Telecom In India: Should VAS be Outsourced

Long back I was having coffee with one of the senior member of an organization which was into management consulting. So I asked Rajat “What are issues you are facing today with respect to Indian Telecom market?” He said “Fortunately many and that’s the reason Telecom has become our core focus area”

 The main issues shared by him was as follows: 

1.       Revenue growth

2.       Subscriber growth

3.       Profit margin

4.       Many Operators leading to Price war

5.       Huge investment in 3G Roll out leading to high debt

6.       Rural Penetration

7.       MNP

8.       Security clearance for procurement of Telecom equipment

9.       Review of spectrum management and licence terms and condition

10   Re verification of mobile subscribers

11   MVNO

12    Network Operations

13  Saturation of voice. Not much usage of data

14    Off and On Termination of Prepaid service in J&K and north east

15   TRAI directive on Value added service

Well if you look at the above problems you will find out that all are inter related. I am going to take few points in this write up and rest of the points in part II of the write up (which will be released after 1 week ). In this article I am going to cover revenue growth, subscriber growth, profit margin, Price war, & TRAI directive on Value added service.

1.        Revenue growth – Telco’s are complaining that revenue growth is dipping year by year and the possible reasons given by them are many telecom operators operating in the same region, that leads to tariff war which further results into lowering down the tariff and hence it impacts the revenue growth. But my question here to all the old players“Yours is the established brand and brand recall value is much higher so why should you match your price with the new operators” For old players the strategy should be based on retention not on acquisition and for new operators the strategy should be acquisition hence one shall form the strategy depending on the no. of years spent in industry. Revenue growth is dependent on quality of customer you acquire so if you want to grow your revenue, look at the moment of truth, touch points for customer and make the experience WOW!  If you ask customer they are afraid of keeping the money in the mobile wallet as they feel that operators might deduct the money without informing. Remove that fear. Gain your consumers trust. Let them be your Product Advocate.  Create value for customers, emphasize on customer satisfaction, and award them for loyalty. If you look into these small things your revenue will grow automatically and you will be happy organization!

2.       Subscriber Growth – Well! When one talk about subscriber growth only one word comes in Mind “Channel Sales”. So channel sale is the department which brings sales for the operators, who are responsible for acquiring the customer. One of the important roles of channel sales is to convert potential buyers into profitable customers. Its operator role to decide the strategy for Channel sales. Usually there are 2 kinds of strategy seen in the market. 1. Push strategy 2. Pull strategy. Well for Channel sales all the operators in India use Push strategy. But overall operator uses both Push & Pull strategy. Whatever strategy you have chosen, one has to ensure smooth conversion. One should also understand customer need. There are 4 kinds of consumers 1. Repeated customers 2. High value deal seekers 3. Variety loving consumers 4. High involvement customers. Channel sales should be trained on probing because probing leads to real need of consumers and its easy to convert if you get the nerves of the customer.  We need to go off with the fake activation and high penalty should be imposed not only on the dealer but also on the channel sales representative. Operator need to have strong system which can monitor all these activities. It is worth spending on automation of channel sales. Also a system where one dealer can view the best practices of other dealer. Communication forum for all dealers.

Communication is the most important term for channel as causes of channel conflict are

 1. Goal Incompatibility
 2. Unclear roles & rights
 3.Differences in perception with respect to carrying higher inventory.

Hence communication is very important. So the best way to communicate to all dealers would be to launch Facebook for dealers where dealers can share their experiences and best practices. All the grievances can be addressed online, at the click of the mouse.  If you have clean system, system to monitor frauds, strong policy & clear procedure, trust me Subscriber will grow automatically. Happy & smiling dealers will lead to the quality sales and hence quality subscriber growth. I am again emphasizing on word quality customer because quality is going to help you in long term not quantity.

3.       Profit margin – Profit Margin is dependent on 2 main factors cost &MRP. You can control your cost if you make wise decision in controlling your expenditure. A good CEO should not only be good sales & marketing professional but should also have strong hold on finance. Usually there are 3 kinds of cost 1. Fixed cost 2. Variable cost 3. Overhead cost. Identify and eliminate those products/services that are unprofitable.  Lower the prices of those that are overpriced. Identify and eliminate production or service processes that are ineffective and allocate processing concepts that lead to the very same product at a better yield (process re-engineering aim). If you can control all these activities and rework on the processes, I am sure that will result into high profit margin.

4.       Price War –  Telecom has become an Oligopoly market.  Price war lead to short term gains for the organization but will damage the industry in the long term. We have seen Indian telecom market engaging itself into Price war. Price war can be attributed to the government policies. Price war leads to negative profits and sometimes can lead to the death of the organization. If Government is supporting price war then it should also have the policy of bailing out the organizations because such examples sends wrong message to the world and in future the investors will not like to consider India as the option to invest. So even for the government it might look good for the short term gain but its not viable option for long term. Operators should form the cartel on pricing. With the government support of not allowing many operators to operate and cartel formation by Operators on Price can control the price war but it doesn't mean that you increase the price substantially and it effect the normal customer. There should be policy on Price with minimum and maximum band by the government and the policy should be formed in consultation with the operators. Due to Price War we see only Top 3 surviving in the long run. Our pick would be AIrtel, Vodafone & Idea Cellular. We see many small players merging with bigger one's but we would like to give the standing ovation to the best launch team done by Tata DoCoMo team ! " Do the new" is their brand communication & one of our favorite.

5.       TRAI Directive on Value Added Service – VAS my favorite topic ! I can write Bible on VAS.  I appreciate the TRAI directive and its good for the consumers as well as operators. But the question here is “Should VAS be outsourced” Answer is yes it should be outsourced. Reasons are :-

• VAS partners have more expertise in handling the product
• Cost Reduction
• Experienced professional at the partner end.
• In house focus on core objectives
• Productivity and service improvements
• Win Win situation for both operator and Partner.

Operator should focus on their core business which is providing mobile solution to the customers and they should work on sales & core Marketing ( Prepay,Postpay & UnR). Other services like VAS ,Customer care , Network operations should be outsourced. 

VAS community should work together to bring tangible & intangible value to consumer along with excellent customer service to differentiate themselves. Operators usually blame partner for any wrong moves whereas its not the partner which is at fault but the operator itself. 

If you put unnecessary pressure on partners and encourage the wrong practices then they are bound to follow your instructions hence stop blaming the partner and try to build better ecosystem taking partners into confidence. Its like if the organisation is not performing well you cant put blame on employees, its the CEO responsibility not employees, in the similar manner if there is any mistake by VAS partner its the operator mistake not partner's. VAS community should put clean system which will result into customer Advocacy and hence increase in the product uptake. It will also result in Intangible benefits like trust of the consumer!

Happy Customers are Brand Advocates

Hope you agree with my points. At the end I would like to say that market share is determined by the four major components – 

Customer Penetration, 
customer Loyalty, 
quality of customer, 
Selecting the right Price. 

Work on these components and soon you shall be the market leader. I am sure you all have heard of Bell Curve so your market share will also be dependent on these major components and how you perform on the matrix of these components. We will never have straight line against X axis, We definitely will have Bell curve so your fitting in that curve is dependent on your overall performance. All the best and I shall connect with you again discussing other points.. Till then have fun  ! 

Convergence of Mobile & Education

http://www.slideshare.net/kamnapandey/mobile-education-17822077

Balance Scorecard - An Effective Management System

What do companies like Microsoft, Apple and Intel have in common? Well they all are using scorecard to measure performance and set strategy!

Today’s manager day and night struggle to measure performance, but they somehow miss to include measurement as an essential part of the strategy. For e.g. executive may introduce innovative new processes intended to achieve breakthrough performance, then continue to use short term financial indicators to gauge the performance like return on investment, sales growth, and operating income. Such managers fail to introduce new measures to measure new goals and processes. Also they are unable to question whether the old methodology of measurement will work in today’s dynamic work culture.

Effective measurement however should be integral part of the management process. The balanced scorecard helps executives with comprehensive framework that translates company’s strategic objectives into coherent set of performance measures. The balanced scorecard is a management system that can motivate breakthrough improvements in critical areas like product, process, customer and business development (other words “sales”).

There could be different perspectives though which manager can choose measures. It is beautiful mixture of traditional financial indicators and measures of performance for customers, internal processes, and innovation and improvement activities. These measures are different from the traditional methods used by companies in few important ways:-

Many companies believe in myriad operational and physical measures for local activities. But these local measures are bottom up and are adhoc. The scorecard measures on the other hand, are grounded in an organization’s strategic objectives and competitive demands. And, it requires managers to choose the limited number of critical indicators within each of four perspectives, and once done the scorecard helps focus the strategic vision.

In addition while traditional financial measures report on last period performance; it however doesn’t help managers on how managers can improve performance in the next. The scorecard however functions as the cornerstone of a company’s current and future success.

Moreover, unlike conventional metrics, the information from the four perspectives provides balance between external measures like operating income and internal measures like new product development. This balanced set of measures both reveals the trade offs that managers have already made among performance measures and encourages them to achieve their goals in the future without making trade offs among key success factors.

Finally, many companies that are now implementing local improvement programs like process reengineering, total quality and employee empowerment lack sense of integration. The balance scorecard can serve as focal point for the organizations efforts, defining and communicating priorities to managers, employees, investors even customers. The balance score can be used as the language, the benchmark against which all new projects and businesses are evaluated.

The balance scorecard cannot be termed as template and should not be applied to business in general or even industry wide.  Other factors like market situations, product strategies, and competitive environments force us to think that general scorecard won’t work and organizations require customized scorecards depending on market and organization.  Business units should prefer customized scorecards to fit their mission, strategy, technology and culture. In fact critical test of scorecard success is its transparency: from 15 to 20 scorecard measures, an observer should be able to view the business unit competitive strategy. But the most important factor is who and how score card measures are getting implemented.  For successful implementation the organization should hire a right coordinator. Also a decision that scorecard is appropriate for which business unit. Usually its appropriate for the business unit which has its own customers, distribution channels, production facilities and financial performance measures. So prepare, interview, conduct workshop, interview again post workshop, derive final company’s vision, objectives and measurements and develop target for each measures. The core implementing team must agree on implementation program, including communicating the scorecard to employees, integrating the scorecard into management philosophy and developing information system to support the score card.

Finally companies should not adopt scorecard as latest fad. Organizations hire external consultants to help in implementing scorecard and organizations put system that’s bit different from what existed before. Such systems are only incremental and you don’t gain much additional value from them. It can get worse if one thinks that scorecard as new measurement systems that eventually require hundreds and thousands of measurement and big expensive executive information system.  One should make the scorecard the cornerstone of the way one runs the business. It should be the core of management system not measurement system. It’s the people and senior executives who drive the scorecard approach in the organization. Hence we can say that senior executives will determine the future of the success of management system.  Cheers !

How consumer learning is important in brand building

Kiss Me Close Your EyesMiss Me

Close Your Eyes

Kiss Me

I can wet your lips

and your fingertips

and Happiness in your Eyes

Kiss Me

Close Your Eyes

Miss Me

Close Your Eyes”

You must be wondering what am I up to… no no I am not in romantic mood. Its lyrics of Cadbury “dairy milk silk chocolate” advertisement. Cadbury has been a part of the Indian market for several decades. I have grown up eating “éclairs” so it’s definitely one of my favourite brands since childhood and love for chocolate still remains.

Coming back to Cadbury as brand, there have been several variations in its advertising since the time brand was launched. Almost two decades back it has depicted several segments of consumers in its ad... from children to youth and they have tried to position themselves as replacement of sweet, also tried to capture traditional values in its advertisement. Cadbury as brand has come long way and definitely have been successful in positioning themselves as No.1 brand on consumers mind.

What kind of image comes to consumers mind when he/she thinks of “cadbury”as brand ? “It is something for children” “It’s something sweet and tasty to eat”. “Its chocolate” A brand like Cadbury creates differentiated associations through ads for its specific products (that, is cues) it informs consumers about its benefits (motivates consumer through knowledge aspects), makes them want to try the products (respond) and makes an attempt to retain brand loyalty among children, youth as well as old family members (remember the ad “ Kuch Mitha ho jaye” “ Papu pass ho gaya” )

Repeating advertising messages about brands and their benefits, rewarding people for purchase behaviour, selling high quality chocolate, getting consumers to make associations among different offerings under the same brand name and developing brand loyalty are all elements of consumer learning and brand “Cadbury” has displayed all of this in their marketing. The reason that marketers are concerned with how individuals learn is that they are vitally interested in teaching them, in their roles as consumers about product, product attributes, and their potential benefits where to buy them, how to use them, how to maintain them and even how to dispose of them. Consumer learning and adoption is the critical step of marketing the product. Marketers should also emphasise on how effectively they have taught their consumers to prefer their brand and to differentiate their products from competition. Marketers want their communications to be noted, believed, remembered and recalled. For these reasons they are interested in every aspect of the learning process. Hence we can say that consumer learning is an important aspect of brand building.

Consumer learning is process by which individuals acquire the purchase and consumption knowledge and experience and apply to future related behaviour. Although some learning is intentional, much learning is incidental. Basic elements that contribute to an understanding of learning are motivation (drives), cues, response, and reinforcement.

There are two schools of thoughts on how consumers learn 1) behavioural theories 2) cognitive theories. Behavioural theories relate to learning as observable responses to stimuli whereas cognitive theory suggests that learning is function of mental processing. Learning can also be through trial and error process in which positive outcomes (i.e. rewards) result in repeat behaviour.

Measures of consumer learning include recall and recognition tests and attitudinal and behavioural measures of brand loyalty. Brand loyalty consists of both attitude and actual behaviour towards brand and both must be measured. For marketers the major reasons for understanding how consumers learn are to teach them that their brands are best and develop brand loyalty. Brand equity refers to the inherent value a brand name has in the market place.

Since UP elections have just finished and SP had won the maximum seats are we saying that the brand (politician) “Mayawati” has lost its equity and brand (Politician) “ Akhilesh” has gained its equity. Answer is yes to some extent but since politics is very complex subject more complex than product launch hence it requires deep study on how a political party can enhance its image which results into consumer learning, brand loyalty and hence equity.

Marketing is done only by Marketing team. True or False ??

You guys sell moon & stars to the customer & we have to suffer” shouted Rachael who was heading Customer Service Department in XYZ corporation. I am sure we all have heard these words in our professional life as we all have arguments with other departments. Arguments take place because there is conflict of interest within organization. Marketing department’s interest is to get revenue, Customer Service Delivery interest is to minimize customer issues, Sales is in different world of number fancy, and technology team doesn’t want to touch its core systems. So issue here is everyone want to do best in their roles and no one thinks about end consumer/profitability. Only people in marketing and finance will discuss profitability because profitability is key component of their role. So discussions in the organization are role driven rather than holistic view of organization profits.

Let’s discuss marketing in detail. Do you think Marketing in organization is done only by marketing department? Answer is no its not. Marketing affects every aspect of the customer experience, meaning marketers must properly manage all possible touch points – customer relationship centre, package designs, product functions, employee training, shipping and logistics methods. Marketing must also be involved in key general management activities, such as product innovation and new business development. To create a strong marketing organization, marketers must think like executives in other department and executives in other department must think more like marketers. CMO and later CEO of Walmart.com, carter cast noted that what surprised him most when he became CMO was that “ I would interact so much with function outside of marketing. I didn’t realize it is holistic assignment. Then I realized I really had to understand things like product supply, cost break even and accounting”.

Marketing department is established in any organization to create and deliver customer value but according to late David Packard of Hewlett-Packard observed “ Marketing is far too important to leave to the marketing department”. Every employee of an organization has an impact on customer and must see customer as source of the company’s prosperity. Every company should emphasize on interdepartmental teamwork to manage key processes. Companies are placing more emphasis on the smooth management of core business processes such as new product realization, customer acquisition and retention and order fulfillment.

In practice marketing follows a logical process. The marketing planning process consists of analyzing marketing opportunities, selecting target markets, designing marketing strategies, developing marketing programs and managing marketing efforts. In highly competitive marketplaces, however marketing planning is more fluid and is continually refreshed. Companies must always be moving forward with marketing programs, innovative products and services, staying in touch with customer needs and seeking new advantages rather than relying on past strengths.

The changing new marketing environment is putting considerable pressure on marketing executives. Marketers must have diverse qualitative and quantitative skills, an entrepreneurial attitude, and keen understanding of how marketing can create value within their organization. They must work in harmony with the sales function.

There are five key functions of CMO in leading marketing within organization.

1. Strengthening the brands

2. Measuring marketing effectiveness

3. Driving new product development based on customer needs

4. Gathering meaningful customer insights

5. Utilizing new marketing technology

Harvard’s John Quelch and Gail McGovern note that there is tremendous variability in the responsibilities and job descriptions of CMO’s. They offer eight ways to improve CMO success.

• Make the mission and responsibility clear : Be certain that the case for having CMO is strong and mission is well understood by leaders in the organization, particularly the CEO, the board, the line management. Without a clear need(real or perceived) the role will be rejected by the organization.

• Fit the role to the marketing culture and structure : Avoid having CMO in marketing – led company that has many individual brands rather than single corporate umbrella – unless the person appointed to the position is well connected insider.

• Choose a CMO who is compatible with the CEO : Beware of the CEO who wants to hire CMO but doesn’t want to relinquish any marketing control. Find a CEO who recognizes his/her responsibility to be the cheerleader for marketing and the brand but realizes need to be guided and coached by a marketing specialist.

• Remember that show people don’t succeed : The CMO should work hard to ensure that CEO is successful at being the principal cheerleader for the brand.

• Match the personality with CMO type : Be certain that chief marketer has right skills and personality for whichever of the three CMO model he or she might fill( VP of marketing servies, classical CMO, Super CMO). There is little tolerance for on the job training.

• Make Line Managers marketing heroes : By stretching their marketing budgets, CMO’s can improve a divisions marketing productivity and help business unit leaders increase their top line revenues.

• Infiltrate the line organization : Have the CMO support the placement of marketing professionals from corporate marketing department into divisional marketing roles. Provide input from CMO into annual reviews of line marketers.

• Require right brain and left brain skills : The most successful CMO will have strong creative and technical marketing expertise, be politically savvy, and have the interpersonal skills to be a great leader and manager.

I was reading Kotler and I found above points very informative so thought of sharing with you all.

"A gossip is one who talks to you about others; a bore is one who talks to you about himself; and a brilliant conversationalist is one who talks to you about yourself”…. 

Reference: CMO qualities  - Kotler marketing Management Pg 14

Consumer behavior of Rural India

• IAS = Rs.10 million
• IFS, IPS = Rs.8 million
• Other Gazetted officer = Rs. 4 million
• Non Gazetted officer = Rs.1million
• Pvt. Job Manager and above ( college brand doesn't matter) = Rs.0.5 million

You all must be wondering what I am trying to prove here. Well my friends I am trying to quote the price of groom in rural Indian market. I got to know the above figures as one of my distant cousin (born in small village but studied in girls Pilani hostel Rajasthan) is suppose to get married and when her parents started looking for suitable groom, above figure was quoted by the respective parents of groom. Well as relative of girl I felt terrible but as marketer I saw an opportunity. By looking at the price label I was confident that rural consumers in India definitely trust government products. I mean the products endorsed by government agencies have more value as compared to product endorsed by private agencies.

Since I had interest in the life of rural India therefore I decided to spend some time with villagers and to do so, I went to my native place to learn the changes in the rural environment. I found out that rural consumers tend to lead a relaxed life and are more brand loyal as compared to urban counterpart. Once they become habitual of service/product, it is difficult to change their habit and they tend to feel pride in showing off luxury items (if they get good deal).

Cultural values and norms have stronger influence. (Jeans t shirt is strictly no no in villages). Superstitions and beliefs in omens are high. Woman role is limited to run a household and take care of family. She has little or no say in buying decision except for products like saree, bangles, Alta, Bindi..etc ( I mean the products which are for her own consumption).

Reference group has huge impact on buying decision. Relatives and people from same caste and community are important reference group. 80% of rural India has joint family structure and I won’t be surprised if after 10 years only 50% of rural India stays in joint family because like any other change rural India is also changing. As a result rural India tends to exhibit collective consumer behavior as most products are purchased for the consumption of everyone in the family.

Before we proceed further I would like to share one of my experiences with rural people. When I was 7 year old I had gone to spend summer vacation at my maternal grand parents house. In the same year my maternal aunt was getting married. As part of the custom, brother of the bride goes to pick the bride for something called “ Pag phera”. I got the opportunity to go with maternal uncle to pick the bride. When I entered their huge aangan I was shocked to see the house. It had automatic doors, swimming pool, All bathrooms had bathtubs and shower, Beautiful landscape, gardens……. That house was definitely piece of beauty. Well the point I am trying to make here is rural India has two categories of people ( I have included upper middle class in rich segment and lower middle class in poor segment)
• Rural Rich
• Rural Poor
And trust me you cannot find out the difference between rural rich and rural poor by looking at them because even rural rich will wear same clothes as poor(only difference would be cloth material). Saving is highest in rural India. People tend to save more as compared to their urban counterpart. They only invest in basic needs or for renovation of house( in case of any occasion like marriage or festivals). Their demands are very basic but mind it they can afford luxury items, but their saving habit as well as fear of abduction does not allow them to buy luxury item.
Rural poor comprises of landless laborers, daily wage earners, family servants, pundit who perform pooja in house & temples, lower caste…etc where as rural rich consist of landlords, government officers, SME’s..etc. This categorization of rich and poor forces us to assume that consumption is driven to large extent by occupation and income of the customers. Another important factor that influences demand is instability of income of farmer which is directly linked to seasonability of agricultural production as well as unpredictable monsoon.

The landless laborers & daily wage earners get their remuneration on day to day basis. Some get cash & some get Anaaz (cereals) we can say that barter system still exist in villages. Therefore they purchase small quantities of product at a time, mostly on daily basis or for one or two days consumption. Rural consumers show preference for bold and primary colours. All dark colours except black colour are auspicious for any occasion ( Keep this point in mind while deciding packaging of product). Rural consumers also exhibit a certain specific patterns in five stage buying decision process ;-
• Problem Recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Post purchase behavior

( Please note that above buying decision process is sourced from buygrid framework)


Community plays an important role during information search and problem recognition stage. Even if needs are internally triggered these are shaped by interacting with the reference group mainly community. Low penetration of mass media and dominant presence of community influence the problem recognition stage through word of mouth. Publicity efforts by different government agencies and non government organization working in rural India play crucial roles in creating awareness during problem recognition stage. Fairs, haats, exhibition, roadshows .. etc are some of the methods of information search. Opinion leaders & people who are perceived to be knowledgeable like sarpanch, Mukhiya, school teachers play important role as information providers & advisors. As the perceived risk of buying tends to be higher in rural consumers, they exhibit greater involvement in purchase process leading to more detailed information search behaviors. Since the reach of electronic media and other mass advertising is low in rural areas dependence on information advice and suggestion from other people are higher however as the exposure to electronic media and information technology is increasing rural consumers are more informed about the service and their dependence on traditional reference group is waning. E.g cellular phone. Today the penetration of cellular phone has increased tremendously in rural India so if you are planning to tap the rural market, mobile advertising in Hindi or regional language is best bet.( Now all the product managers of mobile advertising will ask me same question : Handset doesn’t support, how can we send the communication in Hindi or regional language… My answer to that question is think think…Everything is possible in terms of technology. Technology should work in accordance with business requirement not vice versa).

Hence as a marketer if you are planning to target rural consumer than ask below questions to yourself:-

1. How is need being satisfied or addressed today ?
2. How will your product / service meet identified needs?
3. Why it is better than alternatives from the customer’s perspective?
4. What will compel consumer to buy your product?
5. Which aspects of the business are most critical?
6. Which aspects need to be done well and which ones exceptionally well?
7. Which aspects, if done marginally, could sink the business?
8. What talent/expertise is needed to meet critical needs of business?
9. How will you attract that talent?
10. Begin with needs and align talent with it
a. Don’t start with people available
11. Who pays what and why?
a. Specific customer groups
b. Sell price - why reasonable?
c. Volume
i. Initial, Ramp up rate, Reasonable potential
12. Cost Structure
a. COGS
b. Gross Profit (Rs. & %)
c. Distribution Costs
d. Marketing Costs
e. Support Costs
f. Net Potential

Assuming need is basic like soap/shampoo then the my plan would be as follows :-
1. Understand the need of the customer (Begin with the need not the product or service). Suppose need is Soap/Shampoo.

2. Once we have figured out need, now let’s try to segment the base ( since the need is basic we assume that entire rural base is target base) and develop the product accordingly. Based on consumers need I have developed Soap A with 3 product extensions
a. Soap A1 (for Men)
b. Soap A2( for Women)
c. Soap A3( for Children)

(Note: If you study rural Indians you will find that entire family uses the same soap so why should we place different soaps for different segment. Answer is 1) to change habit of one soap/family 2) Rich can afford different soap for different family members 3) Poor usually buy 1 or 2 day consumption so product will be within their reach.)

3. Then segmenting rural base into below categories
• Region/Villages
 Rich
• Men
• Women
• Children
 Poor
• Men
• Women
• Children

4. Secondly build up sales force (from rural India only) who can personally visit Sarpanch/Mukhiya of village.

5. Take Sarpanch/Mukhiya into confidence and try to make them your distributor. Since most of them are rich and would not like to sell your product for lower margin therefore you need to really negotiate with them and if they themselves do not want to associate with your product then ask them to nominate someone. Treat them like your super boss and keep saying “ yes boss”…

6. Position your product separately for Rich and poor. For Rich you can sell 30 days consumption at one go and for poor you can sell pouches/sachets. Instead of taking cash from poor, you can accept anaaz (based on your market behavior. If in local market shopkeepers accept anaaz from customers then you should as well accept anaaz but if it increases your cost then you need to think of selling anaaz on daily basis to local market only and convert them to cash.) If you can print Mukhiya name on the packaging it will be customer delight because they treat Mukhiya equal to GOD.

7. After doing the above activities, analyze the No’s & you will find that 30% of consumers are contributing to your 70% sale. You have two choices
a. Either you concentrate on those 30 % high users
b. Or Increase volume by concentrating on 70% low users

If I would have been at your place I would have gone for mixed strategy, concentrating on both volume and 30:70 rule, because you cannot ignore tomorrow’s future for today’s present.

Hmmm …. Let’s come to an end of this discussion. Please note that I have no experience in selling FMCG products in rural market so my assumptions could be incorrect. I have tried to put across my thought process based on my observation and discussion with villagers. I end this write up with a quote “ haseka Rural India to badhega rural market” means “ Smiling Rural India will lead to growing Rural market”.

Special thanks to
• Shri Bhola Pandey ( Mukhiya Vill Satpipra)
• Mrs. Seema Singh, Mrs. Nirmala Choudhary and Mrs. Sita Pandey ( My family Members)

Glossary
pag phera = a custom followed in Hindu marriage
Aangan = courtyard
Mukhiya/Sarpanch = Leader
Alta/bindi = makeup items used by Indian women
Pooja = offering prayers to GOD
COGS = Cost of goods sold.
IAS = Indian administrative services
IFS=Indian foreign services
IPS=Indian Police service
Super boss = bosses’ boss ( please note that there is no word as super boss in dictionary)

Mobile Value Added Service ( MVAS)

Few of my colleagues who have read my blogs have asked me why I have not written anything about VAS?? So I told them that VAS is like family and you don’t share your experiences about your family… But then I gave it thought and decided “ Lets share my experience about VAS” with my friends.

VAS my dear friends stand for “ Value added services : A list of services which adds value to your daily life” Let’s segment people into 4 broad categories
1. Children
2. Youth
3. Middle Age
4. Old Age

Does VAS provide value to all segments ?? The Answer is yes ( to some extent). Extent of adding value depends on how you place your product in consumers mind.
E.g lok katha, devotional tracks, devotional services…. Etc will be more lucrative to Old age customers. Where as Stock gyan, job on call, Astrology, chatting.. etc will entice middle age customers.
Youth – Youth is one segment to whom you can sell anything. You just need to communicate it in their language. E.g If you want to sell Devotional tracks .. tell them that “ To impress your grand parents, gift them devotional pack “ I am sure they will love to surprise their grandparents. In the similar way you can sell anything and everything to them ( but in their language).

If you target children you automatically get their parents as your customers. You just need to make children content little funny and to target them you have to become children or need to spend some time with them. I have a plethora of idea’s on children content because I am a mother so I know how VAS can satisfy child needs…
In VAS “technology” is a commodity whereas “content” is brand therefore we can say that content is “King” or “Super King”. Good content can make or break your product. I mean behind every successful product there is an intelligent product manager and behind every successful product manager there is an intelligent support system ( In terms of technology, Content team, customer support… etc etc).
Let’s evaluate the pro’s and con’s of product manager. There are so many content partners in today’s world that its likea sea of CP’s. You need to figure out good CP ( which is tough in today’s environment). All CP’s think alike and have the same objective ( Revenue). Issue is not with the objective but the means to achieve those objective’s. Last week I got joke through SMS and the joke was as follows : PATI : mere marne ke baad tumhe mere jaisa aadmi nahin milega. PATNI : Tumhe Kis bevakoof ne kaha ki main doosra aadmi tumhare jaisa chahti hoon.
Do you think the above joke will make you laugh ?? No it will not. Infact its going to create strong dissociation with your product and once you lose trust of customers it will take years to build one. So you need to be very careful while designing the product and what content goes to the customer.

Let’s take our discussion to new product development. Product Managers should think that product is like their baby. And every product like baby has cycle attached to it :-
• Introduction Stage ( Baby)
• Growth stage ( Youth)
• Maturity stage ( Middle age)
• Saturation and decline stage ( Old stage)
It depends on product manager when he wants his baby to achieve saturation and decline stage. It could be 1 month, 1 year or 1K year depending on the strategy and innovation attached to each stage. So what’s the screening model for new products.

Key dimensions of new product are listed below :-
1. Product superiority, quality and uniqueness
a. Is superior to competing products
b. Has unique feature for the user
c. Is higher quality than competitiors
d. Does unique task for users
e. Reduces customer costs
f. Is Innovative – first of its kind.

2. Overall project/resource compatibility
a. A good “fit” between needs of project and company resource base in terms of :
i. Managerial skills
ii. Marketing research skills
iii. Salesforce/distribution resources
iv. Financial resources
v. Engineering skills
vi. Production sources

3. Market Need, growth and size
a. High need level customers for product class
b. Large market (S volume)
c. Rapidly growing market.

4. Economic advantage of product to end user
a. Product reduces customer’s costs
b. Product is priced lower than competing products

5. Newness to the company ( negative)
a. Project takes the company into new areas such as
i. New Product class to the company
ii. New sales force/distribution
iii. New types of users need served
iv. New customers to company
v. New competitors to company
vi. New product technology to company
vii. New Production process to company

6. Technology resource compatibility
a. A good “fit” between needs of project and company resource base in terms of :
i. Research and development resources and skills
ii. Engineering skills and resources

7. Market competitiveness ( negative)
a. Intense price competition in market
b. Highly competitive market
c. Many competitors
d. Many new product introductions into market
e. Changing user needs

8. Product scope
a. Market driven new product idea
b. Not a custom product i.e. more mass appeal
c. A mass market for product ( as opposed to one or few customers)

(Please note that key dimensions listed above are sourced from journal of product innovation management vol 2 no.1 March p.g. 39)

Many companies organize their new product development process into the orderly sequence of starting-with idea generation and ending with commercialization. Under this sequential product development approach one company department works individually to complete its stage of the process before passing the new product along to the development to next department and stage. This orderly step-by step process can help bring control to complex and risky projects. But it also can be dangerously slow. In fast changing highly competitive markets such slow but sure product development can result in product failures,lost sales,arid profits and crumbling market positions. Speed to market and reducing new product development cycle time have become pressing concerns of companies in all industries.
In order to get their new products to market more quickly, many companies are adopting a faster team-oriented approach called simultaneous product development (or team NPD or collaborative product-development) Under this approach company department work closely together through cross functional teams overlapping the steps in the product development process to save time and increase effectiveness. Instead of passing the new product from department to department,the company assembles a team -of people from various departments that stays with the new product from start to finish. Such teams usually include people from the marketing ,finance ,design, manufacturing and legal departments and even supplier and customer. Top management gives the product development team general strategic direction but no clear cut product idea or work plan. It challenges the team with stiff and seemingly contradictory goals— turn out carefully planned and superior new products but do it quickly —and then gives the team whatever freedom and resources it needs to meet the challenge. In the sequential process a bottleneck at one phase can seriously slow the entire project. In the simultaneous approach, if one functional area hits snags it works to resolve them while the team moves on.

It is very important for new product in VAS to have combination of a good brain and resources. If you have good brain in hand, technology and content will fall in place automatically so with this note I come to an end to my write up on VAS. I hope VAS community agrees with me on all the points which I have highlighted here. I see a bright future of VAS in India. (All’s well that end’s well) and I am sure VAS has no end……….. It is endless opportunity both for entrepreneurs and professionals so all the best :)