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  • 1. ‘The rural market is growing faster for us’MD says food and beverages portfolio will grow as consumers are getting ready for development of packaged foods businessSapna AgarwalUpdated: Fri, Oct 26 2012. 11 46 PM ISTMumbai: Hindustan Unilever Ltd, the country’s largest listed consumer packaged goods company, saw net profit and sales of its domesticbusiness grow substantially in the September quarter, largely on the back of price increases and volume growth of 7%. However, growth wasslower than that in the past few quarters. Nitin Paranjpe, HUL’s managing director, spoke to Mint about the challenges in an environment whereconsumer sentiment remains subdued. Edited excerpts:What are the challenges you face today?Given the inflationary pressures that consumers are experiencing, it is a difficult trading environment. So we remain pleased that we are able todeliver growth, which is competitive and has come along with an expansion in the operating margin.What are you doing about the slowdown in consumer discretionary spends?Recent trends as reported by Nielsen during the (September) quarter seem to suggest that volume growth in some of the discretionary categoriesappear to be falling. It’s something that we would watch. At the same time I don’t want us to read too much into this.As a part of the overall consumer packaged goods industry, food is a bigger category than home and personal care and is growing at afaster clip. But this does not reflect in your portfolio...Undoubtedly, our food and beverages portfolio will grow over a period of time and will grow particularly as the Indian market and consumer aregetting ready for the development of the packaged foods business in this country.Is rural growth declining as Nielsen reports?Over the last two years, we have trebled our direct reach to rural areas as we added one million stores across India. This has made a bigdifference. Rural (market) is growing at a faster clip than urban for us. We are seeing the evolution of rural India as incomes continue to rise andaspirations continue to rise.Rural market is a $1.8-trillion opportunity, says HUL’sManwaniRural market is a $1.8-trillion opportunity, says HUL’s ManwaniPTIUpdated: Mon, Jul 23 2012. 04 03 PM ISTMumbai: Indicating that Hindustan Unilever (HUL) which sells almost 40% of its brands in the hinterlands will increase its focus on rural markets,the consumer goods major today called for convergence of urban and rural marketers so that prosperity spreads to the rural areas.Describing rural India as a powerhouse which can even be bigger than the urban markets, HUL chairman Harish Manwani said, “rural India is anincredible opportunity of potentially adding $1.8 trillion to our economy, equal to current GDP.”Addressing shareholders at the 79th annual general meeting of the company here today, Manwani said, “it is often said there are two Indias—Bharat which exists in villages and India that thrives in urban areas. If we want to make a mark on the global stage, then these two Indias mustconverge.”Manwani further said, “We have an opportunity to create a thriving rural middle-class, even bigger than in urban India. We need to build a new generation of leaders and entrepreneurs from villages who will help power the future of our nation.” He also said a new vision for agriculture will uplift millions of small farmers but added the country needs to look beyond agriculture and we need a strategy to provide rural India access to markets and technology, financial inclusion and human capital development. Calling for improving agricultural productivity, he said, “if our agricultural growth can pick up to 4% as envisioned by the Planning Commission,
  • 2. the cascading impact that rural prosperity will have on the national economy could add up to an additional 2% to our GDP and enable us to go fordouble-digits growth.”Manawani also emphasised on sustainable sourcing and said the company is working in Karnataka, Punjab and Maharashtra with small tomatofarmers to help them adopt sustainable agricultural practices.“In 2011, 60% of tomatoes used in Kissan Ketchup in the country were from sustainable sources,” he said.He further said the company’s wide distribution reach can help the Reserve Bank in its financial inclusion plan.“Along with the government, banks and corporates can play a synergistic role in realising this plan. Companies like HUL have a wider distributionnetwork than any government agency as our products reach almost every village in the country. And leveraging this high quality last-mile can helpbring financial inclusion to every Indian,” he said.Manwani pointed out as to how access to urban services had led to new sources of livelihood in villages located in 19 rural-urban clusters like theNational Capital Region, which has emerged as a single geographical entity from Meerut in UP to Faridabad in Haryana.“Creating another 50 rural-urban hubs where every village is within one hour of travel to an urban centre would be transformational. This couldensure that over two-thirds of the rural population have easy access to urban India. These urban hubs will support rural areas and become the bigmarkets of tomorrow,” he said. PTI DS BEN ABC RYS 07231542‘We have complete monopoly in rural markets’Prasar Bharati chief executive officer Jawhar Sircar talks about its revival plan and how it proposes to generate revenueShuchi BansalUpdated: Sat, Oct 06 2012. 12 30 AM ISTNew Delhi: Public service broadcaster Prasar Bharati’s debt—Rs.12,071.33 crore—was written off by the government recently. Jawhar Sircar,who’s spent eight months as CEO of Prasar Bharati, comprising Doordarshan and All India Radio (AIR), that was set up as an autonomous bodyin 1997, said in an interview that this would help the organization turn itself around. Edited excerpts:What does the debt write-off mean for Prasar Bharati?As long as you have debt on your head on which interest is ticking—it does not matter whether you are able to pay it or not—it remains a burden.At any point of time if anybody wants to scuttle something, they can say ‘you have unpaid debts of so many thousand crore’. You can’t reallycome out and win public confidence when you have a lot of debt piling.How do you plan to meet your operational expenses? (Expenditure on salaries will be borne by the government)Once you declared Prasar Bharati to be a separate organization (with 341 kendras—67 television and the rest radio stations), or when you aresetting up transmitters and satellites and have people employed for public service broadcasting, then someone has to pay for it. What we arefollowing is a mixed model. People outside think that we are completely subsidized by the government, therefore we are not cost-conscious. Thatis not true. For instance, in the 11th Five-Year Plan (2007-12), we earned Rs.6,000 crore in a difficult time (at the time top Prasar Bhartiexecutives were facing allegations of financial malpractices; CEO B.S. Lalli had to be removed). The government gave us another Rs.6,000 croreduring this period. So the ratio was 1:1 during the 11th Plan ending March 2012.We got additional Rs.1,600 crore from the government for changing transmitters that were 40 years old, cameras which did not move and lightsthat had got lost. If we had tried really hard, this Rs.1,600 crore could have been split 50:50 too. We could have generated Rs.800 crore.Now our earnings will go into operational expenses such as spectrum and other charges, local taxes, vehicles, content and advertisement. Ourown publicity budget has disappeared.What is your revenue target?For this Plan period, our target should be Rs.9,000-10,000 crore or Rs.2,000 crore a year. We have explained it to our officers. We shouldmake Rs.1,800 crore this year. There are welcome signs. For instance, during the Athens Olympics (2004), we made Rs.5 crore, which went upmarginally to Rs.5.5 crore for Beijing Games (2008). For the London Olympics this year, we earned Rs.16.9 crore.Also, under the new strategy of simulcasting where someone else produces a programme and we also telecast, we earn a lot. For instance, CokeStudio (an MTV show simulcast on DD) makes Rs.25 lakh per episode for us. On Satyamev Jayate, we made Rs.14 crore.How will you reach the Rs.2,000 crore a year target?
  • 3. We are talking of a complete revamp of the marketing channel. It consists of two additional directors general (DGs) and their teams in Mumbai,where the companies are located. Currently, roughly half the revenue comes from the marketing wing and the other half from governmentcommercial wing. There are a lot of doables on these two counts.The recent report by Crisil and NSSO (National Sample Survey Office) shows that the highest consumption is taking place in the rural areas. Noteven our worst rivals can doubt we have complete monopoly in that market, especially in villages with scattered houses. Even in the most difficultplaces, we have terrestrial transmission.Then there is DD Direct Plus, the direct-to-home (DTH) television of Prasar Bharati. With a set-top box ofRs.900, you watch at least 55 channelsfree for a lifetime. You don’t see DD Direct dishes because when we introduced these boxes, the only dishes available were already branded bythe private DTH operators. The dish that you see in rural homes may carry the name of a private brand, but if you go inside they will have a DDDirect box. There are roughly one crore DD Direct DTH homes. There would be another at least 1.5 crore terrestrial-only DD homes. So 2.5 croreviewers are completely loyal to us. All the private operators also carry DD.Marketing has to relate to reports that come out periodically that rural India spending is higher than urban India. We are rural India. That nexushas to be drawn.Today AIR and DD News are lumped together with DD main when they are sold. These have to be sold separately. For that, repositioning andfreshening up of DD News is happening. On our DTH platform, we plan to begin default advertisements. All the private operators have thesewhen you switch on their systems. So, unlike them, I cannot charge the customer, but I can charge the company.We can also get a bigger slice of advertising from government and public sector undertakings. There is a revenue consciousness that is comingin.Any plan to tap the archives?There is pilfering of archives, which is being checked. They are being digitized. We should be able to charge for the use of archival material. Wecould market the archives online. For instance, we could put some up on YouTube and say, for the rest, come to us. This is ‘Backwardistan’. Thisis because no fresh recruitment has taken place in the last 15-16 years.But with 50,000 people, you don’t need any more.No. The 50,000 has come down to 34,000. Many people will be retiring in two to three years. For every three people, we will replace one. That isa way of downsizing.What about voluntary retirement schemes?That is not required. Terrestrial transmission is a labour intensive industry.But how do you boost employee morale?It is looking up. We went though the first-ever zonal co-ordination meetings in history of Doodarshan and AIR.We took G9, that is the group of nine people (all the DGs, members, finance and personnel, and the CEO) who run Prasar Bharati, for thesemeetings. These people have never been on the same page. Or let me say that they have been working on different pages. So we got them onone team and went down to the station level for interactive sessions.Is Prasar Bharati a public service broadcaster or a commercial venture?For revenue, we would have to be public taste-oriented. Without crossing the Lakshman Rekha on decency, family values and other sensitivitieson caste, language groups, community and gender. We have a much smaller playing field. We have these concerns to keep uppermost in ourminds. I am not saying others don’t, but they can show more glitzy shows, which may not be considered family shows.In news, our slogan is: if you want news, watch DD News, if you want views, you can go to other channels. Our news anchors are not screamingat the top of our voices ‘Why aren’t you doing this? or ‘The nation wants to know... I embody the nation.’ We don’t have all those tensions. Wegive balanced news, which may be a little tepid at times.I have to earn 50% of our keep. So, while I may not cross the Lakshman Rekha, we will have to have (a) little operational freedom.MDI Gurgaon Students Analyze Rural Consumer Perception at IlluminaBy The CoolAge ReporterFrom Buzz@Bangalore, BangalorePosted Oct 25th 2012 9:30AM
  • 4. Disguised Rural Market Research Teaches Students Valuable Management LessonsPataudi Villagers get ready to welcome the newlywed Saif-Kareena to their ancestral villageOctober 25th, 2012, Gurgaon: To understand the mindset of rural consumers, MBA students of premier B-school Management Development Institute,Gurgaon conducted a disguised market research in Pataudi village of Haryana on October 24th, 2012. The research was organized on the day of Dussehrawhen the 109 year old Dussehra Mela attracts more than 4000 people in the village.Every year corporate and MDI students collaborate to understand the Rural Indian consumers better - while students get valuable lessons in management,the corporate get invaluable insights for their brands. With different concepts for various companies every year, illumina is conducted in form of a khela or ashort interactive play for the village folk. It is in the guise of this play that villagers are profiled according to demographics and the responses are collected tobe analyzed.What differentiates this research from the others is the absence of a standard questionnaire or loud brand placement. Disguised market research isconducted without letting the villagers know they are helping a brand solve a consumer-related problem. MDI students take a different approach for the targetaudience as most of the respondents are illiterate or semi-literate. In order to capture their attention, they design the research centre like a movie or play setand the concept has been effective and successful. Moreover, the researchers get amazed at the recall value and awareness level of the respondents whoare observant as well as perceptive.This year, the research was conducted for Berger Paints, a premium paint manufacturer in India, which is expanding its services to the upcountry market. AsBerger Paints looked to cater to the demand service gap in rural segments with a hassle free painting experience, MDI students conducted aresearch with a Bollywood theme – wedding of Bollywood stars Saif Ali Khan and Kareena Kapoor. The khela revolved around the theme of their marriagewith the concept that the villagers painted their homes for the visiting couple. It held a special relevance to the villagers as Pautadi is also the ancestralvillage of Saif Ali Khan who is now the Nawab of Pataudi. A day long affair the rural version of the festival gave students first hand lessons in rural marketingand a view of their customers-to-be. With an aim to gauge the mindset of the rural consumers, this is one of its kind event to cover all demographics for amarket survey.In 2011, research was conducted on the problem provided by State Bank of India and was based on Rural Credit. The objective of the research was to findout the reason for low recovery of agricultural loans, to check the methods employed for loan recovery and the awareness of those methods along with theireffect.Market Research was designed on the basis of popular movies like Lagaan and Veer Zara. The focus of the students was to gain unbiased insights into theissues with repayment of loans and what banks could do to alleviate the farmers fear and facilitate the repayment. Three of the students dresses up as Veer(Shah Rukh Khan), Zaara (Preity Zinta) and Bhuvan (Aamir Khan) and guided the respondents through friendly conversations got the respondents to answerthe questions pertaining to the MR.About MDIEstablished in 1973, MDI is one of the leading B-Schools in India known for its academic excellence, high-quality research, high-end executive educationand internationalization. MDI has the distinction of being the first internationally accredited Indian B-School by the Association of MBA (AMBA), UK and bythe South Asian Quality Standards (SAQS). MDI has the vision to be a Global Business School with a focus on Academic Excellence and ContinuedInnovations. MDI has plans to grow by maintaining its leadership position in its current activities and through geographical expansion and internationalization.MDI has already initiated the process of setting up its second campus at Murshidabad, West Bengal. This project is in an advanced stage of execution andsoon thereafter the activities to operationalise this campus shall be taken up.For further information, please visit www.mdi.ac.in