Hrithik Roshan is Magic for M2-Magic Moments

M2-Magic Moments Vodka, a Radico Khaitan Ltd. brand, has recently launched its seven flavors for Indian market. The flavors are raspberry, ginger, lime, lemon grass, green apple, chocolate and orange.

The new brand is targeted at youth. The M2-Magic Moments Vodka has unique packaging which draw consumer attention. The bottles have graphics directly printed on to them, and Radico Khaitan has invested in the latest packaging decoration technology currently being used in Europe.

M2-Magic Moments Vodka promises everything that a person’s life should have – enjoyment, fun, zest and zing. It’s a product which stands for excitement in life.

Bollywood actor Hrithik Roshan has been signed on as the brand ambassador for M2 – Magic Moments vodka. The energy and stylish modern appeal of Hrithik fits well with the international, young, energetic Magic Moments vodka brand and the experience that it promises its consumers.

Aamir Khan is Jhingalala for Tata Sky

Aamir Khan has been in the news these days, heavily promoting his latest production, Jaane Tu… Ya Jaane Na, which is also his nephew, Imran Khan’s debut film. Recently, he has started endorsing Samsung and Parle Monaco. He has been the Titan brand ambassador for a while now.

Tata Sky is a joint venture between the Tata Group, STAR TV. In this venture TATA owns 80% and STAR TV owns a 20% stake. Tata Sky was incorporated in 2004 but was launched only in 2006. The company uses the Sky brand owned by British Sky Broadcasting.
Tata Sky, has roped in Aamir Khan as its brand ambassador. Bollywood star Aamir Khan has entered into a long-term contract with Tata Sky. Aamir Khan will be used extensively for communicating the benefits of Tata Sky to the Indian consumer. It is definitely a strategic move as the rival dish TV has signed Shah Rukh Khan. Tata Sky would use Khan to take the brand forward. He is not the first brand ambassador for the 21-month old DTH service provider. Hrithik Roshan was used during the Cricket World Cup in 2007 for select campaigns and other film stars like Kiron Kher and Paresh Rawal were also used for some campaigns which basically testimonial ads.

Khan will feature in all the Tata Sky ads in print, TV, outdoor and radio with the popular Tata Sky tag line Isko laga dala, to life jhingalala.

Rediffusion DY&R is the company’s creative agency.

Internet In India At A Growth Path

All internet loves must thanks comScore Networks on releasing the survey result which claims that the India has emerged as the fastest growing country of Internet users, surpassing the growth rates in the US, China, Japan. However, India is not there in the top 10 countries in terms of average monthly hours online per unique visitor.

comScore Networks also reports that India ranked eighth in terms of number of internet users as of January 2007. The US has the largest internet population of 153 million followed by China ( 86.8 million), Japan (53.6 million), Germany (32 million) and the UK (30 million) in the top five. The growth in the internet penetration can also be attributed to the fact that India grew at 33 per cent, while the world average was 10 per cent. I believe that the Indian Internet market is still at nascent stage and we hardly have any Internet success story. Indian Internet space needs a few Indian internet brands. I believe that its not enough to have just rediff, Indiatimes, and naukri. In current business scenario the Indian Internet market one needs a path breaking indigenous idea, two a local idea with global standard execution, three experimentation with local content. In current market scenario I can only see that the market is mushroomed with too many me-too ventures. I believe that Indian market is yet not explored well and needs experimentation.

No wonder VC firms from Silicon Valley now focusing on India and several Indian companies as part of their portfolio. The global VC films like Sequoia India, Helion, Matrix Partners, Norwest Venture Partners, Canaan Partners, NEA IndoUS Venture Fund , and KPCB in last few years have funded various Indian internet ventures. The internet companies which got vc funding are Guruji, Travelguru, MingleBox, ApnaLoan, Shaadi, Komli, MakeMyTrip, seventymm, Yatra, Sulekha, bharatmatrimony, cleartrip, naukri to name a few. A close look on these internet venture tells yet another story. These internet ventures can be classified into lifestyle, travel, or existing, prominent portals. All these internet ventures with low internet population are managing the revenue is a commendable task. A close look on these entire ventures also indicates that they are playing in the field which is closely linked to corporate world. Naukri is a job board; Travelguru, MakeMyTrip, Yatra are travel portals with focus on corporate or office goers.

Emergence of Multiplex in India

In 1979, world’s first multiplex ‘Eaton Center’ in Toronto, Canada was opened for the general public. The Eaton Center has 18-screen movie theater complex. Eaton’s movie centers, which were a craze during the 1980s and 1990s, faded slowly and closed finally in March 2001.

In 1997 PVR established, first multiplex in India – PVR Anupam at Saket, New Delhi. The PVR Anupam changed the Indian movie exhibition landscape. Movie exhibition till mid nineties was dominated by Cinema halls – the traditionally single screen halls. Cinema halls witnessed a surge of customers mostly during the festive season and on weekends. The emergence of multiplexes changed the movie exhibition business in India. Today, all eyes in the entertainment industry have turned towards multiplexes, as they generate a larger share of revenue though they accommodate less number of seats per theater.

The emergence of new multiplexes has reduced the audience for traditional cinemas, thereby prompting some of them to transform themselves into multiplexes. The multiplex business is not only prompting traditional cinema theater owners to convert their property into multiplex but in recent times has also attracted many international players to venture into the business. No wonder the multiplex business is so lucrative that foreign entertainment giants like Time Warner, South Korean multiplex operator Megabox, and Australia’s Hoyts are in talks with real estate developers such as the DLF group, the Raheja Group and Sobha Developers to set up chains of multiplexes across the country. We should not forget that roughly a dozen Indian players have entered in the business in small or big way.

New players are trying to enter this sector and the existing players are busy expanding their horizons. In recent times the multiplex has gone beyond the metros to redefine entertainment in Tier 1 and Tier 2 cities like Lucknow, Indore, Nasik, Aurangabad, Kanpur, Amritsar. The good news for most of the movie exhibitors is that at present roughly 70 percent of the total box office collections in the country come from non metros.

These multiplex has multiple screen movie theater complex which also offers lifestyle shopping. It offers brand new experience of watching movies. Today multiplex are considered not just a part of the entertainment, it is an opportunity for family outing which include movies, shopping, eating out, gaming parlors, buying books, buying groceries, etc. Most of the multiplexes malls in India have common structure, which I believe is structure of the ideal multiplex. Ideal multiplex malls have a four to five floors with various leisure and recreation options for customers. The top floor has multiplex and rest of the floors offer facilities like shopping, eating out, gaming parlors, book shops, groceries, etc. The structure of the multiplex mall explores the consumer psychology, where customers who come with the intention of watching a movie are made to pass all the floors in the shopping mall. It increases the possibility of their making some impulsive purchases. I don’t know about other but I end up buying something every time I go to watch movies. Moreover, the multiplexes do not allow outside food and beverages into the movie theaters which offer them opportunities to sale of their own products at a premium.

The decade old Indian multiplex industry has definitely changed the movie exhibition industry in India. The multiplex industry, in India, is still in an early growth stage, and is way behind the size and scale reached in the developed countries.

The Raj Television Network Plans a Print Foray

The south Indian state Tamil Nadu has around 30 regional language newspapers, including heavyweights such as Dinakaran, Dinamalar and the Daily Thanthi. Dinakaran, owned by the Sun TV group, is the market leader, with a total daily circulation of around one million copies during January-June, according to the Audit Bureau of Circulations. In such a cluttered market the Raj Television Network is planning a print foray – Sun TV groups are you listening.

The Raj Television Network was started in 1994 to provide wholesome entertainment for the entire family. The group has programmes targeted at young and old, male and female alike. The Network with unique set of programs has positioned itself as The People’s Channel. The Raj Television Network, like other Indian media companies is looking forward to expand their portfolio and emerge as the complete media house. The Raj Television Network once has a print presence would help in terms of selling advertisements across television and newspapers.

Raj Television Network Ltd plans to enter the print media and is open to acquiring a Tamil newspaper. The company is evaluating options on its print entry as certain players operating in the regional space have approached it to sell their business. Moreover, the company plans to raise INR 50 to 100 crore from private equity firms to build a studio, office complex for its film production business.

Reliance Big Entertainment Acquires Majority Stake in Willow

The company in news is Willow.TV. It is the world’s leading portal for live Internet streaming of all Cricket events worldwide, and has been providing live streaming video of every major cricket series since 2003. It is a paid site with a subscriber base of over a million registered users, primarily in the US, Canada, Australia and Europe. It provides subscribers with an unparalleled viewing experience with enhancements such as live interactive scorecards and high bandwidth video streams as well as mobile and IM offerings

Willow.TV, last year, streamed all major cricket events live, including the iconic Indian Premier League, as well as all Australian, South African and English international matches. The Willow.TV gain maximum visibility in India when it telecasted the Indian Premier League.

Reliance Big Entertainment, which is on buying spree, has acquired a majority stake in the US-based cricket webcasting portal – Willow TV. According to report The Anil Ambani company will invest Rs 300 crore in the portal over the next two years. The amount also includes the acquisition price of the portal.

Reliance Big Entertainment has been aggressively strengthening its position in the entertainment and media space and has been building value across the value chain. The acquisition will strengthen the presence of Reliance Big Entertainment in new media.

Special Economy Zone in India – Lessons from China

In the late 1970s, the Indian and Chinese economies were comparable. The Chinese economy in the 1980s and 1990s cruised ahead of India, and today it finds itself at the top in all sectors against India except in software and knowledge-based products. Special Economy Zone is one of the backbones of the growth of the Chinese economy.

The journey of the Special Economy Zone in India started in year 2000 when Maran, then Commerce Minister, made a tour to the southern provinces of China and realized the importance of SEZ. On returning from the visit, he incorporated the SEZ into the Exim Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules was formulated. The formation of the Special Economic Zones Act was not the first initiative of its kind by Indian government. India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. The experiment with the Export Processing Zone did not do wonder with the Indian economy.

The government, economists, and entrepreneurs jointly studied the Chinese SEZ model. After through analysis of the Chinese SEZ model, they decided to start the SEZs in strategic locations close to port cities and economic centers.

Lessons from China’s SEZs
In 1979, China started four SEZs and after ten long years the fifth one was set up in 1988. The Chinese government analyse the trends of the first four SEZs and based on that they started the fifth SEZ.

The SEZs in China are located on the coastline near Hong Kong and Taiwan which are major economic centers in the region. A large chunk of the FDI was contributed by the non-resident Chinese from Hong Kong and Taiwan, who invested in labor intensive industries. The size of the SEZs has been an important factor in the success of China’s reforms process. Government of China has gone a step forward and declared the entire region or province as a SEZ. In china, cities along the sea coast, including Shanghai, were opened up for foreign investments and given a status comparable to SEZs. Moreover, the hire and fire policy has attracted foreign investors to invest in China’s SEZs. The flexible labor policy of China was the biggest attraction for the foreign investors.

India Go Forward
In current market scenario when the global manufacturing bases are shifting from the developed countries to the developing countries. The countries like India and China hold good future, primarily due to cheap factor prices and proximity to new markets. In the emerged scenario, the Indian SEZ can easily attract FDI in manufacturing provided they offer hassle-free environment for the investors and all necessary fiscal incentives. Indian SEZ can do wonders the way china had done in past. The Indian SEZ have to remember that the Chinese SEZ were large in size, attracted FDI from the nonresident Chinese, government offered attractive incentives. The Chinese government promoted SEZ with flexible labor laws, liberal customs procedures and decentralization of power to the local authorities.

Special Economic Zone in India

History of SEZ
In 1947 when India got independence at Puerto Rico industrialist and government was busy setting up world first industrial park. Ireland and Taiwan followed Puerto Rico in sixties and in eighties China bring the SEZ to the global map with its largest SEZ at the metropolis of Shenzhen.

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. In 2000, after thirty-five years, Murlisone Maran, then Commerce Minister, made a tour to the southern provinces of China and realized the importance of SEZ. On returning from the visit, he incorporated the SEZ into the Exim Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules was formulated.

The main objectives of the SEZ Act include – generation of additional economic activity , promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities.

Government initiative for SEZ
Indian government to instill confidence in investors and signal their commitment towards a stable SEZ worked on the Special Economic Zones Act. In May, 2005 the Special Economic Zones Act was passed by Parliament, which received Presidential assent on the 23rd of June, 2005.

The Special Economic Zones Act 2005, after extensive consultations, came into effect on 10th February, 2006. The Act offered drastic simplification of procedures on matters relating to central as well as state governments. The main objectives of the SEZ Act include generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities. It is expected that the Special Economic Zones Act will trigger a large flow of foreign and domestic investment. Government offered various incentives to the companies in SEZ:
• Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
• 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
• Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
• External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
• Exemption from Central Sales Tax.
• Exemption from Service Tax.
• Single window clearance for Central and State level approvals.
• Exemption from State sales tax and other levies as extended by the respective State Governments.

The Special Economic Zones Act also offered major incentives and facilities to SEZ developers which include:
• Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
• Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
• Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
• Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
• Exemption from Central Sales Tax (CST).
• Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).

Apart from the above mentioned incentives the companies in SEZ require no license for import made under SEZ units. In the case of losses they are allowed to carry forward losses. The other advantages are
• No license required for import made under SEZ units.
• Duty free import or domestic procurement of goods for setting up of the SEZ units.
• Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years.
• The SEZ unit is permitted to realize and repatriate to India the full export value of goods or software within a period of twelve months from the date of export.
• “Write-off” of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization.
• No routine examination by Customs officials of export and import cargo.
• Setting up Off-shore Banking Units (OBU) allowed in SEZs.
• OBU’s allowed 100% income tax exemption on profit earned for three years and 50 % for next two years.
• Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.
• Since SEZ units are considered as ‘public utility services’, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947.

The advantages of the SEZ are evident from the investment, employment, exports and infrastructural developments additionally generated. In midst of all these advantages the SEZ also has its own set of disadvantages, which include
• Revenue losses because of the various tax exemptions and incentives.
• Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves.
• The number of units applying for setting up EOU’s is not commensurate to the number of applications for setting up SEZ’s leading to a belief that this project may not match up to expectations.

The economist strongly believe that the benefits derived from the investments and additional economic activity in the SEZ and the employment generated thus will outweigh the tax exemptions and the losses on account of land acquisition.

Strategy as Simple Rules

Strategy as Simple Rules

I for long debated with friends and academicians that the management of new age companies in India like Future Group, Wipro, Infosys, Satyam had no strategic bent of mind. The only positive thing about the management of these companies was starting the respective business at right time which is no mean task. They utilized every opportunity in their growth path very well; they were highly flexible. I was not ready to accept the fact that they were genius, and they had strategy. The article – Strategy as Simple Rules – changed my views and I started respecting the management of these companies.

I always believed in the rule of simple and try and practice in my life. The believe was cemented when I read article ‘Strategy as Simple Rules’ written by Kathleen M. Eisenhardt, a professor of strategy and organization at Stanford University in California and Donald N. Sull, an assistant professor at Harvard Business School in Boston. A must read article for every business professional. The authors in the article advocate that when the business landscape was simple, companies could afford to have complex strategies. But now that business is so complex, they need to simplify. I strongly believe in the rule of simple. My profession doesn’t advocate it though.

The article talks about the success of Yahoo! – The company began as a catalog of Web sites, became a content aggregator, and eventually grew into a community of users. Yahoo today is a broad network of media, commerce, and communication services. The other internet success story like eBay, America Online, and Google, also rose to prominence by pursuing constantly evolving strategies in market spaces that were considered unattractive according to traditional measures. In Indian context I believe the companies which in recent past have seen tremendous growth like Ranbaxy, Future Group, Wipro, Infosys, and Satyam knowingly or unknowingly followed the rule of simple. They did not compartmentalize themselves in one single space and instead focused on growth. These Indian companies attained the current state of prominence by pursuing constantly evolving strategies in market spaces that were considered unattractive. Managers of these companies – both global and Indian identified the opportunity in the chaotic markets. They jump into chaotic markets, probe for opportunities, build on successful forays, and shift flexibly among opportunities as circumstances dictate. In the chaos they recognize the need for a few key strategic processes and a few simple rules.

I would request all management professionals to read this interesting article – Strategy as Simple Rules’ written by Kathleen M. Eisenhardt, and Donald N. Sull, published by harvard business review. Article is avilable at

Simple Rules, Summarized
How-to rules – They spell out key features of how a process is executed –“What makes our process unique?”
Boundary rules – They focus managers on which opportunities can be pursued and which are outside the pale.
Priority rules – They help managers rank the accepted opportunities.
Timing rules – They synchronize managers with the pace of emerging opportunities and other parts of the company.
Exit rules – They help managers decide when to pull out of yesterday’s opportunities.

Shah Rukh Khan The King of Endorsements

In 1993, Shah Rukh Khan first appeared in three ads for tea brand Brahmaputra. The ads heralded the arrival of Shah Rukh Khan as a brand endorser of some stature. The very next year, he ended up endorsing three more brands – Hero Puch, Cinthol and Mayur Suitings. The series of his hits not only established him as a super star of film industry but also positioned him as a bankable endorser.

In 1996 he was signed by cola giant Pepsi, which can be seen as the turning point of his endorsement career. Shah Rukh Khan since then, has endorsed Bagpiper, Hyundai Santro and i10, Top Ramen noodles, Jeanne Arthes, Clinic All Clear shampoo, Emami-Sona Chandi Chyawanprash, Lux, Omega, Airtel, Nokia, sunfeast, Compaq, Home Trade, Videocon to name a few.

The superstar Shah Rukh Khan has 34 brand endorsement deals for year 2008 which is down from 37 endorsement brand in year 2007. I believe that other celebrity like Hrithik Roshan, Salman Khan, Aamir Khan and Akshay kumar have not shown great interest in the endorsement market. In the given scenario it is important to understand what makes him the most popular celebrity brand endorser around?

Shah Rukh Khan has been around for a long time, and has become a bankable name. He is the only one who has proved to be consistent for last fifteen years (since the release of his first movie in 1992). In recent past we have seen that the actors like Hrithik Roshan, Salman Khan, Aamir Khan and Akshay kumar are also consistent and bankable name of the Indian film industry but they are not the corporate world darling. In my views corporate world not only look for these two factors there are something more than this. The other important factors are – corporate friendliness, image of celebrity, brand personality of celebrity.

Marketers claim that Shah Rukh Khan’s appeal cuts across age, gender, and class, and blends the characteristics that mirror multiple identities – the ordinary middle class guy who went on to became the King. The king is a traditional and family loving Indian.

The biggest plus about the actor Shah Rukh Khan is that he holds self-made man image. The common Indian man associates with him and aspires to become Shah Rukh Khan. In last few years Akshay kumar has also attained status of self-made man which is challenge to the king. The other plus about Shah Rukh Khan is his image of down-to-earth, approachable person and his ability of straddling the classes and the masses. He is not niche actor like Aamir, and not even a down market actor like Govinda. In this parameter also Akshay kumar has taken a lead. This new image of the Bollywood star Akshay kumar can be a threat to the Shah Rukh Khan’s endorsement kingdom.

The fact that Shah Rukh Khan has been so overexposed by advertising leaves little room for credibility among consumers. I can’t imagine Shah Rukh Khan driving Huandi Santro or i10 but the fact that the Shah Rukh Khan’s fans still associate him with the products is doing wonders for him.