trade-offs between service levels and inventory and annual budgets. It works at the plant or shop floor level and aids in decision-making such as the what and how of production, transport and warehousing—on a daily, weekly or monthly basis.”
Mulki believes that SCM is the core of managing operations in any FMCG company. “By the nature of its operations, supply chain costs will constitute at least 20 percent of the overall costs by the time a product is delivered to the end consumer,” he adds. With growing competition and the pressure to maintain prices at a certain level for a sustained period, the only way that one can churn out profits is to make sure that the cost of producing and transporting goods to the end consumer is kept at the minimum.
An effective SCM system bridges the gap between the shop floor and decision-makers. To this end, it ensures the smooth sharing and free exchange of data in real-time. An SCM solution makes the entire value chain a transparent entity. Thereby line managers can take quick and well-informed decisions on planning, buying and transporting merchandise from suppliers to customers.
Abel Correa, Assistant General Manager, IT, Piramyd Retail and Merchandising agrees, “FMCG/Retail is a low-margin, high-volume game. The only way to achieve this is to have high sales turnover and minimal inventory, for which one needs a good CSM process and robust technology to support it.”
How SCM has made a difference

FMCG/Retail
SCM implementation
Benefits

Godrej Industries
The ERP system is QAD MFG/PRO. The supply chain solution ‘Sampark’ is from Botree Software.
Reduced time for closing accounts
Better visibility into the inventory pipeline
Almost 400 distributors connected through Sampark
Pantaloon Retail (India)
SAP SCM solution
Integration of warehouse management,procurement and inventory functions
ITC
SAP Upgrade project
Business Process Optimisation
Minimises overall cost of the supply chain and maximises net revenues
Creates multiple scenario data
Tackles both strategic and tactical problems
Piramyd Retail & Management
JDA’s ERP Package
Provides the technology support to manage and monitor supply chain efficiency
Systems in place
Piramyd is currently implementing JDA’s ERP suite for retail including modules that will provide the technology support to manage and monitor supply chain efficiency.
ITC already has SCM systems in place at different levels broadly classified as MRP led production planning, raw material planning, distribution planning for stock management and delivery order planning for shipments to customers or distributors.
The other instance is that of Godrej Industries which has deployed an ERP system, MFG/PRO from QAD up to the clearing and forwarding agent (CnFA) level. The company has successfully reduced the time taken for closing accounts by 15 days and gained better visibility into its inventory pipeline.
Pantaloon has recently replaced an in-house solution with SAP SCM. The solution takes care of procurement, warehouse and inventory management in an integrated environment while working seamlessly with core merchandise management.
Added advantage
With the consumer buying patterns shifting from need to impulse-based shopping, companies are realising that any stock-out translates into lost business. Solutions like SCM are going to play an important role in gaining customer loyalty by offering superior service.
Correa says, “With collaborative planning, a manufacturer can plan his production for the stock keeping units (SKU) which are proving to be popular.” In short, the manufacturer can utilise its production capacities optimally to bring down the cost of a popular product and hence its selling price.
Other than this, SCM solutions help optimise business process and create a balance between cost and service levels. Says Babu, “SCM has a lot of potential, it can minimise the overall cost of a supply chain, maximise net revenues from it, create data regarding multiple scenarios, compare them on key variables and help tackle both strategic and tactical problems.”
However, creating an efficient supply chain is an enormous task. Since people are habituated to working in a particular manner, getting them to adapt to a new technology becomes an issue.
“The major challenges are all non-technical, they are people-oriented. It has got to do with the culture and mindset of the stakeholders, because when you are linking the supply chain with a new technology you are actually changing the culture of the work that people are used to. A perfect SCM solution has to translate into attractive benefits for all stakeholders,” concludes Mulki.
priya@expresscomputeronline.com

Canon targeting and positioning

Canon targets retail sector with print-on-demand
Som Gangopadhyay Director, Business Imaging Solutions Division, Canon India talks to Faiz Askari about the digital printing market and Canon’s Retail Print on Demand initiative.
Som Gangopadhyay
Canon’s foray into digital printing
The digital printing industry is undergoing a lot of change. Due to the stress on customized convenience, the need for fast turnaround times has been felt. We at Canon are providing solutions for short print runs. Canon is just entering the pre-function area of the main hall of digital printing and, in today’s scenario, customized demands from customers are acting as a catalyst for the overall growth of the digital printing.
Retail Print on Demand
The retail segment is expected to contribute 48 percent of consumer revenues by 2007. Canon has chalked out an aggressive strategy to capitalize on the recent boom in organized retail. We have created a new division whose exclusive focus is on various types of retail chains.
The growing need for information dissemination has made Print on Demand (POD) more relevant in present times. POD publishing, combined with the Internet, as a marketing tool has democratized the publishing industry and it has become much easier to self-publish and self-market today than ever before.
Partnerships
Canon is currently in talks with multiple large format retail segment players to enter this segment. Tie-ups are also happening.
Selling proposition
Today’s commercial printing environment is more complex and competitive than ever before. Our customers are increasingly demanding faster turnarounds, shorter run lengths, and personalized color documents. The key to leveraging these trends is to develop new ways to work that translate into finding innovative ways to increase productivity and RoI. POD will result in an increased production capacity coupled with a faster speed of production.
At present national chains contribute a paltry 1.2 percent, while regional stores and specialty stores contribute 15 percent each. But by the end of 2008, national chains will contribute a good 7 to 8 percent, while the share of regional retailers will go up to 25 percent. The share of Canon exclusive franchisees in the overall retail pie will be a constant 15 percent.
The growth in the number and spread of retail chains will only create more shopping platforms and help to expand the market.
The total business of the traditional IT channel will continue to grow in absolute numbers, although their percentile share will come down.
Investments and execution
Canon India will be undertaking scaling up operations of the technology in this segment of POD services. POD can be applied to more customers in various segments as it is more of an enabler.
Canon is showcasing its strength in Retail POD segment at IPEX India. Moreover two showrooms are coming up—one in Gurgaon and another one in Mumbai. An estimated Rs 5 crore is earmarked as the initial investment apart from the A&P expenses.
There will be a dedicated team to carry out this [program] apart from sales as well as service. Apart from that a slew of associated software will be delivered and sourced.
With the entry of large format retail stores like Pantaloon, Staple, Reliance fresh, POD segment will progress very quickly in India. POD will be driven from customer’s point of view or the family point of view.
The digital printing market
Digital printing is cost-effective, and opens up new avenues with features such as variable data printing which allows large volumes of prints to be taken with significant differences in each printed item. India is witnessing a shift in consumer preferences towards high-end products. Consumers are willing to pay more for performance, efficiency and durability. Hence we see tremendous growth in the digital printing market.
One of the advantages that digital printing offers is variable printing, which means that each printed document can incorporate personalized or customized data. Another advantage of digital printing is the ability to offer a quick response time due to its minimal press setup and its built-in multicolor registration system. This eliminates many of the upfront and time-consuming processes that can cause analog printing methods to have a slower turnaround time. Besides, even the inventory requirements for end products are low along with simpler production steps.
faiz.askari@expressindia.com

Toothpaste market in India

The toothpaste market in India is growing but Hindustan Unilever Ltd (HUL) has little reason to smile. While the oral care industry in the country continues to grow at double-digit rates and smaller rivals such as Dabur India Ltd have gained share, HUL hasn’t just lost market share but also grown slower than the industry.
In the quarter ended June, the oral care industry grew 12%, but sales of HUL’s flagship toothpaste brand, Pepsodent, grew by only 4.5%. Colgate-Palmolive (India) Ltd (C-P) grew its business 14% in the quarter, Dabur India, 32% and HUL (the oral care business), 11% according to data released by AC Nielsen a market research firm. HUL declined to comment.
Analysts say oral care is an extremely competitive category and product positioning as well as marketing communications impact sales to a great extent. “The positioning of the products and advertising and promotional campaigns play an important role in boosting products sales in such categories,” says Sumeet Budhiraja, senior vice-president, First Global Securities Pvt. Ltd, a Mumbai-based brokerage firm.
In an effort to boost sales across all its product categories, HUL spent Rs1272.88 crore, 26.5% more than it did the previous year, on advertising in the fiscal year ended December 2006. It restructured its oral care portfolio, which includes brands such as Pepsodent and Close Up; the ‘Pepsodent germi-check’ range was relaunched as ‘Pepsodent Complete’, but none of this seems to have helped.
AC Nielsen data shows that HUL’s oral care business has been bleeding since 2003. The business’ compounded annual growth rate (CAGR) between 2003-04 and 2006-07 was 4% (in volume terms) against an industry average of 8%. In 2006-07, while the Rs3052 crore (by sales) oral care industry grew 15.3% in value terms, HUL’s oral care business grew by 11%. The difference was even more stark in volume terms (total number of units sold) with the industry growing by 12%, and HUL, 6%. The company earned around Rs753.8 crore from the oral care sales during the period. For the fiscal year ending December 2006, the company reported a turnover of Rs12457.9 crore.
Meanwhile, HUL’s rivals, particularly Dabur India have registered impressive growth, albeit on a lower base, in the period. While Dabur India recorded an impressive growth of 24%, clocking Rs374.7 crore in revenues, Colgate-Palmolive’s oral care division grew 17% to report Rs1445.8 crore in revenues. Colgate markets brands such as Cibaca and Colgate, while Dabur’s brands include Babool and Dabur Last. The CAGR of the two companies between 2003-04 and 2006-07 was 9% and 32%, respectively. Colgate Palmolive did not respond to an e-mail query from Mint.
Analysts say Dabur’s growth can be attributed to its diversified product portfolio, whereas HUL is limited to the premium segment only. “Dabur’s Babool, Meswak, and Red cater to all consumer segments whereas HUL has a limited presence. Besides, the value-for-money segment, which Dabur has a strong presence in, has been growing faster than the premium segment; HUL is primarily limited to this segment,” said Budhiraja.
Dabur, however, credits the success of its oral care brands to consistent investments in brands, product upgradation, repackaging and aggressive marketing communications. “Babool was a Rs30 crore brand in 2005 while today, it has grown to become a near Rs100 crore brand, while Meswak is an over Rs20 crore brand. Once the brands were acquired (from Balsara Hygiene Products), Dabur went about repositioning and repackaging them. Alongside, Dabur also invested in marketing the brands much more aggressively than before. For instance, we signed film star Vivek Oberoi to endorse Babool,” said V.S. Sitaram, executive director (consumer care Division), Dabur India.
According to AC, Nielsen HUL’s market share in the oral care market has slipped over the past four years, from 26.5% in 2003-04 to 24.7% in 2006-07. The company’s biggest rival, Colgate retained its leadership with 47% market share, while Dabur’s share grew from 5.3% in 2003-04 to 12.3% in 2006-07.

Positioning of cinthol

Confidence Code
Byravee Iyer / New Delhi April 15, 2008

Godrej hopes to take Cinthol to its place among the stars.
Confidence, adventure, machoism…. You would associate all these attributes with bike advertisements or with films starring Bollywood hunks like Hrithik Roshan. But, jumping off cliffs or rafting over raging water-bodies for a toilet soap?
As the country’s second largest toilet soap maker, Godrej Consumer decided to relaunch its flagship brand Cinthol last month, it decided to let Hindi film star Roshan do what he’s best at.
Accompanying the new action-packed television commercial that’s currently on air, is an entirely repackaged offering from the Cinthol franchise.
The company has relaunched its entire range of soaps, deodorants, and talcs in three fragrances — Classic, Cologne and Sport. To send one cohesive brand message across price points and variants a “24-hour confidence” stamp is also affixed on all products carrying the Cinthol nameplate.
Revamp RationaleLast year, Godrej Group Chairman Adi Godrej unveiled the results of a brand valuation exercise undertaken by international brand valuation consultants, Brand Finance for the group. The report card showed that there was immense scope for improvement.
While the potential value of its top five brands — Cinthol, Fairglow, Godrej No 1, Ezee and Godrej Powder Hair Dye — was Rs 3,900 crore, their realised value was at only Rs 2,600 crore.
What explained the Rs 1,300-crore gap? Brands like Cinthol. The brand had a huge equity, but that was hardly being reflected in sales. For instance, in 2007, retail audits pegged the market share of Cinthol at less than 3 per cent in the Rs 6,000-crore toilet soap category.
Then, toilet soaps were growing slower than hair colours in the Godrej portfolio. There was also a lot of gap to close with the market leader, Hindustan Unilever. With a combined market share of 9.4 per cent (a bulk of it coming from the volume soap, Godrej No 1), Godrej’s far behind Hindustan Unilever’s 54 per cent share of toilet soaps (Source: Angel Broking).
Brand Cinthol is also a shadow of its former self. In the 1980s to a better part of the 1990s, Bollywood superstar Vinod Khanna and Pakistani cricketer Imran Khan, both of them at the peak of their careers, pitched for Cinthol. By 1993, the soap boasted of an 18 per cent share of the premium segment of toilet soaps.
Then, Cinthol’s fortunes took a turn for the worse. Between 1993 and 1996, it got in-and-out-of a joint venture with Procter & Gamble (P&G), the aftermath of which saw Godrej’s overall market share in soaps slip to a measly 5 per cent.
Post the P&G partition, Godrej relaunched its Cinthol International variant. But the results were negligible, says market observers with the brand being perceived by many as old-fashioned and male centric.
In March 1999, the Rs 15-crore Cinthol advertising account shifted from Madison to Ambience D’Arcy. The campaign made a conscious effort to move away from its masculine perception and took a more unisex approach. But these efforts did little to push up market share.
Godrej is now taking another shot at reinvigorating the brand. “Cinthol is the flagship brand of Godrej. But we haven’t given it due attention. We stretched it too much without a unified platform. We now intend to bring it under one umbrella while making it more relevant to the young male audience,” says Tanya Dubash, Executive Director and President (Marketing) Godrej Industries.
Brand Consultants agree. Harish Bijoor, CEO, Harish Bijoor Consults says, “A brand needs to be specific and every soap must have a niche appeal. Somethings are not for everybody.”
Competitive ChallengeThe company conducted a poll on 27 groups consisting of eight consumers in each group across eight cities. The focus group participants included both users of the soap as well as buyers of competing brands.
The objective of the study was to understand the values associated with each brand, their strengths and weaknesses and finally the contribution of the different brands to the overall brand equity.
The brief given to creative agency Orchard Advertising was to understand the equity of the Cinthol brand vis-à-vis its competition and translate what the brand stood for in the consumers’ mind into effective packaging and marketing communication.
“The communication had to be relevant to the target audience — the confident achiever who wants to live an active lifestyle,” says Sameer Penkar, General Manager Marketing, Godrej Consumer Products.
Yet because of the varying price points, the company needed to ensure that it delivered a single message to consumers of brand Cinthol, rather than design variant specific communication, he adds.
“Cinthol has always stood for confidence. We, therefore, needed to decode what confidence meant to youngsters, which helped us develop a clearer position. This position needs to be attitudinal, therefore, the new 24-hour confidence and the ‘don’t stop’ concept,” adds Dubash.
The new ad represents just that. The racy campaign features Roshan pulling off dare-devil stunts. The ad starts off with the actor running through the wilderness and across roof tops. This is followed by the actor indulging in incredible feats of bungee jumping, rafting, and horse riding.
The campaign ends with Hrithik playing football. He looks into the camera and says “Don’t stop.” Dubash says, “We saw a complete fit between what Cinthol stands for and Hrithik’s values. He exemplifies energy, passion, and the ‘don’t stop’ attitude to achieve what he wants to. That is exactly what our brand represents, as well.”
Bijoor adds, “Hrithik has sex appeal and Cinthol has always used celebrities with that kind of appeal. Be it Imran Khan or Vinod Khanna. Moreover, after Jodhaa Akbar, Hrithik’s appeal has only widened. He will be a great fit with the brand.”
Apart from the conventional TV, print, and cinema promotions, the company’s 360-degree campaign includes outdoor visibility, modern retail activation, digital marketing initiatives and communication through short messaging service (SMS). It also plans to beef up its rural distribution.
The competition is unlikely to sit back and watch. Years ago, when Godrej relaunched the Cinthol International variant, its rival swooped in and relaunched Liril.
Likewise, in 2004, HLL launched Fair & Lovely soap in response to Godrej’s successful FairGlow brand. If history is anything to go by, the action will not be restricted to just Cinthol’s TV commercial this summer.

HUL hair care segmentation

Mumbai: In an attempt to consolidate its position in the haircare segment, India’s largest consumer products company Hindustan Unilever Ltd (HUL) will launch more products from the portfolio of its parent Unilever Plc., introduce new products at both the low-end and the high-end of the price spectrum, and strengthen its distribution network.
“In the developed market, we have a varied range of haircare products beyond shampoos and conditioners. We will bring these into India sooner than later,” said N. Rajaram, general manager and category head for haircare, HUL.
According to Rajaram, the company believes there is “opportunity” in the top- and bottom-end of the market.
In May 2007, HUL launched Dove shampoo from Unilever’s portfolio.
The same year, the company also launched shampoo sachets priced at 50 paise each in an effort to increase penetration and usage of the product in rural and poor households.
Until these launches HUL’s presence in shampoos has largely been restricted to so-called mid-priced shampoos with its Clinic and Sunsilk brands and their variants. The company has, meanwhile, discontinued the herbal shampoo brand, Ayush, at the retail level. It is now available only at the Ayush therapy centres.
Globally, Unilever sells hair sprays, gels and styling aids, besides shampoos and conditioners under brands such as Vibrance, Suave, Lux and Axe. Lux and Axe are present in India as well but are confined to categories such as bathing soaps, gels and body spray.
The changes seem to have worked for the company. According to research firm AC Nielsen, HUL’s share in the haircare business went up by one percentage point from 47% in the first quarter of 2007 to 48% in the December quarter. In comparison, its nearest rival Procter and Gamble’s (P&G) share fell from 25% to 23.3%.
The segment is important to HUL. It contributed 7.5% to the company’s total revenues of Rs13,718 crore in 2007 and around 26% by revenues to its personal products business, which in turn accounted for 46% of HUL’s net profit in 2007. In 2007 (HUL’s accounting year ends in December), the company grew revenues 13.3% (compared with the previous year) to Rs13,718 crore and net profit of 14.5% to Rs1,769 crore.
“The biggest growth factor (for the company) last year was the launch of Dove, a high-margin product. HUL managed to connect with the urban consumer by the sheer quality and positioning of the product. It should further consolidate its status in the segment this year,” said Unmesh Sharma, an analyst at Mumbai-based ­brokerage firm Macquarie Securities.
Despite the growth in market share, HUL faces stiff competition in the Rs2,200 crore by sales market for haircare.
Besides multinational firms such as P&G and L’Oreal, many local companies such as Dabur India Ltd, Marico Ltd and CavinKare Pvt. Ltd have brands in various price points. And new players such as ITC Ltd and Godrej Consumer Products Ltd have also entered the ­market.
claims that its rivals cannot match its reach. “We still dominate the HUL rural segment, as our rivals (such as P&G) cannot match our wide distribution network in the villages,” said Rajaram.
The company has tweaked this distribution network— premium products are now being sold through modern or organized retail outlets, while the lower- and middle-end products will continue to be sold through local or kirana stores.
Analysts say that despite all this, HUL will have to watch for competition. Dabur, for instance, increased its market share by two percentage points in 2007 to 6%, according to AC Nielsen. “The category is getting crowded and bigger players such as ITC could be a threat for the market leader in the near future,” said Sharma.

Steelcase entry to india

from BUSINESS LINE, March 14, 2008 New Delhi, March 13 - Steelcase, the US-based $3.4-billion office furniture major, which has set up its retail venture in India, is exploring the possibility of setting up a greenfield venture as also acquisitions to strengthen its presence here
The global major in performance-oriented office solutions said it will invest suitably to expand its footprints
"We have set up two retail outlets, Steelcase Worklife, in Gurgaon and Bangalore to display our product line. Our research has shown that there is a strong co-relation between office performance and design. Therefore, all our products are designed to enhance office performances," Mr Uli Gwinner, President (Asia Pacific), Steelcase, told Business Line
The company, which earlier had a distribution arrangement with Godrej, said it will use its own distribution network to expand in India
"Our typical client will be anyone who will need a 100-200 workstations. A slew of MNCs are already part of our client base," he said
Steelcase is also looking to set up outlets in Pune, Mumbai, Hyderabad, and Chennai. "Our product offering is targeted at multinational companies, the ITES sector and newer Indian companies looking at enhancing their office environment," he added Steelcase will introduce a range of office furniture which varies from seating, desks, storage, conferencing, worktools, technology, reception and lounge areas which are easy to assemble and sourced from global centres
According to a research report by Nasscom, the IT and the ITES segment has the maximum demand for office furniture, and there is a change in the way the offices are being designed
The domestic market for furniture is about Rs 5,000 crore, of which the office furniture accounts for about Rs 2,500 crore. Of this, organised players constitute Rs 500 crore of the market, which is growing at the rate of 30-40 per cent a year
Mr Gwinner said currently the company is looking to consolidate its distribution and supply chain mechanism. "During our second phase of operations, we will look into setting up of a facility or acquiring an existing one." He said all Steelcase products are 100 per cent recyclable and reusable
Bindu D. Menon Copyright 2008 Business Line

Repucoms entry to India

from Business Line, March 20, 2008 Mumbai, March 19 - Repucom, a global leader in providing broadcast analysis services in sports and branded content environments, has entered India with the appointment of Mr Shahid Zainudeen as Senior Vice-President of its operations here. Headquartered in Sydney, Australia, with regional Asian headquarters in Singapore, Repucom is a full service brand analysis and research agency. Set up in 2004 as an extension of the successful sponsorship and brand activation company , Total Sport & amp; Entertainment (TSE), Repucom's rise in the global sponsorship measurement market saw the company break away to form Repucom International in 2007. Repucom provides services based on exclusive digital technology called SpikeNet and utilising proprietary software known as Radiuss. This unique combination can analyse brand exposure in television broadcast in an accurate, consistent and verifiable manner. Using an unique image detection technology, Repucom aims to provide clients with actionable information and insights for planning, buying and post-analysing their media investments within sports, entertainment and branded content environments

Pricing fertilizers

Pricing fertiliser
PITY THE FINANCE MINISTER. While deciding to raise the issue price of fertilisers modestly, Mr Jaswant Singh may have scarcely imagined that howls of protests from a cross-section of MPs and others would greet the proposal. The demand for a roll-back is gaining momentum. Those against the hike, for reasons political or otherwise, seem to be keen to demonstrate their allegiance to farmers' cause. Mr Jaswant Singh's explanation that in view of the likely increase in naphtha and gas feedstock, the ballooning fertiliser subsidy (over Rs 12,000 crore) has to be contained and that the benefit of subsidy did not fully percolate to farmers failed to cut ice.
In defence of Mr Jaswant Singh, he only acted on the Expenditure Reforms Commission (ERC) recommendation that fertiliser prices be raised 7 per cent every year and move towards decontrol over the next five years. Following last year's Budget, maximum retail prices of urea (a controlled fertiliser) and DAP, MoP and complexes (decontrolled fertilisers) were increased and merely repeated this year. It is recognised that given the current emphasis on international competitiveness, global marketing, import liberalisation, import price parity and free trade, the individual retention price scheme for urea producers is out of tune with economic reality. Thus, the Government decided to put in place from April 1 a new pricing policy for urea units (based on the ERC recommendation) to move in the direction of parity with international prices based on the use of the most efficient feedstock and the state-of-the-art technology.
Further, efforts to contain the fertiliser subsidy are being made by plugging inefficiencies in the production system which were earlier passed on to the government by producers, and periodic increases in issue prices are part of the strategy. These efforts deserve the support not only of policy-makers but also of those keen to make Indian agriculture globally competitive. It is in the context of global competitiveness that one must take a fresh look at the subsidy regime. Subsidies may per se not be bad or undesirable; they are a reality the world over. Farm subsidies granted by OECD countries in 2001 were $311 billion, that is, almost one billion dollars a day. In the Indian context, the question is of affordability and whether subsidies actually reach the intended beneficiaries. At about 90 kg per hectare, India's fertiliser consumption per unit of farm land is among the lowest in the world. Even in the country, there is a great deal of variability in fertiliser consumption, which is surely telling on productivity in many regions.
A sound delivery system with appropriate pricing is the way forward. An effective medium through which the Finance Minister can deliver the benefit of fertiliser subsidy to farmers is the Kisan Credit Card. Already, over 2.7 crore KCCs have been issued, and since its launch in 1998-99 over Rs 64,000 crore has been disbursed. It may be worthwhile for the Finance Ministry to explore how to tie in the use of KCCs in the new pricing policy to be introduced from next fiscal (in the form of a group-based concession scheme depending on vintage and feedstock) so that the benefit of subsidised price flows directly to farmers.

HCL tech pricing

HCL Tech moving towards value-based pricing
Our Bureau
Chennai , July 28
HCL Technologies is gradually moving towards value-based pricing. Explaining this at his first press conference after he took over as president at the company, Mr Vineet Nayar, said, "For long, the Indian IT software industry has priced its offerings based on the effort and time it took. Now, revenues based on a customer's success or business benefit will increase in proportion to overall revenues."
Of its $750 million of revenues, about $100 million comes from contracts with such pricing. Giving an example, he said, "If we work with an insurance client for example, instead of pricing just manpower used and time taken, we would get a certain fee per policy. So, we go up or down with the business volume of clients. There is a certain risk involved. But because of efficiencies we would bring in through automation, we would get higher revenues. So, that risk is mitigated."
Asked what kind of due diligence the company did with clients before it got into such contracts, Mr Nayar said, "It is true that a client's commitment is necessary to make this plausible. We focus on Fortune 100 companies who are already our large clients."
Commenting on the impact of the merger between Oracle and PeopleSoft (HCL Technologies does work on products from both), he said, "We have practices that focus on both. We also work with SAP. Clients wanting to move on from PeopleSoft to Oracle or to SAP would present a business opportunity for us."
He added that HCL Technologies is building a new campus in Noida where it has acquired 50 acres of land. "It is being built. This is for our expansion purposes and would house several thousands of employees," he said.

Appollo pricing

Market-driven pricing to evolve for health cover’
Insurers moving towards risk adequate premiums
“We will use some of the existing practices from the US and Europe and customise it to Indian needs.”Mr C. Chandra Shekhar
Mr C. Chandra Shekhar
Phalguna Jandhyala
New Delhi, Oct. 11 The Insurance Regulatory and Development Authority (IRDA) expects the health insurance business to be the second-largest premium earner for companies after motor insurance within the next three years.
The regulator expects the sector to grow larger than fire insurance business after complete detariffing. Until now only two companies have been operating in the segment on a stand-alone basis. The latest entrant is Apollo DKV Health Insurance. In a conversation with Business Line, Mr C. Chandra Shekhar, Chief Marketing Officer of Apollo DKV, expressed his views on the sector in India.
How is the health insurance sector shaping up in India?
What we are seeing in the health insurance segment is an intense period because lot of players are now introducing new products. The market is in a growth phase and has witnessed a CAGR of over 35 per cent in the last couple of years. The growth is expected to sustain over the next three to five years. What is heartening to note is there is an attempt by players to start what is known as the risk adequate premium. One of the banes of the segment in the past was that pricing was inadequate and was getting grossly cross subsidised by other portfolios.
But now with detariffing , the results are very apparent. More needs to be done on the firming up of the process to be risk adequate for every nature of insurance. There is also a correction happening between the portfolios and we expect it to firm up in the next one year and market-driven pricing like what exists in the telecom sector will evolve.
How is the future for the segment?
In the next one year, we expect the market to become mature. We also expect more stand-alone players in the segment. This is really good, as there is enough room for everyone; only 2 per cent of the market has been tapped so far. According to estimates, the health segment will be around Rs 15,000 crore in the next seven years from the present level of Rs 3,500 crore.
How different is the segment in Europe and the US?
In India, the products have to be renewed annually, but in Europe they have long-term care plans. The US market is similar to what we have in India, but at the same time they offer much more comprehensive covers like outpatient products.
The US concept is based on managed care. There is a lot of involvement in offering health insurance as a solution. India will do well to adopt some of their strategies.
Is Apollo DKV looking at a similar model?
We at Apollo plan to resonate a couple of ideas using our sector-specific health care expertise. Our current plans will be to make our brand promise of wellness evident in the initial products. Though they might be contemporary, the difference will be in terms of service.
For example, we are building up capability to make an individual health risk assessment on every proposal which comes to us. After this, we will send an individual prescription of awareness to the individual to follow. So we will use some of the existing practices from the US and Europe and customise it to Indian needs.

Adobe India pricing

Adobe offers `special pricing'
Our Bureau
Kolkata, May 31
Adobe Systems India has said that it will have a "special pricing" for educational institutions that purchase its range of products. The company is also working on a "licensing programme" to make its products more affordable for educational institutions. The company will soon announce its policy for the education market in India, according to Mr Sandeep Mehrotra, Country Sales Manager, Adobe Systems India. Addressing a news conference held here on Wednesday to unveil Adobe's go-to-market strategy for its Creative Suite 3 (CS3) product line, Mr Mehrotra said in partnering with educational institutions, the company would prepare the curriculum and even train the trainers.

Bajaj Branding strategy

Our Brand IdentityOur Brand is the visual expression of our thoughts and actions.It conveys to everyone our intention to constantly inspire confidence.Our customers are the primary audience for our brand.Indeed, our Brand Identity is shaped as much by their belief in Bajaj as it is by our own vision.Everything we do must always reinforce the distinctiveness and the power of our brand.We can do this by living our brand essence and by continuously seeking to enhance our customers’ experience.In doing so, we ensure a special place for ourselves in the hearts and the minds of our customers.
Our Brand EssenceOur Brand Essence is the soul of our brand.Our brand essence encapsulates our mission at Bajaj.It is the singular representation of our terms of endearment with our customers.It provides the basis on which we grow profitably in the market.Our Brand Essence is Excitement.Bajaj strives to inspire confidence through excitement engineering.Blending together youthful creativity and competitive technology to exceed the spoken and the implicit expectations of our customers.By challenging the given. By exploring the unknown and thereby stretching ourselves towards tomorrow, today.
Our Brand ValuesWe live our brand by its values of Learning, Innovation, Perfection, Speed and Transparency.Bajaj will constantly inspire confidence through excitement engineering.
LearningLearning is how we ensure proactivity.It is a value that embraces knowledge as the platform for building well informed, reasoned, and decisive actions.
InnovationInnovation is how we create the future.It is a value that provokes us to reach beyond the obvious in pursuit of that which exceeds the ordinary.
PerfectionPerfection is how we set new standards.It is a value that exhibits our determination to excel by endeavouring to establish new benchmarks all the time.
SpeedSpeed is how we convey clear conviction.It is a value that keeps us sharply responsive, mirroring our commitment towards our goals and processes.
TransparencyTransparency is how we characterise ourselves.It is a value that makes us worthy of credibility through integrity, of trust through sensitivity and of loyalty through interdependence.

Laser printer

laser printer for every office
Laser printers lead the IT investment list of IT/ITES and telecom players along with surging demand for notebooks and Windows x86 servers. By Chirasrota Jena
The Indian IT-ITES industry continues to register double-digit growth. Growth in domestic IT/ITES spend has been driven by investments in IT infrastructure, line of business applications, security products and services, IT outsourcing and managed services and by consumers of mobile and digital products. As IT companies are tech-savvy, they are looking at their IT infrastructure as a business enabler. These companies have successfully adhered to international regulations, winning customer confidence and ensuring that the inflow of outsourced work isn’t staunched. IT has helped bring about improvements in operational efficiency and transparency. Most IT/ITES and telecom companies are investing on desktops, servers, cabling, printers, connectivity and power conditioning.
The mushrooming of outsourcing in India has added fuel to the growth of the IT investments. As these companies have to be compliant as per international norms in order to get MNC customers, they are looking seriously at IT. To maintain confidence levels and broaden their customer base, large IT/ITES players have to move up the value chain by offering better solutions and services. The same is true of the telecom sector where starting from service providers to the telecom equipment manufacturing units and operators; they are all looking at new avenues to face intense competitions. The m arket for Value Added Services has also grown which directly calls for investment in IT infrastructure.
Growing popularity of laser printers
To create a better working environment with an easily manageable infrastructure, large enterprises are going for advanced laser printers. With the cost of printing per page escalating companies are looking at different avenues to control the same. Thus they are looking at the laser printers to satisfy all their needs. According to the survey 95 percent of the respondents from the IT/ITES and telecom sectors are planning to invest in laser printers.
Of the 21 respondents, all already have laser printers in their respective organisations. Colour printing is increasing. On the other side, integrated security on the printer is becoming commonplace. MFDs (Multi Function Devices) are gaining in popularity. In terms of the market trend, a high level of awareness about the benefits of in-house printing is being witnessed amongst large enterprises. This shift towards colour laser printers can be attributed to the increasing awareness among organisations that colour can bring great benefits to their businesses. Increased affordability as also the introduction of colour access control in colour MFDs, which allows cost control has resulted in increased adoption of these devices.
Informs Imran Khan, IT Head, Aurora Software, “The downward trend in the price of laser printers has created demand for this category. The operating cost of these printers and the advanced features like security with improved technology, which these printers are offering to the customers, have quadrupled demand.” On the other hand, vendors in the laser printer segment are facing intense competition, which has forced them to innovate furiously. To get a good hold in these verticals they have come up with specific strategies. Customers have variety of options in the entry-level range in the laser printer category, which has helped the vendors to widen their reach in this segment. On the other hand telecom operators deal with a huge subscriber base and paper bills have to be printed for all of them. This makes them dependant on laser printers for the cost-effectiveness and the improved quality of printing. Network laser printers are gaining popularity among large enterprises.
Convergence drives Gigabit Ethernet
With the growing demand for convergence technologies telcos are taking interest in deploying Gigabit Ethernet. IT/ITES companies looking for a high-capacity network infrastructure are also upgrading to Gigabit Ethernet seeing it as just another form of the Ethernet they have been using all along. The local area network (LAN) has undergone dramatic changes over the years. As the need for high-quality streaming media, e-commerce and entertainment applications over the network increases rapidly, massive demand for network bandwidth will require new efficient ways of transmitting traffic in the future. As per the survey, 81 percent of the respondents from the IT/ITES and telecom sectors have existing fast Ethernet while 71 percent have Gigabit Ethernet infrastructure. 90 percent of the respondents are planning to deploy Gigabit Ethernet LANs. Gigabit Ethernet LAN solutions can be applied wherever Fast Ethernet works. It is a simple and cost-effective investment that can easily and quickly relieves bottlenecks of network connections. Gigabit Ethernet LAN allows users waiting less time on the network and being more productive. Additionally, since Gigabit Ethernet is developed from the Fast Ethernet standards, which are the most common used networking protocols; network managers will find the new Gigabit Ethernet protocol very familiar.
Says V V Purushothaman, Asst. System Admin, IBM Daksh Info Services Pvt. Ltd, “A Gigabit Ethernet LAN over copper costs less to maintain than optical fibre cable. You can increase network performance with Gigabit over your existing cabling infrastructure. It is also more reliable than the alternatives that are available. Although we are using Fast Ethernet connectivity, we are planning to deploy Gigabit Ethernet in the coming year. As we have deployed various applications we need much faster speed than what we currently possess.” As the IT/ITES and telecom companies have either deployed numerous applications like ERP or are planning to deploy them so they need higher bandwidth. Gigabit Ethernet is an order of magnitude faster than Fast Ethernet and also reduces network maintenance challenges. It allows data to be transmitted and received at the same time so that the effective bandwidth is virtually doubled over and above its 10x speed boost. Some telecom service providers have already deployed Gigabit Ethernet connectivity as the prices have reduced drastically. BPOs in India are increasingly under pressure due to falling margins. Added to that, the cost of basic infrastructure has remained the same or in some cases has gone up. Call centre operators now have an alternative to large upfront investments for call centre solutions. This comprises both voice and data-based solutions that enable inbound and outbound calls. Call centre management solutions can route callers to the next available agent at any remote call centre. The latest generation of IP solutions offers flexibility and productivity at lower costs.
A preference for Windows x86 Server
With the major investments of large enterprises going into desktops and servers, most IT/ITES and telecom players prefer to go for Window based operating systems. As per the survey, 71 percent of the IT/ITES and telecom respondents have already deployed Windows x86 servers. With the growing popularity of Windows based applications large enterprises are deploying this server for its compatibility and reliability. As security is a major concern for the ITES industry, most of the players are depending on these servers to run their ERP, back up and archiving solutions. 81 percent are planning to deploy additional Windows x86 servers. Servers have a direct impact on the power conditioning market. BPOs are investing in more seats and consolidating their servers and storage at the backend. The IT/ITES sector is keen on investing in servers more than any other industry segment. Telecom companies are dependent on their technology vendors to provide them with equipment which can scale up rapidly and in a robust manner to handle the ever-growing base of consumers. Their need is for an IT infrastructure which can support the deployment of value-added services rapidly to as many subscribers as possible creating newer revenue opportunities.
Many large enterprises are looking at data warehousing and Business Intelligence as near term investments so that they can take faster business-related decisions, retain and acquire customers. In this segment, we see demand for high-end servers based on features such as reliability, accessibility and serviceability, virtualisation technique for higher availability and performance, supporting multiple operating environments. Opines Purushothaman, “After a long period of focused on cost cutting and buying servers just to run current applications, enterprises are once again investing strategically in systems to handle future workloads. We are also planning to enhance the capacity of our servers. Our IT investments are mainly on new applications and hardware. We have spent about 55 percent on software and the rest on hardware.” Today, the advancements in x86 server technology is tremendous, they have adopted several features from high-end machines (mainframes and RISC servers). The initial investment as well as maintenance cost is on the lower side and above all they provide the right computing power requirements for this segment. Also, with the latest technologies such as clustering or cascading, more reliable and powerful computing platforms can be created with x86 servers.
The mobile workforce needs notebooks
As per the survey, there is a 100 percent penetration of desktops and 90 percent of notebooks. With the increase in mobile workforce across verticals, companies are providing notebooks to their executives for the better functioning of the business. In the IT/ITES sectors all most all employees are either using desktops or notebooks. There is a growing trend towards the growth of notebooks in these verticals as compared to desktops. There is an awareness found among the executives about branded notebooks. With prices of laptops coming down along with the enhanced feature from well known vendors IT savvy companies are looking for mass deployment. The marketing executives of telecom companies are using notebooks while making presentations to their clients. Price and affordability are not crucial factors any more with entry-level notebooks available at the prices of mid-range PCs. Near about 25-30 people are using notebooks at IBM Daksh office at Bangalore. The company is also planning to invest a major portion of its IT investment in buying notebooks and desktops.
With a huge range of offerings available from different companies, the market for notebooks is set to explode. The IT sectors executives are using notebooks to make presentations, develop software, showcase technologies and check e-mail on the go. For these companies price is not a major barrier. The features of the notebooks are a prime concern for them. Driven by the need for comfort, convenience and mobility, the demand for notebooks is growing every year. Few companies have a dedicated wireless computing policy for the usage of these devices. As far as handhelds are concerned, up till now these have been restricted to top level executives. As per the survey 81 percent of the respondents are planning to procure notebooks and 76 percent desktops. Says Khan, “Technology remains an integral part of doing business. We need to upgrade our technology in line with the constant changes that occur. Now IT is aligned with business, it is considered as a business enabler. Though very few of our executives are using notebooks but due to requirements of our business we are planning to allocate a greater portion of the budget towards the procurement of notebooks.”
Highlights
95 percent of the respondents are planning to deploy laser printers in the coming year while 100 percent have already laser printers in their respective organisations
81 percent of the respondents from the IT/ITES and telecom sectors have existing Fast Ethernet and 71 percent have Gigabit Ethernet infrastructure. 90 percent of the respondents are planning to deploy Gigabit Ethernet.
71 percent of the IT/ITES and telecom respondents have already deployed Windows x86 servers while 81 percent are planning to deploy.
100 percent of the respondents are already using desktops while 90 percent are using notebooks and 81 percent of the respondents are planning to procure notebooks and 76 percent desktops.
Also in demand
The IT aspect is considered a part of strategic business initiatives. Indian companies are trying to win customer confidence abroad and this confidence is in terms of the cost savings and quality results that they deliver. In their effort to get revenues from foreign markets, IT companies are demanding more applications that operate in real-time, which lead to an increase in bandwidth usage. Companies that were using 64 Kbps links are opting for 1 Mbps and beyond. To reduce spending, companies are looking at optimising their existing infrastructure. As per the survey, leased lines are the preferred option for large enterprises. 86 percent of respondents from the IT/ITES and telecom sectors have a leased line connectivity infrastructure while 76 percent are planning to make further investments. Streaming media video and audio conferencing and inter-office communications is also resulting in increased bandwidth consumption.
Realising the opportunities in the IT/ITES sector, vendors are gearing up to come out with suitable solutions for them. The present data centres requirements in terms of flexibility, scalability, density, and manageability are met in part, by the connectors, which enable designers to create a cabling infrastructure that meets the challenging density requirements but is flexible enough to handle moves, adds and changes. While fibre cabling can be more expensive than copper, it is designed with more capacity than the copper cable. As per the survey, 90 percent of the IT/ITES and telecom players have copper cabling infrastructure and 86 percent have deployed fibre cabling. But the scenario is changing. In the coming year, 81 percent of the respondents from these segments are planning to deploy fibre while 57 percent will deploy copper cabling.
The growth of date centres is also driving the growth of power conditioning. Every data centre deployment and expansion project will need power conditioning solutions and therefore the market for these solutions is also increasing. It is therefore critical to get the right technology in place. It is important that one adopts the right architecture for the data centre, one which enables businesses to be agile and supports it as it grows and yet scalable enough to adopt the future technological and environmental changes. As per the survey, 76 percent of the respondents are planning to deploy power conditioning equipment. Khan informs, “Business drivers today are ROI (return on investment) and doing more with less. The two key emerging IT trends are centralised IT environments and compaction. A big concern faced by customers with respect to Information Technology today is asset utilisation and operating costs.”

Creating visual equity

Creating visual equity!
Rina Chandran
Design — for everything from soap wrappers to store signage — is taking centre stage as companies seek to differentiate their products, and take on spiffy foreign offerings on shop shelves. Ad agencies are stepping up to offer specialised services.
WHEN Rachna Narang, Executive Director of Mars Restaurants, wanted to position a range of premium chocolates as a unique corporate gift, she went to Lintas' specialised design unit, dCell, for ideas. Instead of a gold-coloured box with a satin ribbon, dCell created `Chocolate Stories' — chocolates packaged like classic books, complete with gold spine and curvy lettering. The `chocoliterature' boxes became instant collector's items.
With the retail environment becoming organised, and with more products crowding shop shelves, design — or visual identity in the form of colour, symbols, shape and structure — has become increasingly important to differentiate brands. Besides, more international brands are coming in, even as home-grown brands look outward, says Sabyasachi Mishra, Vice President, dCell. "These concerns did not exist 10 years ago, but with the likes of Tommy Hilfiger coming in, Indian brands are looking a little tired in comparison," he says. "At the same time, there are international brands that want to adopt an Indian sensibility — so there is opportunity for design both ways."
Potential clients at dCell are taken through an exhibition rather than a PowerPoint presentation, and the items range from soap wrappers and shaving cream tubes to a detergent dispenser, credit cards and retail signage. The division comprises about 15 people with formal design and communications backgrounds, and offers packaging, graphic design, corporate identity, product and structural design, merchandise and naming services. Its recent work includes an export tea brand, collectible cans for Coke in Thailand, a range of Axe products, various Unilever brands, HSBC credit cards, Go 92.5 FM, Surf Excel packaging, Vim bar wrappers, and branding architecture for a large retail chain — store windows, signage, and visual merchandise.
Clients who haggled over a bill of Rs 5,000 for design are now willing to pay several lakhs for specialist services, as they are aware of the need for a unique visual identity and structural differentiation, Mishra says. "Design is basically about creating visual equity through colour — which is the first thing you notice — or symbols, which dominate our religion and is a part of our lives, and through shapes and signature," he says. "It has to differentiate, and take the positioning forward. And while it has to be functional, it can also delight and excite."
So far, a strategic understanding of design was missing, Mishra says. For example, the way a mass market consumer perceives design is very different: a consumer in a small town uses colour — "only flat colours, no vignettes" — and symbols as his handles of recognition, and may not even notice a misspelling, he adds. In the past, large companies have gone abroad for design, while international firms like Shining have done some very visible work for the likes of Wipro and Britannia.
Until recently, art directors in agencies designed the logo, packaging and other visual elements of a product; but lately, structural design — or shapes — has become critical, and this is where a specialist unit of an ad agency scores over a design hot shop, as it has a communication background and a strategic understanding of brands. "We have knowledge of the context of where and how design operates, and that informs our work," says Mishra, who offers a choice of business cards with images of colourful fruits, vegetables, nuts and spices, because the best designs are inspired by Nature. "At dCell, we bring a combination of aesthetic expertise — which is the forte of design shops — and strategic capability."
That is also the reasoning at Design Sutra, Contract Advertising's design unit: originally named Contract Design, the outfit has done work for such brands as Cadbury, JW Marriott, Asian Paints, Platinum, Raymond Group, ABN-Amro Bank, Reynold's and Shopper's Stop. Specialist designers can better appreciate form, structure and shape, and also understand the science of shelf throw, food grade material, air contamination, stackability and spill-proof packaging, says Rajiv Sabnis, Senior Vice President, Contract.
"The task is to get the client better `brand throw' in the marketplace, and make the brand look distinct on the shelf," he says. "Design specialists have the ability to translate positioning into design — and to them, a product label is more important than a print ad."
At Lemon Communications, a Euro-RSCG company, a unique design and identity are seen as essential, as the impact of conventional advertising is limited. For the food court in Mumbai's Inox multiplex, Lemon created the branding and visual identity. Working closely with auto design guru, Dilip Chabbria, Lemon named it `Refuel', and created the identity of a gas station — and extended it to other properties on the premises. For Culture Curry, a south Indian restaurant, Lemon created the logo and the menu, which became such a hit with foreign tourists, that it was priced at $20 for them to buy, says Chief Creative Officer, Ravi Deshpande. Lemon is now working on the retail identity for Gili jewellery.
Today, design projects can cost anything from Rs 50,000 for a label to a couple of lakhs for packaging and Rs 20-50 lakh for integrated retail identity, and design units of ad agencies have become viable profit centres. Retail and FMCGs will be the primary drivers of specialised design services, as design can take the brand positioning forward, and actually swing a consumer's decision: "Packaging, for instance, is the last chance to talk to your consumer before she decides to buy," says Ashish Bhasin, Director - Integrated Marketing Group of Lintas.
One of the challenges — besides convincing clients that the money is worth it — is the lack of research. While dCell works closely with the ad research team to understand how consumers relate to visual equity, the research tools available now are international, and cannot be used in India because design sensibility is so cultural, and because the way we respond to design is so irrational, says Mishra, who would like to get his hands on postcards, railway booking forms, money order forms and road signs, to give them a facelift. "There's too much focus on what should work — but design can also delight," he says.
The distinct shape of the Coca-Cola bottle is perhaps just as recognised as the red-and-white logo itself, and an entire campaign for the new Volkswagen Beetle was created around its unique shape; here, too, the basic truth about design will ensure that its importance will grow: "No one buys a magazine or watches TV for ads," Mishra says.
"But people will buy a shampoo for its colour, or a perfume for the shape of the bottle."