Monday, September 10, 2012

Hell Dorados

Post the frenzied activity that begins in any sector opened up in the Indian Economy, many entrants, including the larger ones, lose out due to lack of long term strategies and inability to adapt to business dynamics. Ultimately, market forces take them off road, putting paid to all the aspirations that convinced them to enter the sector in the first place

Terms like intense competition, mergers and acquisitions and low margins are not new to Indian market by any chance in today’s day and age. After all, the Indian economy is labelled as one of the most lucrative on the global charts. That is precisely why, as numerous sectors like telecom, aviation, retail and insurance opened up one after another; a number of Indian business houses ignored all considerations of synergies, potential growth impediments or possible gloomy scenarios and took the plunge, led by the Tatas, Birlas, Ambanis, Mallyas, et al.

History has repeatedly taught an important lesson that these players seemed to have missed. The story of El Dorado, the mythical ‘City of Gold’ that captured the fancy of European explorers, gained popular appeal in the early 15th century. Multiple expeditions were undertaken in vain to discover this city; till better sense ultimately prevailed, two centuries later! The fact is that a number of Indian businesses have also been victims of two precarious beliefs w.r.t. the so called sunrise sectors – one that the sheer depth of their resources would ensure that they prevail over every eventuality in the sector concerned and second that their stupendous success in their current businesses automatically made them the best bets for these new business opportunities.

Be it television manufacturing that saw a frenzy of competition in the early 1990s and eventually led to many manufacturers exiting or the telecom services sector, wherein new entrants in the industry like MTS, Uninor and Videocon have been disturbing the margins of the big boys like Reliance and Bharti Airtel to the core, such instances abound. In fact, some of the new entrants in telecom are realising that they themselves face a hard time. The fact is that with the huge number of players per circle now and the continuously ARPUs (Average Revenue Per User), it’s only a matter of time before consolidation happens. In retail, we saw the entry of players like Reliance and Birla along with some zealous competitors like Subhiksha and Vishal Megamart. Most of them faced the perils of untethered expansion and had to shut down stores. Subhiksha and Vishal Mega Mart ultimately went belly up. Similarly, entrants into aviation like Air Deccan and Sahara had to bow out of the race as they found their margins getting unsustainable due to myriad reasons. And despite the consolidation phase that passed them by, the remaining players have found it just too hard to keep their balance sheets in the black.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face

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posted by Editorial at 4:36 PM

Saturday, September 08, 2012

Whether or not your baby will grow up to be an obese Adult, is partly in your hands!

According to American Dietetic Association and WHO, breast-feeding is necessary for six months, after which it’s ideal to give other food along with breast-feed till 12 months. This practice develops immunity, reduces the risk of asthma, blood pressure and heart diseases. Mothers who subscribe to the trend of quickly giving-up on breast-feeding, should know that it is also beneficial for them as it lowers risk of breast and ovarian cancer, lowers post-partum depression, accelerates the process of shrinking the uterus and thus resume the menstrual cycle, and the calorie expenditure helps mothers return to their pre-pregnancy weight sooner.

Well, promoting breast-feeding doesn’t imply that formula-feed is harmful. It makes for a healthy diet, but it also leads to obesity. Dr. Rahul Nagpal, a pediatrician at Max Healthcare, expounds, “There have been observations and numerous medical papers, which prove that bottle-fed babies, at five years of age, have turned out heavier than those who were breast-fed, reason being that formula milk is tougher to digest than human milk. And formula foods have higher calorie content. Formula food manufacturers try to provide the same nutrients and contents that is present in mother’s milk, although it cannot match up because there are so many components in mother’s milk, which cannot be made otherwise.” Stating other possible reasons for their obesity, Dr. Nagpal said, “In breast-feeding, the intake depends on the baby. In bottle-feeding, the mother will want the baby to finish the entire bottle of milk, thereby over-feeding the baby. Slowly, the baby’s appetite increases, fat cells develop and these fat cells show-up in adolescence.”

So mommies, if you don’t want to spend your midlife fretting about your teen kids fretting about their weight, you know what to do. Or not to do.
 

Source : IIPM Editorial, 2012.
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posted by Editorial at 3:44 PM

Saturday, September 01, 2012

Iran: The war is over, finally!

With the Obama administration playing down the Bushehr reactor issue, US finally accepts Iran; B&E brings out a completely hidden fact of the timing of the State Department’s pro-Iran statement

“We recognize that the Bushehr reactor is designed to provide civilian nuclear power and do not view it as a proliferation risk!” With this one statement on August 13, 2010, Darby Holladay of the US State Department created history by changing a decades’ long policy stand of United States towards Iran. The statement was brilliantly timed, given the propensity with which Israel was preparing to attack Iran’s nuclear plant. The statement also defined a historic moment in US-Israel relations, by communicating to Israel that the US was no longer ready to blindly accept any anti-Iran tirade.

These voices from the Obama government express an opinion considered improbable just a few months back, when US was said to be on the brink of attacking Iran. In February 2010, Obama had warned, “Despite their (Iran’s) posturing that their nuclear power is only for civilian use, they in fact continue to pursue a course that would lead to weaponization.” Given such a negative statement, the current US stand is momentous.

For the trained political analyst though, the past year should have been enough to give much evidence of what was around the corner in not only Obama-Iran relations, but most importantly Obama-Israel relations. Last year, when US Vice President Joe Biden, during an interview with ABC Sunday, announced that US would not “stand in the way” of Israel attacking Iran, US President Barack Obama had immediately backtracked asserting that US had “absolutely not” given any go ahead to Israel for attacking Iran. Obama had reiterated further, “We have said directly to the Israelis that it is important to try and resolve this in an international setting in a way that does not create major conflict in the Middle East.” For Israel, that was bad news, and not just because of worsening political relations with US – Israeli fighter crafts would have had to pass over Iraq to attack Iran; and Iraq was under US control then.


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posted by Editorial at 12:01 PM

Friday, August 31, 2012

Billions of dollars investment increase; what’s up with agriculture?

It’s magnanimous and astounding, but agriculture of all the sectors has seen huge increases in private and public sector investment in the past five years. B&E does a quick news synopsis and update of the investment scenario in the agricultural sector and commentates on visible issues by Angshuman Paul

We’ll jump straight out of the chaff. According to the Annual Report 2009-10 of the Ministry of Agriculture, the public and private sector investment in agriculture has been steadily increasing since 2004-05. While public sector investments in agriculture have increased from $3.61 billion in 2004-05 to $5.5 billion in 2008-09 (52% increase), private sector investments have increased from $14 billion in 2004-05 to $25.5 billion in 2008-09 (82% increase).

While the general think has been that agriculture has slowly been losing out its sheen – both at the grass roots level (more and more farmers preferring to migrate to cities) and at the corporate level – the actual figures allude to a situation that seems clearly quite to the contrary. Not only has the agriculture sector been able to attract investments, it also has been able to do the same across the value chain – right from the fields to the point of value added disbursement.

On afterthought, this shouldn’t have been that difficult to forecast, as much of the planned investment is arising purely because of the clear cut rising gap between the demand and supply of food items like cereals, pulses, edible oil and sugar. Consultant and industry body estimates that the rising gap will further give birth to a plethora of service-providers and firms that would try to develop newer business opportunities between the consumer and food-manufacturer.

Data from FICCI corroborates this perspective – FICCI research claims that the food processing industry in India would reach an astonishing size of `1 lakh crore by the end of 11th plan. And in this food processing chain are involved grading, sorting and packaging (GSP) service providers, venture capitalists, and other food processing firms. At the front end of this supply chain, organized retailers are targeting consumers with attractively packaged processed agri-commodities; and at the back end, are companies specialising in setting up cold chain facilities. At the vanguard of these opportunities are some of the biggest names of India Inc like Tatas, ITC, Reliance who are consciously linking to Indian farmers in various ways.

Star Bazaar (the hypermarket formats of Tatas) has recently collaborated for setting up a supply chain of UK’s Tesco that will ensure exports of agri-commodities from India. Reliance Fresh is building a logistics business that includes a massive cold storage operation; this should be operational by 2011. Tata Chemicals has set up a banana ripening centre in a joint venture with Irish company Total Produce. Christened as Khet Se, this venture was started in 2007 and within a time span of three years it has managed to grow at more than 30 per cent. And these are the top examples that signify the impetus driving the sector currently.


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posted by Editorial at 1:30 PM

Friday, August 24, 2012

“Our concern was – How do we manage our rate of debt?”

In the midst of the general concern and uncertainty in the market regarding the realty sector and companies like DLF, the company’s Group Executive Director Rajeev Talwar is optimistic of a more evolved market & consistent supply in the coming years. In this exclusive with virat bahri of B&E, Talwar talks about DLF’s downturn adjustments and future vision. Some excerpts

B&E: Market reports are highlighting the fact that DLF missed its targets for FY 2009-10. What is your view of the company’s performance?
Rajeev Talwar (RT): This question (by analysts) is unreasonable on two grounds. Firstly, is it due to lack of knowledge about the recession in the developed economies, including Japan, and downturn and meltdown in the other economies? That should answer one half of your question – why the targets were missed. Secondly, real estate is a hugely complex and intricate business. People talk at times of a price bubble in booming economies. There was no price bubble (in India) at all. There was a mere gap between demand and supply. It may take a gestation period of less than an year for a particular processed product in the manufacturing sector; in this sector it takes very often 4-5 years between conception to delivery. Whenever economies boom and there is no regular supply chain, there is bound to be a price rise due to shortage of housing or office space. If the economy grows at 8%, then the CAGR of real estate sector should be around 20%. That is the reason for demand-supply gap and increase in prices and speculators coming in. On the other side, in a downturn, people’s jobs are affected, emotional security is affected; there is an immediate drop in interest to acquire. Downturn and slide is much greater in the real estate sector. We were certain that there is bound to be a tight leash on targets of sales and revenues in downturn. But expenditure targets have to be exceeded, since that is the time when you have to concentrate and focus on execution and delivery. Construction in the last 1 year, which had dropped down from peak levels of 65-70 million sq. ft. (msf), a large percentage of construction in the private sector to 40-41 msf has picked up again to around 56 msf. So we are focusing on execution and in better times to come they would reflect better deliveries and constant supply.

B&E: How do you see the demand scenario picking up now?
RT: A good economy which is coasting along, hopefully a good monsoon, better crops, lower inflation and pressure on RBI reduced to hike up rates and possibly to go back to a low interest economy regime – if that happens, one sees a growing confidence from consumers and strongest demand from the residential sector. A good economy will also reflect that the corporate sector is getting stronger, which will reflect itself in increased demand for office space. In retail segment, while last year’s festive season was good, a good period of economic growth will shore up confidence among people and if there is a good festive season this year, the next fiscal should see some growth signs back in the retail segment.

B&E: What potential does DLF see in middle income/affordable housing?
RT: Due to our legacy, it is high income, because our locations and plots are extremely valuable. We are taking projects and seeing to it that we launch at the most competitive levels in order to make them value for money housing. Revenue growth should come. Government talks about Rs.10 lakh and above as mid-income. In tier 1 and super metro cities, it should be probably above Rs.50 lakh. Land here is usually controlled by government or it becomes very valuable if it is in private hands too.

Therefore your cost of acquisition becomes high. It therefore becomes impossible to give you what is normally called affordable housing or middle income housing below Rs.20 lakh. But Rs.10-20 lakh homes, even below, will be available for the poor. If housing costs Rs.50-75 lakh as mid-income housing in the super metros; in a tier 1 city it will cost Rs.45-60 lakh and going down to a tier 3-4 cities, you will get good homes at even less than Rs.20 lakhs. Since we are not in those cities and towns, I don’t think it will be possible for DLF. Our value housing even below Rs.5 lakh and Rs.10 lakh will be adjunct to the service category of our mid-income and high income group housing in super metros & tier 1 towns. Due to our name, quality, & location in the heart of the town, we tend to be in the upper end, but certainly, we also provide housing for the economically weaker section. Those will also be coming & will be costing anywhere between Rs.5-20 lakh depending on their proximity to premium locations.

B&E: Downturn increased debt levels significantly. How have you managed them over the past year?
RT: Some time after 9/11 in the US, everyone thought there was no end to the upswing. When it did come, it caught everyone by surprise. They weren’t unmanageable levels of debt for us but the only concern was how do you reduce the rate and increase the tenure. There was so much commercial paper in the market prior to that. Anywhere from 120-180 days seemed to be a long cycle till the time we realized that a good long cycle commercial paper or debt is of a period from 3-5-7-9 years. The second lesson was to reduce the interest rate. Our debt from under 1 year has increased to 3-5 years in tenure and also has portions of 7-9 years. At the same time, from 11.98% interest level, we have already come down to 10.5%. In real estate, people ask whether your debt levels are high or going higher. The fact is that there is so much of embedded value in your assets that debt is not something that you are normally so worried about, till the time a company is so highly leveraged that it cannot meet its development requirements (front flow) or its overhead costs for its normal cash flow. For us, thanks to various policies before and therefore very far-sighted policies even to take care in a downturn where you have a steady rental inflow of income, we have been through that much more easily. It’s already established that whatever overhead developmental costs or interest costs we have are well met from our usual leasing and launch businesses; so DLF doesn’t face pressures that some other overleveraged companies may face.




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posted by Editorial at 4:42 PM

Thursday, July 26, 2012

UP’s Land Acquisition Policy - Any Surprises?

After rounds of Protests by Farmers and Opposition groups, The Ruling UP Govt. announced a New Land Acquisition Policy of The State. The Improvements as most did not expect, took many by Surprise. Is it a beginning-much-needed, or is it just another Political Gimmick?

Facing flak from the ruling coalition in the Centre over the stand-off between the Noida administration and residents of Bhatta-Parsaul village in Greater Noida, Mayawati, the Chief Minister (CM) of Uttar Pradesh, on June 2, 2011, announced a new policy for land acquisition in the state. Under the newly laid-out policy, all land transactions hereon, will now be struck using a consensual approach. This will happen through a direct dialogue between the private developers and the land owners.

“The role of the government now would be that of a facilitator only, limited to issuing a notification under Section 4 of the Land Acquisition Act, 1894,” said the Chief Minister while briefing the media in Lucknow at a press conference organised to announce the new Land Acquisition Policy of the state. This is the second such policy to be announced by the Mayawati regime in the past nine months. The previous one was declared on September 3, 2010. The new policy will be implemented with prospective effect and will not apply to land acquired during the time period when the previous policy was active. The announcement of the new policy followed a “kisan panchayat” addressed by the Chief Minister. The panchayat was attended by farmers’ representatives from Bharatiya Kisan Union, including its general secretary Rakesh Tikait, and those from Tappal and Bhatta-Parsaul.

According to Mayawati, the new policy had been devised after elaborate discussions with the farmers’ representatives. Describing the new policy, the CM claimed it would be better than the “proposed land acquisition policy of the UPA government”. The Congress, which a few days back had slammed the UP chief minister for alleged atrocities in the process of acquiring land for the Yamuna Expressway project and had spoken volumes against the state’s policy, did not respond to her claims. Mayawati claimed that the issue of land acquisition policy would be raised by the Bahujan Samaj Party (BSP) in the monsoon session of the Lok Sabha and if the Centre’s policy was not announced, the BSP would ‘gherao’ the Parliament.

Voices from the industry have been divided on this issue. The two major industry bodies, Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industries (CII), have expressed dissenting views on the matter. The major point of contention appears on the role of the government. While CII has found support with the National Advisory Council’s (NAC) suggestion that the government should play a prominent role in the process of all land acquisitions, FICCI believes otherwise. Speaking to B&E on the role of the government, Chetan Bijesure, FICCI’s Additional Director, says, “In the case of UP, the role of the government has changed from that of an acquirer to one of a facilitator. We are not saying that the government should be absolved of the entire process. We are advocating a model that ensures better results for farmers as they will have the option to negotiate better rates.” Further, he adds, “The past instances where the state government has acquired land, we have seen the [unsatisfactory] results (in West Bengal, UP, Orissa). Also, the option of the developer meeting the farmer directly reduces the possibility of vested interests influencing the process at any given stage.” B. Muthuraman, President of CII, however had a different explanation for recommending a greater government involvement. As per him, the government cannot absolve its responsibility in land acquisitions. “We are pleased to note that NAC is also of the similar view on this critical issue. The State must fulfil its responsibility for economic development and play a critical role in acquiring land for industrial projects, as planned industrialisation is essential for job creation and inclusive growth,” says Muthuraman.

The mass agitations which had become synonymous with land acquisitions in the state could only be dealt through innovative solutions, and the confidence with which the UP government has doled out the fresh land acquisition policy, is backed by the reforms that it proposes to bring out.

Government sources told B&E that the new policy on land acquisition has broadly been categorised into three parts. The first part deals with direct transfer of land from farmers to private developers, with the state (district administration) merely playing the role of a facilitator. The policy underlines that the compensation package against the acquisition of land will be prepared only after the terms and conditions have been approved by 80% of the farmers or land owners whose land is to be acquired for a particular project. Failure of the private parties to woo 80% of the farmers would result in reconsideration of the project proposal. Additionally, the farmers have been given the option of taking 16% of the land developed for the project along with annuity at the rate of Rs.23,000 per acre for a period of 33 years. The farmers will also have the option for cash component in lieu of a portion of the 16% developed land. Furthermore, farmers who wish to forgo annuity will be entitled to a rehabilitation grant at the rate of Rs.276,000 per acre. [The rehabilitation grant in the September 2010 policy was fixed at Rs.240,000 per acre.]

The second part of the policy states that farmers whose agricultural land has been acquired for building state highways and canals will be entitled to all the benefits accruing under the state’s Relief and Rehabilitation (R&R) Policy, 2010. Apart from the rehabilitation grant, 25% shares of the developer company will be allotted to the farmer and one member of each farmer’s family will also be given employment in the company. In the third part of the policy, where land has been acquired by the development authorities under the master plan, the deal will be executed only abiding by the terms of agreement through a consensual approach, sources told B&E. Mayawati’s new land acquisition policy has definitely set a benchmark for the Centre to better (when it brings its bill to the monsoon session of Parliament). The events could also, actually translate into the UPA coming out with a more farmer-friendly Land Acquisition Bill.


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posted by Editorial at 4:47 PM

Tuesday, July 24, 2012

Anna Hazare : My Prime Minister

A seventy-three year old unassuming man by the name of Kisan Bapat Baburao Hazare is again set out to give sleepless nights to the Government of India. More popularly known as Anna Hazare, this isn’t his first endeavour to take the establishment head on. He earned his due recognition when he tirelessly fought to develop a model village in the district of Ahmednagar in Maharashtra. As it happens to most in our country, for all the good work, Dr. Hazare was also arrested in 1998 and was released on account of a huge public uproar. Incidentally, the Government of India also recognised his efforts by bestowing him with the Padma Bhushan. But amongst all his mini revolutions which have advantaged the smaller sections of society, this time, Hazare is taking up such an issue which is probably the biggest malaise of our democracy and is a cause which affects every living Indian in some way or the other.

Hazare is one amongst those few who have dared to raise their voices against corruption in our system, by voicing his concerns over the Jan Lokpal Bill. The Bill currently, is nothing but a politically jaundiced version of the anti-corruption bill. In order to assert his arguments, which manifests into a more meaningful and logical conclusion to the Bill, he declared a fast unto death at Jantar Mantar, New Delhi; a fast that started on April 5, 2011 amidst massive support. His arguments stem from the manner in which the current bill has shaped up; the current bill is not just illogical, but also nothing more than a mere tokenism with respect to the fight against corruption! On the one hand, while Hazare is asking the government to give powers to Lokpal to receive complaints of corruption directly from the victims (and declare their decision suo moto), on the other, our government wishes to confine such powers to those that can be politically influenced. In simple words, in its current form, Lokpal can only probe complaints forwarded by heads of either the lower house or the upper house. The fact is that in its current form, the Bill is purely a tool for political gaming and one-upmanship. Unfortunately, the government – quoting hilariously that it cannot be blackmailed by Anna Hazare – has conveniently turned down Hazare’s logical argument of involving representatives from civil society. Owing to the fact that the biggest victim of corruption is the common man, Hazare also rightfully is demanding extending the ambit of the Bill to a level where the Lokpal can register FIRs and act as an independent body (along with the CBI) to punish corrupt officials, with sentences ranging from a minimum of 5 years to a maximum of life imprisonment. Expectably, and shamelessly, the government doesn’t want any such powers to be given to the Lokpal and instead wants corrupt officials, if convicted, to serve a punishment ranging from only six months to a maximum of 7 years. In a nation where every second official is corrupt, the quickest and strictest of punishment should have been the recourse! The government apparently thinks otherwise.

As the affairs stand today, when a civilian has to bribe any and every police official for raising an FIR, a Lokpal would be of great social benefit. Furthermore, making this body independent of political intervention would ensure its smooth functioning. It is so very unfortunate that first, our government is not willing to adopt a tool which can uproot corruption from our system; on top of it, like a habitual offender, the government is trying to find a scapegoat in Dr. Hazare and is even conspiring to punish him! I am amazed by the audacity of the government to not only turn down such logical and meaningful arguments but also criticise him! These are the heights of double standards when the same government, which awards a person with the highest state honour, after sometime, tries to find avenues for charging the very same person with criminal offences. We have seen such a situation happen with Dr. Binayak Sen as well!

At a point in time when the entire world is witnessing the fury of civil societies which are toppling governments left, right and middle, at a point in time where we are seeing global governments increasingly allowing public intervention in political decision making, our own government is going back in time and is trying to adapt a dictatorial model – and that too in its worst form! There is no doubt that just like the Right to Information Bill, the Lokpal Bill will not only give Indians the voice that had got suppressed over the years under the huge debris of corruption, but it would also increase public participation at large, which is an imperative in any functional democracy. Perhaps that is the very reason why Dr. Hazare has been getting every support from media, celebrities and common people, who understand the significance of his argument. Such is his support that while writing this article some time past midnight, when I uploaded his picture on my Facebook profile as a gesture of my support towards him, in 15 minutes flat, his photograph had received as many as 200 comments and 750 likes!

All in all, it is visibly clear that through this Bill, the government is trying to do nothing else but save its own skin and the skins of its own corrupt officials. In its current form, the Bill is similar to CVC initiatives, which are good for nothing and have no tooth to bite. The current situation is a matter of utter disgrace for the Indian government – especially when it has failed to bring back the Swiss black money, punish CWG officials and arrest 2G scamsters. In a country where the same government has failed to provide its citizens with even two meals a day and instead has allowed corruption to flourish, what more could one expect?

Anna Hazare is increasingly becoming a phenomenon in himself, if not already one, and rightly so. It is the duty of every non-corrupt, patriotic and sensible Indian to provide every form of support to this one man who is selflessly fighting for everyone’s cause. India needs one more victory and this time against corruption! Along with stalwarts like Kiran Bedi – a great icon of honesty – and the great RTI activist Arvind Kejrival, Anna Hazare is showing the way to Indians. We all need to unite to get him right to the top, because finally, Indians have seen an honest man who is also leading from the front. Irrespective of who is holding the position officially, Anna Hazare is my Prime Minister!



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posted by Editorial at 4:51 PM

Thursday, February 16, 2012

Benz trick

In an extraordinary spectacle, 15 G55s embarking on a 16,800 kilometer trip spanning 38 days across continents of Europe and Asia through Germany, Russia and Nepal, drew to a culmination finally in Kolkata, India. Driving and journeying with these ultimate off-roading machines, were a group of 18-80 year old automobile enthusiasts who travelled across terrains and landscapes which inspired awe. This unique caravan, part of the global ‘Mercedes-Benz Driving Events’ campaign, witnessed 15 G-Wagon’s experiencing the pinnacle in off roading, by setting out on an expedition from Germany, Poland, Lithuania, Estonia, across the Ural Mountains in Russia, Kazakhstan, the Gobi Desert in China, Tibet all the way up to the Mount Everest Base camp, finally concluding the grand drive in India. After riding across such landscapes and hostile terrains, G-Wagon has reinforced its supremacy as the finest SUV when it comes to automobile engineering. The participants were incredibly thrilled to have been a part of this magnificent journey. The G-Wagon consistently amazed them with its unbridled performance at every stage of their odyssey. Undoubtedly, this has been one of the most adventurous marketing techniques ever tried. Bravo!

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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posted by Editorial at 3:29 PM 0 Comments

Wednesday, January 25, 2012

Who says a kid can’t go around buying home loans?

Set aside the percentages and mature looking wisemen –TATA capital uses a girl child to put across its message strongly, all in a matter of 45 seconds

Home is a name, a word, it is a strong one; stronger than magician ever spoke, or spirit ever answered to, in the strongest conjuration. – Charles Dickens

The image of a home attracts everyone – from a first grade-identity-badge-dangling-fresh-kid-in-school (who smiles when he can pencil down his first crooked shaped-chimney-flaunting structure) to a professional (who is busy calculating the EMIs). Spoken in a more mature tone – purchasing a home is one of the biggest dreams come true in a mortal’s life. Not to say, those belonging to the middle class don’t live such moments. They do. All thanks to the plethora of home loan options that are thrown around in the market, uniquely packaged in the names of various corporate brands. There is a difference though. That of trust – home purchases are high involvement tasks and if a brand like Tata Capital Housing Finance Limited (TCHFL), walks up to you with an offer, you definitely will consider giving it a good look. Forget the brand equity. Jump straight to its campaign – TCHFL has done a handsome job with its campaign of three TVCs that announce its home loans offerings with a new tagline – “Karein wahi jo aapkey liyey sahi.”

Explaining the tagline, Govind Sankarnarayanan, Director – TCHFL, tells 4Ps B&M that, “The purchase of a home is one of the biggest decisions taken by any individual and Tata Capital assist the buyer in taking the right financing decision. Each home loan customer has specific requirements, and we at TCHFL offer customised home loan solutions that are flexible and tailored to the individual needs of our customers.”

“Customised” is a soothing term, especially when you talk about the ever-rising interest rates. This third in the TVC series, is a simple film told in a refreshing manner, staying true to the brand’s visual imagery of the world of kids. The ad has moved away from the oft-used portrayal of couples, to something more real and relevant. Rented accommodations never allow the freedom of a home you own, and this 45-seconder brings this to the fore. It shows a little girl, who loves to sing. She is shown trying to do so in various places – in school, at the zoo et al. But those around her cut her short each time. In the end, she is shown in her home, where she realises that she can sing, uninterrupted by anyone. The voice over at the end announces, “Khul key jiyo, apney ghar mein.” In short, through this ad, TCHFL explains how one can move closer to the joy of owning a home just by asking for one of its customised home loans.

Launched on November 8, 2011, this TVC (like the previous two ads in the campaign) was conceptualised by Leo Burnett and produced by Chrome Pictures. Elaborating on the creative brief, K. V. Sridhar, NCD, Leo Burnett, explains to 4Ps B&M, “The idea is based on the fact that people have the freedom to do what they want only in their own homes. And TCHFL empowers people to experience the joy of such a freedom with home loans. Based on this, we came up with a simple yet endearing film told in a refreshing manner through the world of kids. Kids have an innocence that makes the message more engaging and creates empathy among the audience.”

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
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