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The Reflection of Management

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Flash Mob
An exploitable promotional strategy!

By Ambili Jayachandran, University of Kerala

Book Review of ‘The Toyota Way’ By Prof. Rishi Kesava Ram Velure,
Faculty Associate, Healthcare, TAPMI

Exclusive Interview of Mr. Prakash Dadlani
Country Head, Marketing Excellence, 3M

“Neuro-marketing”
Can the power of the subconscious affect consumer choices?

By Pramit Das & Subhamoy Ganguly, IMT Ghaziabad

A Student’s Initiative
Volume II, Issue XIII
Pratibimb | September 2012 | 1

September 2012

A Monthly e-Magazine

T. A. Pai Management Institute
Manipal, Karnataka

About TAPMI
T. A. Pai Management Institute (TAPMI) is a premier management institute situated in Manipal and is well known for its academic rigor & faculty-student interaction. The Institute has been recently ranked amongst top 1 per cent of B-schools in India & 4th in the South Zone by The Week Magazine. Founded by the visionary, Late Shri. T. A. Pai, TAPMI‖s mission is to provide much needed impetus to the task of building professional management capability in the country. In the process, it has also played a role in strengthening the existing educational and health infrastructure of Manipal.

Our Mission
We are committed to excellence in post graduate management education, research and practice by nurturing and developing global wealth creators and leaders. We shall continually benchmark ourselves against the best-in-class institutions. We shall foster continuous learning and reflection, achievement-orientation, creative interdependence, and respect for diversity with a holistic concern for ethics, environment and society.

Pratibimb | September 2012 | 2

PRATIBIMB
TAPMI’S MONTHLY e-MAGAZINE VOLUME 2, ISSUE XIII SEPTEMBER, 2012

TAPMI‖s e-Magazine - is the conglomeration of the various specializations in MBA (Marketing, Finance, HR, Systems and Operations). It is primarily intended to provide insights into the plethora of knowledge that relate to the various departments of Management and to give an opportunity to the students of TAPMI and the best brains across country to exhibit their creative cells. The magazine also strives to bring expert inputs from industries, thereby bringing the academia and industry together. Pratibimb the e-Magazine of TAPMI had its first issue in December 2010. The issue comprised of an interview of denoted writer Ms. Rashmi Bansal along with a series of articles by students and industry experts like MadhuSudan Rao (AVP-Delivery, Mahindra Satyam) & Ed Cohen who is a global leader and chief learning officer who led Booz Allen Hamilton & Satyam Computer Services to the first rank globally for learning & development . It also included a hugely successful and engrossing game for finance geeks called “Beat the Market” to bring out the application based knowledge of students by providing them the platform where they were expected to predict the stock prices of two selected stocks on a future date. The magazine is primarily intended for the development of all around management knowledge by providing unbiased critical insights into the modern developments. TAPMI believes that learning is a continuous process and is not limited to the four walls of the classroom. This viewpoint is further enhanced through Pratibimb wherein students manage and contribute to create a refreshing learning environment outside the classrooms which eventually leads to a holistic development process. The magazine provides a competitive platform and opportunity to the students where they can compete with the best brains of the country. The magazine also provides a platform for prominent industry stalwarts to communicate their views and learning about and from the recent developments from their respective fields of business which in turn helps to create a collaborative learning base for its readers. Pratibimb is committed in continuing this initiative by bringing in continuous improvement in the magazine by including quality articles related to various management issues and eventually creating a more engaging relationship with its readers by providing them a platform to showcase their talent. We invite all the best brains across country to be part of this initiative and help us take this to the next level.
Pratibimb | September 2012 | 3

Whereas there is no dearth of actions at TAPMI. R. TAPMIans have proved that they are equally capable of actions and of documentation without losing the intellectual flavour of it.Director’s Message It is always a pleasure to witness that certain efforts of the students are sustained and carried forward.” ends up as a mere platitude when there are no visible actions and documentation. C. Dr. TAPMIans have truly demonstrated the evidence for creative interdependence. it is normally viewed as uninteresting. an important aspect of TAPMI‖s mission. TAPMIans have manifested both the penchant to produce research works and also get their counterparts in other leading business schools to contribute their thoughts to this endeavour. As future practicing managers who will be engaged in rigorous action in different fields of business. Pratibimb is one such. The oft-beaten track. “We are here to learn. documentation is not something that many—other than scholars—choose to engage in. I sincerely appreciate the students and the faculty of TAPMI who have made Pratibimb a possibility through their scholarly works. drab and a drudgery. Scholarship is too important a phenomenon to be left to scholars alone. co-ordination efforts and support. Natarajan Pratibimb | September 2012 | 4 . especially in the field of management. I wish the team the very best. In this regard.

The approved design of tees and certificates will be also released through our page on Facebook at http://www. 3M and another interesting interview with Mr. Prof. I urge all readers to like the Facebook page to stay updated with the latest. Operations Prof.. Prof. Animesh Bahadur Asst..reflecting. Not letting too much of the cat out of the bag. Ashok Bannerjee.Editor’s corner Editor in Chief Sushmit Sinha Branding & Advertising Manish Mishra Design Abhishek Dubey Creative & Cover Design Namrata Mahapatra Communications Divyanshu Varun Anant Sub-Editors Abhishek Raghupungav Aditya Bhat Arun Stephen Devi Kailas Kannan Venkat Pallavi Prasad Rithwik Krishnakumar Publishing Vandna Soni Faculty Advisors Prof. Pratibimb has imbibed new members! With a fresh batch at our campus in TAPMI..edu.management. I. Vinod Madhavan Asst. Vrishali N Bhat Asst.in. ! To aid us decide which entries really merit the cut. Our current issue carries special features such as an exclusive interview with Mr. Prof.com/pratibimb. Also.facebook. Economics & Finance Prof. Our latest September issue has seen a colossal number of contributions. let’s maintain the hint of anticipation. Chowdari Prasad Dean (Branding and Promotions) Dear Readers. Manipal... Prof. on behalf of the entire team would like to congratulate all who have had their contributions published We at Pratibimb salute all who have contributed in any manner to augment this magazine. Marketing Prof. Sanjay Choudhari Asst. Prof. . Our association with Jaipur Rugs has now advanced a stage. Prakash Dadlani. Team Pratibimb has seven innovative new members who now comprise the sub-editorial team. Systems Pratibimb | September 2012 | 5 . Prof.in Enjoy Reading! ~ Sushmit Sinha Prof. The hub of the page is not just the content from the magazine but also trending articles from diverse sectors of management. Marketing Prof. we have a continual rendezvous with many faculty members. Srivatsa H S Asst. we would like to thank all faculty members who have provided their valuable feedback to help maintain the the standards we have strived to attain. Pratibimb will now partner with the Jaipur Rugs Foundation to sponsor t-shirts to contributors of published articles. Flipkart which was published by Yourstory. Mohan Kumar V Asst. Rishi Kesava Ram Velure who has written a book review of the all famous management book The Toyota Way. We also have our faculty member Mr. Lastly. Human Resources Prof. send in your valuable suggestions or feedback to pratibimb@tapmi. A second major progress is that we will brusquely be distributing certificates to winners of various contests.

IMT Ghaziabad 28 Indian Corporate Bond Market by Siddharth Pal. Flipkart 19 Book Review: The Toyota Way 21 Prof. Marketing Excellence. Yellow Fuel causing Economy Blues by Vibhu Gangal. Welingkar. SCMHRD 25 Neuromarketing: The power of the subconscious by Pramit Das & Subhamoy Ganguly. TAPMI Riding the Technology Wave by Shreesha Ramdas & Harish Reddy 23 Yellow Metal. Faculty Associate. 3M 17 Interview: Mr.Contents Functional Beverages: Industry Analysis by Divya Bhatia. Healthcare. Prakash Dadlani Country Head. IIM Rohtak 32 Pratibimb | September 2012 | 6 . Mumbai 7 Flash Mob — Prospects as an Exploitable Promotion Strategy by Ambili Jayachandran. Rishi Kesava Ram Velure. IIM Lucknow 14 Interview: Mr. Ashok Banerjee VP Supply Chain & Data Platform. University of Kerala 11 Below the Line Advertising and the Changing Trends in Advertising by Shashank Srivastava & Sarbaswarup Mohanty.

Consumers purchase these products for both convenience and specific health benefits. caffeine. amino acids and raw fruits to provide additional health benefits beyond nutrition.159 crores in 2010 with a CAGR of 21% in the last five years. 180 and many more are highly caffeinated and high energy drinks. Functional beverages can be defined as ready to drink formulation with ingredients such as herbs.     Energy and rejuvenation Red bull. anti-oxidants and creatine. The faster growth of sector is also because of saturation of market by carbonated drinks. The global functional beverages market grew by 3% in 2010 to reach a value of $48. Although these ingredients are approved by FDA. Functional beverages are becoming popular due to their specific health benefits and are appealing to consumers because of changing lifestyles. Pratibimb | September 2012 | 7 . the global functional beverages market is forecast to have a value of $62. The industrial trend is changing. In 2015. minerals.151 million. enjoyment or simply having fun. These drinks include stimulants such as taurine. But today large numbers of functional beverages are available for various lifestyle problems ranging from anxiety to sleep to weight loss etc. It is expected that the industry will cross Rs 19. Various products which are categorized as functional beverages are sports drinks. vitamins. Welingkar Institute.186 million. an increase of 29% since 2010. Adrenaline rush. Projections for functional beverages are that market will grow by 103% in between 2010 and 2015 and total annual sales exceeding $78 billion in 2015.000 crores sales in 2015. These functional beverages satisfy need of consumers of hydration. fruit/vegetable smoothies and even enhanced water. energy drinks. The Indian functional Beverage Industry was estimated to be around Rs 11. the consumption of carbonated drinks is decreasing while that of functional beverages is increasing. FUNCTIONAL BEVERAGE INDUSTRY Functional beverages sector can be said to be subsector of non-alcoholic industry and is fastest growing sector. energy.Functional Beverages: Industry Analysis by Divya Bhatia. The various vitamins commonly found in energy drinks for their specific benefits are: B vitamin: For energy metabolism E vitamin: Has antioxidant property C vitamin: To activate people Gatorade is well known hydration drink for athletes. sugars. ready to drink tea and coffees. Coca Cola‖s Shock and Red Bull were the early entrants in the industry and are the ones who give chance to late entrant to think about the industry. The industry can be broadly divided into four market segments: Hydration:  Antioxidants. vitamins and fruit extracts are the ingredients which hydrate both inner and outer side of skin. yoghurt. Mumbai INTRODUCTION The first functional beverage which was launched was to hydrate the body.

Even traditional companies who never tried hands in such products are also trying. rice and almond-based drinks. juice drinks. The products of functional beverages offer wide variety targeting different health concerns. The other is probiotic or active drinks which have ability to enhance the power of immune system. Rasna is even planning to enter into the segment with a new subsidiary. Amul Company has come up with Prolife lassee and buttermilk. MAJOR PLAYERS The players in this category are divided into four types. relaxation drinks. Various companies which are coming into new energy drink segment are Dabur. health drinks. metabolism boosting effect. Health and wellness: This segment is about the health conscious people. fat burning beverages are launched by companies that go well with people convenience to reduce the weight.    Dabur will launch beverages under real brand. So various calorie burning beverages. Amul. ENVIRONMENT ANALYSIS PORTER’S FIVE FORCES  Pratibimb | September 2012 | 8 .some health experts still say that all these ingredients are not beneficial to health. So they have introduced less sugar and less caloric beverages to target this segment. beauty drinks. coconut water. They are looking for brand licensing and technical collaboration. All these companies want to woo the health conscious young Indian consumer. Danone and Rasna. This product is launched as quick and healthy solution to stress and fatigue. Amway XL. power house.  Dairy products are even extending themselves to more than flavored milk. and Coca-Cola Co. Weight management Due to changing lifestyle there is an increase in obesity and consumers are looking towards fast and easy methods to reduce weight that can be easily adopted for their lifestyle. functional soy. One is non-alcoholic beverages companies including PepsiCo Inc. Various functional beverages which are available in the market are Rhino's. One major product is hybrid drink with combination of vitamins and other nutrients which has thirst quenching ability. Kraft food. functional tea. XXX. weight-loss drinks etc. Asaram Bapu products etc. energy drinks. The other categorizations of the products are on the basis of sports drinks. Bullet. Cloud 9. functional juice. Other segments are traditional medicines companies products like Patanjali products. PRODUCT The functional beverages has wide range of product like energy drinks. enhanced water. General Mills etc. Another type consists of major food companies such as Nestle. The other is for enhancing memory and mental sharpness. Children are also targeted by these energy drinks and Nestlé‖s Boost is taking the lead in this segment. Amway launched Amway XL energy drink which comes in two flavors of citrus blast and tropical blast. Britannia. In the energy  drink segment Red bull is growing considerably fast. functional yogurt drinks and smoothies. The third group is small scaled companies like local companies.

Some drinks contain anti-oxidants. Diet drinks are low in caloric content and with less of sugar content. Various health experts claim adverse reaction using these energy drinks. Consumers are interested in natural ingredients and beverages which are free from artificial ingredients. These consumers are willing to try something new. The popularity of sports drink is limited to sports people. High sugar content increase the chance of dental carries. 3. High price of these drinks are concern for the company. Some energy drinks have been reported to be misused by college students because of high content of caffeine in them. And another important point is that both energy and Vodka are targeted to consumers around thirty years of age. FACTOR FOR SUCCESS OF FUNCTIONAL BEVERAGES Product: Drink must taste good and have element of Pratibimb | September 2012 | 9 . 4.   XXX has two variants Rejuve and Nicofix. Their popularity is among night clubbers. Large consumption of functional beverages is due to perceived health benefits of product. A majority of Indians are now becoming aware about malnutrition and under nutrition. Market of functional beverages is increasing because people have been become proactive in disease prevention and control. 6. Nicofix is formulated to decrease the urge for nicotine and Rejuve is formulated to rejuvenate mind and body and enhance immunity. These drinks have inherent energizing benefits of fruits and are natural sources of caffeine. Companies are trying to surprise them by coming up with new products. Competition from beverages which are much lower priced than functional beverages. Sports drinks are used only by sportsman before and after performance. Power Horse and Sobe. Females consume or try functional beverages more than males. Concern is there about consumption of these drinks in large amount. 8. SRK is brand ambassador and even brand is associated with KKR as principal sponsor. As some of these drinks contain large amount of sugar and caffeine which thus increases caloric intake and further increase the case of heart attack. taste and aroma of product. There is consumer distrust on the claims made by the beverages. There are various benefits of functional beverages which interest consumer. GROWTH DRIVERS 1. SoBe Adrenaline Rush which is priced at Rs 75 for a 245 ml can. in between 25-45 years old. Due to high caffeine content energy drinks are compatible with alcoholic drinks especially like premium Vodkas. Food and drug administration (FDA) regulation due to high amount of caffeine in some of the drinks. Energy drink segment still remain a new category with only few established players such as Red Bull. 3. 9. As a result this market has huge attraction for people who are concerned about health. Cloud-9. Powerplay. long distance drivers or by people after working long hours. 2. 2. 5. having highly disposable income. belong to upper middle and middle class. Energy drinks used in combination with Vodka: In some cases energy drinks can be used to boost sales of alcoholic drinks or vice versa. CHALLENGES BEING FACED 1. As heart rate automatically increases after exercise. TaB Energy and burn (Shock's global avatar). blood pressure and other heart risks. By surprising customers the purpose of companies is that consumer won‖t get a chance to compare product with cola or juices. Full Throttle Fury. Some of these drinks are even found to contain carcinogenic substances. Coca Cola has a global portfolio of five energy drink brands Vitamin Energy. Challenge is to make its presence on casual basis. so consumption of energy drinks may further increase it. CONSUMER PROFILE Typical consumer of functional beverages is well educated. They are looking for convenient source of energy and functional drinks are fulfilling their need. Energy drinks are good source of energy without providing excessive calories and sugar. 7. Though energy drink are more famous than sports drinks. Surprise can be in form of color. Health concerns are associated with drinks.

as excess of everything is bad whether it is health supplement. Product can be promoted by sampling in the modern retail where consumers are more receptive to product. 30 only. Some of the products launched by companies are only available in night clubs etc. These drinks are targeting to consumer looking for basic nutrients such as protein and fiber. References     Business wire India Nutraceuticals World Foodlink US. User must feel that product works. The growth of energy drink segment has increased even during the recession. vitamins. Price: Product should be launch in small packs at less price. All the claims behind the product must be proved by scientific study and have evidence of testimonies. WHAT’S NEW Energy drink segment is increasing where as natural juices segment is decreasing. Pepsico also launched Trop50. which has same taste as of original cola but caloric content is decreased in product. N0-4 Wikipedia Pratibimb | September 2012 | 10 . Other drink launched by coke is burn which is high caffeine drink and available in three various sizes 250ml. FUTURE OUTLOOK/RECOMMENDATION Relaxing drinks have to look for negative claims and FDA regulation in this segment of beverages. Volume 7. GlaxoSmithKline Consumer Healthcare's sports drink Lucozade and Tata Global Beverages's tea-based wellness drink T!ON are not able to generate good response in market. Traditional products with ingredients such as caffeine. 300ml and 500 ml cans. Gatorade which was initially introduced in Indian markets at price of Rs. Competition: A clear differentiation of one‖s product from the competitor‖s product is there in term of ingredients and their health benefits. Similarly PepsiCo's energy drink SoBe. The product is made not to be mass distributed through various retail channels. 150 but now product is manufactured in India only and is available at price of Rs. The companies are launching products with less of caloric contents while retaining the same taste of products. The product was not able to produce good market response. Packaging should be attractive enough as these drinks are single serving beverages so people want to get notice when they are consuming these drinks. These products reduce the weight while maintaining the general lifestyle as these is convenient on-the-go snack. NourishCo launched glucose-based drink “Tata Gluco Plus” in a 200 ml cup priced at Rs 6 and launched nutrient water under “Tata Water Plus” at Rs 16 for a 750 ml bottle. Brands need to focus on mass segment. gym etc. Other line of extension is natural teas. selected modern outlets. omega 3 fatty acids. Protein drinks are also much in demand.something new in it. FAILURES Coke came up with energy drink Shock which was positioned as lifestyle drink in 2001 with tagline ―unleash your wicked side”. sugar. Range of products has broadened to sugar free. but product will be available in pubs. caffeine free and organic products. other health supplement etc in most of drinks amount need to be regulated. As the segment is continuously increasing the companies are exploring new areas of industry. These beverages are simple with all natural ingredients. Promotion: These drinks are promoted with benefits such as healthy heart. The problem with this segment growth is that people still think that drinks cannot be good source of protein. Beverages companies are pushing their functional beverages along with increasing consumer demand. improved immunity and digestion and energy boosting. Place: Product should be available at all retail outlets. herbs and anti-oxidants are replaced by ingredients such as protein.The content of caffeine. Protein can only be provided by bars and powder formulation. The reasons behind these failures are pricing and most of foreign companies have launched their product as such without any local customization. What is noticed that segment is fairly able to maintain its consumer base but is not able to add more of consumers. Pepsico introduce Pepsi Next. More than 800 sports and energy drinks were launched in 2010 all over the world.

such as profits and joy. to market this product. He describes Guerrilla Marketing thus: campaign is the more attention it captures. and of course permission from the city corporation. Advertisements adopted the push strategy by bombarding the customers with information about the product. "I'm referring to the soul and essence of guerrilla marketing which remain as always -achieving conventional goals. It works because it's simple to understand.This is one of the simplest examples of Guerrilla Marketing and may be the cheapest. entertained and even part of the campaign. such as investing energy instead of money. definition and recognition. It is not preachy or educational but actually makes the viewer surprised. The main success of this marketing strategy is that it is useful for small business enterprises with small budgets. through the publishing of his book. University of Kerala Introduction Guerrilla Marketing was discovered in the late 1970‖s. sending a message in itself. with unconventional methods. easy to implement and outrageously inexpensive. It is not necessary that Guerilla Marketing to be used only for commercial purposes. This was successful in the initial years but later on it lost its effectiveness. that Jay Conrad Levinson gave Guerrilla Marketing its form.When garbage dumping became a problem.Flash Mob — Prospects as an Exploitable Promotion Strategy by Ambili Jayachandran. The more creative the Picture 2:. the Auckland City Council replaced the regular black rubbish bag into a bushy hedge. Picture 1:.” All that it needs is to think out of the box and have loads of creativity. Advertisements did educate the public but failed to engage or entertain them. Till then the aim of marketers was to sell the product by creating awareness about it. It was in 1984. to market or promote their product. Guerrilla marketing is Pratibimb | September 2012 | 11 . In the words of Jay Conrad Levinson. “Guerrilla marketing has been proven in action to work for small businesses around the world. All it would have taken for Nestle is a can of paints. through all Medias available.

marketing awareness in a clueless world. as a protest or for entertainment. do a tableau or simply do something together in perfect sync and disperse into different directions once the act is the railway authorities and most importantly. don‖t be shocked.needed because it gives small businesses a delightfully unfair advantage: certainty in an uncertain world. published on June 17.” Many companies. “It‖s the new rage. as a social awareness act. it has become an absolute necessity for enterprises to satisfy consumers for their survival. Guerrilla Marketing takes different forms such as Graffiti. You are witnessing a flash mob. Shonan Kothari organised this flash mob as a tribute to the victims of the terror attack. The commuters were taken by surprise and this was what the mob wanted out of their performance.Hundred actresses got dressed as Maria Bello's Jane Timoney character in the rookie NBC drama in Canada to market this U. majority of the public are very conventional and traditional. network series. This is done either as an advertisement campaign. So. They might dance. the only way in which a firm can have a fair market share is by creating product preference or loyalty. it‖s entertainment and it‖s an effective vehicle for social messages. this phenomenon has been taken up and performed in various parts of India such as. Vadodara. Vishakhapatnam. bringing in two hundred youngsters to practise and dance together for ten minutes. Kochi and Hyderabad. small or large have used this marketing strategy and have achieved a great response in the form of increased sales and market share in many countries. 2012. Flash Mobs and anything or everything creative. simplicity in a complicated world. Still.Flash Mob at Mumbai‖s Chhatrapati Shivaji Terminus. It is still used widely but not as frequently. Even though India has gone through a lot of development. a day after the third anniversary of 26/11. relative to other forms of advertising or promotional strategies. The first flash mob in India took place in Mumbai‖s Chhatrapati Shivaji Terminus. Flash Mob Suppose you are in a mall and suddenly regular shoppers (or so) come together and do something out of the blue. The first flash mob took place in 2003 in New York Macy‖s. They are new to this concept and might take some time to accept it wholeheartedly. economy in a high-priced world. She was successful in getting permissions from the Mumbai police as well as Pratibimb | September 2012 | 12 . Sticker bombs. Consumers are rational and have full access to information about products (with the advancement of technology and Internet). a day after the third anniversary of 26/11 complete. where hundreds of people entered a store searching for a “love rug”. Noida. sing. It is safe to say that Flash Mobs are rapidly gaining popularity and acceptance. Picture 4:. In such a scenario. It‖s fun. This can Picture 3:. Current Market Condition India has a highly competitive market where there are many enterprises selling the same or similar products.” This is how Neha Malude described Flash Mobs in The Hindu‖s Sunday Supplement “Magazine”.S.

Inc. (2008). There might be a little amount of work to do such as getting permissions or paying rent for the space used and even the mob (if the concept gets wide acceptability then the mall authorities might also try to exploit the same).com/2011/06/10/flash-mob/ http://www.wikipedia. its ability in promoting a product is almost undisputable. but the main task is to manage or coordinate them. John Wiley and Sons. Michael W. This is where companies can utilise the concept of Flash Mobs. which has already started gaining popularity among the crowds. This of course. Gary Armstrong. Flash Mobs are performed in metros and malls. Twelfth edition. is not a Herculean task keeping in view that there are people like Shonan who have been able to gather. It has definitely created popularity. So participation can be ensured.com/2008/06/03/the-history -of-guerrilla-marketing/ http://en. Pearson Education. Flash Mobs have been successful as a social vehicle for spreading social messages. http://www. Almost all promotional strategies have become common and are slowly losing its effectiveness in catching the attention of the public. at the same time crowd-engaging phenomenon. On the flip side. it could be the next promotional strategy exploited by companies to market their products. It has created positive results as a social vehicle in India. it still needs to be seen whether it would do the same as a promotional strategy. References  Philip Kotler. in other words. advertisements only educate the consumers and fait to engage or entertain them. Flash Mobs are new in India and have become the talk of the town. fashion may stay for a long time but fad ends as soon as the novelty of such a phenomenon fades.org http://www. McLaughlin. Neha Malude. 2002 issue. Jay Conrad Levinson.hollywoodreporter. Breakthrough tactics for Winning Profitable Clients. Guerrilla Marketing for Consultants. (2005). they have been able to draw attention. If a company takes up flash mob as its marketing strategy. manage and coordinate a two hundred member flash mob and turn it into a huge success.be done by increasing the product utility and backing it up with heavy advertising and promotional strategies. Principles of Marketing. is its acceptability itself.ndtv. June 17. So this could be the new promotional strategy which can be exploited by different firms.Fashion Conclusion Picture 5:.com/news/nbc-s -prime-suspect-promoted-239161 http://weburbanist.com/flashcards/ cardshowall. Weekly Edition.proprofs. It is too early to say if “Flash Mobs” are a fashion or a fad. Most important of all.com/video/player/news/watchflash-mob-in-mumbai-wows-commuters-atcst/217228 http://urbanpeek. As mentioned earlier. Inc. If it does. The concern is whether it would gain acceptability in this traditional society. Sunday. The difference is that.Fad Pratibimb | September 2012 | 13 . This is comparatively a very small portion of the target market. Being the most cost–effective (in comparison to other marketing strategies). it may not get the coverage that a mass communication media such as a Television or Radio would. The Hindu‖s Magazine. Prospects of Flash Mobs Being an Exploitable Promotional Strategy Flash Mobs seek fun and get it too.php?title=ksu-marketing-400-quiz-2         Picture 5: .

IIM Lucknow In a market rapidly adjusting to changes in technology. Marketers have been tempted to follow one to one advertising or targeting niche customers.  TV viewers are resorting to digital video Pratibimb | September 2012 | 14 . advertisers can reach people with acceptable messages. The purpose of advertising on taxis for advertisers can be many. In these bottlenecks of life. travelling in elevator . Consumers are using technology to counter the entry of ads into their personal lives. The purpose of these activities has been to develop the brand by creating awareness and building a brand profile. going up in an escalator in a mall or it can be travelling in a taxi. This can prove to be beneficial for marketers than billboard ads which are fixed and     Sponsorship Sales Promotions Public Relations Personal Selling Direct Marketing. to a “below the line” approach that stresses targeted customer centric communications and concrete returns on investment. CHANGING TRENDS IN ADVERTISING: Consumers are faced with a barrage of advertisements every day in their lives. Internet users are using software to block spam and popup advertisements. radio. People are starting to lose interest and even despise the mass advertising being followed through traditional channels of mass advertising like – TV. For example Kia Motors uses these techniques to target clearly defined consumer groups rather than a mass audience like its above-the-line activity. focus of marketers has now shifted from an “above the line” focus on reaching a broad population with emotionally oriented appeals . Four specific techniques have been identified where marketers can reach broad segments of people without overshooting their advertising budget. The examples of bottlenecks can be – waiting in an airport lounge . Catching people in the bottlenecks: Though people can easily screen advertisements when they are in their homes but people every day spend time outside their homes where they lack the required control. And the advertiser gets better visibility since the taxi can roam from place to place with different customers aboard.Below the Line Advertising and the Changing Trends in Advertising by Shashank Srivastava & Sarbaswarup Mohanty. etc. Sometimes also the costs of advertising are more than the costs allocated in the budget for promotional purposes. But the practice of targeting “niche” customers can prove to be costly for organizations. available information and heightened consumer demand. newspapers. Some people use mobile devices to download commercial free versions of popular television shows. Below-the-line methods are very specific. memorable activities focused on targeted groups of consumers. Below-the-line methods include:   recorders and on demand technologies to fast forward through advertisements. traditional and brand oriented advertising is no longer the primary driver of customer behaviour. The taxi owner gets revenues from space which could not have been utilized for a better purpose. They are under the control of the organisation. magazines. Its reflected in the dwindling print newspaper circulation and the stagnant market of network television commercials.

Using a Trojan Horse: The concept of “sneaking” ads is familiar with product placement in films. or advertising on pay checks in restaurants and deposit slips in banks or on the rear of an airlines ticket.whose effectiveness location. puzzles and games to travellers on American Airlines and the flight Advertising on Garbage Trucks FedEx Ads on Coffee Cup attendants publicized the benefits. companies have installed a wireless digital screen which broadcasts short news and entertainment programs. The municipalities can get revenues from unused spaces on trucks and companies on their parts get huge unused places to advertise. Other unique ways can include advertising on pizza boxes. Considering the example of “coffee cups”. The recall rate increases with frequent travel. depends on the billboard consumers using the means of transport. Even seats on aircrafts and taxis in developed countries are fitted with small screens which displays ads and for Pratibimb | September 2012 | 15 . they can‖t avoid it altogether. Millions of office goers use insulated coffee cups everyday during office hours at their desks or in board room meetings. Normally the companies won‖t allow advertisers to advertise to people inside the office. movie headphones . television programs and even in video games today. Mastercard provided complimentary snacks. but the concept of placing small ads in the coffee cups helps in gaining visibility for marketers without burning a hole in their pocket. Also on elevators. etc. Companies have also advertised in public restrooms and toilets. Also recently garbage truck advertising has come to the fore.

uk/kia-motors/ using-sports-marketing-to-engage-withconsumers/above-the-line-and-below-the-linepromotion. M. For Example: Golf Carts are being fitted with GPS systems. Hence in the above examples we have seen how the focus of marketers is shifting from the traditional modes of advertising to the other newer modes of advertising.html  http://www.business-standard. Ads can be placed and shown in the GPS system when player is moving from one hole to another hole. REFERENCES:  Nunes Paul F.com/india/news/ belowline-advertising-onroll/339587/ Pratibimb | September 2012 | 16 .co. 2006  http://businesscasestudies. Use of Mahindra Flyte in 3 Idiots Many people interviewed after these experiences were enthusiastic about the whole process which included fun events and planned to tell others about it. Sloan Management Review  Paper on – “Tracking the trends : A comparison of Above the line and Below the line Expenditure trends. & Merrihue Jeffrey.I. People can be given trial kits of Razors.Getting people to play interactive games: New technologies help marketers to interact with consumers in public spaces without employing massive sales teams. Since this kind of advertising doesn‖t disrupt the people‖s activities it is seen as less intrusive for people. toothbrushes or body wash of some reputed company like Gillette or Oral B. Omega watches in Bond Movies Targeting People at play: People generally don‖t like to be bothered when they are vacationing or doing some leisure activity like playing golf. But advertisers have realized that giving people something they can use is a more thoughtful approach to brand building than the tactic of pushing more and more messages when people are glued to the television or computer. In Hotels. For example: Nokia when it launched its 3300 model contributed a quarter of its advertising budget on interactive posters.T. “The Continuing power of mass advertising”. print response ads and telemarketing are coming up in a big way to open up new avenues in advertising and leading to heightened competition among companies. Also direct mails. V12 group & Winterberry Group. An Adidas Ad replicated a virtual football field wherein customers could play by passing a virtual ball to each other.

but now the trend of 'frugal innovation" seems to be originating in India and then going back to other countries including some Western ones.. which begins at the customer and ends with the customer. How does Asian and Indian style of innovation differ from the western trends? How are products Pratibimb | September 2012 | 17 . B and C? The basics remain the same as to the process of innovation. Let’s say a gap has been identified to launch a prospective product. Prakash Dadlani. Excerpts: [The views expressed are his personal and not the views of 3M or any other organization he has worked for] tiered as A. marketing and sales support have to be in line with the tier under discussion to make it a viable and sustainable option. In an exclusive interview with Sushmit Sinha and Aditya Niyogi for Pratibimb. promoting diversity in terms of educational background and qualification. it needs to fit the criteria of the support required in all the above aspects important for the product to reach and sustain in the market. In most cases the Masterbrand and Product would benefit from an association. Hence. Marketing Excellence at 3M. Dadlani shares valuable insights on Branding which would strike a chord with any Marketing student. but allowing a certain time for people to devote to a project of their own choice. Sometimes macro trends play a huge role in identifying trends which the customer may not relate to today. the entire mix. institutions and a meaningful reward and recognition platform. In the balance between master brands and sub brands – what are the key factors that a manager must take into consideration while coming up with new products? What are the associated risks and advantages? A very important question that should be asked by any Brand Manager to his Marketing Head at a very early stage of branding a new product. but these are picked by sharp observers of Consumer Behavior and Tech experts who begin preliminary work on them and then check with consumers. interaction with other industries. i. manufacturing. 3M TAPMI had an opportunity to interact with Mr.e. Prakash Dadlani Country Head. The call needs to be taken in sync with the values of the Master Brand and the upside or downside the product positioning can cause to the Masterbrand and indeed to the product itself. Here the traditional Bottom of the Pyramid approach has worked well for some companies. but the degree of association should vary depending on the exact current positioning as understood by customer research and not the 'feelings' of the brand team. Country Head. route to market. What are the challenges involved in sustaining a highly innovative culture? Not easy to give a single answer.INTERVIEW Mr. Mr. Here too. Traditionally Asian and Indian techniques and methods would follow the West. Marketing Excellence. however. what are the basic criteria that we should evaluate be we go ahead with the development? The capability of the organization to make ROI is primary.

Sales. The real benefit is actually when some companies pay their suppliers to train their larger organization. production team and finance team/purchase team are given individual targets. The most common one is creating of cross functional teams. setting targets to those attributes in sync with the brand positioning and measuring them in conjunction with the sales performance can help understand the impact of Brand on sales over a period of time. Brand is something all functions. Often new technology in not adopted either because people do not wish to re-train or they are uncomfortable with new technology. Over a period of time the teams understand each other‖s pain points and evolve into a close knit unit. Along the period of time. In many companies technical team. Does "Client Education programs" yield benefits? Client education is an important element of the Value Selling concept and there is no way this can be avoided. Till the time this is the case a company can get a decent ROI. innovation obsolescence is high compared to previous decades. other factors How can B-school grads maintain a competitive edge in marketing when they step into the industry? Interaction with Industry in a proactive basis is the only way to achieve this. This need may be a felt need or otherwise. however the better measures are the quality of brand recall. Summer Internship is another good area where students can come in touch with reality. all help build and hence they need to analyze which of their actions impact Brand and hence business and work on those actions with production team wanting a better product and purchase team aiming to reduce cost. Having a cross linked goal sheet like a Balance Score Card or a Hoshen Kaniri System also helps. HR. Often the goals are conflicting. For that the definition of 'Brand' has to expand to include all the touch points of business. Supply Chain. How can companies make buyers adopt their product at a premium on a sustained basis? The basis of any product has to be the satisfaction of a genuine need of a customer. mapping of ad campaigns. Finance. In fact this is a service many clients seek form their suppliers as a given.How can a brand strategy be aligned with a company’s business strategy? There‖s is no option but to make the brand strategy a driving force for business strategy. Under such conditions what approach do you suggest a sales person take? There are various mechanisms to tackle it. What is the test of a successful brand awareness campaign? Are there relevant metrics that can reflect its performance to help in brand strategy? Traditionally we have limited this discussion to Brand awareness only. In today's market. At such interactions both industry and the B school both get the benefit. sales promos and external factors will help clarify the impact of brand vs. Pratibimb | September 2012 | 18 . whether the relevant and desired attributes have set targets and how they fare over a period of time.

I had a very memorable incident. Oracle is a large organization and is very well structured.. We got in touch with Ashok to learn more about what excites him as a data scientist and the cultural differences of working with great companies across the world. Doing my graduation in mechanical. How was the transition? AB: Well. BEA Systems. you went to Oracle and subsequently Google and Twitter. that’s quite a story in itself! After your post-graduation. They wanted someone proficient in CORBA and that is how I landed up there. Here I saw and learned a lot from a really strong Management team. it has been an amazing ride. I chased the professor like anything! I waited for him for hours and made sure my resume reached him anyhow. much more than that but Computer Science had always intrigued me. Having a different background. Persistence pays off. Some of the best innovations in the modern age have come from Google and it shows! The culture is just phenomenal but one thing that I can point out as a bit of a negative from a personal point of view is that Google has a complete stack of its own. I had to get a research assistantship for paying my tuition fees. BEA Systems which was a smaller company taught me a lot. Carpentry and the likes. Twitter and now Flipkart. Twitter was different as a smaller company. Supply Chain & Data Platform.INTERVIEW Mr. It had a much stronger coordination and communication. Mechanical engineering is definitely Pratibimb | September 2012 | 19 . Google. It was still much more of a startup and involved more pragmatic decision making around YS: Hello Ashok. Flipkart It‖s not often that you come across a person who‖s had experience working with the biggest and hottest companies across the globe – Oracle. And eventually I did land the role. Ashok Banerjee VP. through his open office window to make sure he notices my application. Moving to Google was a very pleasant surprise! I was amazed at how disruptive Google was and is. Ashok had offers aplenty but he chose Flipkart primarily because it is the most promising company in India that is on an exponential growth curve. it was going to be an uphill task for me but I did everything in my capacity to get that place. Meet Ashok Banerjee. More of a personal decision of moving back to India from the bay area. you have a very interesting profile! A mechanical engineer who did his masters in Computer Science and went on to become a data scientist. how did that happen? AB: Yes. I even flew in a paper plane version of my resume. Even for my post-graduation. YS: Wow. I realized that I liked the mechanics part of what I was studying but not the part which involved being on the shop floor and putting in muscular power doing Smithy. Oracle was a prestigious job at that time and it is what makes me proud. In my 4 years Google changed and felt much more structured and a larger company feel to it. I took a CS subject as an elective which I topped and for the place of RA. a data scientist who is currently the VP of data platform and supply chain at Flipkart.

communication models change. So. number of pages are increasing . number of queries are increasing but a person searching on google would expect a result in less than 0. I could have joined any other company but I also wanted to be present at the Headquarters because for any company. YS: So. YS: Data is huge. And so is the hype behind it. Taking an example. Clubbing these. traditional databases will be found lacking. Flipkart and hope for many good things to come. Tell us about it. This is a glimpse about how the “User Growth Initiative” goes on. what colour it should be and all such details are a part of it. Looking at India. the room for misinterpretation increases as people know each other less.However the scarcity of senior talent also opens up bigger. These helps you make targeted recommendations and helps you know what a user might want. Flipkart satisfies the exponential growth great technology and culture. and these factors have importance to the customer. YS: What are your views on the startup ecosystem in India? AB: The ecosystem is still maturing and US has more senior people. a lot can be known. I wanted to see a growth curve and an even earlier stage than Twitter. why Flipkart? Why did you decide to make a move to India? AB: There were multiple reasons for this. The rate at which the amount of information is growing in unimaginable. bolder opportunities for those who are ready and willing to step up. I think Google. This growth story is what has lured me into Flipkart. the HQ is where the core work happens. Twitter and Flipkart are very similar. Employees joining at $2 billion valuation is very different from someone joining it at $8 billion valuation. YS: Okay. We wish Ashok all the best for his new stint with the poster boy of India‖s startup ecosystem. The technologies start to become NoSQL and custom systems. For example. Pratibimb | September 2012 | 20 . YS: Your role at Twitter was very interesting indeed. A user may never return after the first interaction so if we cannot connect the new user to interesting personalized content he may never come back. I had personal reasons and desire to be closer to my We at Yourstory. I was skeptic as to how the work culture would be because this is the first time I was going to work from outside the Bay Area but it has panned out very well. growth and exponential growth.costs/constraints and tradeoffs. take in very few details from the user but make the most of it. I had heard a lot about the growth story back in India and it excited me. how has it been at Flipkart? AB: Oh absolutely fantastic. The first name. The growth phase at Twitter was very exhilarating. The first visit may well be the last. As a company grows exponentially culture changes dramatically. Culturally.5 seconds. AB: User growth is all about experimentation and recommendations specially for the new user.in would like to thank the organizers at the Fifth Elephant Conference where we first met Ashok. mother. Twitter is what made me think about social networks. Similarly on Flipkart the number of items we sell is increasing the number of customers is increasing but site must be equally performant and more performant. “User Growth Initiative”. Where should you place an element on the page. Is this validated? AB: I think it is. last name gives the place of origin and the IP gives the current location. As a company grows. Last name and IP can tell you a lot! First name gives the gender.

Teamwork and Genchi Genbutsu. The book is divided into three major parts in which. People/ Partners and Problem solving (constitutes the “4P” model of the Toyota Way) correlating to the Toyota‖s terminology of Challenge. The author acknowledges his 20 years of companionship with Toyota to authenticate his work. Excess inventory. he describes building and transforming a service organization by burrowing the Toyota Way. implying TPS is not just a tool kit but management philosophy. the author has divided all the 14 principles into four sections and explained them in detail. which is highly laudable. which are Over-production. namely Philosophy. Challenge and Courage. Respect. in the concluding third part the author elucidates the application of the Toyota Way in an organization in making it a lean learning enterprise. The second part is critical. Over processing or incorrect processing. Finally. Shoichiro Toyoda gives the three C’s of Toyota company as Creativity. in the development path-breaking model ―Prius‖ in 15 months time. In this part. a disciple of Taichi Ohno developed a simple representation of TPS in the form of “TPS House” which depicts the two pillars of Just-in-Time (JIT) and Jidoka with a strong foundation of Visual Management. Shortest Lead Time. the roof is made of Best Quality. Waste Reduction. And. the core principles being jidoka and One-piece flow. dealing with the basic principles of the Toyota Way. TOYOTA. And. Lowest Cost. the first part deals with the uniqueness of the Toyota Way. He elaborated the understanding of cross cultural management learning and openness of Toyota to share its source of competitive advantage with the rest of the world. People and Teamwork are integral part of the house which runs the entire system. Liker has succeeded in describing the blue print of Toyota‖s management philosophy in a well defined manner. former President. It highlights the holistic approach of considering all the elements as a part of system and consistent practice of organizational principles across the company irrespective of the geographic location. In this part. Unnecessary transport or conveyance. Stable and Standardized Processes. Part II: The Business Principles of the Toyota Way The first section is about Long-term philosophy (principle 1) highlighting the guiding principles of Weapon To simplify. Leveled Production (heijunka). Waiting (Time on hand). Here. Asking the question “what does the customer want?” is the way TPS gets started. is often known as “Lean” or “Lean Production”. Part I: Using Operational Excellence as a Strategic principles in to 4 categories. Kaizen. And. TAPMI The Toyota Way unleashes the exclusive 14 Management Principles followed in the world‖s largest automobile manufacturing company. This is the foundation for the Toyota Production System (TPS) founded by Taichi Ohno. The author was successful enough to present the practical application of lean thinking and lean production along with various workplace systems. Process.BOOK REVIEW The Toyota Way by Prof. which is an industry record. the author has classified all the 14 Pratibimb | September 2012 | 21 . Unnecessary movement. Rishi Kesava Ram Velure. the author explained how the Toyoda family succeeded in differentiating themselves from the rest of the world through their Toyota Production System (TPS). Best Safety and High Morale. Continuous Improvement. Fujio Cho. Defects and Unused employee creativity. eliminating the eight wastes is the heart of the TPS.

live the philosophy. time in system (TIS). shine. and alternative Toyota decision making methods. it concludes how the Deming cycle can be applied at all levels of the enterprise. discusses continuous solving of root problems driving organizational learning. Standardizing tasks are the foundation for continuous improvement and employee empowerment (principle 6) emphasizing the need for enabling bureaucracy and standardization as ―Enabler‖. the book ends with 13 tips for transitioning your company to a Lean Enterprise. the author explains the importance and factors influencing leadership “commitment to lean” journey. concludes with real time examples of Northrop Grumman Ship Systems Service Process Kaizen event and Visual Control of Engineering at Genie Industries. Making decisions slowly by consensus. standardize and sustain) and A3 reporting. Thus. The author has brought out the uniqueness in the mission of the company to create constancy of purpose and place in history with three exclusive elements of contributing to the economic growth of the country. thoroughly considering all options. where the author explains takt time and One-piece flow. Using “pull” systems to avoid over-production (principle 3) elaborates on Kanban system. and teach it to others (principle 9) impressing on the leader‖s view of TPS with people through Technical. straighten. In the concluding chapter. Dedicate.Unevenness. results orientation: the role of metrics and directing and motivating organizational learning (Hoshin Kanri) .the Toyota‖s policy deployment process. explains about application of five Why’s to identify the root cause for a problem at the workplace and typical Toyota‖s seven step practical problem-solving process. Using visual control so no problems are hidden (principle 7) describes application of five S’s (sort. and the value ratio of value added to total lead time (VR). Thus. The second section enumerates how right processes will lead to producing the right results through creating continuous process flow to bring problems to the surface (principle 2). empowering junior employees to take decisions slowly by consensus and implement rapidly (Nemawashi). Management and Philosophical dimensions and the interesting Toyota leadership model. Mura. process and values on adoption. The last section of part two. thoroughly tested technology that serves your people and processes (principle 8) signifies how a new technology must support people. Building a culture of stopping to fix problems. by going and seeing yourself (principle 12) to thoroughly understand the situation (Genchi Genbutsu).heijunka (principle 4) discusses the three M‖s (Muda. Respecting your extended network of partners and suppliers by challenging them and helping them to improve (principle 11). Becoming a learning organization through relentless reflection (Hansei) and continuous improvement (Kaizen) (principle 14). Create. Deming cycle. to get quality right the first time (principle 5) deliberates on jidoka. Leveling out the workload. And. Part III: Applying the Toyota Way in Your Organization This explains how to understand the reactions for lean change and identifying problems in the flow of service organizations. Foster. The third section is about adding value to the organization by developing your people and partners.Toyota Motor Corporation. Respect. implement rapidly (principle 13) describes. which include Honor. contributing to the stability and wellbeing of team members (internal stakeholders) and contributing to the overall growth of Toyota. Developing exceptional people and teams who follow your company‖s philosophy (principle 10) explains typical Toyota assembly operation and holistic approach towards employee motivation. build your own lean learning enterprise.Overburden). Growing leaders who thoroughly understand the work. Muri. demonstrates mutual learning and supply chain hierarchy at Toyota. He further describes developing and improving value stream maps through Kaizen workshops with key indicators like the task time (TT). It emphasizes on Process vs. He clarifies the myths and reality of TPS and the difficulties in changing culture.waste. Pratibimb | September 2012 | 22 . Pursue and Work. The author illustrates the success of Canada Post Corporation (CPC) with repetitive service operations. Using only reliable. borrowing from the Toyota Way.

We started as Outerjoin in 2007 with three co-founders. Before long. and we started to talk with CRM companies in order to integrate our solution with theirs. Once angel funding was secured. By March of 2010. Having transitioned from a startup. as well as Tibco. Before we knew it. then we tried B2B analytics. Our early success was an indication that our business model could scale. we resolved to not seek venture funding for product development. Hence. we backed our way into what‖s now known as a “marketing automation” solution and transformed it from a mere analytics tool. Using the revenue that Outerjoin generated.com/2012/01/03/ calliduscloud-acquires-leadformix/) Pratibimb | September 2012 | 23 . CallidusCloud swept us away. we were open to the idea. We realized that it was time to seek venture funding in order to expand marketing and sales and taking our brand to the next level. We were fortunate to get early backing from the founder of Brocade (Kumar Malavalli-http://en. We worked on developing our marketing automation solution and launched it at the end of 2009. However. our customers asked us to add email and workflow automation which made our platform useful to marketers.org/wiki/ Kumar_Malavalli) who believed our ―intent algorithm based‖ analytics had a strong value proposition. we evolved to become a product company. From B2B analytics. It took until spring of 2010 before we were sure that we were competing in the marketing automation space. we started as a services company and named it Outerjoin.Riding the Technology Wave by Shreesha Ramdas & Harish Reddy When we started our company LeadFormix. (http://techcrunch. Soon. Companies that have evolved from a similar path include Rhapsody Networks which was sold to Brocade. So. By 2008. we then focused on building a customer base. particularly for expanding sales and marketing at a later stage. we set our sights on expanding our footprint and moving towards establishing a market leadership. we created what‖s now known as the Daily Leads Report. we started to talk with Outerjoin customers to first test their acceptance of a social media monitoring solution. we started to run into marketing automation competitors. we sought angel funding.wikipedia.

Before that. Prior to LeadFormix. He has also held key management positions at MW2 Consulting and Yodlee. Paid marketing. a marketing automation 2. CallidusCloud Currently VP of Enablement at CallidusCloud. where he held the role of General Manager of Yodlee‖s center. Product Management. where he raised the initial funding.AUTHOR PROFILES Shreesha Ramdas. Pratibimb | September 2012 | 24 . Countrywide and Orange. CallidusCloud VP of Enablement. an online marketing services company that helped B2B and B2C customers develop and execute effective online marketing. he worked with the Saud Bahwan Group as their marketing director and before that held a key marketing position with Tata Motors and was responsible for Tata‖s entry into the branded public transportation sector. Affiliate Networking and Brand Management. Harish Reddy. Channel management. Search Engine Marketing. built the company and contributed to the successful acquisition by Callidus in January 2012. where he was instrumental in developing key accounts including Viacom. Harish has a specialisation in Strategic Marketing. Media Planning. as well as a background in sales. He holds a Post Graduate Diploma in Business Administration. VP – India Operations. Harish has more than a decade of experience in brand and marketing management.0 platform. Shreesha drove new business development at Catalytic Software. Shreesha was a co-founder at OuterJoin. and a Bachelor's degree in Engineering. ShreeshaRamdas was the co-founder & COO at LeadFormix. Prior to joining LeadFormix.

This self-feeding spiral continues and raises ringingalarm-bells when it reaches a stage where RBI cannot save the rupee by ad hoc workarounds like selling dollars and "trying" (rather struggling) to induce more FII participation. If gold was available in India. Same is the case with petrol. Yellow Fuel causing Economy Blues by Vibhu Gangal. Directly. more are its imports. It has some water collected in the reservoir. causing the sharp decline in value of rupee vis-a-vis dollar. More the demand for gold. recording a growth of 44. Had the channels being broken and had the water been routed to households instead of fields. government expenditure and net exports. more depreciates the rupee. A consistent surge in demand eventually causes the same vicious circle of events. crops to the GDP. Reports suggest that gold imports contributed to almost one third of the incremental rise in Current Account Deficit over the 2008-2011 period. gold and petrol are the biggest burden on trade deficit and have worsened current account deficit badly. more expensive becomes any imported item including gold. Let‖s take a closer look at its causes and implications. which makes net exports and overall national income negative. The trade deficit during 2011-12 was recorded at $184. out of 902 tones of domestic annual gold demand. it‖s the channels which ensure that the water in the dam gets utilized for growing crops and not for domestic purposes of farmers' households. it is backed by money and indicates a destination where people roll out the money they possess. Indians have imported gold worth $61.Yellow Metal. If this money is spent to fulfill any of these demands which add up to the national income.4 per cent during 2011-12. the more the country grows economically. gold contributes 0.36% to inflation index.000 crore) in 2011-12.5 billion (or around Rs 341. crops could never have grown due to lack of water and the production of the territory could have taken a severe hit. is when the money possessed gets expended big time towards imports. Thus.7 billion during 2010-11 mainly on account of large imports of fuel. The water is equivalent to liquid rupee with the Indians.9 billion than $118. Together. where we have a dam constructed with an aim to irrigate fields. and channels to the government regulations and policies. leaving the investment demand of the nation unquenchable. The moment we say 'demand'. Consider an analogy. In India. more is the payment in dollars. Pratibimb | September 2012 | 25 . it‖s a positive sign.4 per cent of India‖s imports. the tendency of buying gold would have created better circulation of money and the multiplier effect would have done well to the economy. investment demand. where possession of money with individuals of a nation can harm the economy. more is the influx of rupee in forex market. more is the outflow of dollars from forex market. India produces only two tones and the rest 900 tones is imported. The more this happens. the more is the national income. One scenario. A similar thing seems to have happened in India. a major part of money (water) is spent in buying volumes of gold by families (household demand). gold & silver accounting for 44. the stronger is the home currency. SCMHRD The demand equation states that the aggregate demand (and the national income at equilibrium) is an algebraic sum of consumption demand. This water flows to the fields through channels. Unfortunately.

quality in terms of speed. this would mellow down dollar appreciation and prevent further damage. Let‖s remember in a dam. This shall help in fading the rise in demand for crude oil and so shall prevent the rest of the spiral. this nation needs to plan for a durable strategy which would 'subtly' and 'indirectly' bring about relatively stiff and lasting changes in the economy. corporate bonds. So. it can be discouraged by raising customs duty exorbitantly. Indian borrowers will now pay more for every dollar borrowed. What I wish to convey is instead of unplanned adhoc and short-term steps like giving subsidies on fuel prices and making efforts to attract hot money sources. grievance handling mechanisms and any and every aspect which makes mass transport well-preferred and equal in status vis-a-vis individual vehicles. Instead. ambience. On the other hand. where do we break this infinite-loop of events where every step. so have to be the prices of finished products. a self-check on surge of gold demand can help prevent a number of significant things. I say why? As a long term plan. government securities and the share market or it gets to quench 'domestic' consumption demand of goods and services. the rupee loss is going to be phenomenally huge and shall reflect on a cost-cutting approach by companies' management which shall also include a cut in salaries. why Pratibimb | September 2012 | 26 . One may say that if investment in India is on a backseat. The time lags between rise in gold demand. where bikes and cars are favorites for personal transport. with other events increasing imports and causing rupee to depreciate. it‖s just a matter of time. This would trigger the multiplier to take effect and eventually translate liquidity into growth. we end up blaming the government without any knowledge of ground level proceedings. frequency. But every time the rupee depreciates against the US dollar by one rupee. Even if the demand for gold reduces partially. With Indian businesses borrowing big-time from foreign sources. with industrial products being costlier than earlier. rise in import prices and rise in end product prices make the three events appear disconnected to the general public and as the "safest" option.. Buying gold should be made at least half as tough as buying a scooter was in late 1980s. It all gets again into the selffeeding loop discussed above. if every link in the chain is made to melt down in terms of its prominence. government should ensure that substantial part of rupee gets either invested into banks. the root cause for the good and the bad being the same. Here‖s what I mean to say… Whenever individuals hold disposable rupee. availability. it should be THE time for government to make capital investment attractive. with imports already being discouraged due to sharp depreciation of rupee. Recently. the government should let the petrol price rise so that vehicular usage takes a hit. Weakening or breaking one block might give a temporary relief to figures. should be picked up and transformed into towns with a quality mass public transport. If the input costs rise. the government declared a subsidy on petrol price. it translates into a requirement to raise prices by 77 paisa. with booming inflation. this would cease growth. Eventually it‖s the inflation which kicks off. Towns. every action has a well justified reason behind it? But somewhere. A major reason for S&P indicating to downgrade India in terms of its investment-grade rating was a drought of investment opportunities in India. every dollar reduction in international oil prices translates into a cut in product price by 33 paisa. But one misses to note that at the time of repaying the same loan taken against gold. after a lot of hue and cry on oil price hike. Eventually.. With every firm borrowing millions of dollars.Indirectly. it makes all imports including crude oil costlier fuelling input costs for all industries ranging from plastics to automobiles. As far as demand for gold is concerned. approachability. the value of the money repaid plummets so much that the good done by the investment gets offset substantially by severe inflation. this fall in exports due to inflation exacerbates the trade deficit causing further decline in rupee value. even though the hit is marginal. it‖s the channels which ensure the usage of water in desired way and ultimately govern the production. One may say that it‖s the gold which facilitates loans and so fosters investment. Arithmetically. he is fuelling inflation to such an extent that he himself is going to get in trouble. Whenever it‖s expected to have an enhanced liquidity among individuals. why would a buyer in international market prefer buying Indian expensive goods when the same is available at a lower price in other countries? Together. the consumer which demands gold and oil so excessively needs to understand that if he chooses deliberately to intensify imports. somehow you need to break this to get things in place. Another aspect is. but in long run. the whole chain shall cease to be prominent.

as it is already burdened under a budget deficit of 5. References: Analogy of dam and liquidity (quoted in second paragraph of article) referred from knowledge sessions of a mutual fund firm. One may say that subsidies on fuel shall be continued for some more years as the inflation is cost-pushed and not demanddriven. Thus.doesn't the government invest? But one misses to note that it would be dumb on the government's front to do so. it‖s high time now that the administration of the nation gets into a patient and consistent mission of correcting the fundamentals of economy at a macro-level with an aim to bring about a long-term change.19 percent and any further disbursement of money would widen it more. Pratibimb | September 2012 | 27 . But one misses to note that it‖s the demand which drives the entire spiral discussed above and it‖s the drive of this demand which ultimately coverts into a cost-push inflation.

Montague decided to repeat the tests with fMRI in what was known as The Pepsi Challenge. The term “neuromarketing” was coined by Ale Smidts in 2002. Author and marketing guru Martin Lindstorm‖s bestselling book “Buyology . It was observed that the knowledge that they were drinking Coke increased activity in the medial prefrontal cortex. neuromarketing is about making the intent-action gap visible in a consumer. people have no idea why they are doing what they are doing” —Clotaire Rapaille. consumers liked the taste of Pepsi but when the names were revealed three fourth of them switched loyalty to Coke. The authors seem to be mystified while the marketers still try to unravel the gap between the consumer intention and action. showing how different parts of the brain are made to take part by cues such as branding (for example. 2002 Nobel Prize winner for Economics. The experiment showed that while people liked something in their subconscious brain they express something else. it was applied to promote sales and research organizations such as BrightHouse Institute was set up to serve corporations eager to reap the nascent developments in the field. This encouraged neuromarketers to use the neuroimaging techniques to identify decision making triggers among shoppers to help companies directly click the “buy button” on in a Multi-Cultural world” Well. The results were astonishing. 2003. in his book “Thinking. a marketing professor at Erasmus University in Rotterdam. While neuroscience has been around for decades. Fast and Slow”(2011) throws light on the ways in which we make choices—most often. Coke vs. Market Researcher and author of “The Culture Code: 7 Secrets of Marketing selecting and buying a product. Throughout the 70‖s and 80‖s blind taste tests had shown that Pepsi was the winner when consumers were told to choose between Pepsi and Coke without knowing which one they were consuming. 2003 it was brought out that brand and image could affect the customer‖s choices more than the product. my experience is that most of the time. automatically and not necessarily in line with our best intentions. As research proceeded. As said in a Forbes article. Psychologist Daniel Kahneman. It uses a brain mapping medical technology known as fMRI (Functional Magnetic Resonance Imaging) to study blood flow and blood oxygenation in the neuron activity of consumers at the time of Pratibimb | September 2012 | 28 . was however intrigued by the fact that in spite of these results. Though it started with the application of neurosciences. an area of the brain associated with thinking and judging. From The Pepsi Challenge. a neuroscientist. IMT Ghaziabad “Now. He found that when blind folded. Dr. The example became a classic to be used later on in marketing case studies worldwide. he is not alone. Neuromarketing involves application of cognitive neurosciences in the field of marketing and marketing research. Read Montague. medicine and music to accentuate his idea of “thin-slicing”. Malcolm Gladwell in his celebrated book “Blink: The Power of Thinking Without Thinking”(2005) draws on examples from fields of science. the Netherlands.a concept that some mental processes work rapidly and automatically from relatively little information. Coke dominated the market.Truth and Lies About Why We Buy” (2008) claims from his experimental studies that subconscious mind plays a major role in people‖s buying decisions. Pepsi) or by facing a spend-or-save choice between whether to indulge for pleasure now or delay gratification for some later date. advertising. over the years it gained entry into the traditional methods of doing marketing research. it is only recently that it became part of the marketing parlance. sales. But there is a more interesting story about the public attention to the term.Neuromarketing: The power of the subconscious by Pramit Das & Subhamoy Ganguly.

According to the company itself. The latter is only a subset of the former and focussed on the application part as implemented by the marketers. intending to get consumers to buy more soup. 2010 an article in the Wall Street Journal carried the caption “The Emotional Quotient of Soup Shopping”. It dealt with how the Campbell soup company had applied neuromarketing techniques in a two years study.S. campaigns and product or service features to make them more acceptable. of presidential speech) is the end result of neuromarketing. This rare ability to watch inside the mind of consumers and noting how sensory inputs like image. heart-beat and biometric by Campbell soup company was really worth it. It should be noted that neuromarketing is not exactly the same as subliminal marketing. among others:        Proctor & Gamble (in launching of Febreze room freshener) Motorola (in product positioning) Hyundai (in changing exterior appearance of a car) Paypal (in identifying what turns people on more in e-shopping: speed or security) Microsoft (in knowing the engagement of Xbox users) PepsiCo‖s Frito-Lay (in testing packaging in the U. It drew a lot of public attention at that time and encouraged debates on whether the studies on skin moisture. studying the brain‖s reaction (sometimes also heart rate. fMRI is not the only technology that is used. Magnetoencephalography (MEG) measures the fluctuations but with greater accuracy than EEG and Transcranial Magnetic Stimulation (TMS) is used to measure causal roles. and overseas) Buick Motors (in enhancing dealers‖ experience Pratibimb | September 2012 | 29 . and skin response) to the social triggers and so on. without the subject's knowing. the sound the box makes when shaken. The alterations which. While fMRI is chiefly used for refining the product attributes. whether it was the shape of the packaging. included different colour packaging for different lines of soup and a new logo proved beneficial for the company as it went to increase its bottom line. Application in the real world to boost sales or acceptability (say. In the process. and so on. which could influence his/her subsequent behaviour. EEG frequency On 17th Feb. among others. brand and products. An important part of neuromarketing which is more related to subliminal messaging is "priming" which refers to subtle suggestions made deliberately to the subconscious mind. smell and touch culminate to reach decisions enables the advertisers and marketers to optimise their advertisement. They include. Neuromarketing involves much more such as involving the test subjects. the colour of the packet. the consumer‖s brain is scanned which help the neuromarketers to find out how consumers react subconsciously to advertising. This will tell the neuromarketers what the consumer reacts to. say the fMRI scanners(other technologies are used too).the customer‖s brain to boost sales. using the biometric and physiological sensors to carry out experiments. Various companies had adopted the services of neuromarketing research organizations successfully in the last decade. So how is neuromarketing implemented in real life? Starting with. Electroencephalography (EEG) measures fluctuations in response to advertisements.500 subjects were interviewed and tested using multiple methodologies—ranging from traditional consumer feedback to neuromarketing techniques. breathing. The same subjects also participated in a deep interview process called ZMET (The Zaltman Metaphor Elicitation Technique) which helped the Campbell's team to contextualize the biometric measures that were used. more than 1. the end results of the expensive neuromarketing efforts offered many insights that the company needed to work on and which traditional methods could only partially arrive at.

Another recent article “Neuromarketing Proof? UCLA Brain Scans Predict Ad Success. The brain waves from them showed stimulation in the limbic system and frontal cortices of their brains. being intervening with the customer‖s privacy when practiced without their knowledge. Many research papers hold that the findings of fMRI are not revelatory and only reconfirmed some rules that marketers had known intuitively. Johnson & Johnson and Unilever are using threedimensional computer simulations of both designs and store layouts along with eye-tracking technology to deduce how to improve sales. Using this market researchers would be able to capture data on consumers‖ subconscious responses in real time wirelessly thus opening up new testing environments beyond the lab such as home. a full-brain wireless EEG sensor headset. it is hard to call neuromarketing a flash-in-the-pan and the future could be beyond traditional focus groups. Pratibimb | September 2012 | 30 .with customers and increase in sales) Yahoo‖s 60-second television commercial which shows happy and dancing people around the world was pretested with neuromarketing. More recent inductees such as Kimberly-Clark. The advertisement surfaced in September 2009 to attract more users to its search engine. Yahoo had run it on EEG-capwearing consumers.from branding and brain washing. brand information played a major role in decision making as seen by increasing activity in the area of brain where attraction occurs.”(2012) voices that scientists using UCLA fMRI facility for the prediction of 3 anti-smoking advertisements‖ found the prediction from brain mapping more correct than the self-reports given by the subjects. iPhone and other smart devices. Before rolling it out and spending money to air the advertisement on television and online. Activity in the Ventromedial Prefrontal Cortex during Credibility Judgments" (2005) says that when consumers faces credibility doubts. Regarding the latter. critics assert that it is inexact science as body movements such as breathing could distort or disrupt images and there are multiple interpretations of a mapped image unless assumptions are taken. The data would be streamed to platforms such as iPad. The researchers focused on a seeing activity in the region of brain called medial prefrontal cortex (MPFC) while showing the 3 ads and found that the ad campaign which created the greatest activity in that region generated significantly more calls to a stop -smoking hotline. The below figure illustrates it. calling it “brandwashing”. Other concerns include that the benefits received might not outweigh the cost incurred and the accuracy of the findings. However neuromarketing is not without its share of criticisms. co-author Michael Deppe in his paper “Bias-Specific In March 2011. As for example. But brand loyalty was traditionally always a factor on such occasions. some non-profit organizations and customer advocacy groups maintained that the concept was unethical. With this rate of development and participation by the corporate giants. world‖s largest world's largest neuromarketing research firm Neurofocus (now part of Nielsen) had launched Mynd. While some groups claims that the research institutes are exploiting the corporate clients. dominated by mind-reading technology for understanding the consumers. where memory and emotional thought occurs. These groups have coined a new term for this practice carried out by corporations.

Kugel. H.itchannel. (2005).com/healthy-manhattan-this-is-yourbrain-on-coke-or-pepsi/ Veronica. The New York Times.. Schwindt. M.nytimes. Evidence for a neural correlate of a framing effect: Bias-speci…c activity in the ventromedial prefrontal cortex during credibility judgments. Retrieved from http://www. Fast and Slow.com/forbes /2009/1116/marketinghyundai-neurofocus-brain-waves-battle-for-thebrain.forbes. Krämer. L. Forbes. 6).com/blog /             Pratibimb | September 2012 | 31 . Plassmann. Nov. 15). Forbes. Feb. 21. T. J. Marketing the gap between intention and action.com/home/ post /2012/07/17/Eye-Tracking-CPG071712.S. (2011. Vidyasagar.Truth and Lies About Why We Buy. W.. Neuromarketing: Companies Use Neuroscience for Consumer Insights. S.com/2011-09-21/ tech/30183631_1_campbell-s-soup-soup-cansneuromarketing Geisweiller. 27. 25). Neuromarketing: Is Campbell in Soup? IUP    articles/neuromarketing-soup-nuts. N.edu/pdf/ Neuromarketing_April_2012. 21). Apr. (2011). July 17). Buyology . Retrieved from http://www. Neurosciencemarketing. Brief history of neuromarketing. Retrieved from http:// www. SCN Lab: Papers . N. Retrieved from http:// www. Making ads that whisper to the brain. Straus and Giroux Lindstorm. (2009.org/news/2012-07consumer-product-giants-eye-trackers-size. July 16)..pdf Singer. Physorg. H.fastcompany. Healthy Manhattan: This Is Your Brain on Coke or Pepsi. 2012 from http:// www.brandchannel. 22). Kenning. Ringelstein. 23).forbes. Nov. Priming the customer. Retrieved from http://phys.. S. (2006.scn. D. Retrieved from http://www.. Neurosciencemarketing. FastCompany.html Neuromarketing Proof? UCLA Brain Scans Predict Ad Success.aspx Williams.com/article/rebuttalpseudo-science-in-campbells-soup-not-so-fast Burkitt. Jul. (2012).ucla. Eye-tracking helping marketers boost shelf awareness. (2008). Retrieved Mar.businessinsider. 2011 from http:// neurogadget. M.com/blog/articles/ priming-the-customer.ro / faa /119_pdfsam_ICEA_FAA_2009.com/sites/ onmarketing/2012/07/17/ marketing-the-gapbetween-intention-and-action/ Dooley. Feb. 13). J. Retrieved from http://www. Farrar. Consumer product giants' eye-trackers size up shoppers. R. (2010. Sep. Is Neuromarketing The Future Of Marketing? BusinessInsider.neurosciencemarketing. Retrieved Apr. M. E. Little Brown and Company. Brandchannel. Kahneman. Sep. 10). The International Conference on Administration and Business. Retrieved from http:// nypress. B...B.gr / uploads/bias-specific%20activity%20during% 20credibility%20judgements. Brain Research Bulletin. Campbell's Soup Neuromarketing Redux: There's Chunks of Real Science in That Recipe. Retrieved from http:// www.html Shayon. (2012. P. Retrieved from http:// articles. Neurogadget. NewYorkPress. R. S. B.com/2010/11/14/ business/14stream. (2012. Retrieved from http:// www. Blink: The Power of Thinking Without Thinking. (2010. Nov. (2012. Doubleday.com /2011/03/21/neurofocusreveals-mynd%E2%84%A2-the-first-wireless-full -brain-eeg-headset/1416 Deppe. (2010. Neuromarketing: From Soup to Nuts.htm Olenski.pdf  Journal of Marketing Management  Owano.References:   Gladwell. (2009.UCLA.P.neurosciencemarketing. & Babu. N. Retrieved from http:// www.html Troni. (2005.htm Dooley. 16).mydelphi. (2010. Thinking. July 17).pdf NeuroFocus reveals Mynd… the first wireless full-brain EEG headset.

Why Indian Corporate Bond Market Lags? Now that we have established there is a need for a vibrant and liquid corporate bond market in India. especially for long-term infrastructure projects. The major investors in G-Sec are Commercial Banks and Insurance companies. less well-developed. Let us analyze the reasons that impede its growth. India‖s government bond market has grown steadily—largely due to the need to finance the fiscal deficit—and is comparable to many government bond markets in the world with around 30% of GDP. From the perspective of developing countries. The basic philosophy of developing a diversified financial system with banks and non-banks operating in equity market and debt market is that it enhances risk pooling and risk sharing opportunities for investors and borrowers. Its corporate bond market remains restricted in regards to participants. 2011) Indian Debt Market is only 34% of GDP which is very less compared to other nations. however. Given the huge funding requirements. For the issuer it provides low cost funds by bypassing the intermediary role of a bank. the government bond market remains largely illiquid. Major factors inhibiting its development are:    Regulatory restriction on institutional investors. and partly as a result of the ongoing need for deficit financing. there exists a yield premium opportunity in comparison to traditional deposits at banking institutions.Indian Corporate Bond Market by Siddharth Pal. the private corporate debt market has a crucial role to play and needs to be nurtured. The presence of corporate bond market in India is barely perceptible as compared to Pratibimb | September 2012 | 32 . other economies. The Indian bond market is. IIM Rohtak India is a bank-dominated market and the relative importance of bank assets as a percentage of GDP has continued to grow—partly as banking penetration has deepened with financial liberalization. While having seen rapid development and growth in size. For the investor. It also increases the investment opportunities in different type of instruments and tailors risk reward profile according to his/her preferences. a liquid corporate bond market can play a critical role in supporting economic development as it supplements the banking system to meet the requirements of the corporate sector for long-term capital investment and asset creation. Need for Corporate Bond Market? The role of a healthy corporate debt market as a channel that links society‖s savings into investment opportunities is of vital importance for several reasons. Indian Debt Market Let us compare the debt market of India with other countries. Non Uniform stamp duty Majority Issues being Private Placements and not Public Issues Source: RBI (as on Dec. But the corporate bond market is relatively underdeveloped with only 4% of GDP. Presence of bond funds gives the corporations an alternative means of raising debt capital and thus ameliorates any potential adverse effect that a bank credit crunch may have on the economy. The article will analyze the challenges faced by corporate bond market and suggest reforms for the same. largely arbitrage-driven (as opposed to driven by strategic needs of issuers) and also highly illiquid.

This prevents banks from investing in bonds of lower rated corporations which may include infrastructure companies. if the bond is being sold in one (state) jurisdiction.SLR investments in unlisted debt papers. In developed economies. Currently. 6. UK.    Insurance Companies and Pension Funds: Internationally institutional investors like insurance companies and pension funds play an important role in the corporate bond market as the investment time horizon for these institutional investors and the bonds are long. Also there is lack of demand due to regulatory restrictions on investment in corporate bonds.12. The issuers raised an amount of 2. Chicken And Egg Problem: There is a lack of supply of suitable long term bonds which suit the need of insurance and pension firms. This limits issuance of lower rated bonds.785 crore by way of private placement during 2010-11 as compared to 2. TDS is deducted at source for resident and on non-resident investors as per prevalent tax laws. Absence of sub-investment grade securities: In developed markets like USA. and have to be open at a fixed price for a month to allow investors particularly retail investors to subscribe. The rise in funds mobilized could also be possibly attributed to issuers preferring the domestic debt markets as a primary source of corporate debt. private placements have also remained as one of the preferred modes of raising debt funds. Non Uniform stamp duty: Stamp duties are typically 0. but the asset has to be securitized in another. Insurance companies and pension funds have huge potential to play a bigger role and contribute to the sophistication and deepening of the bond market in India. The rate of duty varies depending upon location (various states have set their own rates). They require a prospectus approved by SEBI. 3. This may be due an illiquid secondary Pratibimb | September 2012 | 33 . long-term funds were channeled into capital markets by pension funds and the insurance sector and these funds facilitated the emergence of very liquid bond markets in those economies. Only holdings in excess of the SLR requirement can be traded and repurchased. the involvement of insurance companies in corporate debt market so far has been limited. non-banking finance companies and mutual funds to set up IDF in the year has seen a number of public issues.The existing guidelines of IRDA and PFRDA does not permit insurance and pension funds to invest in the proposed Debt Fund.18. as they are strictly ad-valorem. TDS in Corporate Bonds: In case of corporate bonds. While in India regulatory restrictions prevent institutional investors from investing in such securities. 2. They are also restricted to invest only 10% of their total non . Infrastructure Debt Funds: The Reserve Bank of India allowed banks. Majority Issues being Private Placements and not Public Issues: Public issues are bonds offered to a wide range of investors and which conform to the regulatory standards required of public issues of bonds. 5.” 4. huge amounts of stable.375% for debentures and. Regulatory restriction on institutional investors Banks:  Statutory Liquidity Requirement (SLR) requires banks to hold one quarter of their assets in public sector bonds primarily government securities.    TDS in Corporate Bonds Absence of sub-investment grade securities Low Retail Participation Absence of Market Makers September 2011.635 crore in 2009-10. Further only investment grade securities are eligible for subscription by banks. In India. Low Retail Participation: Indian retail investors have not shown interest in the corporate bond market. Private placements can be made to a maximum of 50 “Qualified Institutional Buyers” (professional investors). They are prevented from investing in unrated debt instrument. there is no volume discount. SEBI in its Annual Report 2010-11 said “Although 1. Japan there is a vibrant market for sub investment grade securities. then the stamp duty as applicable in the latter is levied.

Initiatives should be taken to popularize these instruments. Foreign Institutional Investors: Income Tax Department. issuers and market makers.is the cut off for investment by insurance or pension fund. Chairman PMEAC has also suggested that there is need to set up dedicated institutions like DFHI and Securities Trading Corporation for the purpose of development of corporate bond market needs consideration. PFRDA (Pension Fund Regulatory and Development Authority) should allow pension firms to invest in IDF by declaring such investments as eligible investments. Same could be done for corporate bonds as also been suggested by CII. Rangarajan. C. Minimum investment requirement should be investment grade only i. IRDA should allow insurance firms to invest in IDF by declaring such investments as eligible investments. Absence of Market Makers: There is a need for general market for corporate bonds to be developed for the market participants. Life Insurance Co. Once this gets established the list could be expanded. Fix stamp duties based on tenor and issuance value to encourage public offerings of corporate debt. IRF (Interest Rate Futures) and Repos on corporate bonds but they have not taken off.’s: Minimum investment required in respect of approved securities (GOI. State Government & Securities granted by either GOI or State Government) should be reduced. Upper limit for investment in Government securities or Government guaranteed securities or gilt funds be reduced. Same has been done to attract off-shore funds into IDFs by reducing withholding tax on interest payments on the borrowings from 20% to 5%. Ministry of Finance should do away with or decrease withholding tax rate to encourage investments in bonds. 5. Pension Firms: In order to accelerate the flow of pension funds into infrastructure. Market Makers can address the issues of price discovery and liquidity in the corporate debt segment. the bond market must therefore evolve. It may be stated that in United Kingdom BBB. Risk Mitigation Steps: To address the risks associated with investment in corporate bonds. Less investor knowledge and awareness about such products may be one of the reasons for their low participation. 3. Removal of TDS on Corporate Bonds: TDS was viewed as a major impediment to the development of the Government securities market and was abolished when the RBI pointed out to the Government how TDS was making Government securities trading inefficient and cumbersome. Department of Revenue (DOR) and State Govts need to act on it. 2. Republic of Korea had also scrapped this tax leading to threefold increase in FII investment. 4. securities (currently they are required to hold until maturity) to improve liquidity and depth to secondary bond market. As a pilot project some PSU debt paper could be assigned to the existing PDs for market making. PFRDA should allow pension funds to trade in Govt.market and the low confidence (low risk appetite) in the corporate world. The policy recommendations should focus on designing a self-sustaining ecosystem for investors. (By creating a network of dealers which provide two-way quotes).e. 6. GOI had introduced CDS (Credit Default Swaps). Dr. Creation of Market Makers in Corporate Bond Market: There is a need to set up institutions that will perform the function of buying/ selling bonds. As India already has an established system of Primary Dealers. Retail investors prefer PF and Post Office schemes and other alternate investment avenues. How it can be improved? There is a need for developing an efficient and vibrant corporate bond market. The following reforms are recommended: 1. 7. securities (currently they are required to hold until maturity) to improve liquidity and depth to secondary bond market. Rationalizing Stamp Duty: There should be a uniform low rate across all states and that the maximum amount payable should be capped. Pratibimb | September 2012 | 34 . IRDA (Insurance Regulatory And Development Authority) should allow insurance funds to trade in Govt. BBB -. it should utilize the same for good corporate bond. To meet the needs of firms and investors. 7.

which are sometimes never sold and intraday profits are booked.tapmi. BSE. It is interesting to observe the behaviour of trading activities during the period preceding and succeeding Mahurat Trading. The pattern of the stock index might help in predicting some of the effects of the various events. It is performed as a symbolic ritual since many years. it is widely believed that trading on this day will bring wealth and prosperity throughout the year. There are various countries and societies which follow their own calendar on the basis of their religion. the National TAPMI Stock Exchange is largest in 35 Pratibimb | September 2012 | terms of Market capitalisation and Volume. The study conducted by Caginalp G. I have used the data of the Manipal—576104 . The Hindu calendar is called “Panchanga” and it is based on both movements of the sun and the moon. The investors place token orders and buy stocks for their children. and H. It marks a link with the rich past and brokers look at it on a positive note.e. Further. Weak form inefficiency of the stock market was discovered by them after analysing how people are systematically overreacting to unexpected and dramatic news events which were surprising and profound. Rt = return at time t Pt. however small they may be. The purpose of this study is to know the effect of the festival prior and post diwali on the the returns.edu. It marks an auspicious beginning to the Hindu New Year. The asset prices follow a random walk path i. they are merely random numbers. Thus.Introduction `Does the stock market overreact?' De Bondt and Thaler in 1985 gave start to a new wave of thinking known as behavioural finance. Team Pratibimb I have used S&P CNX Nifty as it has got the most liquid stocks in its portfolio.edu. t-1. NCDEX to name a few lasts for about an hour. The special ritual called “Mahurat Trading” can be observed on major stock exchanges like NSE. The calendar anomalies tends to exist which goes against the efficient market hypothesis. For example. the Hebrew calendar is followed by the Jewish society. Econometric methodology I have measured stock return as the Join us on: compounded daily percentage change in the share price continuously index (S&P CNX NIFTY) as shown below: pratibimb@tapmi. and similarly Hindu and Chinese follow their own.in/student-life/pratibimb/overview/ Where. which is strictly based on luni-solar. Pt-1 = closing value of the stock price index at time t. which is based on solar. The festival of “Diwali” is typically occurs at the end of October and beginning of November. The researchers have used Gregorian calendar to investigate the calendar anomalies. Laurent (1998) by the predictive power of price patterns finds patterns and confirms that they are statistically significant even in out-ofsample testing and report. the Christian society follows the Gregorian.in Rt = (lnPt – lnPt-1) x 100 …………………… (1) Visit: http://www. The Efficient Market Hypothesis as proposed by Fama (1970) asserts that the stock prices reflect the relevant information.

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