Marketing review

26 Jul 2007


Zee Interactive plans 35 Kidzcare centres
Kolkata: Zee Interactive Learning Systems (ZILS) has crystallised plans to set up a 35 Kidzcare centres across the country, all in the current fiscal.

ZILS, the education arm of the Essel Group of Companies, already has seven such centres in New Delhi, Bangalore, Hyderabad and Kolkata. The company is looking at setting up childcare centres via the franchisee route.

A higher number of nuclear families with both parents working has lead to an increasing dependence on childcare centres. Kidzcare has been designed to provide quality pre-school childcare in urban markets.

The centres aim to provide a secure, safe and caring environment, with age-appropriate and learner-centric activities for the all around development of children. ZILS expects earnings from the Kidscare initiative to be in the range of Rs3-5 crore in the current fiscal.

PC Replacement demand propels sales
The replacement of old personal computers in big corporations was the primary sales propeller for hardware manufacturers in 2006-07. Computer sales to the "home" segment saw sales skewed towards notebooks.

The small and medium enterprises (SME), expected to exponentially increase technology spend, generated only 31 per cent of sales as per the Manufacturers Association of Information Technology (MAIT). A focus on e-governance initiatives and demand from the banking, education, BPO and IT-enabled services sector also spurred sales.

The business segment accounts for about 74 per cent of PC sales, with household consumption of desktops accounting a smaller 26 per cent. The home PC market is yet to pick up on account of price sensitivity, with people looking to maximise value for money.

Betting on India pays off for Vodafone
New Delhi: The domestic market appears to be amongst the best performing ones in UK-based Vodafone''s portfolio.

The second-largest mobile subscriber base for the company is in India, with a user base of 30.75 million as of June 30, 2007. Vodafone''s German operations have the highest subscriber numbers at 31.6 million.

Among its other significant markets, the UK has 17.6 million, Italy has 21.7 million, Turkey has 14.9 million, Spain has 15.1 million, Greece has 5.2 million, The Netherlands has 3.8 million, Portugal has 4.7 million, Romania has 8.2 million, Egypt has 10.9 million, South Africa 16.2 has million and Australia has 3.3 million.

Indians also talk the most, scoring the highest in terms of total voice minutes. Total calls (incoming, outgoing and visitor) during the quarter ended June 30 in the Vodafone Essar network were for 26,713 million minutes, compared to Germany''s 9,897 million, Italy''s 8,932 million and UK''s 8,963 million.

Vodafone''s subscriber base was at 232 million as of June 30, with the mobile subscriber addition in Vodafone''s networks around the world was 9.1 million, of which about 3 million came from India. In the same quarter last year, Vodafone had added just 4.8 million mobile subscribers. Vodafone acquired a controlling stake in India''s Hutch Essar earlier this year.

Future Group''s Depot banks on price and quality as its mantra
Mumbai: The Future Group''s year and half old Depot is all toddle into the retailing of books, music, toys, gifts and stationery, and currently has eight standalone stores along with 55 shop-in-shops with Pantaloons and Big Bazaar.

By end 2007, it plans to increase the number to 100, with 15 standalones and another 85 points-of-sale.

Books seem to be a clear revenue-earner for Depot, contributing 35 per cent of total revenues. Another 25 per cent come from music, and the balance from toys, gifts and stationery. The size of the book market in India is estimated to be around Rs3,000-4,000 crore.

Targeting a regional fare, the company is looking to provide a range of books for adults, for which it has commissioned authors like Nita Mehta, Sanjeev Kapoor, etc, and plans to publish titles on Gujarati and Marathi literature. Depot''s mantra for success is a price range between Rs49 and Rs109, coupled with quality products.

However, explored the Indian market for over a year, Depot is also keen on international tie-ups. A visit to the Frankfurt Book Fair, which is a platform for publishers to acquire rights, Depot has partnered a company called ''Small World'' that specialises in books for kids'' up to the age of seven.

Content ideation for this co-publishing deal is done in the UK, and the production and printing is done in China. Outlays for any such deal span $2,000-3,000 paid in advance, with supplemental revenue sharing depending upon sales.

Moser Baer forays into the Eastern domestic market
Moser Baer, manufacturers of removable data storage media, is to commence sales of DVDs and CDs in Kolkata.

The company has launched about 7,500 film titles in all major Indian languages, and is trying to include some more. About 75 Bengali titles have been launched by the company, which sells DVDs at a market price of Rs34 and CDs at Rs28.

The company ventured into the home entertainment market in January 2007, with an initial investment of Rs500 crore. The company plans to launch 50 titles every month, with its core area being content development, marketing and distribution.

India has over 30 million DVDs and VCDs users whom are growing at the rate of 25 per cent every year. Presently, Moser Baer is the first public limited company with a share of 40 per cent, with future plans to secure the lead by producing movies in Hindi with Saurya being the first movie to be released by the company this year. The movie stars top Bollywood actors Rahul Bose and Esha Deol.

Brand Hutch soon to be consigned to the history books
Sure to be rememberd as a short-lived super brand with Cheeka, the Hutch pug, inheriting a new master, the brand Hutch will soon find its place in history books.

The pink tri-stars on the Hutch logo are soon to be replaced by the conspicuous red logo of Vodafone, sounding a retreat for the epic brand.

However, a few stalwarts at Hutch and O&M (Hutch''s ad agency) are trying their best to retain the essence of Hutch and keep it alive. Two popular tales doing the rounds are that for sometime there will be dual-branding to help transition some of the loyalty to the new Vodafone brand, and the other is that the pug ''Cheeka'' and the little boy may don some new advertising for the red logo.

Over the years, Hutch has been successful in keeping consumer loyalty intact. Be it touting ''Mobile Manners'', promoting the ''Chota Recharge'', or the more recent ''Ranga Shankara Theatre Festival'' - the Hutch campaigns focused on simplicity yet were startling in nature. Estimates say over the past five years Hutch has spent between Rs800 and Rs1,000 crore for its advertising duties.

Intel-HCL combine launches classmate PCs
The world''s largest chipmaker Intel and leading computer manufacturer HCL Infosystems have announced the launch of Classmate PCs. The mobile PC is priced in the sub Rs18,000 range, and will be available in the market for schools.

The Classmate PC is essentially an educational tool developed by Intel to aid students in classroom learning. It is powered by Intel Processor 900 Mhz and comes with WiFi and Ethernet connectivity, with a 7-inch LCD screen, 215 MB and 512 MB RAM with one GB and two GB flash memory.

The 18k price range also includes cost of installing supporting connectivity infrastructure, teachers'' training and customised integrated learning solutions via our tie-ups with content developers and education service providers. This cost is slated to reduce even further.

Classmate PCs will be retailed through schools and HCL Infosystems expects to deploy 3,000-5,000 such PCs over the next three to four quarters.

Weighing in only 1.4 kg, the PC is durable and rugged, with a personal learning assistant that resembles a textbook. It provides for three to four hours of usage time.

Accessories to go with the PCs include note takers and digital pens. Intel OEM partners Wipro and Zenith will also offer the PC shortly.

Jet to avoid price war on the US circuit, looks to differentiate using service
Private Indian airline Jet Airways, which commences US operations next month, has ruled out a price war, and expects to attract passengers by showcasing top-class services.

In an interview posted on the website of Forbes magazine, chairman Naresh Goyal stated "We are not here to get into fare wars. We are here to give you the best product, which hopefully no other airline gives you".

According to Goyal, American passenger-airlines "dump people" from one point to another. With Jet, passengers get a hot three-course meal in every section of the airplane irrespective of the class they travel.

Jet makes its maiden US flight to Newark airport from Mumbai next month. This will be followed by Toronto in September, as part of efforts to tap the 800,000 Indians
living in Canada. Subsequently, services will cover JFK, San Francisco, Chicago and L.A. (Los Angeles) over the next year.

BSNL baits corporate houses with fixed-mobile convergence
Kolkata: Unlimited free phone calls between fixed and mobile networks, together with internet access at a fixed competitive rental is in the offing for corporate houses.

BSNL''s new corporate scheme is slated to be absolutely free from any charge other than rental for calls. There will be no roaming charge, according to Calcutta Telephones chief general manager S K Chakravarty.

A corporate user can now make unlimited free calls between fixed and mobile phones besides internet usage. This will be possible even on the move, within an own nationwide user group or virtual private network (VPN), and is designed to give BSNL an edge over private telecom operators.

Earlier, BSNL used separate VPNs for fixed and mobile (CellOne), which have now been integrated, including the data gateway for high speed data service.

The monthly rental for the corporate scheme was likely to be in the range of Rs500 per user. All corporate members would also get free access to Wi-Fi at hot spots like the NSC Bose International Airport.

Stating that the new corporate scheme would lead to increase in BSNL fixed and CellOne mobile usage, Chakravarty said there was no major investment in introducing unified VPN solution as there was a separate Intelligent Network for fixed and mobile services.

Under the corporate scheme, BSNL would also offer international calls which would be cheaper by almost 30 per cent, and will introduce an international calling card under the brand `CallNow''.

Tata''s cheapest car could be pricier than envisaged
High input costs and production delays could force Tata Motors to raise the price of the world''s cheapest car, as suppliers resist pressure to lower prices any further.

Tata Motors is turning negotiating with parts makers as it pushes to launch the car next spring or summer, despite delays in construction of the plant in the state of West Bengal land acquisition problems.

Tata Motors is India''s third-biggest carmaker, and had earlier announced the launch for early 2008. Suppliers, already grappling with fluctuating raw material costs, are finding Tata''s price and delivery targets almost impossible. Some have reportedly turned down orders from Tata Motors, while others are now seeking guarantees on volumes and prices.

Tata Motors has promised a price tag of Rs100,000 ($2,500). Sceptics say it will now have to price it 25 per cent higher if it wants to maintain a profit margin of 8 per cent.

A sticker price of Rs125, 000 would put the vehicle in line with other low-cost cars being envisaged by competitors Renault and Nissan.

Chairman Ratan Tata said at a recent shareholders meeting that the firm was committed to launching the ''Rs one-lakh car'' in the first half of the fiscal year ending March 2009. A car priced at a lakh, in a country where small cars make up two-thirds of sales, could have a potential market of one million units. Suppliers say they have been told to gear up for an initial run of 250,000-300,000 units.

Tata Motors has reportedly been encouraging suppliers to set up factories near the new plant to reduce transport and packaging costs, which account for up to 8-10 per cent of total manufacturing costs. It is also enabling just-in-time which will reduce inventory costs.

Among its suppliers are fellow Tata Group companies, including Tata Bearings, Tata Toyo Radiator, Tata Johnson Controls, Tata Yazaki and Tata Ryerson, which should help ensure better cost control and timeliness.

GE Money seeks Indian private label opportunities to expand card portfolio
New Delhi: As it looks to expand its growth horizon, GE Money India has said that it is talking to big retailers including Bharti-Wal-Mart and Reliance, for offering credit programmes similar to the private label credit card it has provided to Tata Group.

GE Money India has offered a Visa credit card to customers of various Tata-run businesses, such as Taj Hotels, Tata Motors, Westside and Tanishq. The use of the card allows customers to earn reward points redeemable instantly at other outlets of the group.

"We are talking to a number of retailers... looking for tie-ups with Bharti-Wal-Mart, Reliance Retail, Trinethra, Subhiksha, Spencer''s and the Future Group," GE Money (India region) president and CEO Vishal Pandit said. He was optimistic about the tie-up with Bharti-Wal-Mart because of GE Money''s global relationship with US retailer Wal-Mart.

In 1998, GE Capital tied up with State Bank of India to market, issue and service payment of cards under the brand, SBI Card. While the joint venture with SBI continues, GE Money is looking to broaden its reach in the cards business via big retail chains. This is one of the new strategies the company is following since it decided to exit consumer durables finance through mom and pop stores.

Jet Lite drops plans to fly to Malaysia post merger
Kuala Lumpur: India''s Jet Lite, the erstwhile Air Sahara, suspended plans to fly to Malaysia following its merger with Jet Airways, according to an announcement on Thursday.

Renamed Jet Lite, the former Air Sahara is undergoing a restructuring to become a low-cost carrier with a focus on the domestic segment, said Kevin Marthinus, country manager for Jet Airways in Malaysia.

The merger announced in April 2007, is expected to create an airline controlling almost 50 per cent of India''s domestic aviation market, spanning a fleet of 89 jets. According to the announcement, Air Sahara''s previous plans to fly to Malaysia and other international destinations have been shelved until it completes its revamp. The New Delhi-Singapore flight -- the airline''s only international route -- was terminated earlier this month as part of the overhaul.

Air Sahara first received landing rights in Malaysia in 2005. The approval lapsed as Air Sahara failed to start flights due to operational difficulties. It once again was cleared to land at Malaysia, in May 2007, with approval to fly from New Delhi to Kuala Lumpur, by which time the carrier was already in the process of being taken over by Jet Airways.

Toyota unveils a plug-in hybrid, to conduct road trials
Tokyo: Toyota Motor Corp. has unveiled a plug-in hybrid car based on its popular Prius model. The company is to now test the vehicle on public roads, which would be an industry-first in the automobile business.

The car, named the Toyota Plug-in HV, is presently not ready for commercialisation, as it uses low-energy nickel-metal hydride batteries instead of the better charging lithium-ion ones which are believed to be better for rechargeable plug-in cars.

Plug-in cars are designed for short trips, powered entirely by an electric motor that uses a battery as its power source. The chargeable battery be energised via an electric socket at home, as easily as connecting any other appliance.

Environmental advocates see these cars as the best available technology to reduce dependence on gasoline, and the resultant global-warming greenhouse gas emissions. However, engineers opine that battery technology is still too nascent to store enough energy for long-distance travel. Commercialisation of plug-in hybrids hinges largely on advances in battery technology.

The Toyota Plug-in HV, is due to be tested in the United States and Europe as well. The car has a cruising range of just 13 km (8 miles) on a single charge. Detroit''s General Motors Corp. and Ford Motor Co. are also working on plug-in hybrids, partnering with battery makers such as Germany''s Continental AG. GM in January 2007 showcased a concept version of the plug-in Chevrolet Volt that would be powered by a lithium-ion battery, and has set 2010 as a target for production.

Earlier this month, Ford partnered No. 2 US electric utility Southern California Edison for real-world testing of a fleet of up to 20 rechargeable vehicles, which would be based on the Escape Hybrid SUV. Ford has said plug-ins could retail at showrooms in 5 to 10 years.

Toyota launched the world''s first mass-volume gasoline-electric hybrid car, the Prius, in 1997. The company plans to test eight prototypes of the plug-in hybrid to gather data on real-life driving conditions over a three years span. Many Japanese automakers including Toyota, Nissan Motor Co. and Mitsubishi Motors Corp. are working with Japanese battery makers to develop next-generation lithium-ion batteries that will have improved capacity to store energy.

Electric car maker Reva plans to ramp up operations
Bangalore: The home grown, Bangalore-based Reva Electric Car Company (RECC) is ramping up its current annual production capacity from 6,000 units to 30,000 units, estimating an oncoming surge in demand for its electric cars.

The new facility will spring up near its current plant in Bommasandra, on the outskirts of Bangalore, and will be operational by the mid - 2008.

The company generated around Rs80 crore last December, and is planning to accelerate its marketing and production efforts to push up sales in various markets. It is already doing some test marketing in about 13 countries, and a number of Indian states.

RECC is planning on an annual growth rate of around 400-500 per cent, according to RECC deputy chairman Chetan Maini, who disclosed this at the launch of REVA''s advanced version - REVAi.

Rising oil prices are seen to be spurring strong growth in electric vehicles by. Maini also expected REVA''s steep price to come down with technology and volume changes.

The company sold 600 REVAs last year, of which 70 per cent were exported, and is planning sales of an enviable 3,000 cars this year. European markets like Cyprus, Malta and Greece are prime target markets for the company, where it is already selling the car, and has plans to branch into Norway, Spain, Germany and Austria, which have encouraging policy for Electric Vehicles. The company is also looking to enter Japan, which offers around Rs 1 lakh subsidy to buyers of electric vehicles.

In India, only five states (Karnataka, West Bengal, Andhra Pradesh, Pondicherry and Goa) provide road tax exemption for electric cars. The high tax component of 30 per cent in the REVA price makes it expensive, but the company is confident of sales picking up as people experience the convenience of owning an electric car.

PVR Cinemas tie-up with Visa, offers 50 per cent discounts
New Delhi:
Multiplex chain PVR Cinemas has partnered Visa International for providing discounts on online tickets purchases via Visa''s Platinum card.

In a yearlong offer starting this week, customers can get up to 50 per cent off on online ticket purchases.

Though the offer has been launched only on the Visa Platinum card, it could later be broad-based onto other Visa cards as well, depending on the kind of response, according to Cine Media PVR chief executive officer Gautam Dutta.

Dutta said of the total transactions, about 12-16 per cent are from online ticket sales, and in the next one year the company is targeting two crore customers, up from 1.4 crore in 2006-07.

Initially, the company expects around one lakh transactions via Visa Platinum cards. Both companies are sharing the cost of the programme. PVR plans to spend Rs1.5 crore on the promoting the offer, across print, on ground and radio advertising.

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