Sunday, December 31, 2006

What SEZs could be...

Found this interview of Marc Faber (of Gloom, Boom and Doom fame) in ET a couple of days back. I liked his answer to a question on Indian real estate developers.

We have (in Malaysia and Thailand) industrial land development companies. They buy big chunks of land, put in water and electricity and build factories. If you are Sony and you want to produce out of Thailand, you could buy land. But it is a nightmare till you put in water and electricity . You go to these industrial land development companies . They will rent or sell you a factory and provide the whole infrastructure for a management fee. That is a good business model.

Today in India everybody is rushing to put up IT parks, Technology parks but really there arent too many people doing this work. These were done earlier by governments by setting up industrial estates (One which I visited in Butibori - Nagpur was particularly impressive - its better than E-city Bangalore too). Nowadays there is very little policy attention towards creation of industrial infrastructure. But one town I have seen recently comes to mind - Sriperumbudur, TN - which seems to be doing all the right things.

If the SEZs that are being set up can make it easier for manufacturing companies to set up factories here, it will give that boost to the manufacturing industry that is so desperately needed here, Singur notwithstanding.

Friday, December 29, 2006

Blog Blah!

This is title of a piece labelled "Devils Advocate" in the TOI today. I am not a big fan of Web 2.0 myself but even by my standards, this is puke. The article starts in this way and goes downward soon after.

...seems to overlook the fact that blogging and online collaboration are just ways to give mindless drivel a free hand.

Replace blogging and online collaboration with Times of India and its supplements and the same thing can be said about the whole newspaper. And then you read this sentence, it rings true even more.

The whole thing is a virtual wasteland assisting human beings in their quest to think less.

Atleast blogs dont waste paper and and trees. What makes the author think that the crap that got published thanks to the ignorance oversight of an editor is good? Half of the articles in the supplement of the newspaper starts with "ABC in USA did crap, what does PQR in Bangalore think...". I am sure my intelligence increases with this and I think more!

Holier than thou?

So, if you are reading this, I would recommend going through some of these blogs for starters.
The Acorn - Indian foreign policy etc.
Atanu Dey on Indias development
each of which offers a better perspective than any MSM. Once you read them, perhaps you can go through their blogrolls too.

And yes, I do agree that there is a lot of crap in the blogosphere as Nilu will tell you. (Search puke and you will know) and if this particular piece was a blog, it would find its rightful piece there (and then again, if it is lower than puke, it may not)

Thursday, December 28, 2006

How to write about India?

Or how to be successful/popular/sought after as a journalist/writer/author especially abroad. Here are the rule(s) of thumb when writing about India for a Western audience...

Heres how you go about it.

Your piece has to start well. Therefore you first create, with good vocabulary, a nice paragraph on the social inequities in India. Keywords to be used are caste, poverty, illiteracy. Statistics like 80% of India lives on farms or 50% of India is illiterate or 70% of India does not use soap can be very handy. Other than percentages, use population figures. 4,32, 1235 houses do not have more than 12 volts of electricity for 3 days of the week would make a great sentence. Include a few names like Vidharba, Madurai if you want greater impact other than the usual outskirts of Bangalore or Hyderabad or slums of Mumbai. If you want to become particularly rabid at this juncture mention child marriage. A comparison with Pakistan and Bangladesh at this juncture would make great reading especially from a literacy rates standpoint or the great strides those two nations have made. If you have to mention China, mention that they are simply a great nation or that they will overtake India in the next 3 minutes. Never, not even once, create an impression that overall India is moving in the right direction.

The second paragraph should be about India's growth in the last few years. Don't forget to add a sentence in the end of this para to denounce the growth. Keep this para as short as possible. Keywords are myth, haves vs have nots, elitist bias. So, a sentence in this paragraph should read, even though India's IT and BPO sector has grown, farmers commit suicides. Do not, repeat, do not make a connection that reforms have never really happened in the farm sector and that it is because reforms have not reached them that this happens. Insist, by repeated assertion, that it is IT and its success at the expense of the farm sector that causes this to happen.

In the third para or thereabouts, compare to death. Example: Compare the life of an educated professional with a gardener and say that the gardener earns about 1/10th of what the professional earns. The other good comparison is the number of hutments outside the balcony of your hotel room or the number of beggars in trains. Wonder aloud why reforms have not reached beggars travelling on trains. In the same trend close your eyes to the number of people cellphones have reached, also close your eyes to how individuals are pulling themselves out of poverty using these very things.

Over the next few paras, whine and whine. Now that you already know how to write, just continue in the same vein. For every one sentence of India's growth, three sentences have to denounce it in the strongest terms. Mention two murders which took place recently in fairly graphic detail.

Somewhere just before the end, mention that India's progress has not benefited anybody. Do not talk about people who have gotten out of poverty thanks to this progress. Try to ignore gardeners who maintain lawns in the IT campuses, also ignore cab drivers who are cab owners today. Preferably avoid talking to maids and security guards who would not have had a job if it were not for this level of growth. Try not to talk to people who are working hard so that their children are educated and their next generation gets out of poverty. Also, if you have to mention that the BPO sector attracts fresh graduates, mention that these jobs are bad for their gall bladder at the very least. Ignore the fact that for many graduates, a BPO job is a godsend without which they would be working for peanuts at best or standing at the end of a long line at the employment exchange. Ignore the fact that for many of them, the job is a stepping stone to many other things. Ignore the fact that BPOs treat them with dignity and pay them well. Ignore the fact that jobs are available for the asking in India at almost all levels. Cooks to caterers to security guards to courier boys to shop assistants to technology architects to structural engineers. Also never once, ask the question to the man on the street - has their life changed for the better over the last 10 years. (Believe me, the answer, except in some very dark corners or leftists, will be a resounding yes.)

Your last paragraph has to sound a warning to all those who read your article. Mention about how people and companies and the government has to take more responsibility for poverty and paint it with a broad brush of "private public partnership to make a significant impact".

And oh, the title of your article should be sufficiently apocalyptic. "Social inequality threatening India's Economic Stability" would make a great example.

BTW, India really is about contrasts. While not getting carried away by the growth and saying all is well here, let us also not go to the other extreme of saying that the reforms have done nothing and that all is wrong here. Neither will reforms take away inequity all of a sudden nor will inequity take away reforms. Both these arguments miss the wood for the trees (or whatever).

Thai and Malabar chips

Recently, I tasted a potato chip with Thai flavour and the chip was just great. These chips are available in India too, but outrageously priced. It set me thinking as to how many such flavours can be created in India given its range of cuisine.

Kurkure (of Frito-Lays/Pepsico) has tried to do just that, as has Lays chips. Both of them have quite a few flavours, but Kurkure has some more Indianised flavours (Red chilli chatka and some Hyderabadi flavour) and the newest one is something called "Mast Malabari" flavour. It tastes quite good, for those who dont mind a coconuty taste of Malabar cuisine.

And it looks like it will enter the US as well.

Monday, December 25, 2006

Cisco Globalization center, East

I got a whiff of this at Perspective: Here's what he (John Chambers) really says he's going to do:

1. India will be Cisco's Globalization Center East meaning all corporate and operational functions at the US HQ will be mirrored in India.
2. They'll pilot a high tech manufacturing facility outside Chennai and finally, and most intriguingly,
3. One fifth of Cisco's senior management will move to Bangalore.

I then trawled the web to find out more. Ciscos globalization centre east to be led by Wilm Elfrink. Excerpts:

"All of the company's primary business functions, including sales, business development, IBSG, finance, HR, marketing, engineering and customer support will all be represented in India, as well as in the US."

It is not a second headquarters, This is more akin to the major headquarters-like capability centers we maintain outside San Jose in the U.K., Hong Kong and the Research Triangle Park area in Raleigh, NC.

In the process, I discovered Bangalore Tigers - a Businessweek blog by Steve Hamm and of course the story behind Ciscos Globalization Center, East. Bangalore Tigers has this post on the same, here, but for some strange reason I couldn't find the article in Businessweeks own site.

While this is great news for Bangalore and for the tech Industry in India as whole, it is worth noting that Cisco with this step will perhaps be one of the first companies to have such an important office in India too. The Wipros and the Infosys being here obviously have their HQs here, but this is the first example of a high end center being established in India. This center will be management heavy - perhaps a first example of the recognition of an Indian management talent pool. In fact, I would not call this outsourcing at all.

These are but baby steps if Indias tech industry has to progress and move up the value chain (and they are - more on this some other time).

Zed list meme

The Zed list meme hit me from Perspective, so here goes. Whats the Z list meme? Find out here:

Shotgun Marketing Blog
Customers Rock!
Being Peter Kim
Presentation Zen - David!
Dmitry Linkov
aialone - JT !
John Wagner
Nick Rice
Design Sojourn - DT!
Frozen Puck
The Sartorialist
Small Surfaces
Africa Unchained
Bob Sutton
Readymade news

Ink Sprawl
Interim Thoughts
Round Peg
Write Now is Good
Rita's Drawing Board
Langemarks Cafe
Ranthambhore - The Tiger Project
Big Picture Advertising

Heres my list...
The Acorn - Indian foreign policy etc.
Atanu Dey on Indias development

Friday, December 22, 2006


For those who are in India, this name will be familiar. Over the last few weeks, they have been releasing full page ads in most national newspapers. Their USP is lipid profiles and other blood tests in a package that is slightly lower than what you would pay if you did all these tests separately. Of course, the chance that you would ever do all these tests simultaneously is miniscule, but this is smart marketing.

According to industry experts, the reason individual blood tests cost higher is because of the limited usage of the kits. One kit can be used for a set of tests, but when an individual comes in for a particular test, the kit has to be discarded. By offering all these tests for a package, Thyrocare is cutting its costs as well as making these tests available for a lower price.

The numbers given in the ad are numbers of marketing offices, not their collection centers. Afaik, they have one per big city (Bangalore has one in Domlur) and their lab is in Bombay. They fly out the samples to the lab, get it tested and courier the reports to your house. If you cannot make it to the collection center, they will pick up the blood from your house for a nominal extra charge. Smart model?

Also figured that Thyrocare is in the news for its tie up with Reliance, its lab...

Wednesday, December 20, 2006

EIU 60th anniversary

and they are celebrating this occasion with a report that appraises the crucial global developments which have taken place over the past sixty years, and then speculates on what lies in store for business and economies over the next 60 years.

Havent read it yet, but it should be worth a read!

Honda might make a small car here reports Hindu businessline.

I wish it were this.

Tuesday, December 19, 2006

Stars shine again

Hema Malini endorses Bank of Rajasthan, Karisma Kapoor endorses Khaitan fans - faded stars are appearing in the endorsement space. In an age when every brand has a celebrity, right from Boost to Malabar gold to Dabur to TMT bars, every star has a market - I hope that companies spend shareholders and their money wisely!

The theory often used in these kind of endorsements is some kind of time lag argument that goes, "Hema Malini is still popular in rural India". Without doubt about Hema Malini and her star potential (even today) and assuming that rural India is out of the Sholay time warp, the argument should not be around the fact that she is still popular in rural India, the question should be, whats the appeal that the celebrity brings to your brand? The point being choose your star carefully. Today, give or take a few, the divide between metropolis India and small town India is shrinking. So, whats cool in Chennai may not be cool in Bhopal, but Madurai, Trichy wont be too far. Certainly not as far as Amitabh Bachchan and Abhishek Bachchan. What needs to be factored in is the audience. So, Amitabh for a slightly mature target audience is a great idea, while he may not exactly be the best bet for Razr.

There is no single right answer here. John Abraham as a biker is great for Yamaha and we still dont know how much Yamaha is adding to its volume, but Sachins campaign for Victor did made a difference, while Hrithik for Karizma never did. And then again, if you want to stay out of hte clutter, there is space for non celebrity based endorsement too. KBC and KBC 2 were all Amitabhs, will Shah Rukh have the jadoo for KBC 3?

Related Links: Top celebrity endorsements in India; how they all stack up, Sports stars earn, Celebs ranking study.

Monday, December 18, 2006

Companies turn training schools

This is how to beat the proverbial labour shortage in India. I had mentioned previously about how the labour shortage is not really a shortage of people, but a shortage of companies willingness to train.

This piece in the TOI is about companies that are training people required for their profiles. Infosys, Wipro, TCS and the IT companies have been doing this for years, but now there are other sectors too, like E&Y. The TOI puts it as an irony, though I am not sure if it is an irony as much as it is about companies adapting themselves to a situation where people arent 'plug and play' in their jobs. To be honest, I am not sure if in any country for any position, people can be plug and play for any sector. There is always a certain element of training into any job. For specialised positions, it is imperative that the training is longer. Few education systems (and almost any other educational system, apart from technical institutes) are about jobs than about degrees - this is just a logical extension of the system.

Perhaps the next step will be for companies to set up their own academies in collaboration with others in the same sector. Why not? It will bring down the cost, provide a captive supply of employable people and have assurance to those who join that jobs will be available at the end of their course.

Sunday, December 17, 2006

Dheeraj and innovation...

"This packaging sucks." said Dheeraj even as he tried squeezing the frozen coconut oil from the plastic bottle.

The bottle wore the look of tissue paper after a wiping a bad cold.

"What happened?" asked Savita
"I will tell you about innovation. You see, this company very well knows that coconut oil freezes in winter, so they can surely use toothpaste type tubes for coconut oil? Yet, they use these containers. Wouldn't that be so much smarter. And here I am working for this stupid company coding my life to glory. My life is wasted."

"But wouldn't they have to cool coconut oil to put into the tubes? Because if it weren't, wouldn't it leak?

And then they would have to transport it too right, in cool containers?

"Wouldnt that push the cost by so much?"

"And also, here in Bangalore and then in Himachal, it would freeze and only in winters, what happens in summers and in places like Chennai?"

"They would need two packaging lines."

"Dont you think I have a point?"
"This is how innovation gets stifled in companies. All good ideas are trashed."

"I was just trying to think why nobody thought of it before and I think you have the answer."

Saturday, December 16, 2006

Retail and farmers

Here's an article in the Hindu Businessline on the effect of Reliance Fresh on farmers. The Indian vegetable, fruit and any farm trade is dotted with middlemen. The effect of these middlemen and their cuts has the effect of pushing the prices at the customer end and reducing the price at the supplier end.

Some months back when I had visited a wholesale market, I found that the price of Onion is 3 rupees a kilo (max) if you picked up a 100 kgs. If thats what you pay at the city end of the wholesale market, imagine what a farmer would have got. Perhaps a rupee? So, if you a farmer you would have to jump through hoops of middlemen and hamalis and agents to get your produce to the city - and there is no guarantee that you will get a good price.

The article says that ladyfinger used to be sold by farmers for 150 rupees for 20 kilos - thats about 7 rupees a kilo. The retail price varies from 12 to 20 rupees a kilo depending on quality and what does the farmer get? 7 rupees minus commission and other charges.

I have argued before (like many others - not including leftists and those who oppose progress) that opening up the farmer end for retail trade will result in benefits that will reach farmers. Ditto for contract farming. As Ravikiran says, we have a stupid romantic view of farming and those far removed from farming invent policies for farmers. The farmers that we have in our mind and textbooks don't exist. Farming is a business and has to be treated as such( and that includes taxing them too).

Retail ventures like Reliance will have a cascading effect on the rural and farm economy - not achieved by years of croses government largesse/subsidy of which 15 % reached the end beneficiary. Retail (and similar ventures like e-choupal) will ensure that all 10 rupees of a kilo of okra will reach the farmer without anybody pocketing it.

Thursday, December 14, 2006

Factories in the city

I read a piece yesterday about Century textiles finally shutting shop in Bombay and moving its operations to other areas. Theres a larger piece today on how textile mills are moving to Gujarat. Companies are continuing to move operations out of the city; Morarjee has moved out of Bombay to Nagpur as have dozens of others.

The textile mills of Bombay are more of a glorious past. The areas of Parel and central Mumbai were the home to these mills. Even today you can see chimneys, old 12 foot high walls. These mills were doing well until the textile strike of 1982 broke their back.

Bombay was a port city and because in the old days factories were constructed closer to ports, the central Bombay area began to house textile mills. Once textile mills happened, it acted as a magnet for other industries (including cars, pharma, chemicals and also fertilizers). A lot of land was reclaimed and factories were built. Over time the city grew to encompass them, so much so that Thane Belapur industrial belt - a chemical zone- was in fact stated to be "out of Bombay", but today the city has expanded into these areas as well. As the city grew, so did land prices and wages. So, pure economics suggests that they should move out to places where labour and land rates are lower and the high cost land put to better use. As we were once told at a briefing on how Piramal came to acquire the space that the Crossroads mall sits at - this space belonged to a pharma company that they had taken over (Roche?) and it was actually a factory - legend has it that they manufactured Crocin (or equivalent) there. Why should someone manufacture Crocin or textiles or cars or fertilizers (RCF is still there) in the middle of a city?

It is one thing to be nostalgic about it and it is another thing to view it pragmatically and say, well, obviously, there is no reason for factories to be in the city since they dont make money being there. Among other things, in the heart of a city (any city, why Bombay), it is difficult to get daily wage workers cheap and results in high cost of operations. Most industries have found it unviable to continue in a zone of high wages like Bombay and they have moved out. Then land prices are very high. As of today many textile mills and other mills have morphed into land holding companies, housing colonies, malls and bowling alleys. And they are minting money through their land in a way that they never did producing textiles.

1 lakh car

The dynamics of the 1 lakh car when it is launched, will be interesting. Whatever the level of sales, it wont be low. There will surely be takers for a 1 lakh car, whether that number is very high or not is the only question. (For the record, the Maruti 800 was the largest selling car until very recently when the Maruti Alto topped it with 5 lakh cars sold in 6 years).

Whether it beats that figure is for the long run. I would like the car to have, with its sales, a few cascading effects on the economy and country.

For one, I would like the 1 lakh car to displace the rickshaws out of the road, perhaps as taxis. The rickshaws are unsafe, inefficient, polluting and perhaps the biggest cause of urban congestion after small roads.

Two, I would like the sales (I am assuming it will be substantial) to spur governments to create better roads all over the country - much like more airlines are making the government think about better airports.

Three, there has always been doubts on why, we, in India pay a high amount for automobiles. Maybe the 1 lakh car will show the way for cheaper (and eventually alternate energy or super efficient vehicles). I am optimistic...

Wednesday, December 13, 2006

Small everything...

Our love for small size is well known - with sub 5 rupee sachets for shampoo, pickles, cough syrup, Frooti 2 rupee packets, 100 cc bikes (and 50 cc mopeds), 800 to 1000 cc cars, 200 ml soft drink bottles, 10 rupees cell phone re charge - the list can go on and on.

Now the 1 lakh (2500 USD) car will get added to the list. It does seem real now. Others are gearing to enter the market based on the impact it has on the market. Apart from the retail revolution, this I believe, is another big thing happening in India, rather waiting to happen in India. More thoughts on this shortly...

Japan fund for tourist sites

We, in India, are not too proud of our own heritage - certainly not all of us, which is why our tourist or heritage sites are frequently vandalised, maintained shabbily and generally left at the mercy of all and sundry. Which is why you can find neglect at Konark, shoddy service at all pilgrim centers or random neglect of our hill stations by indiscriminate building.

Well, Japan with its rich Buddhist heritage has stepped in to build tourist infrastructure to the Buddhist holy places in India (and there are many). It speaks volumes about Indias overall interest in conserving history. I just hope that these funds are spent wisely and do not find their way into politicians pockets.

Japan will help conserve Indias Buddhist heritage, will India conserve its own other heritage? Or will we wait with a begging bowl? Tourist infrastructure like other infrastructure is an investment that will pay back for itself, but our rulers have better things to do, like divide the country...

Tuesday, December 12, 2006

Health food taking off

I had written about this a while back, almost a year ago and it looks like the contours of it are shaping up. This piece in BS does a good analysis of the health food trend.

Last month ITC Foods launched Sachin’s Fit Kit, a new brand of energy bars, cookies and health biscuits, for which cricketer Sachin Tendulkar will extend his brand ambassador’s role to developing a range of healthy foods.

A few days later, the Ahmedabad-based Cadila Healthcare brought back butter-substitute Nutralite, which has just one-fourth the fat content of real butter.

Godrej Foods and Beverages plans to relaunch its soya drinks brand Sofit and PepsiCo India is quietly promoting its Quaker Oats.

With organic food making waves in India almost at the same time as organized retail, colas and fast food, perhaps we are lucky. We missed the junk food wave of the world, colas are not doing well in the Indian market and overall, the nation is becoming health conscious and perhaps at the right time.

Maruti Zen Estilo advertisement

I think this is the lyrics they use in the TV spot for the Maruti Zen Estilo, which I thought was a very nice one. Searched a lot, but couldnt find the storyboard or any mention of the ad online, but I found a video on you tube in which the song is sung.

Quite appropriate when referring to cars, boxes, little boxes!

Let me know it the ad appears online anytime!

Friday, December 08, 2006

Business Standard on retail, M&A

BS has two good pages to watch:

One on - Retail the next frontier

and a page and M&As in India

Good pages to track the goings on in these very hyperactive segment of Indian business.

Thursday, December 07, 2006

Jeans at 199

Read this report from the TOI today that Reliance retail has plans to sell Jeans at 199 rupees in its stores.

The company has asked Arvind Mills, the world's biggest denim manufacturer, to produce jeans that can be sold at that price. Sources in Arvind Mills said the company was working on it but declined to provide details.

Sriram Srinivasan, head of Reliance Retail's apparel business, said he could not comment on the matter. Other sources close to Reliance said Reliance does not expect to make money on the product, but intends to use it as a "loss leader". In other words, sell it at a loss to increase store traffic and sales of other items.

So, at this point the news article is not 100% verifiable, but my first thought was why jeans at 199? And my next thought was it is a smart move perhaps.

Indias retail revolution has not really reached the masses. Our malls are filled with showrooms for premium stuff. True, with the rentals that the stores have to pay, there is no way anybody (other than perhaps Big Bazaar) can make money selling mass market items. Ever seen Cambridge shirts (a big hit in Bombay some years back for their inexpensive readymades.)

My guess is, if one went by footfalls, a place like APMC (wholesale market - Bombay) or Chikpet (market for everything - Bangalore) would easily outscore any (or all) mall(s). There is a lot of value that value seekers can get in places like this.

The way for a hypermarket to make money is to get footfalls from all types of customers - not necessarily only high end customers. That may be a challenge in itself (and how they plan to overcome it will be interesting to see), but the thinking around a 199 rupee jeans is to attract those who may get dissuaded by a mall, thinking , "Everything here will be costly." - which is what my mom still says each time she says a mall. There are still a lot of people in India who rarely enter a mall or if they do, rarely buy anything because there is a lot of value available outside. Unless these people are "captured", it will be one long haul.

2nd Anniversary

The first one was here... What began as a tentative post on 7th December 2004 is a blog thats 2 years old now.

Well, it is chugging along merrily, as much as a part time blogger/writer can manage along with a day job. It has resulted in invites to blog @ Indianeconomy and Desicritics (where I have not contributed much), a piece published in JAM (courtesy Rashmi).

Heres a short retrospective. In the two years of existence, the post on Bangalores real estate has been a big hit with some people thinking I am an expert on it - no I am not. The others which have got a lot of hits are "The truth about jobs", "Of geeks and coders". The Carnival of the capitalists has also been hosted here, though I have not been contributing there of late. Some personal favourites are the posts busting the myth of Indias labour shortage, posts on the retail revolution in India, travel portals all over the place, Managing crowds and Mobile phone and micro entrepreneurs.

I hope to make something more out of it and write more regularly, especially my own pieces. The last few weeks have been as hectic as a "free for all" traffic intersection in Bangalore and things should ease out in the coming weeks.

Thanks for all the support and encouragement.

Monday, December 04, 2006

Wheres your product?

Be it shampoos, creams, oils, toothpaste, for the store owner, a sachet is a sachet and it will be displayed thus...

Saturday, December 02, 2006

Hero Honda launches a new bike!

that has a name that my grandfather knows...

Life in the two wheeler market get more and more tougher. Hero Honda is the only surviving member of those new fangled bikes which hit India sometime in the late 80s (1987 perhaps). We had a spate of new bikes. There was the Hero Honda CD 100,(and the unforgettable "Fill it, Shut it, Forget it"), TVS Suzuki AX100R, Bajaj Kawasaki (not sure what their model was), Escorts Yamaha RX 100 and one or two more. Hero Honda CD 100 was a great bike, frugal on petrol, easy on maintenance and is the worlds largest selling two wheeler ever, until its own Splendor beat it. Much water has flown under the bridge since then.

TVS and Suzuki have parted ways; TVS showed that it was world class with its hundred percent indigenous Fiero and its Victor and followed it up with the Apache. Suzuki has since made its entry into India on its own. TVS also builds a mean scooterette.

Bajaj, once known for its tilt and start scooters (yes) has morphed itself into the darling of the biking gang with its Pulsar and its variants. This company has redefined the biking segment with its machines.

Honda has entered India on its own with its automatic scooter Activa and Unicorn a bike that performs as good as its looks. Not sure where Kawasaki is in this whole picture. Yamaha with John "biker" Abraham has grown out of the glory of its RX100.

Hero Honda, the company is making money, it is still way ahead of its competitors in the entry level segment (100 cc), but it is getting beaten in the other segments and more importantly, does not show the zeal that TVS and Bajaj have in design and development of two wheelers or their indigenous capability. It is not that Hero Honda has not tried, it did launch the CBZ (a nice looking bike IMHO) and the Karizma (whoever suggested that name?), but they were duds in the market. CBZ was wiped out by the Pulsar and the Karizma sunk like a stone.

In response, Hero Honda launches, what, the CD 100 Deluxe in the entry level segment. Sigh! The Splendor still shines for the company- it was relaunched recently as the Super Splendor. The question is for how long will Hero Honda milk its CD 100 and Splendor.

This strategy reminds me of Hindustan Motors, Premier Automobiles, Mahindra and Mahindra in the 80s, when they built their horrible cars and jeeps. They said, they understood the rural market, entry level customers until their customers rejected their vehicles. M&M understood, Premier and Hindustan never did. M&M responded with a slew of launches, and of course, the Scorpio. Hero Honda will face a fate similar to Premier and Hindustan Motors until it does something soon - the answer is not the CD 100 Super Deluxe.

Update: Rajiv Bajaj of Bajaj auto, seems to share the view that 100 cc is surely out, here.
" The 100cc/four stroke bikes are as out dated now as the 150cc/two stroke scooters were in the 90s so there's no reason why they shouldn't share the same fate,” Mr Bajaj added."

Test your brain today

Pick a train, any train running between any two stations. Now locate it here; on the new time table for the Indian railways.

If you can do it without breaking into a sweat, try for Mensa.

Friday, December 01, 2006

Undercover Economist

Just finished reading The Undercover Economist and I was blown away by it.

If there is one book thats a must read on pricing strategies, price discrimination, it is this. So, how do you not fall into the trap?

Simple. As he says, just be more observant!