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Afternoon Despatch & Courier
Business Restructuring I
By A Business Reporter
n the life of every business entity there comes a time when you need to trim the sails according to the winds of change blowing across the global business environment. Business Restructuring entails a holistic change process that pervades all levels of the organization, both on the micro and macro levels across the board,” observed Chief Guest and Keynote Speaker, Justice BN Srikrishna, Retired Judge, Supreme Court of India, at the one day`Conference on Business Restructuring’, organized by the Indian Merchants’ Chamber (IMC), jointly with the Bombay Chamber of Commerce and Industry (BCCI), addressed byeminent speakers from top corporate and consulting firms in the midst of leading luminaries and executives from the business and corporate world. Addressing a jam-packed audience while sharing his views on Business Restructuring, Justice BN Srikrishna, in his frank, candid and humourous style, said, “Restructuring means keeping abreast and in line with the changes in business, government and regulatory laws, taking place in these dynamic times. A successful restructuring process
calls for restructuring measures in all areas of company activities like finance, property, production, sales, purchases, organization, information and personnel. The need of the hour for every business organization is to function like a well-oiled machine, which is alert and flexible to adapt to these changes. The ability to realign has become an integral part of every business philosophy. Post liberalization, the government has realized the importance of creating an environment that is conducive to the growth of the economy. However, the mere ad hoc methods or patch work, which our government is fond of doing, is not enough. A lot needs to be done.” Earlier welcoming the gathering Shailesh Vaidya, President, IMC, highlighted the need for Business Reorganization particularly in respect of familyowned enterprises in India, given the changing dynamics of businesses in India. Giving an overview of the changes on the economic scenario over the past two decades, he said, “After the opening up of the economy in 1992, India has become a part of the global village. Many MNCs have started businesses in India and numerous Indian corporate have started operations abroad. Pitted and competing against global players, only efficient corporate organizations, delivering quality products and services will survive in India. To support Indian businesses and make them competitive, the Government has taken several measures for permitting them to reorganize and restructure their businesses. As a matter of principle, the Government intended to make business reorganization tax neutral. However, it has not yet fully percolated down to all levels of Government authorities. This Conference will share and disseminate information under various laws and provisions affecting Business Restructuring.” The Conference saw eminent speakers from top corporate and consulting firms taking centre stage and address related issues like Changing Regulatory Landscape – Impact on Business Reorganization
INFRASTRUCTURE OUTLOOK APPEARS BRIGHT CLIFTON DESILVA
is an investment expert and a Director at Altina Securities.
O
« INVESTING
nly a few weeks ago, sentiment on the Indian economy was one of gloom; but over the last few weeks there has been a sea change in terms of sentiment. In fact from September 4 onwards when the new Reserve Bank Governor took over reins the sentiment has turned positive. The RBI Governor recently stated that the news on the Indian Economy is expected to get better from now. The bullish assessment is based on a host of factors; the major contributors being the expectations of rising exports in the second quarter and indications of a strong pick up in auto exports. The other factor cited is the possibility that the problems in the US would be temporary and that law makers in that country would arrive at a fiscal deal. The good monsoons so far are another factor which would lead to strong agricultural production, which in turn
could result in cooling of food inflation providing RBI space for monetary easing. Another positive is the revival of many projects that were stalled.
The first signs of revival are likely to surface in the sector that went down first - large infrastructure projects. It was in 2010-11 that the first large projects started stalling and when these projects are revived, benefits will start
accruing from the projects themselves. The liquidity that is released into the market will have a spillover effect on supplies. The first set of stalled projects was revived in January and the impact is beginning to show now. Power is likely to start picking up and there has been a robust power production in the last core IIP (Index of industrial production) numbers. The governor is also of the view that two
central pillars of monetary policy are controlling inflation and maintaining financial stability. Growth is incidental because control over inflation creates the best environment for growth. India needs two transformations: more investment and less consumption at least for some kinds (Gold) and more savings – financial savings. A number of things are happening on different fronts as far as infrastructure is con-
cerned. The first of course is that now there is a renewed push at the top level. Various ministries are working in setting up targets and timelines. Some mega projects have been selected and there is a lot of effort to get them through. The Cabinet Committee on investment has been trying to remove the various impediments like environments clearance, land acquisition and various other government clearances.
Electricity is one area where a lot of investment is required and in this regard the Ministry of power is rolling out two mega projects of 4000 MW each, which means an investment of about of $5 billion in each of these two projects. Further investments are planned in expressways, railway projects and a host of other infrastructure projects. Also the ministry of civil aviation currently is very active and in an advanced stage of inviting participation in further development and management of six big international airports at Chennai, Kolkata, Lucknow, Ahmadabad, Jaipur and Guwahati. Many Fuel supply agreements (FSA’s) have also been signed. The government has put coal production on high priority. Coal production has shown a reasonably impressive growth compared to the previous year. Now the government is trying to get private participation in coal production. The RBI governor is aiming to build sophisticated financial infrastructure in three years that will facilitate trillion dollar core sector investments leading to sustained economic growth. With all these initiatives being planned and implemented, the outlook for the infrastructure sector appears bright in the years ahead and infrastructure stocks which gave huge negative returns over the past three years seem now poised to provide handsome returns to investors over the next two to three years.
Transparent Marketing Is The New Mantra
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he year has begun well. The mood in India is upbeat. The economy is growing and the Indian consumer has great aspirations and is looking forward to improve his quality of life through brands. In this entire growth phase, I would strongly recommend that Transparent Marketing should be practiced. I would like to recommend my model with this new term, which I have created, called Transparent Marketing. The Transparent Marketing Model has 6 elements, which if used well and completely can lead to not only increase in sales, market share and profit for the marketer but also faith and trust for the consumer. Transparent Marketing is all about honesty, openness and leading consumers to a better life and not misleading them. We often hear this word used loosely but I’m recommending the phrase Transparent Marketing to be taken seriously in all its aspects. Let me now share with you, my Transparent Marketing Model and explain each of the 6 elements in the model. TANGIBLE: Any brand that gets marketed has tangible elements which need to be transparent to the consumer. The consumer must know as to what he is supposed to get and gets knowing what is expected and getting what was excepted. This is very strongly the tangible component in Tangible Marketing. It could be the case of buying a laptop and not being given a case along with it and later on being told that there is a separate charge for that or that it is not available. In this case it would be better to be transparent and say that the total cost of the laptop with the case is ‘so much’. Thereafter it could even be explained in terms of a break up saying that the laptop cost is ‘so
JAGDEEP KAPOOR
is CMD of Samsika Marketing Consultancy
« BRAND TRANSPARENT
much’ and the case cost is ‘so much’ and the total cost obviously, ‘so much’. This is transparent. However, if on the other hand a consumer buys a laptop, an expensive one, and after purchasing it when he is about to take the delivery, he is told that ‘so much’ is the extra charge for the case in which the laptop will be put, he feels cheated. This is because in the mind of the consumer his expectation is that the laptop will come with the case. In fact he does not mind paying the total amount as long as he is transparently told that the total cost is ‘so and so’ and the break up for the laptop and the case is ‘so and so’. Transparent Marketing in the tangible element looks at the expectation of the consumer and not the practice of the marketer. In fact the marketer should be providing what is expected by the consumer. This is the tangible element of Transparent Marketing. If this is not followed, there are fights, ill-will and acrimony at the point of purchase or delivery. The entire experience of buying the laptop gets unpleasant because of non transparency. On the other hand Transparent Marketing leaves behind a pleasant taste in the mouth.
INTANGIBLE: The second element of my Transparent Marketing Model is the ‘INTANGIBLE’. This relates to attitudes, beliefs and perceptions. Many a times a brand marketer may provide information about what his brand will do. He provides information about what his brand will deliver. He provides information about how his brand will perform. To my mind, this information is necessary but not sufficient. In my opinion, if Transparent Marketing was followed the brand marketer should inform the consumer about not only what his brand will do or deliver or how it will perform but also what his brand will not do, will not deliver and in which circumstances it will not perform. This transparency is critical for building up a positive, trustworthy relationship with the consumer. It may so happen that intangibly the consumer may assume that certain things will be done or performed and this may later on lead to dissatisfaction. It is better to be transparent in a complete manner, specially keeping in mind the attitude and perceptions of consumers in a particular culture, region. It is better to transparently define expectations.
PRODUCT: The third element in my Transparent Marketing model is the, “PRODUCT”. It is heartening to know that in today’s world certain products are able to put nutrition information as well as ‘best before’ information on the pack. Some also go ahead and inform the consumer when to use a product and how to use a product. Some go further and inform when not to use a product and the caution areas. Information on the product and its packaging should be as transparent as possible so that the consumer is able to make a fully informed choice. That is Transparent Marketing. This would help build a better rapport and relationship between the consumer and the brand.
SERVICE: The fourth element of my Transparent Marketing Model is ‘SERVICE’. Service could be of a car or a consumer durable. Service could be of an airline or the hotel kind. Service could be in a bank or in a multiplex. Transparency in marketing of services is very significant. I do not agree with the ‘fine print’ practice. If some information about a service is important to be given to the consumer, then it should be bold enough and transparent enough to meet the consumer’s eye. It should not be hidden somewhere wherein the consumer misses it out. That is not transparency in its true sense. In fact the brand would benefit more if the consumer of ‘services’ is told upfront about all the benefits that he can expect and all the caution areas along with those benefits. Even in a ‘theme park’, which is a service for enjoyment, certain rides clearly indicate as to what benefits are available and what the caution areas are and who is eligible and who is not eligible on these rides. This is transparent marketing and consumers choose to take that service or choose not to take that service with open eyes.
VISIBILITY On a more specific and lighter side, Transparent Marketing can also be extended to products, which can be seen through the pack. Experience has shown that packs which are physically transparent through which the consumer can see, are packs which are more desirable to the consumer whether they be a biscuit pack or a beverage bottle or a shirt or a pack of rice or any other product. Actually physical transparency enhances the appeal of the brand whether it is aesthetic appeal or appetite appeal. Recently a brand of small cheese bis-
cuits is doing extremely well because of its tall transparent jar which is virtually irresistible as well as of course its great taste and content and pedigree. The real catalyst for the huge sales has been the ‘transparent jar’ not only because of its utility, but also because of its desirability through appeal.
CREDIBILITY: The sixth and final element of my Transparent Marketing model is the most important element. This is the element of ‘CREDIBILITY’. Transparent Marketing leads to increase in trust and credibility. Consumers move away from commodities to buy brands. They buy brands because of trust and trust can be built only though a transparent relationship. Any hidden agenda or ulterior motive can be easily discovered by the consumer, leading to the loss of credibility. It is therefore important that my Transparent Marketing strategy and model be used as a ‘way forward’ to increase and sustain credibility of brands thereby removing misunderstandings and doubts in the minds of the con-
sumers. After all, both the marketer and the consumer stand to mutually benefit if there is Transparent Marketing. I would recommend using Transparent Marketing so that credibility remains high on the agenda of the marketer and in the mind and heart of the consumer. After all, brands are built in the minds and hearts of consumers, in my opinion. Transparent Marketing is strongly recommended by me, as India grows. Ultimately in Trans ‘parent’ Marketing there is a ‘parent’ who would nurture the brand like a child in an honest and mutually beneficial manner. Copyright © 2013, All rights reserved. Jagdeep Kapoor can be contacted at jk@samsika.com
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MUMBAI | MONDAY, OCTOBER 14, 2013
« STRAIGHT TALK ROOP KARNANI
is a Senior Journalist, Author and Industry Analyst
T
Economy In Revival Mode?
he markets have already been inching upwards courtesy the IT sector and certain Indian global companies like Tata Motors (Read Tata JLR) M&M (Read SsangYong), better tractor sales due to monsoon and Autos in expectation of festive season sales. But I believe the major factor in the rise of market is a drop in crude oil prices which has temporarily reduced CAD. However oil prices are unpredictable. Another factor is that the rupee which was volatile pre September seems to have stabilized due to good measures of the RBI like a swap window for oil companies, etc. These measures have led to reduced speculative run on the Indian Currency. Another initiative being taken by the Government and RBI is to include Indian Debt in Asian Debt Indices which could help bring an inflow of about 20 billion US dollars and deepen the Indian Debt Market, whether it is Government paper or Corporate Debt. The stability of the INR is likely to be tested when QE taper begins but this time with less severity and volatility. This will cushion the impact on the stock markets too. The US shutdown is showing signs of resolution. For all the drama and posturing about the US Debt ceiling which will <<RBI Governor be hit around 17th October it should get sort- Raghuram Rajan ed out as it can affect the fragile US recovery, for which neither the Democrats nor Republicans want to be blamed. The earnings season meanwhile will make Indian stock markets inch higher as expectations are low and therefore any negative surprises in major Indian manufacturing company’s results will not cause a significant dent in the markets. The IT sector gains will take markets higher but there would be profit booking at higher levels after which I see a phase of consolidation. The markets will then have to negotiate QE taper and then the May 2014 elections in India. It is only after elections that we could see policy action and growth returning to Indian economy if a stable government is formed. Currently it is too difficult to call, with more fragmentation in Andhra. Before the elections one may not see diesel prices raised significantly. They could, however, be increased by Rs.1 a month instead of 50 paisa per month. If the RBI feels that Food Inflation is not linked to raising rates it may lower rates post its October review or keep repo rate unchanged in October and later reduce rates to nudge growth in the economy even before the polls. This could take the markets higher. World over people watch Central Bank action for growth, unlike in India. But with the proactive governor, who is going to deal with the next dispensation at the Centre he is trying to spur growth without having to wait for Government action. When pressure is off the government, it will lead to better long term policies instead of adhoc decision making and quick fix solutions which is happening now with the present government.