The new Mr. 21st century India

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Sutanu Guru on the indomitable man and his group

It is 1992 and India is in turmoil. The year will end with demolition of Babri Masjid. The Indian stock markets have gone into a tailspin after the unveiling of the Harshad Mehta scandal. Dhirubhai Ambani is unveiling the momentous blueprint of a backward integration strategy that will catapult Reliance into one of the largest companies of the world. Dr. Parvinder Singh of Ranbaxy and Aditya Birla are crafting strategies that will catapult their corporate empires into truly global entities.

Amidst the bedlam, a reticent, shy and soft spoken inheritor is fighting his demons of legacy and satrapy. In the heartland of the empire that he inherited, at Tata Steel, company Chairman Russy Modi has declared war on Group Chairman Ratan Tata. The colourful and loquacious Modi invokes the legendary legacy of the still alive J. R. D. Tata and pleads with the patriarch to not let Ratan destroy the Tata Empire. Other satraps like Chairman Darbari Seth of Tata Chemicals are planning their own insurgencies. And corporate pundits by the end of 1992 start publicly wondering and outspokenly ponder if the Tata edifice will also not come crashing down, a la Babri Masjid.

Fifteen years down the line, on January 10, 2007, in a hall packed with photographers, journalists and frenzied visitors jostling each other for a view, the six feet tall Ratan Tata gracefully limbers out of the 624 wonder to resounding applause, the demons have finally been laid to rest. Pausing for deep breaths and visibly emotional, the sarcastically combative Ratan Tata says, “R. K. Pachauri (Nobel laureate) will not have nightmares and Sunita Narain (Green activist) can sleep at night.” Both Pachauri and Narain had expressed concerns that Tata’s dream Rs.1 lakh car will cause severe pollution and congestion problems on Indian roads.

As the world raved and rivals looked on grudging admiration, the man and the group that were once written off by pundits had unmistakably arrived as the undisputed number one multi-national conglomerate to emerge from India. Gushing it may sound, but some new fans are already comparing Ratan Tata to Henry Ford, the man who created the first auto revolution in the world and his car Nano to Model T, the first car in the world to be accessible to workers and the middle class. Says renowned management thinker who has written the powerful book, The Fortune at the Bottom of the Pyramid, “There is great excitement because Tata Motors has introduced the global auto industry to a whole new consumer segment.”


Just look at the corporate stars who shone in 1992 when Ratan Tata and his group were battling for survival to see how far the man and his group have gone in the global sweepstakes. Harshad Mehta is dead. Nobody talks about Russy Modi and Darbari Seth anymore. Most home grown business families that dominated India Inc. till the 1990s have disappeared from the benchmark Sensex, if not entirely from India Inc.. After a great headstart, the late Dr. Parvinder Singh’s global legacy at Ranbaxy is floundering of late. The late Aditya Birla has left a stronger legacy as his son Kumarmangalam has taken decisive steps to emerge as a global metals player. Even Mukesh Ambani has now publicly admitted that future growth will come from global acquisitions and global markets.

Yet, none match the tenacity, panache and strategic vision with which the Tata group has been systematically going global. In 2000, when acquiring global companies and brands was perhaps not even a gleam in the eye for Indian entrepreneurs, Tata Tea pulled off an audacious gamble by acquiring the British company and brand Tetley for a then whopping 271 million British Pounds. In 2004, Tata Motors quietly acquired the commercial vehicles division of Daewoo. Around the same time, Tata Steel had acquired a majority stake in Singapore based Natwest Steel. In 2007, the Tata group made a killing ($523 million) when it sold its 30% stake in US based Energy Brands Inc. to Coca Cola for $1.2 billion. In 2004, group company VSNL Ltd. emerged as the biggest carrier of telephone traffic in the world by paying $130 million to acquire Tyco International’s undersea telecom cables.

And then came the killer deal in 2007 when Tata Steel acquired the controlling stake in UK based steel giant Corus for a whopping $13 billion. The strategic move catapulted Tata Steel to the fifth position in the global steel sweepstakes with another Indian L. N. Mittal as the top dog. The year 2008 promises to be yet another blockbuster year for Ratan Tata and his group. And not just because of frenzy generated by the small car Nano. Tata Motors is clearly the frontrunner in the race to acquire two powerful global auto brands, Jaguar and Rover from Ford Motors. And who can forget the blistering pace at which Tata’s Taj group of hotels is acquiring prime properties in overseas markets?

Just imagine: this is the man and this is the group whose epitaphs were being written breathlessly by pundits back in the 1990s. Says a lot about pundits, doesn’t it?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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The other critical reason

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We move to yet another critical, breakthrough area – the Indianisation/desification of advertising. During the seventies and even eighties, advertising was dominated by the firang influence. If you had a certain kind of background, accent and interest, you were inducted. So how did the Piyush-Ranjan combine manage to put it on its head & change the equation so successfully? “I think two things influenced this movement. One, the dynamics of the marketplace & consumer profile was changing and we were quick to spot it and zero-in. Two, it had also to do with me, my background and beliefs. Even before Ranjan came in, the first blow had been struck with the chal meri Luna, Fevicol, Asian Paints and Cadbury. Ranjan’s presence only fast forwarded the agenda. Both, he and I, went to the same hallowed institution called St. Stephen’s College, but demonstrated that it did not necessarily mean compromising on our vision of the Indian reality – roots! We were proud to earn our spurs not through niche, elitist, south Bombay-driven work, but communication that cut across boundaries and worked with consumers in the market place. We democratised this sacred, exclusive, precious, in-the-closet animal called creativity and took it to the streets in a fashion that entertained and delighted.” But ad-guru Alyque Padamsee does not seem totally floored with O&M’s work, just as he points out, “There is no doubt that Piyush has successfully turned O&M into a solid brand, partly by doing some outstanding creative work & partly by his media persona. The point is – has O&M, in recent times, really produced amazing brand building campaigns that are both memorable & hot-sellers? Beyond Hutch and Fevicol, I don’t know... In my book, great advertising has always been selling the product before selling the agency.”

The other critical reason (Piyush believes) that hugely helped this gene of advertising, was the life-transforming advent of TV! As a medium, it was truly mind-blowing with a direct, democratic, no-holds barred connect with the masses. English was not the lingual franca of the junta; Hindi and the other regional languages were. So if you didn’t have a command or knowledge of the idiom, or an ‘in’ about the people you were addressing, you were out on a limb. TV rang the death-knell of the erstwhile hero – the English language print writer. It also marked the end of the fancy, cone-size-fits-all kind of advertising. “We, at O&M, were however hugely upbeat about this transition & embraced it with alarming speed and passion. David Ogilvy had stated that we hire gentlemen with brains. We started hiring gentlemen with balls! It caught fire. Everybody wanted to work with us... and with the average age of the agency around 28 – it was literally a youth-quake!


What were the reactions of the big boy, David O, the industry in general and the public, at large? “David was always very supportive and enthusiastic of material that went out of our India offices. Unfortunately, while all this was happening, he was in semi-retirement mode and not keeping too well either, but his blessings always stayed with us. The industry, by and large, was supportive and encouraging and I must specially mention the name of late Mr. Subash Ghosal of HTA. He was simply amazing! I remember... how at large & formal advertising events & parties, he would point at me and tell the biggies in the business – he’s the future of the Indian advertising!”

Has it been tough for a creative person to wear two hats and perform as well? Isn’t there a dilution in core competence? “It was Ranjan’s idea way back in 1995 or so, that I take over the portfolio of Manager, Bombay branch of O&M. He said that since I led anyway and people respected me across the board, it was a logical step up...” So that’s how he moved on... and then became the Executive Chairman and NCD. He adds, “I see myself primarily as a leader playing in form, performing captain of my team, O&M. I am here to inspire and motivate my flock, nurture and encourage them, protect and defend them from the champions of brain-dead stereo-type advertising and allow them to freak out in any which way they wish, without the fear of losing their job. They must feel wanted and secure in the space to fly. That is my job...” He says that he didn’t feel any change earlier on and nor does he feel any change today. “I suffer from no delusions of grandeur and am completely aware of what I can do and what I can’t.

I have an extremely capable team of colleagues – Mr. S. N. Rane, who is the co-Chairman, COO & CFO; Mr. Pratap Bose, the CEO – who are brilliant at what they do and I consider myself fortunate in having such excellent professionals. The secret is: Give each person the freedom to do what he’s the best at. Don’t interfere or play God. That place is already taken!” But is it just all about Piyush? Well, it certainly seems so, and pops Sridham, National Creative Director, Leo Burnett, doesn’t seem too happy about it as he states, “I think they deserve all the accolade coming their way. The Cadbury girl’s dance on the field in early 90s set the tone of O&M getting it right vis-à-vis the Indian pulse and over the years they have been doing some wonderful work. However, of late, I find a dip in their quality – specially Fevicol. Too many agendas seem to have crept in diluting their earlier focus. Also most of the creatives coming out of O&M seem to be speaking in Piyush Pandey’s voice. Individuals must be encouraged to find their own voice...”

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global
The Indian Institute of Planning and Management (IIPM)
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“New Indians driving this desi genre,” says Rohit Ohri, Managing Partner, JWT Delhi

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The consumers of today’s India are becoming more & more socially conscious. So it becomes important for brands to strike the right chord with audiences. But one must be careful that the social cause picked up, must be relevant to the product category so that it adds credibility to the brand. Take for example the Surf ad ‘ek bucket paani rozana hai bachana’ or Lifebouy ‘little Gandhi’ or more recent Hero Honda ‘Jo chalayenge naye India ko wohi chalate hain Nayi Hero Honda CD Deluxe’.

All of these have one thing in common, the social cause picked by these brands are related to the product category and hold relevance to the target audience. Take the Hero Honda CD Deluxe ad for that matter which epitomises the great Indian commuter and his eternal quest of striving and moving up the social ladder. The film talks about this young architect who rejects a lucrative job in the US to contribute to the infrastructure boom in the country by designing the world’s tallest building. A heart touching story (not to forget the dialogue ‘main aa raha hun India’) which showcases the protagonist as an integral contributor to rising India!

Here we captured an excellent opportunity to position the product, which promised to be an extended personality of the average young, middle class Indian, who has been basking in the new found confidence of the booming economy that has resulted in abundant job opportunities. The big idea is that the Progressive Young Middle Class Indian has arrived and he’s making his presence felt with his undaunted spirit to strive hard and move up in life. It is people like him who are actually fuelling the rapid growth of the great Indian middle class which means business. This new Indian knows that the opportunity is here and up for grabs and they are making the most of it.

Though such a social revolution has been sweeping every young Indian it was imperative to create a conduit through mass communication and amplify the current mood which would augment a goose bumpish feeling and reinforce the coming of age of the Great Indian Middle Class. Because it is this New Indian which is making the New India Shine!

(The author heads JWT Delhi, the agency behind behind the Hero Honda CD Deluxe campaign)

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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In Sixth Gear

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Diesel Swift and sexed-up SX4 helped Maruti to reach admirable heights

With an incredible 61 points lead over the industry average, Maruti Suzuki won the JD Power’s India customer satisfaction index study for the eighth time in a row. Fictional as it sounds, India’s largest car maker even bettered global heavyweights like Honda and Toyota by 73 and 98 points, respectively. After firmly establishing itself as a low-cost compact car producer, Maruti company has established itself in higher segments too.

Explains Car India’s Vikram Gaur, “Maruti has consistently upgraded its models and understood the Indian psyche better than competition. The brand positioning has been such that the company has transformed itself into a ‘quality manufacturer’ from being just a ‘cheap manufacturer’.” Surviving in an excessively unfaithful & cruel market, Maruti has proven itself and has most definitely evolved.” True, for it has managed to retain its marketshare despite past critical conclusions that it had lost its way.

Its glorious moment this year was the launch of SX4. Initially, analysts argued that the model’s positioning was as faulty as Baleno’s (Maruti’s prior effort at cracking the C segment). The Baleno was large, well-engineered, and expensive; it was targeted at customers who wanted style and comfort. However, buyers overlooked the Baleno when confronted with the Hondas and Mitsubishis. It seemed that the same would happen to SX4. But SX4 surprised everyone with a dream rollout selling close to 30,000 units in seven months. “The SX4 is a radical product. While being positioned in a segment lower than Toyota Corolla and similar models, it offers features which are not present in even these entry-level luxury cars,” adds Gaur. For once, Maruti had a sexed-up model.

Later this year, the company launched its much-awaited Swift Diesel with an engine that was developed at the new facility in Mannesar. With its looks, the petrol Swift had already mesmerised customers. Maruti quickly converged Swift’s looks with cost efficiency that led to the development of the sophisticated multi-jet diesel motor. This was critical as Tata Motors had stolen the thunder in the diesel compact car category.

But surprisingly, Maruti didn’t opt for a head-on collision with Tata’s Indica. Instead, the former created a new segment – B+ diesel despite critics’ contention that the company should have launched diesel versions of its more popular B segment cars. “We identify gaps in the market and then give the consumer what she/he wants,” says Mayank Pareek, CGM (Marketing) Maruti Suzuki. True, for Maruti has invariably updated its models at almost the right time. The Zen, for instance, has been replaced with Estilo, while Wagon R has been updated with an LPG alternative.

It has also been quick to learn from bad experiences and quietly transform them into positives. Take the example of the Grand Vitara XL7, which was Maruti’s attempt to make a mark in the higher segments. Aware of its brand’s limitations, the SUV’s image was more Suzuki centric, rather than Maruti’s. It did click a bit with rich customers, but it didn’t prove to be enticing to the brand-obsessed buyers in this segment. Especially as the XL7 was considered expensive for the brand it represented.

But when Maruti launched the new Vitara this year, it overcame most of these issues. For one, the new model was priced Rs.5 lakh cheaper than rivals’ products like Honda CRV. It also had a smaller engine under its bonnet and, obviously, it became more affordable. As usual, it created a new segment of consumers who eyed the CRV but couldn’t afford it.

What proves Maruti’s tactical success is that Honda too is planning to introduce a smaller engine in its new version of CRV. This is Maruti’s marketing blueprint: test waters before making the kill. “Models like the Baleno and the older Grand Vitara were part of strategic launches in order to get a market feedback” explains Pareek.

Such customer responses may prove to be critical for the company. As competition hots up in the small compact segment, which is Maruti’s bread-n-butter, it will need to seek extra market share in other segments, where it is a weaker player. This will happen when Tata Motors launches a car priced at Rs.1.5 lakh, and others vie to match that benchmark price. So, getting into higher segments is like a hedging and defensive strategy for Maruti, as it is bound to lose market in the small segment.

However, Maruti managers view this differently. “We are a complete car company and, therefore, we are also concentrating on premium segments. It is really not the case that the outlook of Maruti is changing” answers Pareek. Clarifies Jagdish Khattar, MD, Maruti Suzuki, “We are present in all segments. If you have noticed, all the launches last year were in the compact segment.” It is clear that while small cars will remain Maruti’s USP, higher segments too are important. Whichever way it happens, Maruti will slowly and steadily make its way into the elite ‘full model range’ club.

But the transition will surely not be a cakewalk. As public transportation improves in the metros, especially Delhi and Mumbai that are two major car buying centres, global oil prices shoot up, and several players introduce low-cost models, Maruti will need to quickly re-strategise itself, redefine its philosophy, and re-energise its engines. Or else, it will find itself on low gear, or handbrakes.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Here’s how 4Ps B&M and ICMR got together to pick India’s best and the brightest companies of 2007

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The list of most admired is an exhaustive report card brought out in collaboration with the Indian Council for Market Research, on the reputations of respective Indian companies. The survey was conducted in different phases. We started with the S&P CNX 500 list. The NSE 500 were chosen as the base because of their broad-based benchmark of the Indian capital market for comparing portfolio returns vis-à-vis market returns. The S&P CNX includes only those companies which have a minimum listing record of six months and must have demonstrated high turnover and trading frequency. The list of companies represents about 90.30% of total market capitalisation and about 80.02% of the total turnover on the NSE as on March 30, 2007. Another reason for choosing the NSE 500 as base was that these companies are dis-aggregated into 72 industry indices viz. the S&P CNX Industry Indices. Industry weightages in the index reflect the industry weightages in the market.

Subsequently, the team diligently went through the list to shortlist the top 125 companies. These companies were further shortlisted by the 4Ps B&M editorial team based on the performance of the companies in their respective sectors over the last one year, including compiling and sorting the 100 companies’ financials for FY ’07 (Profit after Tax, Earning per Share, Sales & Market Capitalisation). The number of employees employed by respective companies in FY ’07 was also taken into consideration.

In the second phase, the ICMR team (led by Shivalee Kaushik & co-ordinated by Ankuna & Sakshi Syal) conducted an opinion poll of these 100 companies, based on the parameters of reliability, innovation, employability factor and investor confidence (investor in the company as a brand and as a company). The respondents were asked to rate each of the companies on a scale of 1-10 where 1 is low and 10 is high on each of the parameters. The sample size for this survey was 4000 respondents across the five major cities of India (namely Delhi, Mumbai, Kolkata, Chennai & Bangalore).

In the self-descriptive tables on the ensuing page, companies under each category have been sorted on the basis of PAT for FY ’07, market capitalisation as of 30th November 2007 and number of employees (based on their individual annual reports).

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
When IIPM comes to education, never compromise
IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!