Business Seriously_First Edition

8/4/2019 Business Seriously_First Edition

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Hello Readers,

It gives our Globiz team great pleasure to launch the first edition of Business – Seriously,

another milestone for our club.

I should take this moment to first thank all our prior club members (Super-Seniors), who

guided and molded us to handle the club and take it forward. Secondly, the faculty at IMT,

for graciously sharing their intellect with us. Finally, all the students in B-School frater-

nity, as constantly catering to their requirements has been the driving force for us.

Since I’ve come to IMT, I’ve seen the growing importance of International Business in the present day man-

agement, day by day. Studying this vertical I realized how an economy can severely affect the others, how a

merger in a nation can affect a rival’s business half way across the globe, how globalization can achieve

profitability.

Our club aims to provide a first hand experience to all the budding managers on dealing with issues in inter-

national business world over. All our activities are designed to hone the concepts and strategies of interna-

tional business. It’s our goal to raise the standards and relevance of this vertical in management studies.

I hope this new endeavor of ours will prove to be knowledgeable for you, apart from being fun-to-read. I

also hope your appreciation will keep flowing in form of participation in henceforth editions along with our

other activities.

Happy Reading!

Nipun Gupta

Globiz Coordinator

P A G E 2 B U S I N E S S S E R I O U S L Y

Message from the co-ordinator



Hello Readers,

Greetings from club Globiz.

In our endeavor to always bring you the best, I take the pride in introducing the very first edi-

tion of this monthly issue “Business Seriously”, fully loaded with useful information that you

and me as manager are expected to know. To facilitate a healthy learning environment for our

readers, wise selection of content is made from diverse areas and thus contains expert opin-

ions of faculties and marketers on current trends in International Business arena, latest hap-

penings round the world, articles, viewpoints and print ads from the readers across the Indian

B-Schools.

My special mention goes to ‘Dr. Ratna Vadra’, Assistant professor, IMT Ghaziabad who enlightens us with her valu-

able insights on the Investment opportunities in African Countries and some major learnings for the companies who

are willing to enter the African markets. The market is steadily growing and thus possess huge investment opportuni-

ties besides numerous challenges for Indian companies.

“Experience Speaks– Learn from those who did it!” is one section that students might find extremely useful as it

talks about the internship experiences of PGDM 2010-2012 students of IMT Ghaziabad . I appreciate the efforts of

all of those who contributed towards making this section fruitful for the juniors.

“Two-faced view” section tests the lateral thinking skills of participants where in they have to present both of their

‘for and against’ views on a given topic and thus the ability to present arguments from multiple perspectives.

“Print ads” section is a platform to see how a product can be promoted in its non-home country with globally known

personalities and thus testing the creative thinking of managers as well as power of a celebrity as a brand ambassa-

dor.

To conclude, I would like to thank all the stakeholders of this magazine who have contributed towards setting up a

platform which will always work towards building a healthy learning environment for each one of us.

We would appreciate your valuable feedback on this very first issue so that improvements can be made in forth-

coming issues.

Happy Learning!

Shekhar Sinha

Chief Editor

([email protected], [email protected])

P A G E 3

FROM EDITOR’S DESK

V O L U M E 1 , I S S U E 1



CONTENTS

MAGAZINE TEAM

Cover Story- Foreign Direct Invest-

ment: It’s high time for Africa :Dr. Ratna Vadra….5

Special Coverage: ‘Experiencespeaks’ - Learn from Those who didit ….9

Chanakya Niti: Ideas that can pre-vent a double dip….15

Euro Zone Crisis—

Major Learnings?....18

Euro zone crisis—whatwent wrong?...19

Is there any other Eco-nomic Recession Knockingthe doors?...21

Two faced View: View and

counter view on RuralMarketing...24

NNNNorth. EEEEast. W WW West.SSSSouth...26

Anudeep Paduru

[email protected]

9247253162

Bhaskar Ghildiyal

[email protected]

9453601461

Jagadeesh Kommineni

[email protected] 8826890576



Increasing FDI combined with growing capital

investments and the view of Africa as a future

growth market indicates that Africa's outlook is

positive. Strategic resources, a growing consumer

base and generally positive economic prospects

are all contributing to growing interest in Africa

as a business and investment destination. More-

over, the FDI flows have been from developed to

developed countries until recently, when it has

started flowing from developed to developing

countries as well. The current article highlights the

shift of Investment scenario from developing to

undeveloped countries with special reference to

Africa. In one line we can say that it’s high time

for Africa .

IntroductionIntroductionIntroductionIntroduction

Waka Waka (This Time for Africa) is a song by

Colombian singer-songwriter Shakira, featuring

South African band freshly ground It was the offi-

cial song for the 2010 FIFA World Cup. World

Cup has given the continent a chance to present a

more positive image to the world. Contrary to

popular opinion, the best investment bet that you

can make in 2011 is in Africa. You wouldn’t know

P A G E 5

it if you turn on a TV or read a newspaper, since U.S

and European media focus relentlessly on areas of un

rest and instability, but the reports beyond the fron

page tell a very different story. Record GDP growththe rise of homegrown corporations and increased for

eign investment are all evidence of Africa’s rapid eco

nomic progress and remarkable potential. Prime Minis

ter Manmohan Singh said that we are preparin

"initiatives" that India is prepared to take as part of it

"emerging partnership" with Africa, a region which h

said was poised to become a "major growth pole for th

world economy":- $5 billion for the next three year

under lines of credit for Africa to help meet its develop

ment goals. The Ernst & Young 2011 Africa Attrac

tiveness Survey reflects, first, Africa's attractiveness fo

foreign direct investors and, second, the perceptions o

and outlook for, Africa and its peers across a represen

tative panel of 562 international decision makers. Ac

cording to World Bank Africa could be on the brink o

an economic takeoff, much like China was 30 year

ago, and India 20 years ago.

Africa is the world's second-largest and second most

populous continent, after Asia. At about 30.2 millio

km² (11.7 million sq mi) including adjacent islands,

covers 6% of the Earth's total surface area and 20.4%

B U S I N E S S S E R I O U S L Y

Foreign Direct Invest ment: It’s high time for AfricaDr. Ratna Vadra

Assistant professor

IMT GHAZIABAD, INDIA



of the total land area. With a billion people (as of

2009) in 61 territories, it accounts for about 14.72%

of the World's human population. The continent is

surrounded by the Mediterranean Sea to the north,

both the Suez Canal and the Red Sea along the Si-

nai Peninsula to the northeast, the Indian Ocean to

the southeast, and the Atlantic Ocean to the west.

The continent has 54 states, including Madagascar,

various island groups, and the Sahrawi Arab De-

mocratic Republic, a member state of the African

Union whose statehood is disputed by Morocco. It

has abundant natural resources, From 1995 to 2005,

Africa's rate of economic growth increased, averag-

ing 5% in 2005. Some countries experienced still

higher growth rates, notably Angola, Sudan and

Equatorial Guinea, all three of which had recently

begun extracting their petroleum reserves or had

expanded their oil extraction capacity. The conti-nent has 90% of the world’s cobalt, 90% of its

platinum, 50% of its gold, 98% of its chromium,

70% of its tantalite, 64% of its manganese and one-

third of its uranium. The DRC has 70% of the

world’s coltan, and most mobile phones in the

world have colane in them. The Democratic Repub-

lic of the Congo also has more than 30% of the

world’s diamond reserves. Guinea is the world’s

largest exporter of bauxite. In recent years, the Peo-

ple's Republic of China has built increasingly

stronger ties with African nations. In 2007, Chinese

companies invested a total of US$1 billion in Af-

rica.

Africa is seen as a frontier for energy resources –

P A G E 6V O L U M E 1 , I S S U E 1

because of its massive oil and natural gas resources

mainly the Gulf of Guinea, Nigeria, Sudan and Ango

India imports about 70 per cent of its oil and sources

significant percentage its oil imports from Afric

(RBI, 2008). Efficiency and market seeking was th

common purposes for Japanese firms in Africa; t

Japanese subsidiaries are young and small in low

middle income region, young and large in upper mi

dle income region and old in low income region; the

performance is good with a very high exit rate in lo

income region, high with high exit rate in low midd

income region and moderate with a low exit rate in u

per middle income region. There is a significant i

crease in the trade and investments between Africa an

its Asian partners China, India, Singapore, Malaysi

South Korea and Japan. However, its recent econom

engagement with the dragon and the elephant are

particular significance because of the complimentariof interest between the two emergent Asian partner

The Africans – who are impressed with the sustain

growth rates achieved by their long term, mainly ide

logical allies, India and China – have welcomed t

increased economic interactions with these two eme

gent Asian economic powers in particular.

2.Corporate India wades into Africa

The Chinese have a head start in Africa and their go

ernment is championing their cause, but the Indians a

no pushovers. They are using their private sector mu

cle, people-to-people contacts and a general goodw

amongst the public to penetrate the market. Indi

companies' size of investment in Africa including E



sar Group's $100 million invest-

ment in Essar telecom Kenya

Holdings. China's push driven by

its government, the Indian march

to Africa has been led by the pri-

vate sector. After proving them-

selves in fields as varied as auto-

mobiles, telecom and education

in recent years, Indian busi-

nesses are gradually opening up

in Africa and have become the

new frontier for Indian compa-

nies .

Indian companies, be they in ag-

riculture, telecom, retail, infra-

structure or pharmaceuticals, see

Africa as the pot of gold at the

end of the rainbow. Step out of

the Kinshasa airport complex

and Indian visitors are greeted

by a huge hoarding bearing the

familiar red-and-white signage

of Bharti Airtel, India's biggest

phone firm. Just that it is in

French. And then driving down

the Chinese built highway into

the city, there are more signs of

Indian business in a country that

is 10 hours flying time from

Mumbai: Mahindra Scorpios and

Tata Motors buses, occasional

but not rare. In shops across the

nesses.

Indian power and steel compa-

nies such as Coal India, Steel

Authority of India, Tata Steel

and JSW Steel are importing

coal from both South Africa and

Mozambique by shiploads to fire

thermal power plants and steel

blast furnaces. There are other

opportunities in Africa in which

Indian businesses are uniquelyplaced to take advantage of

given that they have dealt with

them back home in India.

Health, for instance. Infant mor-

tality in countries such as Sierra

Leone is as high as 123 per

1,000 births and average life ex-

pectancy elsewhere, say, in Zim-

babwe, is just 45 years. For

many then, Africa could be the

emerging India market equiva-

lent in pharmaceuticals in the

next decade as the demand pro-

file there transitions from retro-

virals to treat HIV/AIDS and

antibiotics, to drugs to treat dia-

betes or cardiac disorders. Paul

Anley, Founder and CEO of

Pharma Dynamics, majority con-

trolled by Lupin since Septem-

ber 2008, estimates the market

P A G E 7

continent, the India story is play-

ing out. Emami's 'Fair and Hand-

some' fairness cream for men

and Dabur hair care products vie

for space on shop shelves with

drugs by Lupin, Dr Reddy's

Laboratories and Ranbaxy. Ba-

jaj-made bikes, NIIT training

classes, Lava mobile phones and

Godrej soaps are increasingly in

demand in several countries in

much of the continent. And even

Kirloskar pumps, a brand whose

name has become a generic term

for pumps. ONGC Videsh has

invested $2.5 billion in Sudan oil

fields, the future of which seems

secure now after an initial scare

when Sudan split into two in a

referendum earlier in 2011. Be-

sides its coal mines in Mozam-

bique, Tata Steel has a massive

ferro-chrome facility near Dur-

ban, South Africa.

Tata businesses in Africa also

include telecom, hotels and oth-

ers - all of which, at last count,

totted up to some $600 million

in revenues for the group. Africa

can provide access to raw mate-

rial and new markets/consumers

for some of our existing busi-




from $1.4 billion in 2001.

Indians are stepping into infra-

structure businesses they have

excelled in. Wired phones and

Internet connections are few and

far between in sub-Saharan Af-

rica and, although the continent

has some 600 million mobile

phones, companies such as

Bharti Airtel are driving in full

thrust in the 16 African countriesthey operate in. In early 2010,

when it was buying Zain's opera-

tions .

Africa has resources and invest-

ment opportunities to offer and

therefore in academic discourse

it is called the ‘new frontier’. Inaddition to Africa’s traditional

nent suffers from a litany of

problems and several of these

are urban legends - corruption,

crime, epidemics, dictatorships,

tribal wars and piracy - a dogged

push by companies, backed by a

sustained Indian diplomatic ini-

tiative and the local Indian pres-

ence there, will help further In-

dian interests in Africa. China

might be winning the battle but

the war for Africa is far from

over. It’s high time for the world

to realize that it’s the time for

Africa!.

P A G E 8

trading allies from the West, In-

dia and China, the two main

Asian drivers have emerged as

the major trading partners andinvestors since the 1990s.

Conclusion

Africa is a high-reward eco-

nomic opportunity that can't be

ignored any longer. It is the new-

est frontier for global business.

As the continent unleashes itsconsumer power ,India and

China rush in to compete for the

control of its economic future.

With Africa's consumers ex-

pected to spend over $1.4 trillion

by 2020, Indian firms cannot

afford to miss what is often

called the last frontier in global

business. No matter the conti-




Summer internships offer a window for budding managers to taste theactual market place, especially forthose coming from technical back-ground. Interns get to see how theirtheoretical concepts get translated toactual work. Moreover, if you impressthe company officials and manage toget a pre-placement offer: nothing likethat. Salaries offered by company inthe form of PPOs are usually higherthan college average packages. So,one has a huge monetary incentive as

well; in addition to the extensive learn-ing experience.

I did my summer internship at DuPontRefinish (Car Paint Industry), Chennaifor 8 weeks (April-May). DuPont Refin-ish is a key branch of DuPont Perform-ance Coatings and its primary businessis the paint used for refinishing of carsat body shops after collisions. Thebody shops i.e. the car repair

P A G E 9

shops/garages where the cars getrepaired are basically divided in threecategories –

A-class body shops are the ones whichhave their dealerships for selling cars.

B-class body shops are the one whichdo not have their car sale dealershipsbut only repair shop.

C-class body shops are the generalroad side repair centers.

A-Class body shops are the main focus

for the company with some emphasison selected B-Class body shops. C-Classbody shops are not considered as partof its main clientele.

A-Class body shops have more or lessorganized structure and the marketthey offer is fairly clear. However, somemajor B-Class players may be left outand the company may not be aware of its presence. So, one of the objectives

understand their perspective regard-ing such developments. I also visitedmany body shops to get their perspec-tive.

Based on my experience I very strongly suggest interns-to-be to go throughsubjects like – Business Research orany such subject pertaining to datacollection/analysis. The highest prob-ability for any intern is that he will geta market survey/analysis project andlearning such subjects beforehand canbe of immense help – in framing thequestionnaire, designing the samplesize, analyzing the data collected etc.

Besides, one is also required to be clearwith the basics of his stream of speciali-zation i.e. I had to go through the im-portant chapters of Kotler since I havemarketing as my majors.

Interns should also be ready to facesituational challenges like I had atough time surveying garage peoplesince I did not know Tamil and theirEnglish was weak.

Overall, I recommend all interns to

brush up their basics and look forward

to a very enriching experience in those

8-10 weeks.

was to identify such major B-Classbody shops which are doing reason-able business and can be prospectiveclients.

Insurance companies are the oneswho shell out the money for car re-pairs. So, there is a high probability that they may drive their policy-holdersto such body shops which have tie-upswith them.

My task was to ascertain how the in-surance companies influence a per-son’s choice of body shops. I con-ducted several interviews with severalsenior insurance company officials to


‘ Experience speaks ’ - learn from Those who did it

Shantanu Shekhar, PGDM (Marketing)

DuPont Refinish



perspective of the overall culture,

working of the organization. After ahectic day of around 10 hours, we gotback to the company guest house ataround 8. IPL was the only thing in my mind when I was hopping myself back.

We three were pleasantly surprised tosee a helper for us. The second day was kind of a same way in which wewere shown the overall factory toshow how things were made and thetotal organization processes beingfollowed before dispatching a productto the client. I was introduced to my project mentor on that day. Frankly,not boasting of myself, I found himvery happy on seeing my curiosity tomeet him. It was a very participativemeeting, in which he encouraged meto discuss the integrities of the project.

After a small vacation of 6 days post

3rd term exams, I set out for some-thing which I can say as my first job. Aswhen they had come to college forrecruitment, the organization had laiddown some home work for us of un-derstanding the products of the com-pany. It was a process equipmentmanufacturing company. The very word of manufacturing induces animage of big workshop, rusty ma-chines, grease stained clothes, work-ers. Well the same was with me .Wewere asked to report at the manufac-turing plant at Ankaleshwar, Gujarat.

When we reached the plant, a seniormarketing executive introduced usto the senior operations team of theplant. We were briefed by numerouspresentations and lectures by Opera-tions Head trying to give us a firsthand

ing, employee behavior, new situa-tions. The analysis is only the mechani-cal part which can be done from any-where. Suggestions with a properexternal environmental logic to back itup would be superb from any com-pany’s point of view. Building Relation-ships with all around is an integral partof the summer internship which many people fail to do. But that if done prop-erly would be the biggest strength incoming out with a very apt recommen-dation for the company. The clarity of

On the penultimate day of my summerinternship, I was asked to make a crisppresentation of the findings and thatwas to be done in front of businessheads. I wasn’t nervous at all because

I was very clear as to what I had doneand besides that I had my mentor onthe side .

The presentation went well which wasclearly reflected from the applaudsfrom business heads. I was given afantastic farewell lunch from my of-fice and they were very happy withperformance of our college guys. Theoverall learning, if summarized ismainly the organization culture, work-

approach and objectives would be asavior when it comes to delivering finalpresentation in front of the manage-ment. The last thing which I wouldadvise all of you in a summer intern-ship is that whenever u get a concep-tual doubt or any divergence in practi-cal happening and learnt methods ,the best thing is to directly get back toany faculty ( from the college )and thementor even if it is the silliest of thething .

P A G E 1 0

cycle and every touch points they hadwith customers. I interrogated themextensively trying to correlate the mar-keting concepts that I had read to theactual functioning in the organiza-

tion.

Once done with that, I went aheadwith my project of “Establishing a cus-tomer satisfaction index”. I had to col-lect the consumer responses. As they were only business customers, I didn’tfind it difficult to reach them. Once theresponses were collected over mail,the ball was almost in my court as theprimary data needed was there. My mentor had already apprised me thatthere would be ground difficulties in

collecting data from the organizationas every employee would be busy inhis/her own work . So the best time Ifound of developing a good relation-ship with the employees was at lunch.

Due to a proper friendship buildingexercise from my side, I was able to getaccess to the data as and when re-quired.

The project went forward with all theanalysis being done on primary andsecondary data. Timely review meet-ing with my mentor was of great helpto me as it ensured that I was on theright track. Although the waiting timeto meet my mentor was long but Ialways came out with a satisfaction.

After a 90 minute meeting, we cameto defining the objectives of the pro-

ject and approach to go forward.

Within 2 days, I was asked to report inMumbai. Every odd hospitable ar-rangement like a well furnished com-pany guesthouse, and helper, a wellequipped cubicle was all arranged. Imet all the marketing executives per-sonally to understand the total sales


Rakesh Kumar Purohit, PGDM (Marketing)

Bectochem Consultants and Engineers ltd.

way you try to do it. These are Effec-tive, Efficient and Ethical.



P A G E 1 1

interview, what I should wear, how I should prepare myself etc. Believeme it is not as scary as you think.Some efforts from your end and itwill all be a piece of cake. To beginwith be updated about the currentaffairs, this will help you in the GDprocess. Also, brush up the con-cepts that you have learnt so far inthe classes. During the interview remember to be a good listener andmost importantly Be Confident. ItsConfidence that interviewer is look-ing for in you, not some tongue

twisting jargons. So remember don’ttry to throw “Global” fundas to them,be precise with your responses andnever hesitate to say “I don’t know”when you don’t know an answer.These will help you in grabbing any

job that you dream for. With this I wish you get the best of placements during your summers and proper in your ca-reer.

implications of whatever I studied

throughout my first year. The warmwork-culture and support from my project guide and all other employeeshelped me in completing the projectsuccessfully. One thing that I wouldlike to suggest to you, that helped meduring my summers, is Commitment.Summers is your first-hand chance tolearn and to polish yourself, so fully utilize this chance and put all yourefforts in your work. Apart from thisstick to deadlines, be interactive andnever hesitate to seek help from yourproject guide or any other employee.

Your summer placement week is ap-proaching and by this time most of

you must be very anxious about thiswhole process. Hundreds of questionsmust be hovering through your mindlike what traits will the interviewer belooking for, what they will ask in the


Sachin Gupta, PGDM (Marketing)

Britannia Industries

FMCG, an industry that all or, least

I’d say, most marketing managersaspire for to begin their career andI wasn’t an exception. Fortunately, Igot a hang of FMCG during my summers in Britannia Industries.Headquartered in Bangalore it isone of the biggest and oldest F & Bcompanies in India. Its wide portfo-lio of brands makes it a hot favour-ite company for aspiring “Brand”Managers of IMT.

The project assigned to me duringmy summers was related to Brandrevamp of “Daily Bread Cafe”, asubsidiary of Britannia. The projectincluded Identifying Brand Identity of Daily Bread, Competitors’ Profil-ing, Identifying Consumers’ prefer-ences etc. It was a great learningventure for me. During the project Igot to learn about the practical



July, it was when we first startedhaunting our seniors about the sum-mer internships, processes, short listingcriteria, FAQs and what not. Replies

never satisfied our anxious hungry minds. Signups started as soon as endof August i.e. much before even thefirst term final exams. Long queues forsignups, crazy nights catching up onlatest news, revisiting our conceptslearned during graduation and firstterm made it all the more fun.

My journey was a dream (pun in-tended), from getting it signed upthrough a friend to getting selected onday 0. I had the time of my life, with allthe anxiety running through the

nerves of 450 odd talented students. 3

P A G E 1 2

signups and one process is what ittook me to get an internship in TridentLimited.

Trident Limited has 5 business divisionsnamely paper, yarn, towel, chemicaland energy. I was selected for the IT department. 4 of us from IMT joined infirst week of April. I was assigned to anew project being implemented in thecompany, the project (as it was told tome and that I later realized) was very important as the request had comedirectly from the MD, Mr. RajendraGupta. My task was to get the require-ments from the users, understandthem, map them to the applicationthat was being implemented, planning

various stages of SLDC and managing

Parting notes:Parting notes:Parting notes:Parting notes:

- Brush up your basic conceptsbefore summers.

- Know about the company culture.

- Know the dress code expected atthe company from yourseniors who worked there.

- Know about the city you aregoing to work in. (We had atough time adjusting inLudhiana initially).

- In case you know about yourproject try going a little pre-pared with the concepts.

- Avoid office gossips and politics;always remember you are inthe company only for 2months.

- Learn as much as you can; not just through project but by

observation. - Maintain good relations with

your seniors.

communication between the market-ing team, IT team and external vendor.

Prior to coming here I (like most of us)had worked in an IT company. So,working at Trident gave me an oppor-tunity to experience working in amanufacturing environment, learnedthe dos and don’ts in a manufacturingfirm, and handling a project by myself.Our professors always told us “The

most difficult resources to manage arepeople”, which I really doubted, butTrident gave me the proof in its ownunique way.


Chhavi Agarwal, PGDM (Marketing)

Trident Limited



want to go that extra mile. Also you get to interact withthe very best in the industry

and from day one you areentrusted to do things yourown way.

My project involved studying,analysing and auditing thesales process at Maruti Suzukiand its dealerships. Apartfrom in-depth analysis of theevery process of sales in theorganization, we were ex-posed to every other functionfor the first two weeks. Theinternship provided me withan opportunity to understandthe structure of the organiza-tion. The objective of the pro-

ject was to identify the key areas of improvement and to

The Internship with Maruti SuzukiIndia Ltd., in its marketingand sales division, was a won-

derful Experience. Every day came with new challenges aswell as opportunities to out-perform myself. My team wasalways willing to help mewith every doubt no matterhow trivial it was. Everyone inthe office was approachableand willing to render help.The culture at Maruti is one of mutual respect and openness.There are no closed doors-

you can walk right into theoffices of the top managers/

business heads and speak tothem directly. The enthusiasmin the organization is highly contagious, which makes you

went for followed by intensecalculation on how to spendthe rest of days with a few

rupees to spare.

All in all it was an exciting journey, the learning, the fun,the friendship, the money ,the craziness all ending witha trip to home , there’s noth-

P A G E 1

my internship I learnedthe most from.

But as the cliché goes “allwork and no play makesinternship a dull thing”,an internship which

started with me loosingthe offer letter waiting forhours for a gate passmissing the induction to aproject which required nomore than a month’s ef-fort gave me ample timeto explore the city of power “Delhi”, with

friends from college andother interns we were abunch of crazy MBA’s roam-ing about exploring thebeauty (pun intended) of thecity be it malls or multiplexes’

or the road side view. A roadtrip was cherry to the cake;the fun was so that even thescorching heat of Delhi could-n’t melt our morals down.The happiness of getting thefirst of the two months’ salary could be seen in the crazy shopping spree a few of us

suggest the solution towardsachieving them. The projecthelped me develop an under-standing of automobile sec-tor; working with a marketleader with almost 50% mar-

ket share was an experiencevery few of us got exposedtoo. Interviews and interac-tions with customers, sharingof knowledge and experienceby the domain heads, partici-pation in national level con-ference held by company were few of the key parts of


Mithil Jain, PGDM (Marketing)

Maruti Suzuki India Ltd.



would like to tell you that your guide is

the most important person for youduring this period .So listen to what hesays carefully and complete the workassigned to you before the deadline.But the most important thing for astudent to understand is that the timeof your mentor is very precious. He istaking out time from his busy schedulefor you. So stop making unnecessary visits or calls to him. If it is very impor-tant and you cannot move forwardwithout his advice call him but first askhim politley if he is free or not. .

During my training I used to love theinteractions I had with the retailers.Each had its way of thinking whichwould be completely different fromanother retailer. This definitely broad-

The word ‘internship’ brings out a

sense of excitement in all the MBAstudents. Expectations are quite highand it is a trailer of the life one wouldlive after two years of MBA. For many of the students, like me, it is the firstindustry experience which make thewhole thing even more important. My summer training was in a FMCG com-pany and that too in sales, in Punjab.My project involved a lot of field work.I had to visit outlets, collect data andask questions from the retailer whenrequired. Though in the starting it wasdifficult to understand the ‘theth’ pun-

jabi they spoke but then within a few days I not only was able to understandit but also started enjoying it. My daily schedule was visiting the retailers dur-ing the day and then reporting theprogress to my guide by the evening. I

P A G E 1 4

provement. He also gave me pointerson the things to follow during thetraining which were quite helpful. Asthe time passes one realizes how thetwo months period is not enough to

understand the complex structure andprocesses of an organization. But thisis all the time one has and one needsto gear up from day one. This was all Iwanted to share about my experience.My training made me aware about my positive and negatives. I would say summer internship is a bag full of surpises which is quite helpful in pre-paring you for your career.

ened my outlook. So, during yourtraining try to interact with as muchpeople as well as with the employeesof the organization you can. Try to findout their perspective on different

things. If I had to choose my best partof the summer training it would defi-nitely be the one where I met the SalesHead of the West Zone. It was a very unique experience. He was on a visitto see whether the strategies plannedwere being implemented correctly ornot. Since I had seen what was hap-pening at the ground level he askedme where the company needs im-


Rahul Mahajan, PGDM (Marketing)

Frito Lay



There has been turmoil on both

sides of the Atlantic. Arctic ice

is melting heavily for Europe

and hurricanes are ravaging the

US. And the world economy is

in much worse shape than it

was only few weeks ago.

Consumer confidence is de-

creasing constantly. However,

the world seems to have forgot-

ten the basic learning from2008 crisis. There have been

reports on lenders making more

subprime auto loans again.

These car loans are seen by

lenders as relatively safe be-

rect our basics on Economics

before we look or reassess

our business cycles. In 2008,

there was a bold and coordi-

nated effort to save the

world economy with fiscal

and monetary stimulus; how-

ever the steps have not

helped a lot in recovery. Con-

servative methods were putinto place by advance

economies much before the

economies could fully re-

cover.

g i v e n d e e pt h o u g h t a n dfound satisfactory answers to thesequestions, goahead”.

According toChanakya, thehappiness and

small drives the economicgrowth, but before investingone should ponder on whatChanakya said, “Before youstart some work, ask yourself three questions- Why am Idoing it, what are the resultsmight be and will I be suc-cessful. Only when you have

peace attained by those satisfied by thenectar of spiritualtranquility is not at-tained by greedy per-sons restlessly movinghere and there. As theindividual debt in-variably leads to

P A G E 1 5

cause they are collateralized

and repossessing cars is easier

than foreclosing on homes.

Maybe it is the time to revisit

our 300 B.C. texts and cor-

Caption describing picture or graphic.

sacrifice of his wife and

riches.” -C h a n a -

kya

T h ea b o v el i n e spoint tothe re-

forms at microeconomics

level for individuals. In thecurrent world, most of peo-ple in advance countries fol-low deficit saving approachto an extent that they forgetthe value value value value of money and bur- bur- bur- bur-

den den den den of debts. Investments atindividual level, however

“One should save money

against hardtimes; save hiswife at the sac-rifice of hisriches; but in-variably oneshould save hissoul; even at


One should save money against hard

times; save his wife at the sacrifice of

his riches; but invariably one should

save his soul; even at sacrifice of his


Chanakya Ni t i : Ideas tha t can prevent a double d ip

Deepak Kumar Sahu

Parimal Das

S P J A I N I n s t i t u t e o f M a n a g e m e n t a n d R e s e a r c h



ate a market that could not

be assimilated in the psychol-

ogy of people of our nation.

This philosophy for trade

policies around the world isimportant. This links micro-

economics decision’s impact

on macroeconomic. This also

links psychology of individu-

als to the goods they are ex-

posed to.

Moving towards the mone-

tary policies, US Federal Re-

serve opted to flood the sys-tem with cheap money but

lowering the interest rates in

order to restart the economy

country’s debt and this inturn leads to world debts.

There are many folds to the

economic problems that we

are facing today.

According to Chanakya, the

enemies we deal with are

different and so the strate-

gies we require are to be dif-

ferent. He advocated free

trade but not at the cost of

National’s interest. Accord-

ing to him, nation should

pay as much importance toimports as it should pay to

the exports. Goods imported

from other nations may cre-

that was in recession post

technology bubble and ter-

rorist attack (6% in 2001- 1%

in 2004). Similarly for 2008

recession the fed rate hasdipped from 2.25% in March

2008, to 0.25 in august

2011. This policy has a major

impact towards people re-

sponse to money. Money

started losing its asset value.

At individual level, people

started thinking of maximiz-

ing their utility of money.

As we have came much

ahead on that policy now,

the best way out is what

long enough to

make them all

yourselves”. The

developing coun-

tries which are not

so much affected

by recession need

to keep an eye on

we have to live in present

and not on real GDPs that

are based on pre-recession

data. For emerging econo-

mies, they have to keep in

mind the words of Chana-

kya, ”Learn from the mistakes

of others. You cannot live

both real GDP and

Nominal GDP for

their monetary poli-

cies.

Chanakya said a lotabout Governmentcontrol over prices

P A G E 1 6

GDP in advanced econo-

mies. The GDP without infla-

tion adjustment has raisedboth public and private debt

burdens, since the

ability of house-

holds and firms to

service their debts

depends on nomi-

nal incomes and

revenues. Monetary policy

will then react as of now,

easing when NGDP grow and tightening when it is

slowing. Targeting NGDP

may come with a price, the

price will be inflation or de-

flation but that would take

some time. As of now to

tackle the enemy at the gate

Chanakya said, “Once you “Once you “Once you “Once you

start to work on something,start to work on something,start to work on something,start to work on something,

don’t be afraid of failure and don’t be afraid of failure and don’t be afraid of failure and don’t be afraid of failure and don’t abandon it. People don’t abandon it. People don’t abandon it. People don’t abandon it. People

who work who work who work who work

sincerely are sincerely are sincerely are sincerely are

the happi- the happi- the happi- the happi-

est.” est.” est.” est.” We

have to tar-

get nominal



Learn from the mistakes of

others. You cannot live long

enough to make them all

yourselves.



in market economy and equilibrium of demand and supply....Governments at macro level throughout the world should try to handle the issue at the budget level. Union budget is simply a statement of income and expenditure of Government. The

source of income and the quality of expenditure decides thehealth of budget. The fiscal policies of Governments through-

P A G E 1 7 B U S I N E S S S E R I O U S L Y

out world should addressthese concerns. Adjustingfiscal policy does not meanonly stimulus, it also means

reforms that will improve thepublic nances over time.

To overcome the double dip,we need to change thecourse. First, the fiscal poli-cies and in some country themonetary policy need to lookat long run reforms. Second,a great effort is required onthe supply side reforms. Evenfalling back to 300 B.C.knowledge will not be en-sure an easy path, the recov-ery will be fragile and slow.However, this will lead tochange in psychology at theindividual and firm level thatwill avoid business cycles tohappen so quick, so fast andso devastating.

FED rate of US From Jan 2001 to 2006

FED rate of US From June 2006 to 2011

Jun06 Sep07 Jan08 Mar08 Oct08 Dec08 Jun09 Dec09 Jun10 Dec10 May 11 Aug11

FedRate

5.2 4.75 3.00 2.25 1.50 0.25 0.25 0.25 0.25 0.25 0.25 0.25



Varun Salwan, NARSEE MONJEEINSTITUTE OF MANAGEMENT

STUDIES

With the Euro zone being on the

verge of a crash in its economy, the

paralysed banking systems of the Euro-

pean Union nations have been dis-

closed to rest of the world. The finan-

cial crisis of European Union has

brought in front the underlying prob-

lems and the erroneous tendencies of

the various countries of Europe. It also

exhibited the weaknesses that oc-

curred in the structure of the monetary

union which was the prime reason

behind worsening the situation.

cially strong nations were burdenedwith the financial obligations of the

weaker nations. This further weakened

the whole of the Euro Zone by weak-

ening the financially strong nations as

well in spite of easing out the situation

by balancing the debts. Also, the poli-

cies once set should be consistently

kept under the check. The expendi-

tures should be monitored on a con-

stant basis even if it is a boom time forthe economy.

Foreign Owned Banks Come to a Res-Foreign Owned Banks Come to a Res-Foreign Owned Banks Come to a Res-Foreign Owned Banks Come to a Res-

cuecuecuecue

Although the topic is highly conten-

ConclusionConclusionConclusionConclusion

The current crisis requires fundamental

decision making by the leaders of the

European Union. The learning from

this financial crisis can be taken ahead

to bring out the breakthrough

changes in the current financial sys-

tems and improvise the situation. In

count deficit and creates more imbal-

ances in the economy. Also the West-

ern nations usually do not have the

tendency of saving. However, the crisis

calls for the increase in the saving ratio

of the nations. The savings ratio has

been very low for the European coun-

tries as the saving ratio of UK sank

down below 0% in mid 2008.

addition, the support is required at

both, domestic as well as international

levels.

P A G E 1 8

The financial crisis of the Euro Zonehas brought with it a plentiful of les-

sons to be learnt by the policymakers.

Strong Institutional Framework & Poli-Strong Institutional Framework & Poli-Strong Institutional Framework & Poli-Strong Institutional Framework & Poli-

cies are Importantcies are Importantcies are Importantcies are Important

It is of utmost importance in today’s

scenario to have the good financial

policies laid down strongly in the sys-

tem. It is distinctly understood from the

current crisis that the countries which

had the unstable fiscal policies were

undermined by the economic turmoil

before any other nations.

One example of the unsustainable

policies was exhibited when the finan-

out the crisis outstandingly because of

the copiousness of the foreign banks

in these countries. On the other hand,

the domestic banks of countries like

Parex in Latvia and OTP in Hungary

could not cope up with the trouble

because of the absence of the sustain-

able and strong business model.

An Increase in Savings Ratio Is Re- An Increase in Savings Ratio Is Re- An Increase in Savings Ratio Is Re- An Increase in Savings Ratio Is Re-

quiredquiredquiredquired

There has been a remarkable hike in

the personal debts of the people living

in Europe and US. This culture has

proved out to be extremely dangerous

for the economies of these nations as

it further enhances the current ac-

tious in many emerging markets, the

foreign banks help in creating a more

efficient financial sector. This enhances

the competition in the market which

lays the foundation for fortifying the

domestic banks.

For example, PKO BP and Sberbank,

the domestically owned banks of Po-

land and Russia respectively, braved


EURO ZONE CRISIS—MAJOR LEARNINGs



Amit Kumar Singh, S. P. JAIN INSTI-TUTE OF MANAGEMENT AND

RESEARCH

On 1st January 1999, theworld saw uprising of a major power – Euro Zone –aneconomic & monetary Unionof 17 European nations, withthe GDP size bigger than theUnited States. It promised to

change the global landscapeforever. With a common cur-rency – Euro- the Eurozonewas ready to take on theworld. It was expected thatsoon Euro would become

union?Countries are blaming coun-tries like Greece, Portugal,Italy and Spain (PIGS) fortheir lack of proper Govern-ance which increased theirborrowings to such an ex-tent that now the whole Eu-rozone is unable to cope upwith it. But how correct is it

to blame these small coun-tries? There is no denyingthat these countries are suck-ing up money from the IMFand other Eurozone nationsas bailout funds, but the star-tling Question is why the

tact- but because the ap-proach taken by the 17 gov-ernments – the fiscal policies-were different. As there wasno fiscal consolidation &hence no fiscal obligationtowards the union, countriesas Greece & Spain adoptedtheir own policy of providing

didn’t do was fiscal consoli-

dation.

So, during the boom, they allenjoyed under a commonmonetary policy & currency,but when darkness ap-proached in 2008, they fal-tered. Not because the poli-cies failed- they were still in-

fiscal stimulus to recovertheir economies quickly andthey did manage to do so!But when the crisis revisited(in another form though) in2011, they were not ready for it. The same fiscal stimu-lus was now acting like aFrankenstein monster-ready

P A G E 1 9

the currency of the world,dethroning USD and Euro-zone would become the su-perpower. But 12 yearshence, and the existence of the zone is itself in danger.

17 is believed to be a very unlucky number and so did itprove to be. The Euro Zonewas struggling to get on its

feet post-2008 when 2011happened! The union whichbelieved that it could over-throw US as the world super-power is struggling for itsexistence. So what did gowrong with such a strong

the bigger economies as

Germany, France etc. whohad the notion that if they develop a consortium of European Nations they canoverpower US as the worldsuperpower, because essen-tially they would be adopt-ing the same structure as of

the United States of America.

But this was their cardinalsin. They did very well to domonetary consolidation,bringing in a new commoncurrency, a central Banker –European Central Bank andstrict monetary policies toadhere to. But what they

other nations as Germany

and France are bailing thesecountries? Are they doing aphilanthropic act or trying tosave their own skin?

When we delve deeper intothe topic, the fuzzy picturegets clearer. Eurozone wasmistake. It was the mistake of


Euro zone crisi s—what went wrong?



tence of the zone wouldn’t

have been crisis. But, that

would have meant surren-

dering one’s democratic

rights to one central author-ity which no country would

have wanted to. A dilemma

was there whether to go for

the partial-consolidation or

not- if we can call it so, but

the policy-makers thought to

take the risk, because the re-

wards were quite lucrative.

They did take a calculated

risk, but the Value-at-risk (a

financial concept of measur-

ing risk) was quite high for

the event and as we saw, the

event did happen. And the

consequences – well a reces-

sion is larking ahead!

to eat the economy which ithad revived, & they had togo for austerity to avoid Gov-ernment default, which con-

sequently slowed down theirEconomy. (The GDP growthfor Greece in FY2010 wasnegative 4.5% & Spain nega-tive 1%)

The 2011 Eurozone crisis ex-

posed to us the never seen

effect of consolidation. It re-

vealed to us the traps of an

improper consolidation. The

Eurozone was missing a fis-cal link, & having a central

monetary policy when the

fiscal policies are not aligned

doesn’t make much sense.

Had the 17 Governments

had a fiscal consolidation too

they would not have met

this fate, & surely the exis-

P A G E 2 0V O L U M E 1 , I S S U E 1



Is there any economic recessionknocking at the doors? This is the

only question which will be there in

the minds of every people since the

credit rating of United States de-

clined to current AA+ from its

AAA rating by S&P.

Friday, August 5- a day every sin-

gle person would remember. It is no

less than a Black Friday which peo-

ple would remember for the wealththey lost and for damage on the

global economy. United States, the

super power and the most devel-

oped economy of the

world, lost its crown

of top tier AAA rating

by Standard & Poor’s,

which showed a seri-

ous impact on the

global economy post which econ-

omy of almost all the major nations

across the world were affected.

Standard & Poor, S&P as it is

known commonly which is the big-

gest credit rating agency in the

world, cut the long term US credit

rating by one notch to AA-Plus

(AA+) with the concern of rising

debt and government’s budget defi-

cit. The downgrade came days after

the US government seemed to de-

fault on its debt obligations as a

result of its ballooning debt and arefusal by the Congress to raise the

debt limit. This is the first time ever

US lost its AAA rating which was

given to it in the year 1941.

August 2011 proved to be a bad

month as far as the global economy

is concerned. A string of economic

indicators released earlier in the

month suggested of a world eco-

Sachs has reduced its growth fore-

cast for China and the continent. It

cut down the predictions for China

from 9.4 percent to 9.3 and for Asia

(excluding Japan) from 7.8 percent

to 7.7.

Also Hong Kong’s Seng index

closed out the day with a 2.2 per-

cent loss which was again a major

setback for the people in Hong

Kong. Europe:

Europe the most affected continent

where the crisis does not seem to

end soon opened lower on Monday,

August 8 and made gains early in

the day but still came down at

close. The European Central Bank’s

purchase of Italian and Spanish

bonds and the G-7 statement about

its member nations to work together

to ensure liquidity prompted earlyimprovements, but did not seem to

be enough to prevent overall losses.

India:

Similar to other stock exchanges

across the world, mood on Dalal

Street was negative as it has soured

after Standard & Poor's US credit

rating. On the contrary, investors

being very optimistic and faithfulon the economy, have not pressed

the panic button yet.

The rating downgrade, which was

declared after the US market hours

on Friday, capped a tumultuous

week that saw around $2.5 trillion

wiped off the value of global equi-

ties due to concerns over a US

P A G E 2 1

nomic recession close to four years

after the onset of the global reces-

sion in December 2007. Completely

out of line the first-in-history down-

grade of US Treasury bonds by

Standard and Poor's did reflect the

mood in the market as the market

across the world were seen to fall

and all the stock exchanges round

the globe closed in red.

Effect of the downgrading on theforeign market:

Japan:

Japan’s Nikkei index was down by

2.2 percent to 9,097.56 where as

current Nikkei is 16.5 percent downfrom a pre-earthquake high on Feb-

ruary 11. Starting the day with a

positive notion Asian government

officials tried to reassure investors

that problems in the US shouldn’t

prompt a market panic. Apart from

this the Japanese Finance Minister

Yoshihiko Noda said "our confi-

dence in US Treasury isn't shaken

and we still see it as an attractive

instrument."

Shanghai and Hong Kong:

The Shanghai Composite Index,

which serves as a benchmark for the

region, closed down 3.8 percent and

is down to an extent of 20 percent

from its November 8 high thus push-

ing it into official bear territory.

Seeing the market trend Goldman


Friday, August 5- a day every single person would

remember. It is no less than a Black Friday which people

would remember for the wealth they lost and for damage

on the global economy.

IS THERE ANY OTHER ECONOMIC RECESSION

KNOCKING THE DOORS?



slowdown and the euro zone crisis.

In India, investors lost Rs 2,682.58

billion as key indices fell to their

lowest levels in 14 months. Expertsbelieve that the downgrade of the

US credit rating will have a short-

term impact on the Indian market.

Other Global happenings:

Besides the never-ending crisis in

Europe, the fear of a second reces-

sion within half a decade was a rea-

son for this despondency. The news

from almost all sources was discon-

certing. Recovery from the reces-

sion was still sluggish in the US.

Japan, another developed economy

and a member nation

of G-7, has been ex-

periencing long-term

stagnation, and has

been devastated by

wholly unexpected

natural calamities

which ruined the life and economy

to a great extent. Adding to the eco-nomic problem, France also an-

nounced that it had experienced

virtually no growth in the quarter.

The real dampener came when the

evidence that the strongest econ-

omy in the rich nation's club —

Germany was released which indi-

cated it was losing all momentum,

and registered a mere growth rate of

0.1 per cent in the second quarter.

Thus the real economy crisis had

penetrated Europe's core, pointing

to the possibility of a return to re-

cession in the Eurozone as a whole

(which registered 0.2 per cent

growth).

Impact on Indian Market and

Economy

Due to the credit rating downgrad-

ing of US the export market in India

more than a minor blip in its confi-

dent trajectory.

Finance Minister Pranab Mukherjee

while consoling the investors at aconference said “Our institutions

are strong and (we) are prepared to

address any concern that may arise

on account of the present situation.”

So at last, in a nutshell it should be

noted that it is not a financial crisis

but the political crisis which has

shown its adverse affect on the

economy of developed nations and

thus is affecting the economy and

market of developing nations as“Globalization” is what we follow

in every sphere of life these days.

Nothing much is in our hands and

could be done if there is slow global

growth or a borderline recession.

Being an open economy there will

be impact on exports and FDI, and

portfolio inflows into stock markets

may be affected but the intensity of

impact is the point of concern.Where in for the internal i.e., the

intra-terrestrial issues the apex bank

RBI has been tightening monetary

policy so as to get rid of the biggest

enemy of the economy as of now,

inflation.

(This is a detailed analysis done by

Mr Niraj Satnalika of IMT

Ghaziabad (2011-13).

He can be reached at

[email protected] )


The only relief in this dismal condi-

tion is that the US has recently

fallen from its status of India's big-

gest export destination, where in thecredit being given to the Middle

East nations.

India's export industry has been

growing at a break-neck speed of

around 45% for the first six months

of the year where in to the US

alone, India exported $11.85 billion

worth of goods during the first six

months of this year. Murli Deora

the Union Minister of Corporate

Affairs said, “The down grading

will lead to further appreciation of

rupee against dollar, thereby blunt-

ing our competitive edge. More im-

portantly, the US government will

have to increase taxes to bring inmore people under the tax net to

curtail its deficit which will further

shrink their disposable incomes and

may have an impact on India's ex-

ports to North America.”

The US economy grew at a mere

rate of just 1 percent in the second

quarter, a slowdown that leaves the

nation at risk of entering into reces-

sion. For India, which is now more

integrated with the world economy,this has to be bad news. But if the

Government of India is to be be-

lieved, the Indian economy is not

likely to be very adversely affected

by the current round of global vola-

tility. Finance Ministry sources ar-

gue that the Indian economic

growth story is so robust that the

current uncertainty will cause no

“Our institutions are strong and (we) are prepared to

address any concern that may arise on account of the

present situation.” - Pranab Mukherjee




Business Crosswords

DOWN

2. proof of payment

3. put money into acompany or business

5. money paid to owner of

copyright or patent

7. part of the capital of a

company

8. where shares are bought

and sold

9. money lent11. amount of money spent

14. neither cheque nor credit

card

15. money returned

12. promise to repair or replace

13. amalgamation of two companies

14. legal agreement

16. total sales of a company

17. share of profits paid to shareholders

Across

1. rate and efficiency of work

4. ask the bank to advance money

6. money paid for a loan

Business Kakuro Business Sudoku



PROSPROSPROSPROS: About 58% of the disposable

income comes from the rural markets.

Government initiatives to improve thestandard of living in the rural areas hasled to virtually free food and shelter;primary education and healthcare. Thishas led to increased amount of dispos-able income and has lent a high pur-chasing power to the rural community.

Government initiatives like MGNREGA

have enhanced the livelihood security

of the unskilled and manual workforce

of rural areas. Besides this, government,

NGOs and local cooperatives are con-stantly working towards promoting the

khadi, weaving and handloom indus-

tries. By the way of exhibitions and me-

las, the rural produce is brought to the

urban market. Hence, income security

for skilled artisans has also considerably

increased.

India has always been an enticing mar-

ket for both MNCs and Indian compa-

nies. The aggressive moves by these

companies since 1990s finally led to the

saturation of urban markets. This made

the companies look at the greener

country side with immense growth po-

tential. With 72.2%72.2%72.2%72.2% of the Indian Popu-

lation belonging to the rural areas and

with fast changing habits, attitudes and

preferences of the rural consumer; the

players in the consumer goods, health-

care, consumer durables, finance and

banking cannot afford to ignore themarket which can contribute to a huge

share of their profit pie. There comes

the need for Rural Marketing.

The rural space:The rural space:The rural space:The rural space:

The rural India brings with itself the

dichotomy of poverty, starvation and

high purchasing power of consumers.

Increasing exposure to national media,

expanding telecom connectivity, finan-

cial support from organizations like

NABARD, infrastructure development,

better irrigation and agricultural facili-ties are indicators of constant improve-

ment in standard of living of the rural

populace.

While rural India remained an unex-plored pasture for many years due tolack of focus by the marketers, tappingthis market has today become the new found focus of many a companies andrural marketing is one way to begin theprocess of entering this space.

Creating innovative products thatwould suit the rural segment, makingthem available to them in a cost effec-tive manner at a reasonable price andinfluencing the mindset to identify thevalue that the company wishes to de-liver are three major tasks at hand forrural marketers to resolve.

Is it really worth the effort? After a good

deal of contemplation on the same is-

sue, summary of my arguments for and

against rural marketing is:

P A G E 2 4

Cons:Cons:Cons:Cons: Income fluctuations -Majority of the household income in rural areascomes from agriculture. The other in-come avenues are forestry and fisheries.The farmer may be self funding butmost of the workers are paid daily,monthly or weekly wages. Their incomelevels are greatly dependent on sea-sonal fluctuations. Heavy rains may killthe crop or a drought may lead to fam-ished conditions. Farmer suicides havebeen a concern for the governmentand NGOs for many years now. Finan-cial institutions think twice before lend-ing a sum to a farmer as the risks of default are very high.

Inflation tends to considerably reduce

the purchasing power of the consumers

in the rural segment. With price rises of

the order of 5-25%, the spending is defi-

nitely going to shrink while the dispos-

able income remains the same.

Cons:Cons:Cons:Cons: Caste, gender, cultural differences

restricting sensible choice making

In a rural family, choices of products are

still largely dominated by the male

members unlike in an urban family. In-dependent choice making is limited

because opinion leaders like the

“Sarpanch ” tend to sway the mind set of

communities. Taking independent deci-

sions may at times involve breaking

strong social structures, a set of inher-

ited beliefs which the older generation

may perceive as attacking the tradi-

tional roots. A married woman in a rural

setting may have to think hard before

finalizing on a pair of jeans for herself if

her in-laws and/or husband prefer con-

servative dressing. A person may alsonot switch to LPG because of the in-

grained misconception that an LPG

cylinder may burst automatically. A fe-

male member in a family may not even

present herself before a male marketer

to respond to a market survey. These

issues pose serious challenges to the

marketing exercises conducted by com-

panies.

Pros:Pros:Pros:Pros: The educated rural consumer -Therural literacy rate has shown a steady increase from 36% in 1981 to 45%(1991) to 59% (2001) and 70.44% inthe year 2011. The development bringsto the forefront an educated consumerwho does not necessarily look for low cost products but is increasingly seekingvalue for money. In such a scenario, if acompany takes the onus of educatingthe consumer in better understandingits product (highly applicable to savingschemes and insurance products, con-traceptives and health supplements), hewill be able to appreciate the nuancesof the product and the value that hecan derive from it.

One such initiative that I would like to

mention here is that of SBI bank. SBI,which is a leading public sector bank,tied up with Hindustan Unilever’s Shakti

Ammas, a network of self-help groupsto educate the rural folks about theimportance of savings besides makingavailable to them, monetary capital forenterprising. With HUL’s establishednetwork of Shakti Ammas, SBI couldpenetrate farther into the rural seg-ment. By sensible strategies, a company can make good business sense .


View and counter view on RuralView and counter view on RuralView and counter view on RuralView and counter view on RuralMarketingMarketingMarketingMarketing



Cons:Cons:Cons:Cons: Infrastructure issues

Although rural areas offer attractive opportunities, over68% of these markets are still untapped. This is primarily due to the restricted reach that they offer to participatingcompanies. The load and goods have to move large dis-tances to reach the rural areas. This can be done using ahub & spoke model wherein large distributors are suppliedat a higher frequency (hub) and from there the goodsmove at lower frequencies to the designated areas(spokes). This model though cost effective in the long runrequires a substantial investment to create an extensive andall-encompassing network.

The supply chain innovation issues become more complexif there is an established network developed by a competi-

tor. In such areas, it is very difficult for a company to bevisible and accessible to its potential consumers.

At the same time, direct selling companies like Oriflame and

Amway have tasted great success in the north eastern

states with their business model. The evolving middle class

and women consumers have shown eagerness and intent

to be a part of the modern growth story of India. Hence,

although the infrastructure remains a worry for the rural

India, original thinking on the part of the companies will

only find a way out.

Pros:Pros:Pros:Pros: Haats and melas to reach out to Rural India

Most consumers like to ‘touch’ and ‘feel’ the objects thatthey would like to buy. This also applies to rural consumers.Haats, mandis and melas are places where trade and ex-change of goods take place. It is one of the easiest andcost-effective ways to gain access to a large rural audience

and even study their choices, behavior and sentiment asso-ciated with the product. They also serve as the centers forcultural congregation. A single haat can cover 20-50 vil-lages and is visited by over 5000 people at its 300+ contactpoints.

Also a company like HUL, which entered the rural marketbefore its competitors has a significant advantage in creat-ing its brand monopoly and also its distribution network.Such a brand has greater recognition amongst masseswhich is not easily replaceable. This loyalty sentiment be-comes dominant when a company is seen as someoneparticipating for uplifting the living conditions of the com-munity people like the SBI Tiny deposit scheme, the ITC e-Choupal or HUL’s Project Shakti which focused on giving

flexible saving options (as low as Rs. 10 deposits), a betterconsumer experience and women empowerment respec-tively.

Pros:Pros:Pros:Pros: Gives impetus to product innovation

Catering to a heterogeneous rural market demands innovativemix of product, advertising and distribution. It requires a thor-ough understanding of the consumer requirements whichshould necessarily match with a company’s vision, mission andlong term strategy. “Chotukool ” is one of the best examples

that can be cited here. A compact size refrigerator which doesnot have a compressor, runs on battery, weighs only 7.8kgs,can stay cool for long hours without power and costs less thanhalf of what conventional refrigerators cost, is a panacea forrural consumers’ electricity and cost troubles.

To gain a stronghold in the rural markets, a company needs to

constantly differentiate. This can be done by redesigning the

product or changing its packaging to make it more appealing.

Coke could create magic with their idea of Thanda going rural.

Making Amir Khan enact in the villager’s get-up, making avail-able an illustrious beverage like Coke at Rs. 5 garnered instantrecognition amongst the consumers. The villagers could relateto Amir Khan who looked like one amongst the masses and

felt immensely satisfiedbecause they would haveto pay a small amount todrink the Cola that even

Amir Khan drinks!

Using red and yellow, the

festive colors also makes

for an effective ad cam-

paign for the rural areas. Hence, the Thanda ad had all the

ingredients in it: the perfect price, perfect size and perfect col-

ors. Post this campaign, rural markets accounted for 80% of

new coke drinkers and 30% of the sales volumes. The rural

market grew 37% against 24% in the urban market in the year

2004-05 over the previous year.

Cons:Cons:Cons:Cons: Fake products and losing brand equity

Low literacy and education levels in many villages have re-

sulted in consumers identifying brands based on their logos or

colors. This has given scope for spurious products to flood the

markets. The look-alike, spelt-alike and exact replicas are the

types of fake products that easily make way into the haats and

melas.The existence of fakes has the potential to topple the

entire branding and imaging exercise undertaken by the com-

pany. At the end of a huge campaign, it can be more than just

disappointing if the cheap fakes sell and not the real goods. A

bad experience using a fake product can turn away a potentialcustomer forever. This kind of a sentiment can be particularly

strong amongst the rural consumers who tend to be loyalists

and judgmental both. Such an occurrence will seriously affect

the brand equity.

The company has to take measures to use holograms to secure

their products and educate the consumers of the same. This

would again increase the advertising spend and increase the

selling costs of the company, thereby affecting the bottom line.


(These are the views of Ms.Priya Amrute , SPJIMR, Mumbai . ([email protected] )



FED to shift $400 bil-FED to shift $400 bil-FED to shift $400 bil-FED to shift $400 bil-

lion in holdings tolion in holdings tolion in holdings tolion in holdings toboost economy boost economy boost economy boost economy

The Federal Reserve on 21stSeptember 2011 said itwould sell $400 billion of itsshorter-term securities tobuy longer-term holdings, itslatest effort to boost a weakeconomy.

The Fed's move to rebalanceits $2.87 trillion portfoliocould lower Treasury yields

further. Ultimately, it mightreduce rates on mortgagesand other consumer andbusiness loans.

The Fed also said it will rein-vest its holdings of mort-gage-backed securities,which would help keep

mortgage rates at super-low levels. The Fed had

previously reinvested theinterest and principal intoTreasury purchases.

Stocks fell immediately after the announcement.The Dow Jones industrialaverage dropped 100points. The yield on the10-year Treasury notetumbled, and its pricerose.

In its statement, the Fednoted that the economy isgrowing slowley, unemploy-ment is high and housingremains in a prolongedslump.

As a result, the Fed has di-rected the New York Fed to

purchase Treasuries with

remaining maturities of sixto 30 years, and to sell anequal amount of securitieswith maturities of three

years or less.

In June, the Fed completeda $600 billion bond-buyingprogramme that may have


The Reserve Bank of India

further liberalised the for-eign exchange facilities forindividuals under the For-eign Exchange Manage-ment Act, (FEMA), 1999.

Individual residents in Indiaare now permitted to in-clude non-resident closerelative(s) as joint holder(s)in their resident bank ac-counts, namely, savings (SB),Exporter Earners' ForeignCurrency (EEFC) and Resi-

dents' Foreign Currency (RFC) accounts, on ‘formeror survivor' basis.

Non-resident Indians(NRIs)/Person of Indian Ori-gin (PIO), are now permittedto open Non-resident

(External) (NRE) Rupee Ac-

count scheme/Foreign Cur-rency (Non-Resident) (FCNR)

Account (Banks) schemewith their resident close rela-tive(s) as joint holder(s) on‘former or survivor' basis.

A person resident in Indiacan now give to a personresident outside India, by way of gift, any secu-rity/shares/debentures of value up to $50,000 in valueper financial year subject to

certain conditions. Earlier, aperson resident in Indiacould give to a person resi-dent outside India, by way of gift, any secu-rity/shares/debentures of value up to $25,000 per cal-endar year.

North . east . west . south

RBI relaxes forex facilities for individuals



Buoyed by the strong sales of its mobilehandsets, Samsung Electronics onThursday announced tripling the manu-facturing capacity of its mobile manu-facturing unit at Noida from 1.2 crorehandsets to 3.6 crore handsets annually with an investment of $70 million(around Rs.315 crore).

Minister of State for Communicationsand IT Sachin Pilot, who formally inau-gurated the new section of the plant inNoida, said the government would

soon come out with ‘National Electron-ics Mission' to give boost to manufactur-ing of electronic products. “From $50billion today, the electronics sector islikely to reach $400 billion by 2022…weare taking all steps to develop India as aglobal manufacturing hub for electronicproducts. We are not only becoming

With an aim to expand its presence in thecomputing world, technology giant Intel onWednesday announced that it has partneredGoogle for accelerating its entry into thesmartphone market by the first-half of 2012.

It has also promised to bring power-efficientand affordable ‘Ultrabooks', a sleeker andlighter version of laptops, to the market thisholiday season.

The company unveiled a computer with aprocessor running on a postage stamp-size cell powered by solar energy.

intelligence and data manage-ment solutions space. CSC Presi-dent and Managing DirectorBrian Manning said the acquisi-tion was in tune with the com-

pany's expansion programmes.

Though both companieshave not disclosed the finan-cials of the deal, sources said Applabs was valued above$300 million.

Global leader and U.S.-based technol-ogy services provider CSC on Wednes-day announced the acquisition of test-ing solutions major AppLabs Technolo-gies for an undisclosed sum.

The founder and Executive Chairman of AppLabs Sashi Reddi said the break-upof the acquisition comprised 50 per centof the stake from WestBridge, 40 percent from the promoters (primarily him-self) and 10 per cent from employees.

At present, AppLabs has a head countof about 2,500, including 1,900 at itsswank new facility here and 250 eachin the U.S. and the U.K. For CSC, a com-pany with 93,000 employees and areported revenue of $16.2 billion for the12 months ended July 1, 2011, this isthe second acquisition within twoweeks of its buying up Baltimore-basedMaricom Systems that is in the business

Coca-Cola India and Jain Irrigation on Wednes-day launched Project ‘Unnati', a unique partner-ship with farmers to demonstrate and enableadoption of ultra-high density plantation(UHDP) practice for mango cultivation. The pro-

ject will encourage sustainable, modern agricul-tural practices and help double mango yields.UHDP is a farming practice that leads to mangoorchards attaining their full potential in 3-4

years and allows nearly 600 trees to be plantedper acre instead of the conventional 40 trees.

P A G E 2 7

largest consumers, we alsohave huge talent pool and raw material…India will soon be acentre for global sourcing of electronic products,” the Minis-ter said.


C S C a c q u i r e s A p p L a b sC S C a c q u i r e s A p p L a b sC S C a c q u i r e s A p p L a b sC S C a c q u i r e s A p p L a b s

I n t e l p a r t n e r s G o o g l e t oI n t e l p a r t n e r s G o o g l e t oI n t e l p a r t n e r s G o o g l e t oI n t e l p a r t n e r s G o o g l e t om a k e f o r a y i n t om a k e f o r a y i n t om a k e f o r a y i n t om a k e f o r a y i n t os m a r t p h o n e ss m a r t p h o n e ss m a r t p h o n e ss m a r t p h o n e s

S a m s u n g t r i p l e s m o b i l e h a n d s e tS a m s u n g t r i p l e s m o b i l e h a n d s e tS a m s u n g t r i p l e s m o b i l e h a n d s e tS a m s u n g t r i p l e s m o b i l e h a n d s e tp r o d u c t i o np r o d u c t i o np r o d u c t i o np r o d u c t i o n

CocaCocaCocaCoca- -- -Cola ties up with Jain IrrigationCola ties up with Jain IrrigationCola ties up with Jain IrrigationCola ties up with Jain Irrigation




G o o g l e M o t o ro l a A c q u i s i t i o n

Kunal Patankar

S P J A I N I n s t i t u t e o f M a n a g e m e n t a n d R e s e a r c h




G u i n n e s s i n In d i a

Abhishek SanduAbhishek SanduAbhishek SanduAbhishek Sandu

Prin. L. N. Welingkar Institute of Management Development & Research




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