Investment for Rest half (2012)

Wrt to my last Article, It has been a good climb with the graphs of pharma/healthcare companies still not peaking and yet have more to come. Its Irony, but thanks to Rupee depreciating and this sector leaving stone upturned for  the opportunity to spread domestically and internationally. It is nothing but an experience to learn, on how even in bad times for the overall market, a sector can perform exceptionally good. Look at lupin, Sun Pharma, Ranbaxy (20-30% up, still 10-15% more to come). Except a few disappointments like Dr. Reddy's and also GlaxoSmith (3-7% up).

But what's next?? Surely not Airlines/Telecom for a while, with the battles going on. Monsoon does not favor FMCG. The chase cuts down to IT, Pharma, Auto, banking/finance, Energy, metal or Commodities. Edible commodities like sugar, cotton  have already picked up 10-12% due to foreseeing demand/supply gap(reason being poor monsoon), but still have chance of another 15-17% upside. Festival time for next 3 months indicate precious/semi-precious commodities will pick up pace but how much (Since they are already on there all time peak), another 5-10%  and festive season is good for Auto sector, but the inflation and growing cost will put a break on buying so it can experience 10-15% upside. In IT sector, one needs to be selective, yet the returns will not be same as pharma has shown till now. Energy Sector with most of the PSU's stalled under the weight of subsidiaries. Metal needs to pick up in terms of demand. Banking being marred by NPA's in PSU banks and competitive margins in private banks, also inflation puts yet another hindrance, positive single digit upside expected.    

Steps taken by RBI about Nose diving Rupee

Huge demand for dollars due to rising imports, and shrinking inflows from foreign investors due to sluggish growth, high inflation, widening current account and fiscal deficits and policy stalemate are key factors for the slide in the rupee.

To slow down the depreciating rupee, the RBI had in the recently taken a couple of measures like raising interest rate on NRI deposits in foreign currency to promote inflows, discouraging outflow of foreign currency by instructing exporters to sell 50% of their retained foreign exchange earnings.

Also in the past, RBI had said forward contracts once cancelled cannot be re-booked and that the forward market should only be used for genuine hedges. This drove speculators out of the currency market. RBI also curbed banks’ open exposure to the currency market and set limits for them.

What RBI can do further!

Impose a cash Margin (10-25%) on forwards. This will reduce speculation to a significant extent and will give access to market for actual trade.

RBI could directly propose oil companies to buy dollars directly from the central bank or it could purchase oil bonds.

Reduce the limit of dollars for people going abroad.

Further tariff or restriction on gold import, So that the greenback stays and is not being traded in huge volumes.

Rebates to support more exports, this in turn will improve dollar liquidity. 

Pharmacy/ Healthcare - Sector to invest in 2012

With the crisis deepening and strengthening due to European situation, Currency depreciation, Inflation and Political instability, India's Stock market doesn't seems to be the right place to park money and multiply. But not all sectors will be suffering due to the current situation. Pharmaceuticals sector is a no-stop train, although it gets sluggish due to global factors. Rupee depreciating will boost the sector as 40-45% is exported. Primarily, Lupin in Pharma looks strong without too many hiccups compared to it's counterparts in the sector. Also, Apollo Hospital after a GDR with Mauritus based Healthcare looks strong and promising. Sun Pharma looks in a better position as they have zero hedging policy against dollar. Ranbaxy after the FDA settlement needs to cover up losses.

What Starbucks should do in India!!

Starbucks one of the biggest coffee brands may not be so worried about its operation in India. But there are certain things to ponder upon. With the beverage segment in coffee already divided by others presence, entering the market and making a good impression is a challenge. This means Starbucks should know what tickles the taste buds of Indian consumers, what it takes to change one's regular coffee from others to Starbucks, why should others apart from those who know the brand will try and come back again as their regulars?

Drive Thru Coffee/ Burgers & Pizzas

Quite a few motels/restaurants are their at the highways in India. Road Transport is still not preferable for lot of folks, but it is growing at a faster pace than ever as the highways are getting better. Reservation numbers through RedBus or any other medium are increasingly growing. With roads becoming safer and better medium, soon it will be time for business opportunities for hotels/restaurants to have a Drive Thru/Take Away places near petrol pumps or places where buses halt.

EasyJet Flying High Inspite Downturn in Global Business

EasyJet, UK's low cost airlines & rival to Ryanair, Air France, Lufthansa, is flying high despite weak economic outlook and high fuel cost in Europe. Thanks to a good strategy unveiled last year aimed at business and leisure travelers EasyJet is sailing high tides smoothly, keeping a tight focus on cost to improve margins and finding room for growth in providing better services.

Axe Lynx Outdoor!! Ad banned

The above AXE Lynx Outdoor Ad is banned by advertising Watchdogs for the reason that it objectifies woman and hence is degrading to them. The above poster attracted a lot of complaints for the same reason. In its defense Unilever said the ad shows how the product makes wearer attracted to women in easy going and light-hearted tone. But ASA doesn't want to take the justification.

Airlines in India (need to learn!!)

Airlines in India are facing a tight margin due to increasing fuel prices, high mandatory charges at airports, Weak economic situation and strong competition from competitors. This needs to be tackled before it gets worse and without the measures it is going to hurt all of us be it customers, Airline's employees & employer's or the governing bodies.

A few lessons which Kingfisher, Indigo or Jet can learn are from the Airlines which operates in foreign countries and are leaders in their business. With a cut throat competition in foreign countries, they prevail and fight by innovating things, customizing solutions & giving better options to customers.

Coffee War!!

With established brands like Starbucks and Costa Coffee entering the market, Others(Gloria Jean's, Coffee bean, Java Coffee) ramping up presence in india, it is time for established ones(CCD & Barista) to think a step ahead and attack the most spending segment(Techno Analysts). Opening up as many small outlets in corporate premises or independent outlets in a cyberpark will help more than increasing the numbers in malls or airports.

Ryanair's Marketing Bag

Ryanair is the low cost airline in Europe. Over the years it has been a successful brand and a successful business.Michael O'Leary has a business model with a central focus on cost reduction. In around 20 years he has taken Ryanair from a single plane company to become the largest airline in Europe. The business simply has lower costs and those costs are passed on to their passengers in the form of low fares.

There are lots of factors which contributes to his cost reduction models. Ryanair does not use travel agents so it does not pay agency commissions. It uses direct marketing techniques to extend products and services to customers, which in turn reduces costs. Online booking saves them 15-20% on agency fees.

Ryanair uses Secondary Airports. It is cheaper to from a secondary airport than from the primary/busier airport. Also Since it is less busy aircraft can be turned around very quickly. Many of Ryanair’s destination airports are secondary. For example if somebody wants to go Copenhagen(Denmark) you arrive at Malmo(Sweden), which is a less than 50km drive from Copenhagen.

Keeping aircraft in the air for most of the time is another important part of low cost for which Ryanair has tweaked their operations. There is no check in, One has to show passport and supply your reference number. One cannot select a preferred seat. It is first come, first served. This aids speed. Baggage is deposited directly onto the terminal - it's quick.

Beyond any doubt, Ryanair is one of the strategic marketing successes of the last decade. Undoubtedly synergized by Michael O'Leary - the low cost strategy that it employs is remarkable and industry changing.

What Next for Deals??

Deals war is going on between Snapdeal, Dealandyou blah blah... so many and it will be survival of the fittest. Innovation and persistence is the key here as everyone gets bored after a while. Increasing the domain will be one important factor i.e. capturing more services. Putting up new options like bulk deal, group deal will keep the customers engaged. Will have to wait and watch.

Snapdeal - Dealsandyou - Dealivore - Groupon ...

List goes on!! quite a few have entered the market and a furious competition is expected from global or local players in the near future. But the one who will make the first mark in new cities will be the one who will shine brighter. For instance a friend of mine wanted to gift from one of these e-commerce business to one of his friend in Indore but couldn't find the city enlisted.

India is a deals savvy market. Though metropolitan people have the luxury to spend and overlook the price still most of the shopping is done during season off(when heavy discounts are offered). We go for shopping at Shopper Stop, Pantaloon or Mark & Spenser's but we carry their loyalty cards to get the extra 10% discount on card holders or special days.

Catch here is that Metropolitan comprises not even 10 percent of the population. The rest who don't have the luxury to spend but the wish to buy luxury items at affordable price don't have the option. A whole such segment remains untapped and is waiting for such thing to happen. Once somebody enters it will be the talk of the town, avoiding the marketing cost for their customers and vendors.

Times of India has a huge network & resource in India, wonder what Timesdeal is waiting for.

Advertising @ Ryanair

Ryanair spend as little as possible on advertising. It is done in-house. O'Leary himself oversees much of the promotion of Ryanair. They use simple adverts that tell passengers that Ryanair has low fares. Ryanair employs controversy to promote its business. For example in 2009, the company reasoned that passengers would be charged £1 to use the toilets on board. O'Leary reasoned that passengers could use the terminals at either the destination or arrival airport, would speed things up. It was reasoned that this is what passengers wanted. O'Leary also argued that larger passengers should be charged more since they took up more room - again it was reasoned that majority of passengers want this to happen.

Ryanair has been a fun little jokster. Take into account that they have a history of pulling April Fools jokes in the past. There was this prank of Selling porn to on-boards, then their was one with providing moon flights

Ryanair launches moon flights , click here for more details.

After you click another message appears: GOTCHA, Happy April Fools Day, we’ve no moon flights yet, but we’ve millions of FREE earth flights! Click here to book your free flight.

Then there was “first class seating” April Fools prank, which goes as follows

The Irish discount airline Ryanair today announced plans to introduce a First Class section on all of its pan-Europeanflights. Aircraft conversion is scheduled to begin after the busy summer travel season and is expected to be completed in time for the Christmas travel rush.
Ryanair's new premium product will provide travelers with a whole list of unprecedented travel comforts at no additional charge. Travelers will enjoy the following amenities:

Use of Check In Desk
Free Hand Luggage (15lbs)
Free Checked Bag (35lbs)
Boarding Pass
Use of Jetbridge (where available)
Guaranteed Seating
A generous 30" pitch
Reading Light
Window Shade
Overhead Luggage Bin
Free Water
Access to the Newly Introduced Inflight Refreshment Center
Valet Luggage Delivery via Baggage Carousels
Free "Ryanair First" Sticker

Overall Ryanair has been viral in terms of advertising, first you get media outlets to report on the story, creating buzz and free advertising. Then, after it is announced it was a joke, there is another round of free advertising, saying it wasn’t true and how silly Ryanair is being.

5 Star Or No Star

Ramesh & Suresh, the Duo of Cadbury's ad, in their first appearance meet at a shop after a long time and every time they have a bite of 5 star their memory resets. The ad was a Hit; Duo got an identity which was kind of a brand for cadbury's 5 star.

This could have continued like a strip of ads with new innovative ideas on Ramesh & Suresh, but the new marketing campaign which simply focuses on the change in packaging and leaving aside any value addition to the product or any other reason for consumers to reconnect(re-look) makes it negative buzz demolishing campaign. To put icing on the blunder the ad makes it worse and leaves no scope for any person on screen named Ramesh & Suresh.

Mentos "Luv ka The End"

Sounds like Mentos ka The End, after watching the ad I couldn't connect the Luv ka The End funda with its spontaneity and wittiness which mentos has always projected. I came to know after a few searches that it is yet another product going for product placement through films after Kelloggs- Chalo Dilli and Navratana- Dum maro dum, both of them didn't make a lot of sense to me in terms of its connection with the product. Although Mountain Dew - Zindagi na milegi Dobara(farahan aktar doing sky diving after saying- "dar ke aage jeet hai") was somewhere on the lines of movie's takeaways and Mountain Dew's tagline.

Mentos an established brand. Don't need to push so hard, Just yet another creative idea would have done a lot of business for it. This will pulverize the brand and will give a different image which will definitely demolish its positioning.

Coffee or Starbuck mobile!!

Starbuck has truly earned the mobile marketer. Mobile's role in giving legs to social media, print, television, radio, direct mail, catalogs, insert media and the internet is what makes it a standout medium.

Mobile social networking through games(which lets you win real world starbuck reward points), played against friends, in iphone and ipod; SMS dialogue with consumers at MTV movie awards; Happy hour promotion through social media channels has been part of its strategy.

The most important one has been the Starbuck mobile card, which came after a survey from customers who wanted to make things convenient, easy and fast. Card holders could pay the bills without bothering about the queue and transaction time. Such innovative ideas keep the competitors on their toes.

Apart from competitors who strive for better innovation, it keeps customers engaged in new things, it gives brand an edge over others, it opens space for new possibilities, it provides platform for brand to experiment.

Brands need more than just Fans!!

David Parfect: It is crucial for brands to have a valuable proposition for consumers in order to turn friends or fans into brand advocates.

Well said and so true.

Amul('s) Stamina

Amul , a Symbol of quality, a superb business model which started out as a co-operative movement has pushed itself strongly in an Indian economy. Morally empowering the women and farmers to collect milk from their cows and pass it on to them for a price. A very good example of supply chain management is going to relaunch its product Stamina, which was not a success in 2006.

Re-launch, yes you read it right. Stamina, a whey based drink, made from whey protein which is a liquid remain after the milk is curdled and strained. Although the product has stamina increasing properties but Amul needs to spread the word clearly.

Yes it is true, most people when asked about sports drink imagine only Red Bull, Cloud 9, Coke's Burn etc - in short Energy drinks. So Amul has to create first its own audience as it is totally a different segment. Energy drinks have caffeine which can cause dehydration during physical activity. This one has protein which increases the stamina.

Amul has a few obstacles. First is the not successful Stamina 2006. Amul needs to change that impression first. Second comes as competitors, not as the same segment competitors but since it is a sport drink people will compare it with different energy drinks. So it needs to build a different segment and be the best in it. The time taken to build with bring more competitors in the same segment which will be its upcoming third hurdle.

On the better side, Amul has its brand name, the most trusted one. This is the drink which will not be restricted to sport centric segment. It can make easier for mothers, how to give their kids protein rich diet. Health and proteinx freak gym riders will be ready to include it in their diet. Mid -40's, 50's, 60's... and aged are often recommended by doctors for protein in their diet especially when it comes to stamina.

Its not that easy as it looks. Amul will have to play a real guju(cunning) game here. It should really focus on the segmentation of the product and also on how to bring this product as part of a routine diet as this one has the potential. A campaign which can bring in everyones attention and roll the wheels for stamina.

Cadbury's : Glass and a Half Full

Latest campaign launched in UK. Just Wondering how different the approach Cadbury have everywhere. India Cadbury is targeting it as a sweet or desserts, UK Cadbury doesn't have the tiniest sign for the same.

Deals! Deals! Deals! LivingSocial to Groupon

LivingSocial has gone a step ahead in the deals world with its hyper local(penetrating into tier 2 cities with deals) idea. Indeed a good idea. Hope it has done its homework in terms of number of people having access to deals , people giving positive response in having it as part of their spendings, Vendors ready to join hands and most importantly its own ROI.

Why not?? Vendors will get better marketing and ROI, compared to what they get from local advertisement spendings to establish their business. People in Tier 2 or 3 cities are more cost centric and would definitely love it, in fact this will be encouraged more than what it is in tier 1 cities.Only the ROI will be less for livingsocial as compared to Tier 1 cities given the number of vouchers sold are same in the time period. As these cities have less expensive stuff to offer.Only thing that will matter is access to the deals. Given a good access, this thing is going to Rock & Roll.