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Proliferation of E commerce in Developing Nations: An Indian Perspective

Have you ever wondered how convenient it is to shop online these days? There is no traffic, parking issues and aimless walking around malls. Instead in the convenience of your home you can shop at the click of a mouse.

“But aren’t things cheaper on the Internet? Then how reliable is the quality of the stuff one buys online?” This is often the question that deters most people from buying goods online.

It is true that the Internet does offer products for cheaper rates than most other physical stores. But that does not mean quality of the goods sold is necessarily suspect. I have bought, among other things, a mobile phone, an iPod and a watch-- all well known brands at least 30 per cent lower than the market price. And they are all working fine.

What made me buy them online? It started when I realised my mobile phone retailer would not show me the handset unless I bought it. “We are not allowed to open the seal until the handset is bought,” was the reply I got tired of hearing at most places. If I had to see the phone inside the packing, was I not well off buying the same model cheaper? That is when I logged on to an online shopping site. Not only did I see a bigger picture of the handset, I also saw 3-4 pictures of it from many angles- front, back, side, screen shot. What was more I also had a choice of colours to choose for the handset.

How is it that the online medium can offer so much variety at such low prices?

Concept of Dis-intermediation

E-commerce or using the Internet and other electronic media to make financial transactions was based on the concept of dis-intermediation. This refers to a business model where middlemen – distributors, wholesalers and retailers—have been removed from the value chain, their role being fulfilled by the Internet.

This means things are cheaper due to the fact that the amount of money spent on maintaining a physical establishment like a retail outlet is not there.

A retail outlet, as you are aware, has fixed and variable costs. Aspects like rent or mortgage of the rental space would contribute to fixed costs while establishment costs such as electricity, telephone bills and salaries of sales staff would account for variable costs.

The cost savings hence incurred are passed on the customer in the form of discounts on all products—branded or otherwise.

The other interesting aspect of an online transaction is that the payment for the purchase is usually made while placing the order—not on delivery. The product is delivered later. This gives enough time for the company to source and deliver the item at the customer’s doorstep without prior investment in a large warehouse or maintaining inventory.

Does this mean it is easy to run an online store?

The real costs for an online site

When it comes to online purchases, the customer is looking for recognizable names when he logs on to the Internet. In marketing parlance this is referred to as top of the mind recall. This is called the common marketing problem which we call as top of the mind recall. It is this aspect of the business – publicising the site—that requires most money.

Most of us know of amazon.com now. But what we do not know was that the venture was in loss for a long time, funded periodically by the promoters and venture capital money. The site site’s biggest cost— advertising.

So where do these E-retailers advertise surprisingly they mostly use traditional media like print, television as well as radio. How often have we seen the commercials of sites like zapak.com and recently ibobo.com on prime time television. The key is that to have your brand like say Amazon.com on the highest recall rates when the consumer thinks of making a purchase on line.

And its not that only the online retailers have been on the net. Of late the traditional brick and mortar companies have been taking to the net in a big way. Take Staples Inc, the largest office merchandise retailer in the

United States

for example. They have embraced the on-line retail format and in 2007 almost one-third of their revenues came form E-tailing. That’s almost $ 5.7 billion in revenue which is at a lower cost as the traditional costs associated with retailing like ware housing and occupying retail space are not there.

The power of E-tailing became evident the day when Barnes and Nobles the brick and mortar book store went on line to merchandise its books.

This phenomenon has taken a new turn when Unilever in

India

decided to go online and with the help of Web 2.0 created a socially interactive site for its hair care product ‘sunsilk’. This was a classic case of co-branding, a social interactive site with an old economy product like shampoo. The result was a site called ‘sunsilk gang of girls’ which offered Career advice apart from the usual beauty and hair tips. As a matter of fact the brand ambassador for sunsilk actress Priyanka Chopra writes an infomercial in a leading daily about her inspirations in life. A case of online venture advertising in traditional media.

So what can you buy on the net?

Not everything can be retailed through the internet. Any product that is standardised can be merchandised on the net. Branded electronics items like IPods from Apple, Sony Ericsson mobile phones, digital cameras from Canon can be bought on the net. As these products come with an international warranty and assured quality the consumer can buy them without being worried. Same for Books, music cd and DVDs can be bought on the net.

What can’t be bought on the net? Definitely clothes where the touch feel and colour becomes important.

And as I get back to my computer to click for a new digital camera, I can already hear my wallet tick. All this from the comfort of my house (You can also be sitting in your office!).

New to SalesLab

Hello my name is Alba Henderson and I new to SalesLab.  I look forward to being a great part of this community amongst greatest marketing and sales professionals.

I am sure it will be a wonderful experience.

Best

Alba

persona-based marketing for ideal success

digg this article at http://digg.com/business_finance/persona_based_marketing_for_sales_success/blog

by M. H. "Mac" McIntosh, CBC

Persona-based marketing is part Hollywood and part business analytics. Construct a fictional customer--based on real-life data and intelligence--and then use that character as the touchstone for promotion and selling decisions Mac McIntosh, The Sales and Marketing expert

Introducing our cast

Meet Joe, He's the VP of sales of a down-sizing technology company. Joe is in his early 40s, sports a new iPhone and gets up early to work in a 4-6 mile run while he trains for long-distance races. He prefers to wear turtlenecks and high-priced jeans, donning a suit only when he has to. Joe drives a late model SUV with a booster seat in the back seat for his three-year-old son. He's harried, and worries about the headcount of his sales force. He wants to leverage web services to increase his team's results and reach a related vertical market, but doesn't know where to start.

SaaS predictions for 2008 and beyond

Now that 2008 has arrived, along with the New Year's resolutions and the ever-present pundit predictions, I thought it was the perfect timing to dive into what Saugatuck Technology just reported as being their Software-as-a-Service (SaaS) predictions, highlighting five key trends for 2008 and beyond:

SaaS platforms and marketplaces will begin to proliferate, becoming a significant channel opportunity for vendors, as well as a key means by which users will gain access to SaaS solution capabilities.

SaaS is becoming an international phenomenon, driven by both local demand as well as large multi-nationals who are adopting SaaS business solutions on a global basis. While US SaaS adoption is clearly going “mainstream”, Europe and Asia are only now beginning to experience the steep adoption ramp that the US has witnessed over the past two years. Whereas average US market growth rates will likely slow into the 35-40 percent range in 2008, European market growth rates should exceed 60-70 percent next year.

SaaS merger & acquisition activity will explode. No doubt a serious feeding frenzy is about to unfold and it could be anticipated that a large number of venture-backed start-ups and emerging SaaS companies would be acquired by either SaaS pure-plays, ISVs hungry to enter the SaaS fray or on-shore & off-shore IT services and BPO providers who are eager to leverage a SaaS model.

Traditional on-premise application ISVs will earnestly begin to fight back. Approximately 15-20 percent of ISVs have already either begun new initiatives or gained access to SaaS assets and development experience through M&A activity. However, over the next 12-24 months, this number is anticipated to rise dramatically, as a tougher economic climate will only exacerbate an already challenged on-premise and traditional perpetual license model.

SaaS development platforms will evolve and 2008 will see explosive growth in the adoption and use of SaaS-based software development platforms and services. Wide availability of open, standardised tools and technologies in subscription-based, on-demand environments will help streamline and reduce the costs of software development and customisation.

Other key insights and Strategic Planning Positions provided by Saugatuck include the following predictions …

Unleashing the power of remote collaboration & virtual team management

When thinking about factors that distinguish top performing companies, the root of their success often can be traced to the human equation. But how many companies are able to tap more than a fraction of their workforce potential? How many are able to take advantage of latent talents, ideas and contributive strengths waiting to be switched on? How many are able to unleash the power of remote collaboration & virtual team management? The companies that find the means to use a larger fraction of their human resources will undoubtedly supersede their competitors. That is their edge in the global economy.

With increased globalisation, virtual leadership has started gaining a strong foothold in recent times. As the workplace evolves, the techniques for managing employees are changing. Today’s leaders and managers are faced with a different set of challenges for managing employees who work in various locations across the globe or telecommute. Managing in the virtual environment can be quite a daunting undertaking.

The biggest challenge with remote collaboration & virtual team management is actually to maintain quality and productivity across all participants, despite the physical and cultural distance. Other associated issues are operational. Indeed, you do need to ensure that everyone is working on “the same project”. Social issues may also come into play: If the teams adopt an “us versus them” mindset, they might well wind up working at cross-purposes. All these challenges may finally be exacerbated by time zone and language differences that make collaboration and real-time communication even more difficult.

Advances in information and communications technologies have enabled businesses to become truly global in scope. There is an abundance of technology available today for collaboration. However, a company's culture and processes that encourage people to share work in a productive manner are central to effective collaboration.

So how are top performing organisations avoiding the many pitfalls of remote collaboration & virtual team management and what are the key to success for adapting to this complex and ever-changing working environment?

Power Of Positioning

Al Ries and Jack Trout their landmark book 'Positioning' expressed their on the power of occupying a space in the mind of the consumer with regards to the brand.

  The power of positioning has virtually garunteed immortality to many brands worldwide like Colgate, Gillette and Coca-Cola to name a few. Of late this has been the only way to beat clutter that is rampant in the feild of advertising of late and grab market share for the brand. Even sisnce the Indian economy has been opened up this has been one of the problems facing the sales and marketing community, now that the consumer is blessed with many choices how to beat the clutter and grab the mind-share  or more importantly the wallet share of the consumer?

TheIndian Fm Radio market is witnessing similar problems with most channels out doing each other to grab listening share, content being almost similar their focus is on innovate programming which lasts a few weeks before a rival channel replicates it. Radio Jockeys have become minor celebrities with people listening sometimes to a programme just because of the Radio jocket hosting it.

In Chennai Radio City stood out in many ways, they had specific two hour segments in the mornings and in the evenings which played English music. this was different from the rest of the channels which played vernacular Tamil movie songs. Many like yours truly listened to this channel on th eway and back from work. now this represents a clear positioning in the minds of consumers like me and may others i knew who listen to the channel without switchng to other channels. Now the rest of the channels which played similar content had to face a lot of swithching channels between songs just in cae the song being played was not of liking of the listener or to escape advertisiments andthe banter of the RJ's.

In midst of all this radio City in chennai wnet into consumer survey and they went in for a major over haul based on the results of the survey. the results showed that listeners wanted radio City to play more vernacular content. so promptly they switched from playing Rock and POP to Tamil film songs and thus diluting their clear positioning. I have stopped listening to Radio and instead depend on my I-pod or on CDs and so have others like me.

Now the point is like me there were others who would be loyal listeners to the content, but who have all abandoned the channel due to its abandoning its claer positioning. why would the channel listen toits own listeners who wanted Tamil music played as no one listens to the channel due to its name but due to its content and its innovative programming. It ,makes sinse even in business if you have claer positioning like the Mac or like LVMH.

In the Business Newspapers similar tred follows with most newspapers in india having abandoned content long ago to add to the jazz and get analysts to speak for them. all except one which is the Businessline which still sticks to the old format and in many ways is the only credible source of detailed information on the business scenario in India.

Sony Ericsson in Music Phones, Balck berry in PDA's, I-Pod in Music, rajnikant in tamil Cinema these are claer cases of brands that have used the power of positioning to their advantage. The rest have just added on to the clutter and the noise and distortion.

Radio City in Chennai was a claer well positioned channel which has now diluted its positioning. No doubt in the short run they would se increase in listening share and may be increase in revenues but ina predominatly english speaking city like Chennai English music had its own market and in the long run this would definitely hurt the intrests of Radio City.

By

Dr Vikram Venkateswaran

Senior Business Consultant

Computer Sciences Corporation

IT Outsorcing : Indian Paradox

Recently i read an article published in a leading business daily in India. The author, a distinguished gentleman in the field of private equity was actually perplexed by all the hype surrounding the stories of the margins of Indian IT companies coming under pressure. He says the margins are actually not under pressure as it is indicated in the stock prices which are list stable, even the earnings he claimed were robust. He goes on to say that the margins on the exisitng deals have come under pressure and the new deals are being signed at higher values to compensate for the stronger rupee.

Now from the private equity funds point of view I can understand his natural inclination in painting a 'feel good' picture. But the truth is 2005 was when the problem began, Gartner in its breakthrough study suggested that Multi-Vendor policy was the way forward for IT outsourcing. From then on there were bids for the various applications out sourced and the vendors(mostly Indian IT firms) had to bid for them which was some form of the French Bidding process.

For someone like me who has ben in these processes many times, there is a constant pressure on the vendor sales and marketing teams to come up with the right billing rate in order to win the deal and at the same time to ensure that it is not infeasable economically to deliver the project. In such a scenario there is no question of increasing the billing to compensate for the strong rupee, if we do that then the competing vendor would just quote lower and win the deal.

Truth is all these factors, the Multi-Vendor system, Strong Rupee and the Capacity Utilisation issues are putting pressure on the company's Human resource departments as the employees and the developers are the ones that feel the brunt of the all these issues.

It is almost juvenile to talk about financial margins under pressure where the Human Resources quotient is bursting at its seams and it is the employee satisfaction and company good will margins that are under pressure.

Sales 2.0: Taking sales to another level

Yes, the '2.0' hype is getting somehow out of hand and the moniker now comes to Sales … There’s been a lot of talk recently about 'Sales 2.0' and how companies can benefit from adopting Web 2.0 concepts and technologies in sales. The movement is under way to classify and clarify this latest version of sales-related technology. So before we dismiss Sales 2.0 as yet another buzz word, let's try and identify what 'Sales 2.0' really means for the sales and marketing disciplines.

It seems that Sales 2.0 truly merges sales and marketing into a seamless effort to target buyers more effectively using innovative and integrated tactics with an objective to bring in a lot more business at a lower cost. It is also about making anything and everything in the sales and marketing lifecycle measurable, so that you can take that information and resulting analysis to further optimise your sales process. More streamlined processes, together with the technologies to carry out smarter approaches, can immediately help organisations that are committed to moving their sales and marketing efforts to the next level of performance and dramatically accelerate their sales cycle.

More than a collection of technologies that help sales professionals personalize information for customers and interact with them rapidly, Sales 2.0 should be considered as the synthesis of new technologies, models, processes and mindsets.

Sales Optimization

Dear Fellow Buddies,

                              I appreciate Bernard's help in making me join this group. I've always believed that relationship and contacts matter since its people who buy not organisations!!

Now since I would be moving on to a new company shortly which is a pureplay telecom vendor awaiting to make entry into EU, APAC, AMERICAS, my daunting task would be to maximize penetrations via direct sales to carriers and also via channels/alliances. Can anyone give me quick tips for the begining, moreover if anybody knows any regional partners for channle partners or alliances with the biggies in telecom for the regions mentioned then pls help me network with them.

This should give me a quick start!

cheers.

Anshuman

New Age Brands

The other day i saw on TV that in south Korea there was a contest to selct their first astranaut. This is a direct extension to the contests to selct pop stars and movie stars etc. The power of the media has extended to these aspects which not until very long ago were considered very serious scientific business.

The trend in Branding so far is to use a personlity as a brand ambassador, like in Inida we have Shah Rukh Khan, In the US celebrities liek Britney Spears etc. But what if the brand were to become a star itself?

What if Pepsi for eg wants to find out who is the biggest pepsi fan, holds a contest all over the country where the contestants have to prove that they are biggest fans of Pepsi, talk about the values that they share with their brand and the winner would be crowned as the Pepsi king or something.

We are not talking about people being paid to endorse the brand rather than common folk who are so passionate about the brand that they talk about it and share their views with their peer group and others expect in this case they do it on live television in he form of a show.

This would be the next step in direct marketing where the brand is the star and all people on that show are endorsing it. so our coomon joe for eg thinks pepsi, talks Pepsi even wears t-shirts or other apprel which demonstrate his dedication and faith in his brand.

This would be only way to beat the clutter and declare the coming of new age brands.

by

Suyash Parashar                                                            Dr Vikram Venkateswaran

Assistant Brand Manager                                               Senior Business Consultant

Henkel                                                                       Computer Sciences Corporation