Marketing Glossary

Packaging

The activities of designing and producing the container or wrapper for a product

Penetration pricing

Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share

Penetration strategy

A marketing strategy based on low prices and extensive advertising to increase a product's market share. For penetration strategy to be effective the market will have to be large enough for the seller to be able to sustain low profit margins.

Personal selling

Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always
ultimately end with an attempt to "close the sale

Finance News

StanChart IDRs up 5% as Sebi allows conversion

Indian depository receipts (IDRs) of Standard Chartered were up more than 5 percent after the Securities and Exchange Board of India (Sebi) allowed partial conversion of IDRs into underlying shares.The capital market regulator’s move is aimed at improving liquidity in the instrument by making more attractive for investors.

“To retain the domestic liquidity, it is decided to allow partial fungibility of IDRs (ie redemption/conversion of IDRs into underlying equity shares) in a financial year to the extent of 25 percent of the IDRs originally issued,” a Business Standard report said quoting Sebi circular.

IDRs are depository receipts denominated in rupees. Shares underlying the IDRs are deposited with the custodian, who holds the shares on behalf of the depository, according to the report.

Though IDRs were introduced a few years back, Standard Chartered is the only foreign company to have listed IDRs here.

The Sebi move follows a proposal in the 2012-13 budget to allow two-way fungibility of IDRs, subject to a ceiling. The proposal was aimed at increasing the participation of foreign companies in the domestic capital market.



HR Article

The Educated Training Consumer

Why Is Training Undervalued?

Training and development activities can increase the capabilities and abilities of most organizations. Virtually every recent management leaders (eg. Deming, Crosby, Senge), have stressed the importance of learning as a primary tool for organizational success. That said, training as a whole, is not consistently valued by managers or staff. Even when managers support training through what they say, when the time comes to allocate resources for training, it is often the new photocopier that wins out.

Staff can also be ambivalent. We've noticed a shift in the perceptions of employees regarding training. Ten years ago, training was often regarded as a pleasant break from work, a chance to learn a few things and meet others. Now overworked staff are more hesitant to even attend. Being away from the workplace for a day means that somehow a day's work must be made up.

Since we work in the training delivery sector, you might expect us to attribute the undervaluing of training to neanderthal managers, prehistoric like organizations, or burned out employees. In fact, we think the explanation must lie with the profession itself. Perhaps training is undervalued because it often doesn't provide value! If that is so, then the responsibility must lie squarely with training practitioners. We are going to look at some aspects of the training profession so that you can become a more educated training consumer.

The Problems With Training

In our years in the training profession we have made the following observations:

1. Trainers are often more interested in selling a program than helping you and your staff improve performance or organization effectiveness.

2. Trainers generally move into training from other jobs. Few people choose training as a primary career choice. Hence they are unlikely to have undergone rigorous training in psychology, learning, interpersonal relationships, etc. They are less likely to have formal training in the content they will be teaching.

3. The training profession is dominated by a culture that includes the notion that a trainer does not need to have advanced knowledge about what s/he is teaching.

Thought for the Day

Marketing Glossary

Combination brand

 A combination brand name brings together a family brand name and an individual brand name. The idea here is to provide some association for the product with a strong family brand name but maintaining some distinctiveness so that customers know what they are getting

Competitive advantage

A competitive advantage is a clear performance differential over the competition on factors that are important to customers

Competitor benchmarking
Competitor benchmarking compares customer satisfaction with the products, services and relationships of the business with those of key competitors

Consumer buyers

Consumer buyers are those who purchase items for their personal consumption

Consumer durables

Consumer durables have low volume but high unit value. Consumer durables are often further divided into White goods (e.g. fridgefreezers; cookers; dishwashers; microwaves) and Brown goods (e.g. DVD players; games consoles; personal computers)

HR Article

What's Training Good For Anyway?

There are good reasons to mandate training and development in your organization, and there are bad reasons for mandating training.  There are ALSO good reasons for NOT training, in some circumstances, and bad reasons to refuse.  Knowing what training can and cannot accomplish enables you to make the right decisions at the right time, ensuring that your limited training dollars are used effectively.

The Chaotic Work World

If our work worlds were stable, and un-changing,  we might not need to worry too much about training.  We might still do it to provide employee development but it would be less critical to our organization's success.
It ain't so.  All you need to do is look around at your own organization, and what you are likely to see is significant changes that have occurred during the last year.  You may have lived through down-sizing, re-structuring, changed mandates, increased workloads, flattening of management structure, and a host of other changes.  It is not likely that these changes will cease in the future, and we may be looking at changed political imperatives that will result in movement towards Special Operating Agencies, and making government more entrepreneurial.

You know all this.  Change has accelerated to the point where some organizations are in chaos, and most are at least staggered.  What all this means is that as our work worlds change, new skills, knowledge and concepts are needed to achieve our corporate goals.  And, our personal goals.  Just to stay even, and just to keep our sanity.

Since change is occurring at such a rapid rate, while we may have taken our jobs at a time when we were fully qualified, we may now have gaps in our knowledge.  At a management level, the skills needed to manage a flat organization, a Total Quality Management organization, or a Special Operating Agency are different than those we have.  At an employee level, it is no different.  Technology changes, or changes in the way organizations are managed, or even increased workloads change the actual JOBS in an organization, and change them in such away that new skills and abilities are needed so that new expectations can be met.

What Training Can Do

Training CAN accomplish many things.  It can help people learn the new skills that are required to meet new expectations, both formal and informal.  For example, a support staff person may have been hired originally for his/her ability to type, to answer the phone and file.  But now, with increased workloads, we want that person to be able to do much more...perhaps to solve client problems, to use desktop publishing processes, to handle more of the day-to-day issues, so we can use our time more effectively.  Training can help people accept the challenge of their evolving jobs.

Thought for the Day

"I believe in God, only I spell it Nature."

That's what Oneness is about. And to quote John Muir: "Climb the mountains and get their good tidings. Nature's peace will flow into you as sunshine flows into trees. The winds will blow their own freshness into you, and the storms their energy, while cares will drop off like autumn leaves." And Albert Einstein: "Look deep into nature, and then you will understand everything better."

Marketing Glossary

Extinction pricing

Extinction pricing has the overall objective of eliminating competition, and involves setting very low prices in the short term in order to ‘undercut’ competition, or alternatively repel potential new entrants.

Family brand name

A family brand name is used for all products. By building customer trust and loyalty to the family brand name, all products that use the brand can benefit.

Family life cycle

The stages of family life based on demographic data that are useful in defining the markets for certain goods and services. Each group has its own specific and distinguishable needs and interests.

Fast-moving consumer goods
Fast-moving consumer goods are those that sell in high volumes, with low unit value, and have fast consumer repurchase. Good examples include ready meals, baked beans, newspapers etc

Focus group

A small group of sample customers who are brought together into a group discussion to measure their response to a marketing stimulus such as a new brand or product

HR Article

ROLE OF THE FACILITATOR

Most people associate the word "facilitator"with the training environment.  Often, that person at the front of the room leading a training sessions, is  referred to as the course facilitator. While it is true that some seminar  leaders do "facilitate", the facilitation role is often important in other areas.  For example, the chairperson at a meeting often takes on the responsibility  for facilitating the meeting, rather than "running it". The government  employee involved in mediation of disputes between other parties is also a  facilitator. Human resources staff members often facilitate discussions in  various contexts. And staff that work with groups of stakeholders and  members of the public may be well advised to take on a facilitating role rather than a directing one.

For those of you who already are involved in facilitating, or those of you  that may do so in the future, we are going to look at what the facilitation  role entails.

Basic Definition

A facilitator is an individual who's job is to help to manage a process of  information exchange. While an  expert's" role is to offer advice,  particularly about the content of a discussion, the facilitator's role is to help  with HOW the discussion is proceeding. In short, the facilitator's responsibility is to address the journey, rather than  the destination.

When Facilitation is Appropriate

A facilitation approach is appropriate when the organization is concerned  not only with the decision that is made, but also with the way the decision  is made. For example, an organization may be moving away from an  autocratic style of management to a participatory one. So, to encourage  staff to embrace more involvement, the manager may choose to act as a  facilitator rather than an expert or the final arbiter for the decision. In this  situation longer term process goals become as important as getting a good  decision.

As another example, let's envision a government employee who's task is to  communicate with members of the public/interest groups regarding  legislation and regulation. Since one purpose of this communication is to  reduce resistance to legislation and regulations, the employee can choose a  more facilitative, consultative role, rather than being a simple "bearer of  information". In this case, the facilitation role is more likely to encourage  others to be more cooperative.

Thought for the day

Education … has produced a vast population able to read but unable to distinguish what is worth reading.
- G. M. Trevelyan British historian

Marketing Glossary

Normal goods

Normal goods have a positive income elasticity of demand so as income rise more is demand at each price level

Objectives

Measurable aims of a business set for a given period (e.g. marketing objectives for the next year)
Occasion segmentation

A basis of segmenting a market based on occasions when buyers get the idea to make a purchase, actually buy, or use a purchased item.

Opportunities

Opportunities are any feature of the external environment which creates conditions that a business can exploit to its advantage. If the business is successful in exploiting opportunities, then it will be better
placed to achieve its objectives.

HR Article

The Value of Values Clarification

- JUST STOP THAT NAVEL GAZING

We walked in, individually, and in pairs.  Like many other branches, we had interpersonal conflicts, and many of us felt that even in with our small size, we weren't all pulling in the same direction.  It just seemed we were not on the same page of the book.

The manager, also a consultant, decided that what we needed was to share our values and beliefs, so that a) we could better understand each other (and thus, reduce conflict), and b) we could develop a "held-in-common" set of values and beliefs about what we did.  After a brief introduction, the manager asked us to complete a values clarification survey, that listed a number of things on it, like honesty, teamwork, friendship.  We were asked to arrange these in some priority order...I think there were other parts to it, but can't recall.  After we had completed the thing, we went 'round the table discussing what we valued.  One person had listed love as his primary value, another teamwork, and yet, another independence.  It was a jolly time.

We trusted the facilitator enough so that we didn't question the process or the purpose, but you could see the somewhat perplexed looks on the faces of the people there.  We had real problems, and here we were talking about things so abstract that they had no relevance to our everyday life.  Nobody voiced this concern.

By the end of the day, we had discovered that we were all different.  Armed with this information, we could all now explain why someone else acted like a jerk.  The next day there was some brief discussion between employees.  "What was that all about?" one person said.  But, after a day or two, we simply forgot all about it.

Sound familiar? It's becoming more common.  A consultant or manager will get it in their head that problems can be addressed through a discussion of values and beliefs of the people that work there.  Some sort of retreat is set up, and a facilitator helps people to clarify what they hold dear.  The basic premise of the exercise is that a common set of organizational values and beliefs can be created that will guide individual and collective behaviour.  The reality is that almost nothing happens.

On the surface of it, clarifying values, beliefs and principles seems to be an effective way of getting people on the same wavelength in terms of how the organization is to conduct itself. Unfortunately, this process is based on some erroneous ideas about the role that values, beliefs and principles play in influencing human behaviour, both on an individual and collective basis.

Thought for the day

"The barrier between success is not something which exists in the real world: it is composed purely and simply of doubts about ability."

If you believe you can do something, then you almost certainly can, provided you are open to learning. Simple as that.

Marketing Glossary

Multi-segment strategy

A strategy by which a business directs its marketing efforts towards two or more market segments by developing a marketing mix for each

New product

A new product can be defined as a good, service or idea that is “perceived” by some potential customers as new. It may have been available for some time, but many potential customers have not yet adopted the product nor decided to become a regular user of the product.

Niche marketing

Niche marketing refers to the exploitation of comparatively small market segments by businesses that decide to concentrate their efforts. Niche segments exist in nearly all markets – for example the self-build sports car segment of the motor industry

Non-personal communication

Methods of promotion that do not generate any personal feedback. Advertising is the best example of this

Business News

Walmart to apply US laws to Indian operations; wants anti-bribery undertaking from store owners

Walmart is demanding anti-bribery undertakings from landlords of its Indian stores along with rights to inspect their books, the latest blowback from its global anti-bribery campaign that has put an unflattering spotlight on its fledgling India operations.

The US supermarket group's India venture, BhartiBSE 0.03 % Walmart, now at the centre of a raucous political debate on the entry of foreign firms into the supermarkets sector, wants landlords of all its stores in India, including Easyday stores operated by partner Bharti Enterprises, to give undertakings saying they are not party to and will not indulge in corrupt practices, effectively bringing them under the ambit of US anti-bribery laws.

Landlords are not only expected to certify that they have not paid any bribes while building the premises, but also give undertakings that give Bharti Walmart powers to periodically check their books and other documents, a person with direct knowledge of the situation told ET.

A second source confirmed such an exercise was underway, and noted that KPMG had been tasked with securing undertakings from landlords. A landlord of an Easyday store in the NCR said a Bharti Walmart executive had called him earlier this week to inform him about an anti-bribery agreement that landlords must sign as part of the Foreign Corruption Practices Act, or FCPA, a 1977 US law that bars American firms and individuals from bribing government officials in any foreign country wherever they are operating or working in.

Bharti Walmart has engaged KPMG to spearhead its anti-corruption campaign in India, and the consulting firm has undertaken programmes to sensitise employees about FCPA. It is also tasked with certifying vendors that are fit to do business with the retailer.

Asked about the undertakings from landlords, Bharti Walmart said it was implementing a "number of specific, concrete actions to strengthen our compliance programme in India".

"We take compliance with FCPA very seriously," a Bharti Walmart spokesperson said in an emailed reply to a list of questions from ET.

HR Article

Understanding Nonverbal Communication

Communication is more than just an exchange of dialogue.  Sometimes, even the most powerful messages are unsaid or nonverbal.  Nonverbal communication reminds you of what is inside another person’s mind.  Emotions and thoughts are usually conveyed without the use of words or voice, but the best communicators are sensitive to its messages.  Nonverbal communication includes facial expression, gestures, body language, and the use of space.

A study over at UCLA indicated that around 93 percent of communication effectiveness is determined by nonverbal cues.  Another study shows that the impact of a singing performance was determined seven percent on the words used, 38 percent by voice quality, and 55 percent by nonverbal communication.
Nonverbal behavior also reflects a person’s true emotions and thoughts.  A speaker may try to say one thing, but his body language and the tiniest of facial expressions tells otherwise.

However, multicultural differences in body language and gestures are usually open to misinterpretation.  Greeks would nod their heads when they mean “no,” which we would instantly misunderstand for a “yes.”  Brazilians, meanwhile, would find the OK sign vulgar.  With the thumb and index finger forming a circle and the three other fingers are extended, for them it means “you’re an a-hole.”

With these in mind, nonverbal communication can be a vital tool in screening job candidates.  If you want to determine what is really on each interviewee’s mind, you need to pay close attention to the following.

Article

12-12-12: Is today a good day for making a new beginning in life?

Mankind's belief in dates where the day, month and year all harmonise would have been put to the acid test if the ill-fated Titanic had rammed into an iceberg on December 12, 1912.

The collision happened on April 14, 1912, so the belief that synchronised, sequentially-numbered dates are lucky has endured. Jessica Ferri's blog notes that David's Bridal (one of the largest bridal retailers in the US) has estimated that approximately 7,500 brides will tie the knot today, a whopping 1,446% increase from December 12, 2011.

And AFP estimates that Singapore will see 540 couples getting married today, eight times the number married on the same day last year, and Hong Kong four times as many. Marry Abroad UK is reported as saying that there has been a 15% increase in inquiries about 12-12-12 even though the date falls outside the traditional wedding season of May to September. American numerologist Daniel Hardt has noted, "The date reduces to 11 (12 + 12 + 2012), which connotes a high degree of spiritual awareness and also brings sensitivity and romance to the marriage, but there is a danger of one or both parties taking things too seriously."

The only other hitch is that 12-12-12 falls on a Wednesday and not a weekend. In India, the media has already informed us that quite a number of expecting parents are keen on having their babies delivered today. The exact number will be known in a few days. With competition for everything getting so intense, being born on the right day could give the tiny tot the winning edge, or so parents would like to believe.

Who knows, a future prime minister, the next Sachin Tendulkar or India's second Nobel laureate for literature may be born today when Rajinikanth's fans will be celebrating his 62nd birthday!

Thought for the day

Marketing Glossary

Market

A market is the demand for a particular product or service, often measured by sales during a specified period.

Market challenger

A business in a market that is fighting hard to increase its market share

Market concentration

Market concentration is the proportion of market value that is owned by the leading brands or products/companies in the market. Where the market leaders own a large part of the overall market, the market is said to be highly concentrated. By contrast, where the market leader has a relatively small market share and there are many other competitors, a market is said to be “fragmented”

Market development

The process of growing sales by offering existing products (or new versions of them) to new customer groups (as opposed to simply attempting to increase the company’s share of current markets).

HR Article

Estimating Time Accurately

Establishing Realistic Project Timelines

Have you ever been on a project where the deadline was way too tight?Chances are that tempers were frayed, sponsors were unhappy, and team members were working ridiculous hours. Chances are, too, that this happened because someone underestimated the amount of work needed to complete the project.

People often underestimate the amount of time needed to implement projects, particularly when they're not familiar with the work that needs to be done. Be realistic... For instance, they may not take into account unexpected events or urgent high priority work; and they may fail to allow for the full complexity of the job. Clearly, this is likely to have serious negative consequences further down the line.

This is why it's important to estimate time accurately, if your project is to be successful. In this article, we look at a process for making good time estimates, and we explore some of the estimating methods that you can use.

Why Estimate Time Accurately?

Accurate time estimation is a crucial skill in project management. Without it, you won't know how long your project will take, and you won't be able to get commitment from the people who need to sign it off.

Even more importantly for your career, sponsors often judge whether a project has succeeded or failed depending on whether it has been delivered on time and on budget. To have a chance of being successful as a project manager, you need to be able to negotiate sensible budgets and achievable deadlines.

The World's Most Powerful People

There are nearly 7.1 billion people on the planet. These are the 71 that matter the most.

What do the president of the United States, the Pope and the founder of Facebook all have in common? They’re all featured on Forbes’ 2012 ranking of the World’s Most Powerful People –an annual look at the heads of state, financiers, philanthropists and entrepreneurs who truly run the world.

To compile the list, we considered hundreds of candidates from various walks of life all around the globe, and measured their power along four dimensions. First, we asked whether the candidate has power over lots of people. Pope Benedict XVI, ranked #5 on our list, is the spiritual leader of more than a billion Catholics, or about 1/6th of the world’s population. Michael Duke (#17), CEO of Wal-Mart Stores, employs two million people.

Next we assessed the financial resources controlled by each person. Are they relatively large compared to their peers? For heads of state we used GDP, while for CEOs, we looked at measures like their company’s assets and revenues. When candidates have a high personal net worth –like the world’s richest man, Carlos Slim Helu (#11)– we also took that into consideration. In certain instances, like Saudi King Abdullah bin Abdul Aziz al Saud (#7), we considered other valuable resources at the candidate’s disposal –like 20% of the world’s known oil reserves.

Then we determined if the candidate is powerful in multiple spheres. There are only 71 slots on our list – one for every 100 million people on the planet – so being powerful in just one area is often not enough. Our picks project their influence in myriad ways: New York Mayor Michael Bloomberg (#16) has power because he’s a politician, because he’s a billionaire, because he’s a media magnate, and because he’s a major philanthropist.

Lastly, we made sure that the candidates actively used their power. Russian autocrat Vladimir Putin (#3) scored points because he so frequently shows his strength — like when he jails protestors.

To calculate the final rankings, ten senior Forbes editors ranked all of our candidates in each of these four dimensions of power, and those individual rankings were averaged into a composite score.

U.S. President Barack Obama emerged, unanimously, as the world’s most powerful person, for the second year running. Obama was the decisive winner of the 2012 U.S. presidential election, and now he gets four more years to push his agenda.The President faces major challenges, including an unresolved budget crisis, stubbornly high unemployment and renewed unrest in the Middle East. But Obama remains the unquestioned commander in chief of the world’s greatest military, and head of its sole economic and cultural superpower.

The second most powerful person in the world also happens to be the most powerful woman: Angela Merkel, the chancellor of Germany, jumps up from #4 last year to take the runner-up spot on the list. Merkel is the backbone of the 27-member European Union and carries the fate of the Euro on her shoulders; she’s shown her power through a hard-line austerity solution for  the European debt crisis.

Facebook CEO Mark Zuckerberg (#25) is one of the youngest persons on the list, at age 29; he dropped significantly from last year’s top-ten ranking after Facebook’s much-anticipated IPO turned out to be a flop. Brazilian president Dilma Rousseff (#18) is one of the list’s biggest gainers: At the midpoint of her first term, Rousseff’s emphasis on entrepreneurship has prompted a slew of new startups and energized Brazilian youths.

Apple CEO  Tim Cook (#35) made a big upward move, too: A year after he succeeded iconic founder Steve Jobs, the company is the most valuable in the world. Apple stock hit an all-time high in September, reaching above $700 a share.

New members of the list include LinkedIn co-founder Reid Hoffman (#71), the world’s most powerful venture capitalist and the most-connected man in Silicon Valley. Elon Musk (#66), the entrepreneur behind PayPal and Tesla Motors, is the most powerful man in space: His company SpaceX is a leader in the private space industry, and with that business set to boom, Musk stands to make out like a 19th-century railway tycoon.

A number of prominent people fell off the entirely. Last year’s #2, Chinese President Hu Jintao, is on his way out of office; he’s already handed over some of his duties, and will surrender the rest early next year. We  removed U.S. Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton from the list for the same reasons: They’re both not expected to return to their powerful posts for Obama’s second term.
Any ranking of the world’s most powerful people is going to be subjective, so we don’t pretend ours is definitive. It’s meant to be the beginning of a conversation, not the final word. So tell us what you think: Is ex-president Bill Clinton (#50) really more powerful than the current Prime Minister of Russia (#61)? Does someone like the chief of the Internal Federation of Association Football (#69) belong on the list at all? Who did we miss? What did we get wrong? Join the conversation by commenting below.

Business News

'Acquisition is not a direct answer to growth'
Mergers and acquisitions have to be strategic: S D Shibulal

S.D. Shibulal, Infosys CEO Photo: Rachit Goswami

S.D. Shibulal, the last of the founders to lead Infosys, is under pressure to boost growth at the software giant. In an exclusive interview with Govindraj Ethiraj on the show Bottomline, airing on Headlines Today, the Infosys CEO spoke on issues ranging from the need for strategic acquisitions to his new vision, Infosys 3.0.

I notice that you have 1,51,151 employees at last count. How many of them are in Bangalore and how many outside?

Actually, our Bangalore population must be around 20,000 plus. But, please remember, we have 10 centres in India. Some of the centres are larger than Bangalore, like Hyderabad, Pune, Chennai are pretty large centres. Our onsite-offshore ratio is about 25%-27%. That means 25%-27 % of our population will be outside India.

Is this of the total population or of the bench?

You can exclude the bench for this computation but the onsite-offshore ratio is about 25% even if you include the bench. So you'd have around 30,000 people outside India. That will include people in the US, Europe, Australia, China, Japan. We also have large centres outside India. We have a centre in China with 3,500 people. We have a 1,000 people capacity in Philippines. We have a centre in Poland. We have a centre in Czech Republic. So we are truly global. We have people from various nationalities working for us.

You have been asked this many times why you do not want to acquire companies and you have said that the reason you cannot do that is because you cannot keep adding people and growing organically in the services business.

 Now can you translate that for us what does this mean and what does every additional employee bring to the table?

I think you are asking two questions and I need to segregate them. Number one: I really believe that our service business can really scale up… Because I have been asked this question when we were 10,000 people, 50,000 people, 100,000 people. I look at the Indian Railways, they have a million people. So please remember that Infosys is a platform we have built, a platform which is absolutely scalable. You come into the organisation you are operating on a scalable platform. In 1999, we were 99% in Bangalore, one centre…

That's when most of the founders used to talk about the infrastructure problems of Bangalore…
But today Bangalore is 19%. That means we have scaled up across the country. Now, we are scaling up into other countries. China is 3,500 people. So from the scalable perspective I don't see any limit with the platform. We can easily go to 250 people, 25,000 people, 400,000 people. That is one aspect. But the question is if that is the right thing to do. Will the talent supply support it? That is the question that needs to be asked. That is why we say we need to create a balanced portfolio of business which will actually make sure that our dependence on people actually comes down over a period of time.

So to what extent is growth of Infosys, when predicated to growth in North America or let us say the world, dependent on the Indian economy itself?

Again, two parts. From a talent supply point of view, India is a predominant piece. They are the largest supply of talent for us. Last year we recruited 45,000 people. This year we will recruit 35,000 people. India is going to produce a million plus engineers going forward. Now even if I assume that 40% of them are MNC ready, that is 400,000 people, so we have enough talent supply in India to support. That is one part of the business. The other part is the Indian business itself. Our revenue from India today is one per cent but, of course, we have entered India late. We have been present in the Indian market only over the last couple of years, other than Finacle. We have been in the Indian market with Finacle as a leader for many, many years. Other than Finacle, that business is starting to do very well. For instance, in India we announced the India Post deal, a Rs 800 crore banking deal with the postal service. It is a real transformational deal. So we are looking for deals of that nature in India and we are seeing very good traction but at this point in time India gives us approximately one per cent of our revenue.

There is volatility... I am not seeing any material change in the environment

Thought for the day

"What if you gave someone a gift, and they neglected to thank you for it--would you be likely to give them another? Life is the same way. In order to attract more of the blessings that life has to offer, you must truly appreciate what you already have."

It's impossible to feel grateful and in the same moment depressed, angry or afraid. If you concentrate on finding whatever is good in every situation, your heart will soon be filled with love and understanding, a feeling that nurtures the soul. As Meister Eckhardt says, "If the only prayer you ever say in your entire life is thank you, it will be enough."

Business News

Fiscal deficit can be reined in at 5.2% of GDP only if subsidies are cut: Kelkar Report

The much awaited Kelkar Committee report was made public on Friday. The panel in its report has said that fiscal deficit can be reined in at 5.2% of GDP for the current financial year - but only if subsidies are cut.

Importantly, the report has also suggested that diesel prices should be brought to market rates by FY14.

The Committee in its report has pointed out that the excise and service tax rates should be cut to 8% over the next few years. The final view on the recommendations of the committee will be taken by the government after receiving feedback from stake holders.

While policymakers say that the committee's recommendations are fairly reasonable, they need to be approved by the finance ministry. While speaking to Bloomberg TV India, Arvind Mayaram and Economic Affairs Secretary said that the poor need to be protected with subsidies and they will be protected.

Stating that the recommendations are rational, Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, said that the government has to take hard measures to bring the deficit down. Keeping in mind the committee’s observations on subsidies, Ahluwalia pointed out that the 12th five year plan had also suggested cutting down subsidies.

Kelkar Committee Report

- FY13 budget deficit may reach 6.1% of GDP
- Budget gap to be higher due to policy inaction
- Budget gap to have serious macroeconomic impact
- India needs immediate steps to cut fiscal deficit
- Estimates subsidies expenditure at 2.6% of GDP
- High deficit, inflation point to deeper crisis
- RBI liquidity infusion can be inflationary
- Subsidies spending pose greater fiscal risk
- Need to eliminate half of diesel subsidy next year
- Can limit deficit at 5.2% if subsidies cut

Aricle

Boon Or Bane ?

Man proposes, God disposes. People whom we trust, mostly deceive us and people with whom we have no expectations, often come to our rescue in odd times. Incidents about which we feel so bad and take them as misfortune, in many cases turn out to be ‘blessing in disguise’ & vice versa. At many occasions in our life, when we look back in retrospection, we get confused as to that particular incident was a boon for us on a bane.

This is a true incident that happened with my friend in Mumbai. He had to attend an important meeting and he reached the station. Knowing the condition in Mumbai, somewhere in the midst of that maddening crowd trying to get into the local train, he lost his spectacles. No sooner he got down to pick them up, the unrelenting crowd pushed him back and he was left behind at the station. He couldn’t board the train. He struggled hard to get in but just couldn’t. He was too irritated as the next train was pretty late. It was with great difficulty that he had fixed up that appointment, but now, he was helpless. He was blaming the day for the mishap. In a short while, he came to know that there was a bomb explosion in the same train which he had missed and many people had died in the same. He was absolutely dumb-founded when he heard that. Just a moment ago, he was grumbling and complaining and now he was shell-shocked! He couldn’t utter a single word ! This was the day he marked as the beginning of a new life.

Missing the train - a boon or a bane ?

World’s great orator Dale Carnegie wanted to be a football player. But due to his height, he couldn’t get the desired opportunities and so he dropped the idea of football totally. He would always complain to God about his shortcoming. He regarded height as an inadequacy but later his own fame and reputation as a author & speaker reached tremendous heights!!

THE INABILITY TO PLAY FOOTBALL -boon or bane ?

Once a king went hunting with his minister and other people. Suddenly a pointed, sharp thistle cut off his finger. His minister consoled him by saying that may be God willed it so and it was a part of His design, so it could even be a good omen. This was no consolation for the king. Highly annoyed, he ordered the minister to be put behind bars.

Thought for the day

The principal goal of education is to create men who are capable of doing new things, not simply of repeating what other generations have done.

- Jean Piaget, Swiss cognitive psychologist

Marketing Glossary

Normal goods

Normal goods have a positive income elasticity of demand so as income rise more is demand at each price level

Objectives

Measurable aims of a business set for a given period (e.g. marketing objectives for the next year)

Occasion segmentation

A basis of segmenting a market based on occasions when buyers get the idea to make a purchase, actually buy, or use a purchased item.

Opportunities

Opportunities are any feature of the external environment which creates conditions that a business can exploit to its advantage. If the business is successful in exploiting opportunities, then it will be better
placed to achieve its objectives.

Own-label brand

Own-label brands are created and owned by businesses that operate in the distribution channel – often referred to as “distributors”. Often these distributors are retailers, but not exclusively. Sometimes the retailer’s entire product range will be own-label. However, more often, the distributor will mix own-label and manufacturers brands

Company Profile

NTPC Limited

A Maharatna Company

NTPC Limited(formerly known as National Thermal Power Corporation Limited), India's largest power company, was set up in 1975 to accelerate power development in India. It is emerging as an ‘Integrated Power Major’, with a significant presence in the entire value chain of power generation business.

NTPC ranked 337th in the ‘2012, Forbes Global 2000’ ranking of the World’s biggest companies. With a current generating capacity of 39,174 MW,  NTPC plans to become a 128,000 MW company by 2032.

Overview  

India’s largest power company, NTPC was set up in 1975 to accelerate power development in India. NTPC is emerging as a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has already ventured into consultancy, power trading, ash utilisation and coal mining. NTPC ranked 337th in the ‘2012, Forbes Global 2000’ ranking of the World’s biggest companies. NTPC became a Maharatna company in May, 2010, one of the only four companies to be awarded this status.

The total installed capacity of the company is 39,174 MW (including JVs) with 16 coal based and 7 gas based stations, located across the country. In addition under JVs, 7 stations are coal based & another station uses naptha/LNG as fuel.  The company has set a target to have an installed power generating capacity of 1,28,000 MW by the year 2032. The capacity will have a diversified fuel mix comprising 56% coal, 16% Gas, 11% Nuclear and 17% Renewable Energy Sources(RES) including hydro. By 2032, non fossil fuel based generation capacity shall make up nearly 28% of NTPC’s portfolio.

HR Article

THE EMERGENCE OF BALANCED SCORE CARD

Prior to 1980s many academics and consultants became concerned that too much emphasis was being put on financial and accounting measures of performance. Management accounting systems had been perfected to produce detailed cost breakdowns and extensive variance reports. It was realized that these systems were not useful for managing a business under the circumstances resulted out of the emergence of global competitive environment during 1980s.

Product quality, delivery schedules, reliability, after-sales service, customer satisfaction became key competitive variables. But none of these were measured by the traditional performance measurement systems.

During 1980s much greater emphasis was given to incorporating non-financial performance measures as mentioned above, into the management reporting system as they provided feedback on variables that are required to compete successfully in a global economic environment. But a proliferation of performance measures emerged and has resulted I confusion when some of the measured conflicted with each other and it was possible to enhance one measure at the expensing another.

The need to link financial and non-financial measures of performance and identifying key performance measures led to the emergence of “Balanced Score Card” approach developed by Norton and Kaplan (1992) in the U.S. The Balanced score card is defined as “an approach to the provision of information to management to assist strategic policy formulation and achievement. It emphasized the need to provide the user with a set of information, which addresses all relevant areas of performance in an objective and unbiased fashion”.

Business News

Indian economy to rebound in the next 12 months, says ex-ADB chief economist

Indian economy will rebound in the next 12 to 18 months, said Dr Satish Chandra Jha, former chief economist of Asian Development Bank who was also a member of Prime Minister's Economic Advisory Council during UPA-I.

Indian economy will rebound in the next 12 to 18 months, said Dr Satish Chandra Jha, former chief economist of Asian Development Bank who was also a member of Prime Minister's Economic Advisory Council during UPA-I.

"That Prime Minister has woken up is a good sign for the country's economy. Indian economy should grow at 6.5 percent next fiscal," Jha told ET. Jha's report to Congress president Sonia Gandhi in 2003 shocked many within the Congress as he argued that India could grow at whopping 10 to 12 percent of the GDP in just a few years' time. Jha, then a member of the Congress' economic cell chaired by Manmohan Singh, was only marginally wrong as India registered upto 9 percent of the GDP growth.

During the last few months, Jha has differed with many global analysts arguing that India has increasingly become a dangerous place to invest. In a Standard & Poor's-organized seminar in Manila in May this year, Jha said India's economic problems would be a short-term phenomenon.

"I am a strong believer of the India story. But we must remember a few things. No country in the world has moved forward without FDI, with heavy doses of subsidies, and without fiscal consolidation. Those who are shouting slogans against FDI in retail have not understood how much it may benefit Indian farmers and aspiring middle class consumers," Jha said.

Jha however said he would not agree with Vijay Kelkar's recent assessment that India might go back to the 1991 era if the subsidy burden continued. "The economy has not reached that stage. There is no need to panic," Jha said.

On the recent diesel price hike, Jha said Indian government was rather late in taking the tough calls. "It's a political problem. Every government in the past has tried to bypass the issue of subsidy. But when 75% of our fuel requirement is imported, we must wake up before it becomes very late," he said.

Indian economy will rebound in the next 12 to 18 months, said Dr Satish Chandra Jha, former chief economist of Asian Development Bank who was also a member of Prime Minister's Economic Advisory Council during UPA-I.

Thought for the day

"The barrier between success is not something which exists in the real world: it is composed purely and simply of doubts about ability."

If you believe you can do something, then you almost certainly can, provided you are open to learning. Simple as that.

Marketing Glossary

Media analysis

Media analysis is a term used in advertising. It refers to an investigation into the relative effectiveness and the relative costs of using the various advertising media in an advertising campaign

Micro forecasting

Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future

Mission

A mission describes the organisation’s basic function in society, in terms of the products and services it produces for its customers.

Mission statement

 A mission statement is a formal description of the mission of a business.

Multi-channel marketing

When a business distributes its products through more than one distribution channel, this is known as multi-channel marketing. Retail chains, for example Argos, besides using the shops to distribute their products, quite often also use catalogue selling. The main purpose of multi-channel marketing is to more effectively reach different customer segments

Business News

Inflation in Eurozone eases, unemployment at new highs

Eurozone inflation eased as expected in October thanks to slower growth of energy prices, but unemployment rose to new record highs in September.

 Euro zone inflation eased as expected in October thanks to slower growth of energy prices, but unemployment rose to new record highs in September, data from the European statistics office Eurostat showed on Wednesday.

Eurostat estimated consumer inflation in the 17 countries sharing the euro was 2.5 per cent year-on-year, down from 2.6 per cent in September, though still above the European Central Bank target of below, but close to 2 per cent.

Upward pressure came mainly from more expensive energy, the prices of which increased 7.8 per cent year-on-year in October, but more slowly than in September, when they were up 9.1 per cent year-on-year.

The second biggest inflation contributor was food, which was up 3.2 per cent year-on-year, up from 2.9 per cent the month before.

Economists expect the European Central Bank to cut interest rates once more before the end of the year from the current record low of 0.75 per cent, to support the slowing economy which is likely to have sank into a recession in the third quarter.

Inflation pressures in the euro zone are low because unemployment is a record levels, rising to 11.6 per cent of the workforce in September - the highest level for the 17 countries that now make up the euro zone since 1995.

Eurostat said 18.49 million people were without jobs in the euro area, up by 146,000 from the month before.

The highest unemployment rate was in Spain, where the number of jobless rose to 25.8 per cent of the workforce in September from 25.5 per cent the month before. Among young Spaniards, under 25 years, unemployment rose to a staggering 54.2 per cent from 53.8 per cent.

Austria had the lowest unemployment rate of 4.4 per cent, followed closely by the euro zone's biggest economy, Germany, with 5.4 per cent.

HR Article

ARE YOU A MENTOR

‘Human Resources’- the magic words are murmured by everyone in one context or the other. All businesses around the world are continuously looking for better ways to recruit smart brains. Much has been said and written about the factors behind the HR factors. Many companies are considering some innovative ways to impart skills, train, re-train and motivate employees as they are the key issues. Why then in a country like India, recruitment melas are looked at as prestigious events while turnovers are more for every quarter in companies engaged in IT /ITES, Construction, Engineering, Manufacturing and the like.

‘The right man for the right job’ may be the HR mantra. On the lines of this saying, candidates are interviewed; the good or better among the brain pool is offered the letter. All is good for the first few months and slowly from somewhere a pungent smell of dissatisfaction spreads across the corporate floor. Where do the innings start? The functioning style of management, the way projects are planned, in the impressive art of delegation of work, the manner in which constructive utility of manpower is exercised and the sense of job satisfaction blended with job security are the dependable factors for a lasting cordial relationship with the employer. The distaste initially starts with absenteeism, staying away from work without permission and the final renunciation of the bondage with one’s company result in an unhappy note. The recruitment team that relaxed for a while suddenly gets into feverish action and the team members stop not till the goal is achieved. On an average, an employee with rich experience in India or abroad also shows low enthusiasm and the heat is on the down beat.

As India is emerging successful in the global arena, it has been an improvement on the economical status of an individual – billing wise or growth wise. Many strategies were evolved over a period of 8 – 10 years but it has been not easy to analyze the psychological changes and attitude of an employee on the long run. We could call this run to span a few months as is the trend. A serious look has to be given to leverage the human capital and support them more effectively. Bucket with a hole or filling the overhead tank with taps open is not a healthy trend. This effect will drastically lead to saturation level of enthusiasm in Recruiters as well. How good is our Indian HR system? It is high time that the delivery model needs a revamp.

Company Profile

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians.

HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

The Company has over 16,000 employees and has an annual turnover of around Rs. 21,736 crores (financial year 2011 - 2012). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €46.5 billion in 2011. Unilever has about 52% shareholding in HUL.

Our vision

Unilever products touch the lives of over 2 billion people every day – whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A clear direction

The four pillars of our vision set out the long term direction for the company – where we want to go and how we are going to get there:

• We work to create a better future every day
• We help people feel good, look good and get more out of life with brands and services that are good for them and good for others.
• We will inspire people to take small everyday actions that can add up to a big difference for the world.
• We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact.

We've always believed in the power of our brands to improve the quality of people’s lives and in doing the right thing. As our business grows, so do our responsibilities. We recognise that global challenges such as climate change concern us all. Considering the wider impact of our actions is embedded in our values and is a fundamental part of who we are.

Business News

Federal Trade Commission to look into Google smartphone patents

The FTC issued subpoenas in June seeking information from Google and smartphone rivals including Apple and Microsoft, and it questioned representatives of the companies as recently as a few weeks ago.

For more than a year, the Federal Trade Commission has been conducting a broad antitrust investigation into the way Google runs its Internet search and search advertising businesses. But in recent months it has added another investigation into Google's competitive behavior.

This time, the focus is on phones - specifically, on patents that apply to lucrative smartphone technology and the conduct of Google's Motorola Mobility subsidiary.

The FTC issued subpoenas in June seeking information from Google and smartphone rivals including Apple and Microsoft, and it questioned representatives of the companies as recently as a few weeks ago, said people briefed on the investigation.

Google owns patents covering communications and data-handling technologies that are crucial for the basic operation of smartphones and tablets - what are known as standard-essential patents. The investigators are scrutinizing the company's policies around licensing these patents and suing other companies that it claims are infringing them, said these people, who spoke on the condition that they not be identified.

Google's Motorola unit pledged to technology standards organizations that it would license the patents to others on "fair and reasonable" terms to stimulate the growth of the industry, benefiting all companies.

Bloomberg reported in June that the FTC had opened an investigation in this area. Since then, the agency inquiry has progressed, and the use of standard-essential patents has been an issue in several court cases and before Congress.

Google said in a statement on Tuesday: "We take our commitments to license on fair, reasonable and nondiscriminatory terms very seriously, and we are happy to answer any questions."

Standard-essential patents, antitrust experts say, are the modern, high-tech equivalent of certain vital railway lines in the 19th century, like the Eads rail terminal and bridge across the Mississippi in St. Louis, the subject of a historic antitrust decision in 1912.

Essential patents, like rail bridges, can become anti-competitive bottlenecks if the corporate owner withholds access to the technology or demands unreasonably high payment.

In Senate testimony in July, Edith Ramirez, an FTC commissioner, speaking of the potential abuse of standard-essential patents, said, "Holdup and the threat of holdup can deter innovation by increasing costs and uncertainty for other industry participants, including other patent holders."

Google is by no means the only smartphone company with standard-essential patents. But when it agreed to buy Motorola Mobility for $12.5 billion, Google picked up 17,000 patents, including a large trove of important patents relating to wireless devices that Motorola had committed to license.

The Google move was partly to defend itself and the smartphone makers that use its Android software, after rivals had already loaded up on patents.

A few months earlier, Apple and Microsoft had led a six-company consortium that outbid Google and paid $4.5 billion for 6,000 patents sold by Nortel Networks, a bankrupt telecommunications company.
In the smartphone patent wars, Apple has relied on its patents on design and the way a person interacts with a mobile device, which are not standard-essential patents.

HR Article

Compensation trends in India 

India’s transition to a market driven economy began in 1991 with the introduction of liberalization (pro-market economic reforms). Prior to 1991, the Government was (and still is) the biggest employer and job creator, accounting for over 85% of post-matriculation (High School) jobs. Pay was largely determined by high-level agreements between employee unions and the Government and was largely guaranteed in nature. A similar situation was prevalent in the private sector, where Government pay scales were often used as a benchmark in fixing and revising pay. Compensation packages were low on cash and high on fringe benefits such as accommodation, cars, and subsidized loans. Variable pay was largely restricted to top and senior management in few private sector enterprises. Grading systems were largely industry-wide and salary progression was purely determined by length of service.

Current trends

Productivity gains (4% in 2003-04), fast growth in real wages (40% over the last 5 years), a booming but extremely competitive economy (GDP growth of 6%), simplification of tax rules and emergence of knowledge-based industries such as Information Technology & Outsourcing Services, Healthcare etc are key factors that have influenced compensation in India post liberalization. Compensation is now characterized by a Total Cost of Employment approach, a rapid movement to flexible benefits, and increasing levels of variable pay (variable pay now forms about 7% - 35% of fixed pay). Grade structures have become organization specific and salary progression is driven by market forces and individual performance. Average salary increases over 2003-04 ranged from 5% - 20%. The average increase was 11%. While most organizations benchmark compensation nationally within a select group of competitors, a few organizations are beginning to benchmark themselves internationally at senior management levels. India has the fastest compensation increase rate in the Asian region at 11.7% and it also has the highest labour turnover in the region.

 Different compensation plans - how do they affect your financial results

With the introduction of FRS 102 Share-based Payment, companies are required to recognize the expenses of employee equity compensation schemes with effect from 1 January 2005. This article highlights the major implications to the financial results of the three most common equity compensation schemes, namely share option scheme, performance shares scheme, and Share Appreciation Rights (SAR, also known as phantom share scheme).

Key Characteristics

The key characteristics of each scheme are as follows:

Share option scheme

• The company grants employees the right to subscribe for new shares in the company at a fixed price.
• Employees are required to pay the company the exercise price in consideration for the shares.
• Employees can generally only exercise the right after remaining in service with the company for a period of time and/or after meeting certain performance targets.
• The right would generally expire after a period of 5 to 10 years from the date of the grant.

Performance share scheme

• The company grants employees shares in the company.
• Employees will generally receive the shares, at no cost, after remaining in service with the company for a period of time and/or after meeting certain performance targets.

Share Appreciation Rights

• Similar to the share option scheme except that:

Upon exercise of the option, the employees do not pay the exercise price to the company nor receive the shares; instead, they are paid the difference between the exercise price and the market price of the shares in cash.

While all three schemes require the use of fair values of the share options or shares for the recognition of the compensation expense over the vesting period, the impact on the company’s financial position and financial results is different.

Impact on net assets
The three schemes have a different effect on the net asset values of companies. Under FRS 102, share option scheme and performance share scheme are considered “equity-settled”. This means that in recognizing an expense for the compensation costs, a corresponding increase in shareholders’ equity is recognized. Hence, the net asset position of the company is unchanged. In contrast, obligations under SAR schemes are considered liabilities of the company, as there would be a cash settlement when the right is exercised. The recognition of the compensation cost under SAR results in a decrease in the net asset of the company.

Thought for the day

I believe that it is better to learn from the diverse people around us than to try in vain to emulate them, better to be a teacher than a role model. As strong as my legs are, it is my mind that has made me a champion.

- Michael Johnson

Marketing Glossary

Market segment

A customer group within the market that has special characteristics which are significant to marketing strategy

Market segmentation

Segmentation involves subdividing markets, channels or customers into groups with different needs, to deliver tailored propositions which meet these needs as precisely as possible.

Market share

Market share can be defined as the percentage of all sales within a market that is held by one brand / product or company.

Market targeting

Market targeting is the process of evaluating each market segment and selecting the most attractive segments to enter with a particular product or product line.

Business News

Economic reforms positive for India's credit worthiness: Fitch 

The recent slew of measures announced by the government, including FDI in multi-brand retail and diesel price hike, will support India's medium to long-term growth prospects, said Andrew Colquhoun, Head of Asia Pacific Sovereign Ratings at Fitch.  The measures will be a positive factor from a sovereign credit worthiness perspective for India, Colquhoun told ET Now. Fitch Ratings will keep an eye on the implementation of the fiscal consolidation roadmap laid down by the Kelkar Committee report.

Colquhoun feels that the Reserve Bank of India's (RBI) ability to ease the monetary policy will be constrained by elevated inflation levels. Supply side factors will also keep RBI's hands tied, he said.

India's credit rating has partly been kept at a 'BBB-' owing to high fiscal deficit levels, he said. "India has higher fiscal deficit levels compared to other developing Asian countries," Colquhoun added.

Asked about the recent cut in GDP growth forecasts by Fitch to 6% levels for India, Colquhoun said that it does not impact the country's sovereign credit profile. However, signs of persistent weakness in growth will be kept an eye on.

Ratings agencies Standard & Poor's and Fitch have put India's sovereign credit rating on the watch citing poor economic fundamentals, high fiscal and current account deficits and lack of action from the government.

A downgrade would take India's rating to below investment grade, which may force many investors to sell Indian securities or stop incremental investments, depressing capital flows and raising cost of borrowing for the local companies.

India's fiscal deficit, which is the difference between revenue and expenditure stood at 5.8% of GDP in 2011-12, way above 4.6% of GDP provided in the budget.

However, some experts believe that the recent big bang changes may have helped ward off the downgrade threat to a large extent or at least push it back.