Consumer Insight : The end of air travel as I see it !

This October 2008, in a move that surprised India Inc , Jet Airways and Kingfisher Airlines announced an alliance for sharing their resources and network. According to a report in Deccan Herald, the company announced that this alliance will share their resources in seven critical operational areas including routes and even employees but both these airlines will maintain their legal and brand entity.

Jet and Kingfisher controls approximately 60 % market share . While pundits and media glorified the swift move by the mavericks who head these companies, I see the formation of a cartel.

As a consumer I see it as the end of my air travels.

Both the companies cited the sluggish environment as the core reason for this deal. The rising fuel cost, the looming recession is definitely going to take a toll in the industry. It makes terrific sense for two major players to come together and share resources and cut costs. I also think this as a unique event when two competitors come together to face the looming threats.

But cartels are bad. Its very bad for a consumer.

I live in the state of Kerala where every sector is ruled by cartels. Where else do you find the Bus Owners forming a cartel in the name of union, auto drivers/owners forming cartels, Taxi owners forming cartels , Film stars have cartels, Film producers have cartels, Contractors have cartels, hotels have cartels, traders have cartels, jewelers have one and even the scavengers have formed cartels.

And Keralites suffer the highhandedness of these cartels. They hold the un-organized citizens at ransom to meet their demands. So we see buses off the road, traders shutting shop and even movie production getting stopped .

India currently lacks sufficient laws to identify and regulate such cartels. Sadly there is no political will to prepare one.

Coming back to the Jet- Kingfisher alliance.

What is going to be the result of such an alliance ? I foresee a significant drop in the competitiveness of the industry as a whole.

I am not a fan of Air Deccan but I credit the boom of Indian Airline industry to that brand. And the death of Air Deccan is going to be detrimental to the growth of this industry.( my personal opinion ).

I am not an expert in this domain but as a consumer I will try to defend my point. Please feel free to comment your thoughts.

I am not a frequent traveler ( not even a regular one ). My first flight where I paid from my pocket was with Air Deccan. Why I chose to fly was that it was affordable ( not cheaper).

There are three main customers for Airlines -

The rich travelers : These customers have the income to afford the travel. They either pay from their pocket or their business foot the bill. So whether there is a slowdown or not these guys will fly.
The Executives : These customers fly frequently but the bill is paid by the company. I feel this segment of consumers form a large chunk of air-travelers. When the economy slows down these class will travel less depending on the austerity measures of their organisations.

The ordinary ones : Well, I belong to this class. I would love to fly if its affordable. This category of customers may not travel regularly.

Air Deccan targeted the ordinary ones and that too successfully. But there was an interesting bonus to that strategy. Lot of corporates began to enable their executives to travel by air . The ceiling of air travel for executives have come down since the airline rates became affordable.

There was a time where an executive who earlier had only the eligibility to travel by First Class train was given the sanction to fly since the rate differential was negligible.

This saw a spurt in airline passengers. Both regular and first- time fliers. Those who have never flied before started looking for better rates.

And look at the way the infrastructure reacted to this new boom. New airports began to come up, jobs in the sector boomed and lot of new business catering to this sector began to evolve.

I agree that much of this boom can the attributable to the economic prosperity that we say in the recent past but the low cost airlines contributed significantly .

Now what is the scenario ?

With virtually no low-cost airlines , the entire industry is in turmoil. Companies have cut the eligibility for air travel why because it is now not affordable. So less number of regular fliers. Airports which came up anticipating large number of consumers see very few and they began to hike the airport charges which again is going to put off many fliers.

And the formation of Jet- Kingfisher is only going to make things tougher. This alliance is going to be a major entry barrier for any new player. And using the commanding postion, these two can silence the current competitors.

Rates will be high, service will be bad and ordinary people will travel by train...

Related Brand
Air Deccan

Samsonite : Life is a Journey

Brand : Samsonite
Company : CVC Capital Partners
Agency : TBWA
Brand Analysis : 356

A travel from luggage to footwear and watches can be an interesting journey for a brand. Samsonite is on such a journey. The global leader in luggage is on such transformational path from suitcases to a lifestyle travel brand.

Samsonite is a heritage brand with a history of 100 years. In 2010, Samsonite will be celebrating its 100 years of existence. The brand had its origin in 1910 when Jesse Shwayder started manufacturing luggage for travelers. The company was Jesse Shwayder Trunk Manufacturing company. The company was renamed to Samsonite in 1966. According to wikipedia, the brand was named after the biblical character Samson.

Samsonite is the second largest luggage brand in India trailing behind the market leader VIP. Samsonite is known for its premium luggage with major attribute being the strength and sturdiness.

The Indian luggage market is huge with a market size of Rs 2000 crore. But majority of the market is dominated by unbranded local players. The organised luggage market is only Rs 950 crores. VIP has a commanding market share of 60 % in the organized segment and Samsonite is having around 35-40% share.

When Samsonite was launched in India, it took on the fight directly with VIP by making the brand affordable to the Indian consumer. But in 2005, the brand took a major repositioning exercise by positioning the brand as a luxury brand. The repositioning was done using a series of print campaigns in leading magazines. The product portfolio was also rejigged by the inclusion of lot of bold colors and shapes.

The brand even had a campaign featuring the iconic Sir Richard Branson highlighting his choice for Samsonite. The brand has the tagline " Life is a journey ".

Samsonite has a multibrand strategy in the Indian market. It has a very powerful brand which offers affordable luggage solutions called American Tourister. Amercian Tourister is also an international brand which was acquired by Samsonite in 1993

American Tourister is famous worldwide as a study brand. Its famous among advertising fraternity for its iconic advertising of 1970.
Watch the iconic ad of American Tourister here : American Tourister

Samsonite also ventured into premium luxury luggage market in 2006 with its brand Samsonite Black Label. Black Label is a designer type series aimed at the luxury segment. The brand is priced above Rs 20,000.

The multi-brand strategy adopted by Samsonite is also an example of targeting different through different brands.

Samsonite Black Label : Targeting the elite travelers . The price range is above Rs 20,000
Samsonite Range : Targeting premium travelers . The price range is Rs 5000-20,000
American Tourister : Rs 1,000 - Rs 20000

In 2007 the brand did something unthinkable. It extended itself to marketing shoes.. Can you believe it ?
Samsonite shoes !!!!!!

When I first saw the print ad for Samsonite Shoes in a leading business magazine, I nearly fainted. I first thought it was crazy for a luggage brand to extend itself into shoes .
I never understood the connection between shoes and luggage in the first place ( may be I am not smart enough ! ).

Then came the logic. Samsonite is transforming itself from a luggage maker to a marketer of lifestyle products associated with travel. Now I get the connection.
The brand has expanded its scope to cover all products that are associated with travel. Hence we are going to see Samsonite watches , Samsonite Eyegear in the near future. This is the global strategy adopted by Samsonite across the markets.

I am not going to predict the outcome of this brand extension ( brand dilution ? ) . But does it make sense for a luggage maker to venture into shoes marketing and then making watches ?

According to reports Samsonite shoes will retail at prices above Rs 5000. So typically it will be competing with the major brands like Florsheim, Hush Puppies and the like.
Can a brand assume that if it is successful in a travel related product, it can succeed in marketing all products that have connection to travel ?

Take the case of watches. According to reports , Samsonite is planning watches that will automatically adjust to different timezones so a traveler need not correct his watch. But my question is whether a frequent flier choose an Omega , Cartier or a Samsonite watch ?

Marketing is a domain where there are no rules. If Apple can succeed in making ipod and then replicate their success with iphone then why not Samsonite ?

I have no answers... what do you think ? Will Samsonite taste success in its latest repositioning ?

Related Brand
VIP

MBAs During Recession : Advice From Gautam Ghosh

Its a great pleasure to present a guest post from Mr Gautam Ghosh on a topic which is currently on the top of the mind of all MBA students who are facing a dull placement season this year.

Gautam Ghosh is an HR Consultant based out of Delhi. An MBA in HR from the prestigious XLRI Jamshedpur, Gautam had an illustrious career in organisations like Deliotte and Touche, Hewlett Packard, Dell and Satyam before venturing into the field of HR Consulting.

An expert in the field of Human Resources Management, Gautam is also an avid blogger. His HR Blog is listed among the top 25 best HR blog by HR World. You can read his blog at gauteg.blogspot.com and gautamghosh.net

I am sure that readers of marketing practice will greatly benefit from the insights and advice from Gautam Ghosh.

How to prepare for placements in tough times .

First of all Harish, thanks for giving me this opportunity to write a guest post. As we all know the economic scenario worldwide is yo-yo'ing and is not one for the faint hearted.

When Harish asked me if I could write a post for students who are looking at graduate into a tough job market, I wondered what I could say to these young bright students.

Then it struck me. Placements are a time for marketing yourself, and in this tough market the principles of marketing become relevant more than ever.

So here are a few thoughts:

1. Be a quality product. As any marketer worth his salt will let you know, there is only so much you can do to sell an average product. Being an outstanding product goes a long way to make the marketing easier. That means not just raw intelligence but a lot of emotional quotient also. The ability to build relationships and get things done. The courage to take decisions. All these matter in addition to your ability to analyze numbers and define processes.

2. First generalise then specialise. Brands and marketers live and breathe segmentation. However, as an individual in the brand bazaar it's always better to generalise more and more and then decide on when to specialise. The upsides of specialisation is that during boom times you can command a premium, but the downside is that during a period of slump the generalists are the last to get laid off. Take the decision depending on how much risk you can take

3. Keep developing and evolving - Brands need to continuously develop and be relevant to the context. As a professional that is imperative too. Building skills and keeping an open mindset (to new horizons, mobility etc) is key to developing as a professional.

4. Prove your worth. As the economy slows, people's perception of what you can do would be different than what they would have assumed a year ago. Their risk taking propensity would have reduced, so be prepared to prove your worth before any additional work is given your way. Credibility would have to be earned and not assumed.

5. The start is just the start not the end. I know how stressful placement days can be. I lived through some of the most harrowing days of my life from days 1 to 3 in my campus placement season when 'dream company' after 'dream company' rejected me. Looking back, I can only see what seems obvious now. The first job has little or no bearing on where you are in ten years. The only case where it has a bearing on is you're lucky to join a job which you stick to for decades. Yes even in this day and age. There are some lucky folks like that too.

Gautam Ghosh



Related Post
MBAs During Recession

Brand Update : Cadbury's Dairy Milk Shots

Dairy milk has launched a new product called Dairy Milk Shots. The product is not a bar chocolate but a candy. The ball shaped candy is milk with chocolate cover. The new variant is being promoted in various television channels

Watch the TVC here : Mann Mein Laddoo


The product is being equated to Laddoo ( an Indian Sweet ) and is being promoted using the tagline " Mann main Laddoo " .

Diary Milk had earlier extended itself into Eclairs. This is another stretch for the brand which is synonymous with Bar Chocolate in India.

Cadbury's Dairy Milk Shots has already been in existence in other parts of the world. The brand is currently priced at Rs 2 for a pack of two shots.

Earlier the rival Nestle's brand Munch had launched a similar kind of product called Munch Pop Chocs.

I personally have negative opinion against too many brand extensions . But in a product category like confectioneries , one is forced to get into various extensions inorder to keep the product in the limelight. Cadbury's Dairy Milk Shots will attract those who want little doses of Chocolate and its a good one to share too.

Related Brand
Cadbury's Dairy Milk

Bio Fresh : Making Fruits and Vegetables Healthy

Brand : Bio Fresh
Company : Blue Saffire Trading Corporation


Brand Analysis Count : 355

Bio Fresh is a new product that has been launched in Kerala recently . Marketing is about meeting needs profitably and successful marketers are able to identify the needs by closely watching the marketing environment. Bio Fresh is such an initiative by a little known company.

Bio Fresh is an organic cleanser which can be used to clean fruits and vegetables. We all are aware that there is an indiscriminate use of pesticides and harmful chemicals on fruits and vegetables . There are cases where fruits like Apple are waxed inorder to preserve it and make it look fresh.

Although there are many incidence of poisoning reported because of this indiscriminate use of harmful chemicals, nothing has been done by government or authorities to check such contamination. Infact India does not have a regulatory and infrastructural framework to check such contamination on vegetable and fruits.

One one hand, doctors and health practitioners exhort public to eat more fruits and vegetables and on the other hand there are growing concern about the harmful chemicals being present on raw fruits and vegetables.

It is in this context that a product like Bio Fresh gains importance. According to the company website and newspaper reports :

" Bio Fresh is an organic cleanser made of extracts from microbes and citric acid which has the ability to clean fruit and vegetables from pesticide and insecticide residues. It is even able to clean the waxing on fruits . The product does not leave any after tastes or residues"

The pesticide and insecticide residues normally cannot be cleaned effectively using running water. The company claims that Bio Fresh can clean fruits and vegetables from such contamination.

The brand is currently available in select cities in Kerala. Bio Fresh is retailing at Rs 79 for 200 ml bottle.
The company has been running some print and visual campaigns in Kerala.

My first impression about this product is highly positive. It really address a common problem faced by households. But that does not guarantee the success of a product.

Although most of the households are aware of the problem of contamination, Bio Fresh has the tough task of convincing the homemakers that this brand is the savior.

The problem I see is that how will Bio Fresh convince the customer that it cleans these fruits and vegetables from pesticides ? The benefit cannot be visually seen by the consumer. Hence convincing the homemaker is not going to be an easy task . For a brand to be able to convince the customer about its benefits, the benefits must be observable.

Although I have not used the product, I feel that the benefits cannot be observed by the consumer. ( I will use it an update on this soon ). And if it is not observable, will the consumer pay and use this brand continuously believing the claims ?

So how can a marketer be able to convince a customer on some intangible un-observable benefits ? The idea will be to tangibilise and make it observable. The brand can use clinical and laboratory tests to prove its efficacy and use those test results to convince the customer.

Using influencers like doctors and health specialists can go a long way in building trust among the consumers. Brands like Colgate and Johnson and Johnson use doctors ( or models posing as doctors) to build the trust for their products. Bio Fresh also need endorsements from such trust -worthy source inorder to break into homemaker's mind.

If the claims are true Bio Fresh is a product that can give lot of homemakers relief specially in households where there are kids .

MBAs during Recession

Lot of readers of this blog are MBA students so I thought I would share my thoughts about the tough times ahead for aspiring management graduates.

This is placement season in most of the business schools and the worried look on the face of my colleagues in placement team confirm the fact that things are not rosy out there. Companies have cut back on their campus visits and jobs are slowly but surely drying up.

I think its time to do some reality check.

All the students who are now sitting for placements this season entered the MBA course when things were nothing but perfect. Last five years was the best period for any professional students.
Irrespective of the size and quality of the school, recruiters came in and took people in bulk. I used to tell the students that this is the right time to enter the job market armed with a management qualification.

Suddenly things are not the same.

Accept the Reality

I would urge my students across the campuses to please accept the fact that times are going to be tough. There is no need to deny the inevitable. We are in a slowdown. There will not be mass recruiters coming in and taking 50 or 100 students at a time.

According to placement co-ordinators, the number of companies visiting the campus may see a 50% drop.

Companies are going to be choosy

Having said that , I don't think that there will not be jobs. There will be lot of jobs. Even during economic slump, corporates need people. But the demand for human resources is going to come down drastically .

So companies are going to be choosy. Earlier during growth period, companies used to recruit in plenty because they were expanding very fast and time was short to pick and choose.
So the HR departments took the " Swim or Sink " approach where they recruited plenty without much scrutiny ( cannot afford to be because demand is huge ) . The idea is that those who can swim will survive and others will move out .

At one point of time, talk of the town was that anybody who can speak well will get a job. But now corporates cannot afford to splurge.

That means there will be less number of jobs and more candidates.

IIMs and top tier 1 business schools may not suffer much but the hit will be taken by the tier 2 and lower level business schools.

So What should MBA students do now ?

I am giving certain thoughts and would urge you to please put in your thoughts too in the comments section.

Be Realistic

Its time to crash- land. Please accept the fact that salaries are going to be low this time. You cannot blame either the college or the industries for doing that . The fact is that most of the corporates are tightening their budgets.

Hence be prepared to work on a reasonable package. I have to emphasis on the term " reasonable " because most of the students have their salary expectations based on the time when they joined . What I learn is that the salaries offered to freshers have come down by 30 %.

Most of the companies are now linking salary to performance ( usual practice !) and hence be realistic in your expectations. So when an offer comes to you with a reasonable salary, accept it. The focus should be on survival.

Start your workout

Its time for the students to have a self- assessment about the skills and knowledge . When the jobs are less and competition is more, you have to be prepared to fight hard to convince the recruiters that you are worth it.

Please accept the fact that No recruiter will take you because you have an MBA degree . They will take you for your skills . If you are able to prove your worth, you will win the job.

So do the following activities :

Be aware
Read business dailies and magazines and prepare notes on the major issue that are haunting global economies .
Brush up your communication skills.
In the past you will be recruited if you have good communication skill. But now you will be rejected if you do not have communication skill. ( Have you understood the difference ? ) .

Know the funda well
Those who tell that theory and practice are different is giving you wrong ideas.
How will a recruiter check whether you work hard ?
He will ask you fundas .
If you cannot answer then it shows that you cannot do your work well. So make sure that you are prepared to face funda questions .

Don't hate sales jobs, start loving it
I teach a course on Sales Management and I know the negative vibes from the students towards sales jobs. But remember that sales jobs are easy to get especially during recession times. If you can prove the recruiter that you can give him good volumes, he cannot resist taking you .
So be open to selling insurance , soaps or beedis whether you are a finance pro or an HR diva ( pun intended)

Attitude
Even if you lack communication skills, one factor that can land you a job is having the Attitude. But alas no business school teaches how to have that attitude. I have seen many students with funda and communication skills fail because of attitude.

What are those critical soft skills that recruiters look for :

Confidence in yourself. But make sure that you understand the difference between confidence and arrogance.

Ability to do basic work : Recruiters love people who can DO Stuff. So if you can convince them that you love getting dirty on the field to get things done, you can get that dream job.

Clarity of thought : Are you clear about what you are and where you want to be ?

And the most important of all is

Proof /Evidence
Can you give proof that the person that the recruiter is looking for is you. If not then try to get those proofs.
Give recruiters proof that you are hardworking .
Give them proofs that you are a leader .
Give them proofs that you can deliver what is expected out of you.

Evidence can be in the form of awards , accolades, stories , personal reference, project reports , activities etc.
If you do not have proofs or evidence to support your claims then you will have tough time convincing the recruiters.

Its not late , so start building your case with stories and evidences.

All the very best.