Marketing review

12 Jul 2007


Kingfisher and Continental Airlines announce a tie-up
New Delhi: Kingfisher Airlines announced a tie-up with Continental Airlines, ranked fifth in the world, with a view to provide better customer service to passengers travelling on the India - US sector.

The two airlines plan to share a comprehensive partnership in areas of frequent flying, airport lounge access and future code sharing with a view to facilitate smooth transfer between them, and leverage increased service primarily on the New York - India route.

Starting October 2007, members of the frequent flyer programmes of the both airlines would be able to earn and redeem air miles on all flights operated by either airline. Kingfisher Airlines currently operates 187 domestic flights everyday connecting 29 key Indian destinations, and has a growing fleet of 31 brand new aircraft.

Mahindra Renault launches two new variants of the Logan
Mahindra Renault announced the launch of two new variants of its recently launched Logan, one each in petrol and diesel.

According to company sources, the 1.6 GLX petrol vehicle is to be priced at Rs5.35 lakh, with the 1.5dCi DLX diesel model costing Rs6.11 lakh. The new variants were introduced in response to customer feedback, incorporating enhancements such as adjustable rear-head restraint, trunk room light, outside mirrors with manual adjustment, front and rear power windows and central locking systems. The new variants are to be first launched in Tamil Nadu, followed by other locations.

The company is also looking at expanding its national dealer network.

Cadbury enters the bubble gum market
Cadbury India entered the Rs180-crore domestic bubble-gum market with an eye to corner a 10-per cent market share within the next 18-24 months. The market has been growing annually at about 20 per cent as per industry sources.

Cadbury''s bubble-gum brand Bubbaloo is already sold in 25 countries worldwide. The company has set-up a separate manufacturing line at its Bangalore facility for specifically for bubble-gums with an investment of Rs20 crore. As per Cadbury India''s marketing director Sanjay Purohit, the company plans to spend around 35 per cent of the sales value to establish the brand in India via advertisements. The company plans to distribute the product through mass market network across the country, with a roll out planned within in the next 2-3 weeks.

Videocon slated to enter DTH business
New Delhi:
Consumer electronics giant Videocon is planning to venture into the Direct-To-Home (DTH) broadcasting business. Government sources reveal the company has applied for a DTH licence, and is expected to commence services sometime next year. The domestic DTH market has shown recent rapid growth due to the implementation of Conditional Access System (CAS) earlier this year, with TataSky, DishTV and DD Direct as the current major players. Bharti Airtel, Sun TV and Anil Ambani''s Reliance group are expected to launch their own DTH services sometime by year end.

Doordarshan services the largest share of DTH customers of around 3 million, followed by Dish TV''s 2 million. Tata Sky has secured a total subscriber base of over half a million customers, with plans to attain the one million mark by August this year. Given the present growth rate, India would have anywhere between 15 million to 20 million DTH subscribers within the next five or six years.

Hyundai Motor India introduces CNG Santro
New Delhi:
Hyundai Motor India on Wednesday launched an alternate fuel variant of its hot selling hatchback Santro, with a dual fuel option of CNG. Priced at a starting price of Rs3,25,361 (ex-showroom Delhi), the CNG powered Santro counters rival Maruti''s Wagon R LPG duo, which comes at a base price of Rs3.49 lakh (ex-showroom Delhi). The CNG kit would be retrofitted at the dealership level, and the alternate fuel variant has been introduced only in Delhi as of now. The company would source the CNG equipment from auto components maker Minda Auto Gas, which also provides LPG kits to rival Maruti.

Hyundai has introduced four variants of the CNG Santro -- XK (non A/c), XL, XO and AT (automatic transmission). The car comes with a two-year unlimited mileage warranty, with the company offering an additional warranty for the same period on the CNG kit and fitment. The car can be run on both petrol and CNG, with the CNG cylinder capacity being approximately 12kg. The running cost is estimated in the range of Re1 per kilometre, making it one of the most cost effective modes of road transportation, possibly even cheaper than some two wheelers.

For launches a Limited Edition Fiesta
New Delhi:
Ford India Motors has added additional features to its mid-size Fiesta sedan for a limited edition version commemorating the rollout of the 50,000th unit in the country. The variant is priced in at Rs6,25,500 onwards (ex-showroom, New Delhi), and is available in the Exi and Zxi variants for both petrol and diesel. The Electric Sun-Moon Roof, however, will cost an additional Rs30,000 over the indicated starting price.

With new interior and exterior features, the limited edition Fiesta provides increased levels of comfort and styling, aiming to further strengthen its position in the segment. The car will be seen in two brand new colours in the Fiesta range - Brush Steel and Jeans Blue - and will be available in the regular colours of Diamond White, Panther Black, Plantinum, Moon Dust Silver And Paprika Red as well. New features include new beige leather-vinyl seat covers, five-spoke alloy wheels for more style and driveability, and a rear spoiler for a sportier look.

Currently, the Fiesta is available in six-series line up with three diesel and three petrol variants.

American auto major Chrysler and Chinese Motor company Chery partner in a watershed deal
US Big Three auto company Chrysler finalised a landmark deal with the Chinese Chery Motor, to see Chinese-made vehicles grab their first major chunk of world markets.

As part of a 25-year deal, small cars made in China would be exported to the United States and other markets under the famous American brand.

The deal is also an attempt for Chrysler to propel itself out of the doldrums, with the first US sales expected in two years, and Chery''s small and sub-compact cars beefing up Chrysler''s product offerings in the small-vehicle segments where it lacks a strong presence. The deal is seen as a quick way for Chrysler to expand its product range, which is currently skewed towards pick-up trucks and four-wheel drives.

Chery plans to leverage the deal to make a protected entry into fiercely competitive international markets by using Chrysler''s sales network. The deal expects to see cars exported first to South America and Eastern Europe within 12 months, followed by sales in the United States.

The two firms initially plan to make less than 100,000 vehicles, with the first cars using the landmark Dodge brand after modifications to comply with tougher international safety requirements.

Chery is a state-owned enterprise based in the Chinese province of Anhui, and has been on an aggressive expansion since its set up in 1997. It sold 305,200 vehicles last year, most of them in China, and has set an ambitious target of 500,000 for the current year.

Chrysler, which booked an operating loss of €1.1 billion ($1.5 billion) in 2006, has undergone dramatic restructuring in recent months, axing 13,000 jobs in US plants. DaimlerChrysler had announced in May that it had agreed to sell an 80.1-per cent stake in the loss-making Chrysler to a US private equity fund, Cerberus.

Fiat hoping to replicate the ''iPod effect'' with the new version classic Fiat 500
Milan: Italian car maker Fiat is looking to remodel itself on fashionable technology group Apple, with hopes to mirror the i-Pod''s success with its new version of its classic Fiat 500 model.

The new Fiat 500 will be modelled on the rounded bubble-like design of the original 1950s "cinquecento" (500 in Italian), of which 4 million cars have been sold since its launch exactly 50 years ago.

The Italian automaker hopes to make the car a trendy, young vehicle with a cult following, just like its predecessor, and builds on the success of previous "nostalgia" cars - new versions of previous classics - such as BMW''s success with a new version of the Mini, and Volkswagen''s acclaim for its new Beetle model.

McArthurGlen may venture its designer shops into India
New Delhi:
McArthurGlen, a leading European designer outlet developer and operator is likely to foray into India in the near future, with UK-based Retail Management Consultants (RMC) learnt to be acting as advisors for helping it set up its India business.

McArthurGlen has 16 designer outlets across the UK, France, Austria, the Netherlands and Italy, with more likely to come up soon. These outlets house several branded stores each, and offer permanent discounts of 30 to 70per cent on the products sold.

There are a total of 1,300 branded stores across these outlets, with the permanent discount offered on big labels believed to be the main reason behind the popularity of these outlets.

Typically, each outlet houses between 80 and 170 stores, with brands such as Armani, Bulgari, Hugo Boss, Prada, Benetton, Calvin Klein, Marks & Spencer, Nike, Puma and Tommy Hilfiger.

The Indian retail sector is witnessing unprecedented action ranging from real estate acquisitions to the hiring of personnel, and even lobbying with the government for amendments to FDI rules.

Conglomerates Reliance, RPG and Pantaloon are the organised retail players in the country, with the Bharti group expected to sign an agreement with US-based Wal-Mart shortly followed by opening its retail stores next year.

Though UK-based Tesco and French retailer Carrefour were earlier in talks with Indian players for retail joint ventures, they are likely to wait for amendments to the FDI rules in the multi-brand segment before entering the country. Presently, FDI is allowed only for single brand stores and cash-and-carry ventures in the retail sector.

FCB Ulka re-christened Draft FCB
FCB Ulka is now Draft FCB. With the merger of Draft and Foote Cone & Belding (FCB) in July last year, these two agencies came under a single management team and a unified profit and loss umbrella.

Draft is a direct marketing agency, or a below-the-line (BTL) advertising firm, with considerable expertise in customer relationship management and retail activities. It is a part of the IPG Group, which also took over the remaining 51-per cent stake in Lintas India recently. FCB, on the other hand, is a mainline advertising agency, with a 135 years history.

As per industry sources, IPG have stake-increase designs with the re-christened Draft FCB, similar to its acquisition of Lintas India, and would like to see its stage increase from 51per cent.

Suzuki looks at a non-geared ride in two months
New Delhi:
The Suzuki Motor Company, having somewhat secured its lead in the Indian car market with Maruti, has now decided to train its guns on the fledgling two-wheeler business. The Japanese auto company had entered the Indian two-wheeler space around two years ago, via Suzuki Motorcycle India, it''s wholly owned subsidiary, launching two 125cc motorcycles.

Now, it appears set to enter the niche non-geared scooters segment. On the anvil is a 125cc scooter in direct competition to Hero Honda''s ''Pleasure'', Bajaj''s ''Krystal'', Honda''s ''Activa Dio'' and TVS'' Scooty, and could hit the market in another two months.

Additionally, a 150cc indigenous motorcycle is under development and could hit the market by March next year. Suzuki is also considering imports of some of its globally known high capacity bikes such as the Hayabusa and the GXR-1000.

The frantic expansion in product line-up would be beefed by a simultaneous increase in the dealer count to 300 over the next two years, accompanied by capacity expansion. The reason behind entering the niche variomatic scooters segment is apparently the good growth exhibited by the segment. Suzuki is entering it with a more powerful product than what its Indian competitors, with existing players offering only 100cc or less powerful scooters, which are aimed mainly at mobility for women. Suzuki''s product would be positioned as a family scooter.

Suzuki appears to be entering the market at a time when the overall two-wheeler market is passing through a slowdown, even though the segment they have chosen to enter, variomatic scooters, has not witnessed a south bound sales trend. Variomatic scooters account of only about 10 per cent of the two-wheeler market.

Moreover, the company''s decision to enter the 150cc bike space could prove risky, given declining sales in the overall market over the last few months, driven at least in part by tighter loans for two wheelers. Suzuki could also face aggressive competition from Bajaj Auto, which is already getting muscling up the 150cc and above bike segment.

Aviva Life signs on Sachin as their brand ambassador
Aviva Life Insurance, a joint venture between UK''s biggest insurer Aviva and India''s Dabur, has secured the little master Sachin Tendulkar as its brand ambassador, and has named its new child insurance policy after the cricketer''s title -Little Master.

As per Aviva India managing director Bert Paterson, Sachin is the most popular sports icon in India across age-groups, and his popularity transcends religion, caste and geographical boundaries. The new product - Aviva Little Master - is slated as a tribute to the brand ambassador, and the company will be launching a nationwide campaign featuring Tendulkar soon.

This is a pioneering endeavour for Aviva India to have gone in for a brand ambassador to increase its market presence, currently slotted at shade over four per cent.

Aviva Little Master, the 20th product from Aviva India, is a unit-linked plan designed for parents to secure their child''s future. The policy is available for children up to 17 years of age, with the parent''s age being between 18 and 45. The policy, with minimum annual premium of Rs15,000 for a 10-year term or above and Rs25,000 for less than 10 years, provides accidental death benefit, a comprehensive health benefit and income benefit, the company said.

Marlboro clove cigarettes to debut in Indonesia
Indonesia''s HM Sampoerna, a 98-per cent owned subsidiary of cigarette major Philip Morris International, announced that it will launch a clove-flavoured cigarette under its flagship Marlboro brand. Pungent "kretek" clove cigarettes are hugely popular in Indonesia.

The company would begin marketing the product on the main Indonesian island of Java, and the resort island of Bali in the second half of this year, with nationwide sales to commence from next year. Exports may begin by 2009.

Philip Morris is a unit of the Altria Group, and acquired the 98-per cent share in HM Sampoerna in 2005. Indonesia is one of the most profitable tobacco markets in the world, with more than 60 per cent of Indonesian men as smokers, and cigarette firms as stock market leaders.

Jet Airways is all for cooperation with the newly merged Air India
Noting that cooperative arrangements are necessary for better the market share of Indian carriers in the traffic in and out of the country, Jet Airways Chairman Naresh Goyal said his company favoured such cooperation with the newly merged Air India.

Historically, India''s market share has lower than 20 per cent of the total traffic in and out of the country, with foreign airlines carrying over 80 per cent of traffic. Goyal foresees this shrinking to around 10 per cent soon, given airline expansion plans in the industry.

Jet Airways has placed an order of 10 Dreamliners with Boeing, which will start joining the fleet in 2011. Additionally, it has also placed an order for 10 long range Boeing 777, with two of these planes slated to join the carrier''s fleet this month.

The Chairman of Jet Airways outlined an ambitious agenda for his airline, which will see the 777s on the North America route starting out of Mumbai first, and later with a major hub in Brussels, Belgium. In a period of a year, Jet Airways is looking to increase the frequency that will include the Chennai-Los Angeles sector, and a Mumbai-San Fransisco route via China.

The ''King of Retail'' prepares to defend his empire
New Delhi:
Kishore Biyani''s favourite way to spend the weekend is trawling the aisles of one of his Big Bazaar supermarkets eyeing what customers are loading up on.
According to Biyani, the pioneer in Indian supermarket retailing, a customers'' story is an open book, read by looking at his shopping cart. However, his store jaunts have taken on a special meaning these days. He''s now looking at fend off deep-pocketed competitors who are threatening to outspend and outsell him.

Biyani visits Big Bazaar, clothing, home ware and other stores up and down the country to see what''s working and what''s not before competition heats up in what analysts foretell will be the "Great Indian retail gold rush."

Biyani sees the real competition as two years away, by which time he aims to be armed and ready to defend his retail empire. Till now, Biyani has a clear lead from competition in the retail sector, and now aims to blanket the increasingly affluent nation of 1.1 billion people with his stores, targeting the average Indian''s obsession with bargains.

Beer, spirits cheaper, wine will get dearer
With the scrapping of additional customs duty (ACD), the overseas liquor industry and the importers will hugely benefit from increased sales due spurred on by an overnight price drop of up to 30 per cent in retail prices of foreign brands. However, wine producers may not benefit uniformly, and premium wine might just become more expensive.

Previously, the additional duty on liquor used to take the total import duty to as high as 550 per cent. Now, with the scrapping of the ACD, the customs duty will come down to 150 per cent (164 percent taking into account some residual special duties), resulting in a significant drop of up to 30 per cent or more in the retail price of foreign whiskies, vodkas, gins and other hard liquor. Beer will share similar benefits, as the basic duty remains unchanged at 100 per cent.

The price of wine, on the other hand, may suffer as the basic duty has been enhanced from 100 per cent to 150 per cent, which is within the agreed outside limit of the WTO. The more expensive premium wines, which also previously attracted 100 per cent basic duty and only 20 per cent ACD, as compared to 75 per cent ACD on cheaper wines (under $25 a case), may become costlier.

Typically, globally beer and wine fall in the same category due to their lower alcohol content. Wine has more health benefits, proven consistently by several neutral, multinational scientific studies. Apparently due to pressure from local industry, the duty on wine has been hiked to the maximum permissible 150 per cent.

The domestic beer market is a lot bigger in size. With 105 million beer cases consumed annually, it could be assumed that the duty at the level of 100 per cent would hurt the local beer industry.

As per consensus, the lower-end wines are likely to benefit the most. The retail price of these are likely to decline by about 25-30 per cent, pegging them closer to domestic wines.

Two-wheeler ads losing traction
Speed, stunts, and style are the essential ingredients for a two-wheeler television commercial. Are these enough to make the two-wheeler manufacturer stand out in the consumer''s mind, given the steep level of competition?

According to auto-analysts, the answer is no. Companies need fresh strategies and ideas to market their two wheelers, and experts feel creative campaigns in this sector suffer from uniformity and fatigue.

Presently, the two-wheeler segment is facing a slump, especially in the entry-level segment, owing to an increase in interest rates up to 17 per cent (on average).

However, manufacturers are hopeful of an improvement in the situation by September, prior to the onset of the festive season. To combat the current situation, manufacturers are focussing on launching new variants and models to keep the buzz and excitement going. Therefore, advertising and promotional activities are most crucial to back these launches by helping create top-of-mind brand recall.

Piyush Pandey, vice-chairman, Ogilvy & Mather Asia Pacific, says Indian biking is in its early stages, which prompts companies to highlight the features that the bikes usually have. An emotional connect happens gradually with the maturing of the market. Pandey had created the memorable ''chal meri Luna'' ad in the 80s, and coined in the concept of brand personification. Alec Padamsee''s ''buland bharat ki buland tasveer - Hamara Bajaj'' had made the Bajaj brand a family name. More recently, the Bajaj Avenger ''I feel like God'' campaign was one that stands out in memory.

Budweiser launched in India
Partnering with Crown Beers, St Louis-based Anheuser-Busch Cos Inc (A-B) has launched Budweiser in India, with its eyes set on growing its beer market outside the US.

The launch is expected to heat up competition in the Indian beer market, dominated by two players - United Breweries Ltd, which controls over 45 per cent of the market, and UK''s SABMiller, which holds around 35 per cent. Mohan Meakin, a relatively smaller player, has close to 8-9 per cent.

Even as these players are jostling for market share, Danish brewer Carlsberg and Belgian brewer InBev are planning to enter India soon. Carlsberg is reportedly looking at introducing the Polish brand Okocim Palone in India.

Anheuser-Busch Cos Inc Indian venture, Crown Beers India Ltd (CBIL), will brew and distribute Budweiser in four western and southern states that account for over 50 per cent of the Indian beer market.

It has built a 5-lakh hectolitre brewery in Andhra Pradesh and launched a strong beer, Armstrong, to suit the taste buds of the Indian consumer. Priced at Rs68 per 650 ml, A-B has placed its beer in the high-end market.

Around two-thirds of the Indian beer market consists of strong beers. The company aims to position Budweiser as a leading brand in the premium category, in a market exhibiting strong growth. Though India''s beer market has been growing at 12 per cent annually over the last five years, high taxes and excessive regulation in production pose a major challenge to the US brewer.

India''s alcoholic beverage market is still very small, and major brewers see a huge potential for growth over the next few years. India''s beer market of 8 million hectolitre is dwarfed by other Asian markets like China, which are 150 times larger.

India''s per capita intake of beer is still less than a litre, compared to the US or Europe, where it is 80-90 litres and 100 litres respectively.

Air Deccan enhances seat capacity
Low cost airline Air Deccan has announced an enhancement of seat capacity for southern travellers, with a view to service the growing demand.

The airline said it had replaced its 72 seat ATR 72 with a brand new 180 seat Airbus A320 on the existing Chennai-Madurai and Chennai-Coimbatore sectors. It has also introduced an additional ATR 72 flight from Chennai to Thiruvananthapuram in the evening, making it convenient for business travellers seeking a same day return flight.

Air Deccan has more than 2.5 lakh seats per month in South India alone, and leads the market with a 40 per cent share in terms of seats offered in the region.

Air Deccan, the leader of low cost aviation in India, has seen remarkable growth not only in leisure but business travel as well. With time at a premium, Indian corporate, small business travellers, and SMEs have switched travel preferences from trains to low cost air travel. Cities of the past like Trivandrum, Madurai and Coimbatore are now becoming cities of the future, developing into modern cities with big IT and corporate companies setting up infrastructure. Air Deccan''s flights at affordable fares are sought after by leisure as well as business travellers on these routes.

Air Deccan presently offers the largest seat inventory among all airlines in the South, connecting as many as 19 destinations. It flies close to 3,000 flights a month within the South. In June 2007, over 2,800 flights were on time within one hour, and approximately 2,500 flights were on time within 15 minutes.

Godrej aims at defence supplies
The Rs6,500-crore Godrej group has plans to push its military equipment supply business aggressively. In the interim, it would be making machineries and equipment for the armed forces, expecting huge earnings from the nuclear business once the Indo-US civil nuclear deal is cleared.

With the defence sector heating up, Godrej is planning its foray into the sector, and has formed a separate team to manage the defence business. No other details about their foray were forthcoming at the present time. Godrej and Boyce is already a supplier of airframe sections for the Brahmos missile, besides supplying equipment for satellite launch vehicles which are built by the Indian Space Research Organisation (ISRO).

The group also supplies equipment for the nuclear sector, both civilian and military, as well as equipment for refineries.

Industry experts feel defence is set to become big business for Indian companies, with the defence ministry proposing to give contracts worth Rs30,000-crore for defence production to private players in the coming years. This has aroused the interest of a number of private players. Since the relaxation of norms for private sector participation in defence deals, companies like L&T and the House of Tatas have acquired licences for the manufacture of defence related products.

The Tata group is looking to consolidate its defence businesses under a unified entity. Among the automakers, M&M and Ashok Leyland supply vehicles to the military, as does Maruti with its Gypsy brand.

A few foreign players such as Lockheed Martin and Rolls Royce are also eyeing the country''s defence sector, even as top-notch international players like EADS, Boeing, and Rolls Royce scout for Indian partners.

Prior to the opening up of the sector in 2001, the government placed defence orders strictly with PSUs and foreign players. Today, it allows foreign direct investment up to 26per cent in defence projects.

Maruti going slower than last year
New Delhi:
Maruti Udyog may have posted a robust 25 per cent growth in sales last month, but managing director Jagdish Khattar says times are difficult, and the company has been trying out various ways of keeping its head above water.

With interest rates impacting sales, Khattar sees it as difficult for the company to equal the growth rate of last fiscal. In June, for example, only 71-72 per cent of Maruti cars were financed as against 80 per cent previously. Banks too are more judicious with loans, and the overall market growth is being driven by new launches, which did not have a base last year.

Expressing concern over floods in various parts of Maharashtra and Gujarat, he pointed out that most of Maruti''s car deliveries to the South pass through these two states, and annual floods could be a cause for worry.

In the June quarter, Maruti logged a sales growth of 17 per cent against the 20 per cent last fiscal. Khattar and his team have been working overtime to beat the slowdown by increasing penetration in hinterland regions via innovative schemes.

Mayank Pareek, general manager - marketing informed of the launch of two promotional schemes to beat the current slowdown that allow for increasing product penetration. While the ''Ghar Ghar Mein Maruti'' scheme targets panchayats and primary health centre workers in rural areas, ''Lalkar'' is a sales scheme involving employee referrals.

The former has seen 2,300 cars being sold last month, even as Lalkar brought in sales of 1,930 units. According to Pareek, dealers in rural areas were being encouraged to recruit locals as salespersons for driving Maruti''s rural penetration plans.

Khattar agreed that these schemes, though good for sales enhancement, signify a greater spend on promotional activities.

Motorola''s MotoStores may be Noon to Midnight
With life getting busier by the day, Motorola India is working on a new retail format for its destination stores, to be called MotoStore. It is entertaining the idea of keeping them open from 12 noon to 12 midnight, in a bid to offer convenient shopping to workaholics.

A pilot store has been opened in Delhi, and based on the learning derived from this store, the company will look at rolling out the model across various cities. The company aims to open 10 such stores across the country in the next 12 months, and is also looking to more than triple its shop-in-shop stores from about 30 now.

Addressing increasing competition in the business phones category, the company is planning to introduce its Blackberry-type model, MotoQ, in the country soon. Though it hasn''t set any timeline for the launch of MotoQ, company sources say it is likely to hit the market before the end of this year.

The model is expected to be launched in both GSM and CDMA formats, and the price is likely to be upwards of Rs25,000.

Not everyone''s enthused by small cars
New Delhi:
With a number of players scrambling to jump on the $3,000 car bandwagon, the original small car company Suzuki Motors, for now is content to wait and watch from the sidelines.

Not just Suzuki, but most big names from Japan, including Honda and Toyota, seem to be reluctant to enter the "cheap" car fray. Even South Korean major Hyundai Motor does not have immediate plans to enter the low-cost car category.

For now, Ratan Tata will probably only find company in Carlos Ghosn, the Renault-Nissan boss, for launching a car that redefines the floor price for cars.

Honda Motors'' cheapest car anywhere in the world is a 660cc one in the home market, priced at roughly $9,000. Compatriot Toyota sells its new small car, Aygo, in Japan for around $10,000. For these companies to think of making a vehicle for less than a third of the existing cost dynamics does sound slightly improbable.

The car that will come at this price would have a different customer profile, and would be a completely different product from existing small cars in terms of engine, speed capability, etc. Analysts point out that the low-cost car can be viable only in the Indian market, as exports to other markets could run into trouble over emission norms, safety regulations, etc.

A viable product at this price level is possible only with a very high level of localisation with no export plans.

The low-cost car pioneer Ratan Tata differs. He still maintains that the Tata small car would be launched in early 2008. Tata Motors has completed its styling and designing and has tested the prototypes within the plant.

Ghosn seems to echo his sentiment, asserting that Nissan-Renault is looking at a small car priced below the Logan at around $3,000 and would be develop such a product with M&M in India.

Giving company to Tata and Ghosn, global consulting firm PricewaterhouseCoopers pinpoints the ''India Advantage''. In a detailed analysis of what PwC calls the low-cost car phenomenon, it says that by 2014, every other low-cost vehicle would be assembled in the Asia Pacific region, with India and China accounting for 34 per cent and 11 per cent of global output.

Cafe Coffee Day to invest Rs100 crore in 15 months
Cafe Coffee Day, a division of The Amalgamated Bean Coffee Trading Co, will invest anywhere between Rs95 crore to Rs100 crore as a part of its expansion plan in the next 12-15 months.

Presently, the company has 435 outlets in 83 cities, and is looking to go up to 700 outlets in the next 12-15 months. Another 50 outlets in Vienna and Karachi would come up in the next two years. Each outlet would cost about Rs25-30 lakh.

Karachi is seen as a great potential market, for its want of hangouts for the youth. Vienna has also shown an encouraging response for Indian coffee, which accounts for its place in the company''s expansion plans. Cafe Coffee Day has an outlet each in Vienna and Karachi. The India expansion plans will cover Delhi, Mumbai and Chennai.

The company would fund the growth through internal accruals and has no immediate plans to go public. There are no immediate plans for any joint venture or acquisitions either.

In FY06-07, Cafe Coffee Day''s turnover was Rs400 crore. In FY07-08 the turnover is forecast at around Rs600 crore, with a 50 per cent revenue growth in the next financial year.

Gitanjali Lifestyle setting up 27 more outlets
New Delhi:
Gitanjali Lifestyle, a subsidiary of Gitanjali Gems, recently announced that it would set up 27 retail outlets by the end of this year, at a combined investment of about Rs5 crore.

Twenty-five of these outlets would showcase Swiss, French and Italian watches such as Morelatto, Nina Ricci, Jacques Lemans, Moschino and Paris Hilton under the multi-luxury retail brand Bezel, and two outlets for Greggio, an Italian silverware brand that offers products such as tableware, cutlery and gifts.

These international brands will be launched in the country for the first time.

Ashok Piramal acquires Italian shirt brand Men''s Club
The Ashok Piramal Group-owned Morarjee Textiles Ltd recently acquired a 67-per cent controlling stake for an undisclosed sum in Men''s Club, an Italian brand of shirts.

The Rs213-crore company is looking for another acquisition for its front-end business in Europe, but is yet to zero in on a prospect. The company prefers to acquire a brand offering high value-added products that fits well with the company''s strategy. It also hopes to make a dent in the Japanese and European markets through this acquisition.

Targeting a turnover of Rs27 crore for Men''s Club for the year ending March 2008, the manufacturing has been outsourced to a plant in Southern Italy, and the company plans to let Men''s Club maintain a relative independence in order for the the brand to retain its authenticity.

The group has a design centre at Milan, and has plans for foray into the US market sometime in the next two years. The company supplies fabric and shirts to various international brands such as Flex, Polo Ralph Lauren, Paul Smith, and domestic ones including Zodiac, Allen Solly and Louis Philippe. It also supplies to women''s apparel brands such as Marks & Spencer and Zara. It will start supplying trousers next year.

In the second-phase of expansion, the company will look to acquire 10-12 acres of land in either Tumkur district of Karnataka or in Visakhapatnam, which will entail an investment of around Rs50-60 crore. Capacity expansion will double to 25 lakh pieces of fabric per annum. The plant would also support the company''s garment unit based in Bangalore, Integra Apparels, which makes medium to premium brands, and exports both menswear and womens wear to Europe, Australia and the US.

The company will undertake an investment of Rs150 crore over the next year in its expansion to build synergies between its fabric, garment and brand divisions. Funding will come from internal accruals, debt and the 50 remaining warrants of the company''s rights issue.

RCom unveils new datacard offers
Reliance Communications unveiled new offers for its data card, which goes under the brand name NetConnect.

A data card is like a SIM card, and is used in laptop computers. It plugs into the PCMCIA slot and has a small antenna that connects the computer to Reliance''s CDMA network. Reliance also offers USB modems, connectivity via Reliance mobile (through data cable) and fixed wireless phones (FWPs). The CDMA network allows for an Internet access speed of up to 144 kbps.

The company has been promoting its data card to corporates, enabling internet access for executives on the move, and is now actively targeting the mass market with new tariffs and bundled offers. Laptop users can now affordably get online for just Rs174. The company is targeting 2 million laptop users in the country who do not own data cards, which comprise 80 per cent of all laptop users.

The company claims a 75-per cent market share in the national data card market. Tata Indicom''s V card and Airtel''s data card are the other players in the data card business.

Tying up with four laptop vendors - HP, Acer, Lenovo and HCL - Reliance expects to bundle a data card for free with new laptops to attract new Internet users. The Reliance network covers 9000 towns and 3.5 lakh villages.

Logan launched in Mangalore
Mahindra Renault has launched the Logan in the Mangalore market. According to Leon Prabhu, head, sales (personal segment), the company is keen on capturing 40 per cent of the market share in ''C'' segment in Dakshina Kannada region with this launch. The price of the vehicle ex-showrooms in Karnataka for the 1.4 petrol version is Rs4.33 lakh, and for the 1.6 petrol version is Rs5.33 lakh. For the 1.5 diesel version, the car is priced at Rs5.53 lakh.

Karnataka Agencies is the dealer for the car in Mangalore.

Cobra Beer plans foray into wine making
Hyderabad: Cobra Beer, a leading global beer company, plans to foray into the wine segment by launching four varieties by the year-end.

Ms Poonam Chandel, Chief Operating Officer (COO) said the company had finalised the brand, blends and packaging, and has zeroed in on Maharashtra for its wine production. The company is looking at an initial volume of 15,000 cases in this category, which will be scaled up to 50,000 during 2008-09.

The company will also invest $20 million to set up Greenfield breweries in Patiala (Punjab) and Andhra Pradesh, though it is yet to decide on the plant location in Andhra Pradesh. These units would have the capacity of producing three lakh cases.

The company is planning to enter markets in Jharkand and Kerala in the second phase of its expansion in the country.

Though the beer market in India is growing fast, per capita consumption is still at a low 0.7 litres.

Hollywood star to be Reebok''s Brand Ambassador
New Delhi:
Leading sports goods brand Reebok announced Hollywood actress Scarlett Johansson as its new brand ambassador, marking its foray into the burgeoning lifestyle business.

The sports goods brand also revealed its latest `Scarlett Hearts Rbk'' collection, a fashion forward athletic inspired footwear and apparel line in India. The brand embodies the pulse points of Reebok''s brand-individuality, authenticity of a life lived to the fullest in perpetual motion. These characteristics make the new Brand Ambassador the perfect fit for Reebok''s new women''s footwear and apparel collection.

While Reebok''s core remains sports, it is looking at sports inspired lifestyle in a big way, as contemporary youngsters love a sporty causal look. Reebok is best poised to synergise fashion with sports and provide the customer the much desired look and feel.

Blue and Blues plans more stores
Italian leather brand Blue and Blues is setting up 18 exclusive stores across the country, over the next three years, and has marked a turnover of Rs40 crore for the same time span.

Increasing its portfolio in the Indian market, Blue and Blues would extend its product range to include products such as belts and office products. It also intends to setup a new manufacturing base in Delhi.

Blue and Blues has appointed O&M to handle its brand, which has the tagline Coloured Leather.

Health conscious tipplers can now go with Romanov diet vodka
New Delhi:
The UB Group''s United Spirits Ltd has launched the first brand variant of its flagship vodka brand, Romanov, named Romanov Diet Mate Vodka.

Romanov Diet Mate includes a herbal ingredient, Garcinia, which helps in controlling cholesterol and burning body fat. The variant is priced at a 10-per cent premium to the original omanov Vodka. The company expects the product to do very well, and believes that it will achieve at least 10 per cent of the sales of the original Romanov Vodka flavour. Romanov Vodka sold nearly 8.5 lakh cases last year, and has a CAGR of 45 per cent.

The domestic vodka market is sized at about three million cases, of which brands from the UB stable, Romanov and White Mischief, account for 70 per cent. White Mischief clocked sales of 1.1 million cases last year.

AP asks Xenitis to set up a small car plant
Andhra Pradesh has asked the Rs650-crore Xenitis Group to make a wish list for setting up its proposed small car plant in the State. Xenitis, engaged in the manufacture of computer hardware and components, and motorcycles, had lately unveiled plans to embark on the manufacture of small cars.

K Praveen Kumar, sector head of APinvest, the nodal government agency, visited Xenitis'' manufacturing facility at Chinsura in Hooghly district and later made a presentation at the Xenitis'' corporate office here.

Xenitis had earlier approached the Andhra Pradesh Government for setting up a semiconductor unit in the state. However, the initiative did not fructify. APinvest later wrote a letter to Xenitis urging it to consider Andhra Pradesh as a destination its new initiative of manufacturing small cars, offering the advantage of being located in the most happening State in the country.

San Motors may contract manufacture for French company
Makers of the convertible San Storm, San Motors, the automotive division of the San Group, is all set to bag a contract manufacturing order from a niche French car company.

The French company, similar to Britain''s Morgan, TVR and Lotus kind of small car companies, has been manufacturing a model that is available in coupe and convertible form. This model will soon be manufactured at San Motor''s plants in the country, according to Behram Ardeshir, director, San Motors. Due to corporate reasons, the name of the French company and the model were not disclosed.

Ardeshir says production is likely to commence by the end of this year. The company has facilities at Goa and Bangalore, though it was yet undecided, which would be utilised, or whether one of them would be singled out. Presently, the Goa facility has an annual production capacity of 3,000 cars, while the Bangalore facility is utilised to manufacture the chassis and body of the San Storm, which are later transported to Goa for final assembly.

The company would start manufacturing the French model with an initial local content of 40 per cent, which is likely to grow to 60 per cent in the near future. Minus the power train, the complete car would be shipped to France. The power train has been outsourced from another automotive company, and hence would be fitted at the French factory premises.

Contract manufacturing has now become a trend among small and big international auto majors to offset rise in manufacturing costs in developed nations.

The company is also conducting tests on a new convertible designed completely in-house, which will have a 1.6-litre engine.

AOL, Warner Brothers in tie-up
AOL has tied up with Warner Brothers to promote the latest Hollywood blockbuster Harry Potter & the Order of the Phoenix.

AOL, in association with Warner Brothers, has launched a micro site The micro site hosts content from the movie including videos, photos, wallpapers and memorabilia. The micro site also hosts two games ''Fight the Death Eaters'' and ''Dolore''s Cat'', and has a contest with prizes to be won.

Both Warner Brothers & AOL are part of Time Warner, a global media and entertainment company.

WPP eyeing acquisitions in India
: Communications services group WPP is looking at acquisitions in India and the rest of Asia as part of its growth strategy. The group is seeking companies in non-traditional areas such as brand identity, public affairs, digital and direct marketing.

WPP Digital recently acquired a 100-per cent stake in digital marketing agency BLUE Interactive Marketing, Singapore. Last year, it acquired a majority stake in Bangalore-based design firm Ray + Keshavan.

WPP has witnessed phenomenal growth from the Indian and Chinese markets, which have been growing at over 20 per cent for the past several years. Asia Pacific, Latin America, West Asia and Africa account for about 20 per cent of WPP''s revenues, and the company is looking to grow these to one-third in about five years.

A key driver of growth in Asia will be new media, along with traditional media. While both traditional and new media are growing fast in Asia (particularly India), the digital medium will be the new leg of the company''s growth strategy. Presently, only 2 per cent of global ad spends comes from online advertising, which are estimated to grow to 8 per cent in 3-4 years. Mobile marketing is another area to track in the long term.

Another area of increasing importance in India is analytics, with Group M, a WPP entity, through its outfit Meritus Analytics India in Bangalore, doing a lot of work in this field for as number of WPP companies.

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