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It is corporate results time again, and stock market analysts are busy analysing the state of the markets - the markets that they spend their time worrying about and the markets that I spend my time worrying about. I used to wonder if there really was a connect between the two, a thought that was wonderfully captured in an Economic Times headline of a few years ago: "The Sensex is driven by neither sense nor sex"! However this is a new age, and I can't but help notice how much more involved and aware stock market analysts and fund managers are about what is happening in consumer markets.

“Nirma, Nokia, Nano: Market creating products that truly understand the India Consumer.”

Sasta, Sundar, Tikau, the mantra for success in the Indian market, has just got a new benchmark, and a new poster child: The Nano. Nirma took the Indian market by storm, as did Nokia, and as we hope, will Nano. What they all have in common is that (1) they are market creators unfettered by analyses of what the current market size is and what it is forecasted to grow to, (2) they recognise that current product markets are the size they are not because Indians are too unevolved to have desires, but because they don’t have enough money and (3) they start with a potential customer base (and not a current industry size), they define a price and a quality that customers will accept, and then challenge themselves to deliver it profitably. It is here that many companies, especially MNCs fail badly.

Rama Bijapurkar, Independent Director and Market Strategy Consultant

If we want opportunity for Indian companies to grow abroad, we have to open up our backyard

Should Ranbaxy have sold out? To begin with, please let us use the phrase "sold", and not "sold out". The dictionary meaning of 'sell out' is betrayal. That sort of prejudges the case! No, I do not believe that the Ranbaxy sale is a setback to the rise of Indian MNCs.

Consumer goods companies seem to have their work cut out for them in the near future. While consumer demand is on the rise, sustaining margins is becoming increasingly challenging. Having healthy margins to keep the stock market happy but missing out on the investment needed to grab the enormous opportunity offered by India’s economics and demographics is a pyrrhic victory - as is having a healthy and high margin market share today at the cost of investing in brands. We are regrettably seeing more and more high market share, but jaded and eroded brands are unable to stand up to strong or reckless competitive pressure.

If the ET awards has a category for the non-Indian multinational that built a businesses in India of the scale, scope and profitability of either ICICI, Bharti or Infosys, it is a reasonable guess that the jury would not have had the problem of plenty to choose from. While it could be argued that the same holds true for Indian companies too, the fact is that the golden greats from overseas have far larger war chests, far deeper competencies and all the benefits of an already global business. Why then has Indian market not been over run by MNCs from outside? Why are there not many, many more Nokias, LGs, Samsungs? At a pinch, we can count Honda in that list, although it is the Hero Honda JV that has changed the landscape of personal transportation in urban and rural India. Maybe Hindustan Unilever can also be counted in this category, but only technically. HUL has been in India since 1933 and is as homegrown as Dalda and Fair & Lovely.

The poor do not have the mind space to be concerned with how much the ‘haves’ have, or how they spend it; they are totally occupied with whether their own quality of life and amenities are improving or not, says Rama Bijapurkar.

The newspapers have commented sharply on the prime minister’s CII speech urging a ceiling on exorbitant corporate salaries and curbing of conspicuous consumption. He says that the ‘haves’ showing that they have too much will upset the have-nots and sow the seeds of resentment in them, and ignite social tension. While his motives for saying so are beyond question, because he is an honorable man and an intellectual worthy of the utmost respect, he does seem to be totally out of sync with how the very constituency that he seeks to speak on behalf of, is thinking.

If supply chain perfection leads to a lower cost or better quality or both, then it must be translated into a customer benefit of a unique price performance point, says Rama Bijapurkar

THERE is a retail fever raging through India, and as in the dot com days, you cannot go a hundred yards without running into someone who plans to get rich on retail or has got rich on retail. The game, as was the case in dot com, is about a temporary suspension of good sense on current and future valuations because of the blind belief that there is a gold mine accessible to anyone who has made the effort to buy a pick and a shovel. This is further exacerbated by the FDI rules and their mosaic of exceptions.

The question is not whether Indian companies have the capability to build global businesses i.e have appropriate products and price points to fulifl consumer needs in markets around the globe, with whatever is the most efficient way to supply to and serve these ma rkets. But of course this capability does exist across several industries, and there are many vibrant examples of this. But the question to debate is whether they have built or have the capability to build global brands.

I was reading a very absorbing leaflet about what seemed to be a very good health supplement. It explained what the supplement contained, how totally natural and safe it was, how exactly it worked, why, the research evidence available; it was totally honest and completely professional in tone - all in all it was a great product and a superb piece of branding. Then, suddenly, it said on the last page "lucky draw - win a holiday to Goa". Made me wonder about everything I had read and thought so far. A potential-to-win brand with a totally un confident brand owner!

The pundits (pun intended) at the Economic Times have said a lot these past few days about 'vindis and levers of change' culminating in the Saturday editorial "will reorganization do the trick at HLL". I am not sure that is the fundamental question that needs to be debated. The reorganization signals continuity with change, and a renewed vote of majority share holder confidence in the old order (the new management team is the old management team, with some increases and decreases in roles, some departures, no outside additions, and certainly no dramatic experiments with organization structure, as far as one can see).

We have watched and waited, this past decade, for the Indian consumer and for Consumer India to 'emerge'. As I have said before in this column, we have been, metaphorically speaking, waiting for Kalki, the next avatar of Vishnu, to come and rescue us. I am convinced that Kalki is already here, only we don't recognize it. One frequent 'waiting for Kalki' question is "when will the per capita income of this country get to X, which is the magic number when consumption will 'take off'. The depressing data answer to this question is that with the slow and steady income growth we will have, in about ten years, we will hit the 1000 USD per capita GDP number.

Consumer India has always been pretty tricky to double guess. Just when we believed that consumer spending was firmly on a high growth trajectory - based on the wonder years of 1993 - 98 - it spluttered and slowed to a crawl. For the next few years, marketers tried everything they knew to speed it up again. They dropped prices while improving product and service quality. "Buy-one-get-one-free", they offered. But that only helped them get volume growth at the expense of operating margins. The fast-moving consumer goods (FMCG) sector had a terrible time with some product categories actually shrinking in size, while consumer durable manufacturers struggled to reconcile capacity with demand. Sure there was a fast growing yet minuscule population of the very rich, which continued to lap up everything from plasma TVs to Mercedes cars - but that was cold comfort for the majority of the marketers.

The last time I wrote in this column about the telecom business, a senior person from within the business called saying he wanted to salute my courage - the 'fools rush in where telecom experts fear to tread' sort of courage. I probably have a death wish, so here I am again, venturing an opinion on the 'hot topic' of Reliance Infocom's proposition to consumers, and what works and does not work with Indian consumers. In my line of work, there is a lot of agonizing about whether enough alternate ways of playing in any market have been explored. Yet there is a significant gap that exists between the aspiration of 'changing the rules of the game' and the actual development of a revolutionary business strategy to achieve it.

Before CK Prahalad described the 'poor', as an opportunity in the Harvard Business Review, and coined the elegant phrase " the bottom of the pyramid" to describe the large mass of poor people in the world, companies and their consultants used to spend lots of time and effort trying to define the size of the Indian market - is it 400 million people? Or a mere150 million? Consulting firms used say that international experience shows that markets "take off' when per capita income of about 2000 USD PPP is achieved. Today, the line seems to be "there is a lot of pent up demand in the lower income, and if you find the right strategy to tap the bottom of the pyramid, then the market in India could explode".

It is with surprise that I read a recent spate of articles in the business press about one of the jewels in our crown - the dairy co-operative sector, of which Amul is the most celebrated offspring of the illustrious parent NDDB. "NDDB: A dream gone sour for Dr Kurien", says one headline.

It contains an interview with Dr Kurien, the founding father of the dairy co-operative sector, criticising the National Dairy Development Board's decision to float a subsidiary marketing company, which would partner with state level dairy co-operative federations in the form of joint ventures.

Services are in. I am told that the only part of our economy that is thriving is services. And that even if you are marketing 'hard goods' like consumer durables or office automation equipment, in this new world of product parity, the service package that comes along with it is a bigger driver of market share and margins. However in practice, it appears that the actual design of services is quite disconnected from what the consumer actually wants. A lot of service initiatives seem designed to address the frills but not deal with the fundamentals. And even the frills are not perfectly frilly, if the highly personalised letters I get from hotels and airlines and travel agents and banks are any indication. They press the flesh in print very well, with the almost hand written signature which I am sure costs a lot to print, but they don't bother to get my gender right.

But then India has always been about mixed verdicts. Talk to a lot of business people, and the cynical will tell you "this is the end, send your children out of the country there is no future here". The more pragmatic will draw attention to examples of pockets of peace and prosperity defined either by business segments or geographic pockets or select companies. As always, everything you say of India, the opposite is also true. Economic and political diversity is increasing between states, and there is every combination of economic performance, political ideology, and business friendliness existing. Even within states there are oases and deserts. Ask any sales manager in any business to analyse the business and he will confirm it. So that's the first clue to surviving the short term.

Dominique Turcq, a McKinsey consultant, described India and China as "Asia's Non Identical Twins" - many similarities, and yet starkly different too. This phrase leapt to my mind on a recent visit to China. While today, the economic differences between India and China are very stark (all we need to do is drive through Shanghai or look at the economic indices), the similarity in the structure and culture of these markets is very real too. This makes for a genuine opportunity (not one that is defined by hype and hope) for Indian companies to leverage their business experience and skills to create businesses in China which can be at least as large as what they have in India.

A business leader with a wry sense of humour recently observed that since the main reason being given by almost all businesses for slow consumer sales was the delay in the festival season and the fewer auspicious dates for marriages, the Hindu calendar should figure as a key variable for annual sales forecasting. I guess a corollary to that is that one of the key routes to stimulating market growth would be to lobby with the Hindu high priests and persuade them to be a wee bit more market friendly in their interpretation of the stars! Having determined that astrology and sentimentality (of the consumer confidence kind) can't be cured in the short term at least, corporate speak is now about surviving and emerging stronger from this continuing slowdown, through "better customer understanding" and "innovation". I would have felt a lot better if the connection between the two were made more explicit as in "our plans are to obtain and use superior customer understanding to innovate new kinds of offers that customers find more acceptable than competition offers or than not buying at all".

The last time I wrote in this column about the telecom business, a senior person from within the business called saying he wanted to salute my courage - the 'fools rush in where telecom experts fear to tread' sort of courage. I probably have a death wish, so here I am again, venturing an opinion on the 'hot topic' of Reliance Infocom's proposition to consumers, and what works and does not work with Indian consumers. In my line of work, there is a lot of agonizing about whether enough alternate ways of playing in any market have been explored. Yet there is a significant gap that exists between the aspiration of 'changing the rules of the game' and the actual development of a revolutionary business strategy to achieve it.

It is the winter of our discontent again, as the pendulum of consumer demand journeys from the 'there's lots more where this came from' end to the 'Wonder where it disappeared' end. For many of the A league companies, even the game of maintaining bottom line growth, despite flagging top line growth, has been played out. There is a limit to which the costs or operational efficiencies can be extracted from a given business system. For many less agile companies, the red ink is happening, as the overall growth of their market slows down, and their more aggressive competitors gobble up market share.

The traditional marketing paradigm is about extracting money resident within the consumer base ('capturing customer surplus' is perhaps a more politically correct phrase.) However, watching growth aspirations of companies outstrip the growth in purchasing power of the Indian consumer base, I do believe that the time has come for companies to adopt an additional marketing paradigm - that of enriching the consumer base. The idea is that companies, individually or collectively, should invest significantly in feeding the goose that lays the golden eggs, or to use a more rural market analogy, put nutrients back into the land that they reap from, even though they are not in the animal feeds business or in the soil nutrients business. The idea also is that companies should accord the 'enrich' activity the same seriousness as the 'extract' activity - as a key element of the marketing strategy, and not just something that is relegated to the corporate PR department.

Maruti has had a lot of unsympathetic press lately, and the media post mortem of its strategy is not yet over. When Titan decimated HMT, the 'timekeeper of the nation', there was no editorial saying "Titans of industry can suddenly look like endangered species if the evolutionary tide of the market moves away from them"(Business Standard, July 5, 2000). The mechanical to quartz shift in the watch market definitely was an evolutionary tide, the like of which has not happened in the car market. Another evolutionary tide, the scooter segment of the two wheeler market collapsing, did not earn Bajaj Auto the screaming headline "market share hits an all time low" (Economic Times, June 24).

It used to be said of a prestigious men's college in Delhi that when it rained in Oxford they would open their umbrellas here, in reflex. The dotcom industry seems to be in the same mode nowadays. When B2C sneezes in America, everyone here seems to develop a full blown cold, complete with cold feet! "B2C is out", is the buzz we have been hearing of late from consultants, funders, and valuation focused dotcom companies, scrambling to re-incarnate themselves as B2B.

The whole discourse on 'Internet India' in the media and in business forums leaves me with an uneasy feeling of déjà vu. It sounds a little too close to the "size and opportunity of the Great Indian Middle Class" saga that was enacted out not too long ago. Small current markets were forecasted to grow to huge numbers, born out of the analogy school of forecasting that applied 'elsewhere' metrics of penetration, per capita consumption and growth to the humongous numbers of people in India. To the quantitative analysis, we then added the qualitative element - the Indian consumer, we believed, was 'emerging' and the ugly duckling was about to become the beautiful swan. The result was a very seductive picture of market opportunity that was expected to happen with a momentum of its own, powered by the 'who can resist progress' compulsion.