Archive for December, 2011

December 22, 2011

What is Innovation?

A question that has inspired stacks of books and reams of newspaper articles. But let us pick the latest row in this context: Malcolm Gladwell of the Tipping Point fame saying that he doesn’t think Steve Jobs was an innovator. S o he covers himself by saying ‘ not a classical innovator’ which is like splitting hair. Invention and innovation have  for a long time been fiercely debated words in terms of their differences, connotations and denotations. Some of it semantic confusion, the rest authentic investigation. But in the context of business it should be relatively easy to separate out enough to give us satisfactory working definitions. We understand that inventors are ‘discoverers’ whether they work outside the system or inside it. Being an ‘outsider’ should not be a critical condition unless by saying this we mean that they respect no boundaries.  Innovators are ‘collators’ who bring together into a new combination elements that have existed in different contexts and when combined into a new configuration – which you, I and Malcolm certainly think of –  produced something totally new and revolutionary. And in this sense Steve Jobs above all others was an innovator. And finally to call the sub prime bunch innovators is to really stand things on their head. Jeff Bezos of Amazon is an aggressive, savvy business and marketing man but not an innovator, not by a far stretch. “Innovators need more than an idea, they need a thick skin”……well that doesn’t sound too profound does it? Malcolm G was very fortunate with his first book that brought him to fame but it still sits in the category of The Secret by Rhonda Byrne….a collection of little so called ‘principles’ strung together to make it all sound new. No issue with this. This is as much creative thinking as anything else. But when some of this begins to aspire to high intellectual pronouncements it becomes irritating.

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December 17, 2011

Brands invade schools!

Today’s front page news in the Economic Times on brands giving price off on shoes and back packs and even iPads for use in schools and colleges sounds both interesting and alarming. On the face of it giving discounts for clothing and other personal effects needed for school sounds fine but under question right now is the intention. The ET story quotes several child experts who think that ‘hooking’ kids this early on branded goods is likely to increase what they call the pester power of children,. leading no doubt to expensive purchases which may or may not be affordable for parents. We know that kids can and do impact brand choice and engagement with this group has become central to strategy for many brands. Are there any moral issues here? Marketing experts do not see any short to medium advantage in this strategy. Some of the more responsible brands see this as crass and not something they consider expressive of true social responsibility. This is a stance worthy of respect and endorsement. Brands that make food and other items for kids have in many cases voluntarily taken the ethical route of NOT targeting children in their brand communication. Manipulating social values is an accusation made against marketers off and on, raising the anti consumerism pitch to new levels. Psychologists and sociologists have been co-opted into helping brands target children more effectively. And the jury is still out on whether this is right or wrong.

What do you think?

December 8, 2011

Multibrand Retail in India: Where are our own big boys hiding?

Our indigenous retail changeover started a while back. Looking back it seems that what drove this change was the opening of imports on the back of which Indian packaged goods got “re-made” and priced. At least four of our biggest corporate brands started “department store” operations that resembled multibrand retailing, with fresh produce available along with a range of personal and household packaged goods.  Anjou pears sat alongside Nagpur oranges and we all felt lucky! The came Spanish olive oil, Italian pasta and Turkish dried apricots! And our lives felt richer.

These stores all had many problems.  Irregular stock, unacceptable pricing, bad customer service. There was confusion on which set of consumers to target: high end with all sorts of imported goods or middle class with routine middle priced Indian stuff. Most likely these operations lost money. But they are still around and hanging in there. So what do the owners of these operations need to do to turn things around and create our own multibrand retail chains that can offer the same economy of scale, brand choice and service excellence  that we are told only the multinationals can bring to India.

The argument goes that we do not have the back-end skills to organize ourselves for multibrand retailing. We do not have the backward linkages to bring produce from the farmer to the consumer sales counter. We do not have the logistical know how to streamline operations and make them work seamlessly. Alongside runs the economic argument…..we need the dollars. All hard to accept since our businesses have the skill to play on the global stage and can hire talent from anywhere they want. There is nothing here that cannot be brought into India by Indians. Why should the profits from one of the largest consumer markets in the world go out of this country with no benefit to business and labor in India.

This is not about the little grocer getting squashed it is about where profit from retailing should go: into Indian pockets or into American and French ones.