A Fortnightly feature from Indicus Analytics

Young and Upwardly Mobile

The heterogeneity that characterizes the modern Indian consumer has created a maze that marketers would like to unravel in order to target their products and services precisely. In this fortnightly series, Indicus Analytics present the various facets of urban consumers, across geographies and socio-economic groups

The young household in the urban SEC B segment total a little less than one million, and most of these are small in size. In this segment, the chief wage earner is predominantly less than 34 years of age, and could be either single or married without children. The defining characteristic for the life stage of the chief wage earner in this segment is that children are yet to appear on the scene. In fact, though a little over half of the chief wage earners here are married, nearly 40% of the households comprise of just the chief wage earner living alone. This is, therefore, a segment of young earners, in the early years of their career. As chief wage earners in SEC B, they are either businessmen who have school education or skilled workers with a college degree. Though their qualifications span a diverse range, there is an equal number of graduates and those who have just completed school, each set making up close to 30% of these households.

Case Study

Perception

Mr. Murthy, the Plant Manager of Frame Manufacturing Company, is the chairperson of the ad hoc committee for space utilization. The committee is made up of various departmental heads of the company. The General Manager of the company has given Murthy the responsibility for seeing whether the various office, operations and warehouse facilities of the company are being optimally utilized. The company is beset by rising costs and the need for more space. However, before Okaying an expensive addition to the plant, the General Manager wants to be sure that the currently available space is being utilized properly.

Business News

• Phone banking: new security rule delayed
• Tata Steel, Nippon to sign JV this month
• No duty on power equipment import

Phone banking: new security rule delayed

The Reserve Bank of India (RBI) has given banks one more month to put in place an extra layer of security--a onetime user password--for credit card transactions over the phone.

Banks will now be required to comply with the new guidelines by 1 February, after which customers will need an additional password for telephonic credit card payments.

Under RBI guidelines, banks were to decline any telephonic banking transactions if customers do not have the onetime password for such services with effect from 1 January. However, some banks expressed an inability to comply with this directive within the stipulated time and sought more time to put in place systems required for this, a senior official at a leading private sector bank said.

Tata Steel, Nippon to sign JV this month

Tata Steel Ltd plans to sign an agreement with Japan based Nippon Steel Corp. by this month end to set up a `2,400 crore steel plant for producing auto grade steel.

The proposed joint venture (JV) facility is expected to commence operation in two years at Tata Steel's existing unit in Jamshedpur. “The JV with Nippon will be signed by January and we expect to start production from this facility by early 2013”, Tata Steel managing director H.M. Nerurkar said.

The facility's initial capacity will be 600,000 million tonnes per year, Nerurkar said.

Tata Steel Ltd plans to sign an agreement with Japanbased Nippon Steel Corp. by this monthend to set up a `2,400 crore steel plant for producing autograde steel.

The proposed joint venture (JV) facility is expected to commence operation in two years at Tata Steel's existing unit in Jamshedpur. “The JV with Nippon will be signed by January and we expect to start production from this facility by early 2013,“ Tata Steel managing director H.M. Nerurkar said.

The facility's initial capacity will be 600,000 million tonnes per year, Nerurkar said.

No duty on power equipment import

The Union government is not going to impose duty on capital goods import of power equipment for mega power projects during the current Plan period, a senior government official has said.

“The finance ministry has decided not to impose duty on power equipment imports for mega power projects during the current Plan period”, revenue secretary Sunil Mitra said.

Mitra added that a committee of secretaries had been set up to look into the issue of the difficulty in maintaining duty free imports of capital goods for mega power projects as Chinese imports were hurting the domestic industry.

Thought of the day

"If you pick the right people and give them the opportunity to spread their wings—and put compensation as a carrier behind it—you almost don’t have to manage them."                                                                                                                                                     
                                                                                                                                        - Jack Welch

Marketing Glossary

Caption

A caption can be an advertisement's headline or the text accompanying an illustration or photograph.

Car Card

An advertising poster placed on buses, subways, etc.

Card Rate

Media rates published by a broadcast station or print publication on a "rate card." Typically the highest rate charged by an advertising vehicle.

Corporate Personality

RATAN TATA

Fix a goal and keep an unwavering focus on it all the time….

Definitely you will reach on the top….!!!!

Ratan Tata is presently the Chairman of Tata Sons, the holding company of the Tata Group. Ratan Naval Tata is also the Chairman of the major Tata companies such as Tata Steel, Tata Motors, Tata Power, Tata Consultancy Services, Tata Tea, Tata Chemicals, Indian Hotels and Tata Teleservices. He has taken Tata Group to new heights and under his leadership Group's revenues have grown manifold.

Ratan Tata was born on

FOREIGN DIRECT INVESTMENT IN FINANCIALMARKET

Following the globalization trend, the financial sector seems to have drastically increased their foreign direct investments in recent decades. Nonetheless, it is evident and well documented that financial firms are far more passive in global diversification than non-financial firms. In terms of value, Berger, DeYoung, Genay, and Udell (2000) document that, even though both the domestic and cross-border transactions have increased rapidly, the gap between domestic and foreign M&A in financial sectors has actually widened over the period 1990-1998. Domestic M&A values have been consistently over 25 times higher than those of international M&As in financial industries (their data source is Securities Data Company). Also, Focarelli and Pozzolo (2001) note that the cross-border M&A deals among banks are only about half of those among non-financial firms in the 1990s. The phenomenon is especially puzzling. There appears to be plenty of motives for banks to extend their presence abroad. For instance, Saunders (2000) identifies favorable factors for globalization specific to U.S. banks: the use of the dollar as an international medium of exchange, capital flows to offshore branches and subsidiaries of U.S. banks caused by political risk concerns, the U.S. domestic banking activity restrictions, and improvements in technology and communications. This paper intends to investigate the reasons for such inertia. The conventional FDI framework may shed some light on this issue. One answer may lie on the nature of the banking business in which ownership advantage is relatively modest and internalization is not critical, compared to its manufacturing counterpart, as well as their differences in financial aspects.

Case Study

Leadership Style

Mr. Surendra Soni has recently joined as the Managing Director of an automobile company, which at present is incurring heavy losses. He has been entrusted with the formidable task of rejuvenating the company. He faces many challenges to achieve this task, such as controlling costs, improving quality, increasing the productivity and boosting the morale of the employees.

Mr. Soni, in his previous company—also an automobile company, as the Deputy Managing Director, had proved to be a proficient manager and an effective leader who had successfully inspired his employees to increase the productivity. He was commended for his maximum concern for both people and production and also for bringing about integration between the needs of the employees and of the company.

Business News

·         Air India Express to shift HQ to Kerala

·         Ralls acquire Metahelx Life

·         Board to fast-track hotel project

Air India Express to shift HQ to Kerala

The headquarters of low fare subsidiary of national flag carrier Air India--Air India Charters Ltd (AICL)--will be shifted to Kochi in Kerala.

However, the engineering wing of the company will operate from Thiruvananthapuram, a company statement said on Thursday.

AICL, which operates Air India Express, is currently headquartered in Mumbai.

Air India Express primarily serves the market in West Asia and South East Asia with a fleet of 21 Boeing 737800 aircraft.

Rallis acquire Metahelx Life

Rallis India Ltd, a subsidiary of Tata Chemicals Ltd, on Thursday said it has completed the acquisition of a seeds research firm Metahelix Life Sciences Pvt. Ltd for an all cash deal of `100 crore.

It managed to successfully finish all the formalities required for acquisition of a majority stake of 53.5% in the Bangalore based Metahelix Life, Rallis India informed the Bombay Stock Exchange in a regulatory statement.

Consequently, Rallis has become the holding company of Metahelix, it said.

On 9 December, Rallis India had announced picking up a majority stake in Metahelix Life. 

Board to fast-track hotel project

In order to fast-track clearances to all hotel projects in the country, the Cabinet has approved the creation of a Hospitality Development and Promotion Board (HDPB). The board will be a single window for every project.

It will review and monitor all projects after holding discussions with ministries or departments concerned on a regular basis. However, HDPB will not supersede statutory clearances given by other agencies. The secretary (tourism) will be the chairman of the board at the central level while the chief secretary of every state will head the respective state boards.

Insurance Glossary

Collision Insurance - Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.

Comprehensive Insurance - Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.