Monday, October 11, 2010

Their happiness is the key

Be frank, be forthright
Sometimes we wonder how some business people or houses or businessmen are successful. We wonder why people flock to them as bees to honey in a flower. If you look deep inside, there is surely something that has people coming to them.
To me, I think it is their service or the way they go about servicing their clients that keep them on top of whatever they do.
For example, I remember approaching a friend to get a dental product a few years ago. Now, he put me on to a well-known friend of his dealing in that and when I approached him he delivered it to me. I liked the way he dealt with me and again, a few months ago I approached the person for the product and I got it within no time.
This may be an one-off thing. The case here is that his service has been good as also his approach that I have been forced to get back to him. Not just that, I even recommend him to my friends or relatives.
I think it would be better for me to give my bank as an example. It is a private bank and I have two accounts with it. I also have demat with the bank. I am not disclosing the bank’s name lest it be an advertisement for it. My point here is for people to know to how retain their clients or customers.
What happened 10 years ago was that I was in a firm where there was superior with my name with a bit of difference. One day, I suddenly found negative balance in my account and when I approached, I was told that it was for the demat. I explained to them that I had no transaction. The staff assured to get back in half an hour. Not only did they get back but also set right my account.
I also have a credit card from this bank. I happened to visit a textile showroom where after purchasing I gave them my credit card. But it didn’t work. Then, I had to use my wife’s card to make the payment. This was an incident I forgot. But after five days, the bank staff called me on my mobile, narrated the incident and apologised for a temporary computer problem. The staff also said they were giving me some bonus point which I could use for purchase of some product. It was a sweet surprise that had a positive impression about the bank on me.
Not just that, every now and then they call me and take my permission if they want to upgrade my credit limit. In contrast, there is another international bank which thrust an upgraded card on me for which I had to pay. Not just that, without any information it froze my earlier card in favour of the upgraded one. This left me with a bitter experience at a petrol bunk which had the attendant asking me if I had enough credit in my card!
I did give an earful to the bank’s people but from that moment I decided never to have any relation with that bank. Let me give another example of another international bank which also extended its credit card. Rather, I agree to avail it because its salesperson was pleading so much. I availed of the credit once and paid it promptly. I decided to use is sparingly. But within a month as I was holidaying with my family in Kolkata, I got a prompt message from this bank saying my credit limit has been cut to one-tenth! Imagine my shock and my position if I had carried only that card for payments during that trip? Again, the other card saved me.
I also would like to narrate this incident with a orthopaedic. This happened some 10 years ago. I twisted my knee, mainly due to a ligament injury. When I visited his joint, he asked me to take an x-ray. On seeing it and my knee, he simply threw the X-ray and said I would have to undergo Arthroscopy to find out the problem. I got upset since it means I would have to be bed-ridden at a time when I simply cant given my family circumstances. Luckily for me, my colleague said I could always go in for a reference to another person. That took me to another doctor who said nothing was wrong and it was enough if I did physiotherapy. In a couple of months, I was back to normal.
Then, again two years ago while trying to defend a penalty corner I ran and twisted my knee again. This time, I went to another who almost wrote the end of my hobby of playing hockey. Again colleagues asked me to visit another ortho who summarily threw out the X-ray I had taken earlier saying it can’t be taken into account since it was taken after the knee got twisted. He just examined my knee, asked to do physio-therapy and medicines.
Sure, it took over six months but then I feel far better. I still dread how big a hole could have been made in my pocket had I gone with the earlier suggestions.
These are examples of who people’s trust is built. Things don’t happen overnight. The ortho who I referred to as throwing away the X-ray has patients flocking to him from as far as 300-400 km from Chennai. So much is the faith people have in him and his integrity!
The same thing holds good for any business, including eateries, hotels, FMCG, electronics.
The lesson in management or business is simple. Be sincere, be over-reaching and be frank. If you think you can handle something, just tell the customer. If things are going to be delayed, tell the client or customer. Any inconvenience to the client, you must tell him or her. Not just that, my banker even alerts me if my wife’s account lies dormant and faces the danger of being frozen.
Any business is about keeping the customer or client happy. As long as you ensure that, very rarely do you face hardship. Finally, remember people are willing to pay a price for the service!

Sunday, August 29, 2010

The flood havoc will benefit India, to a great extent

Cotton, rice and sugar will surely gain

No doubt, we will have to sympathise with the havoc that floods have wreaked in Pakistan. Reports talk of how stench is emanating from bodies and how acres and acres have been washed away. Surely, our neighbour, despite its hostility towards us, needs our care, affection and help.
Surely, we need to help our neighbours because we could be benefiting from their hardships. Wondering how? Therein lies the secret of business. The seasons for Pakistan crops run parallel with India’s and it too has rice, cotton and sugar as the main crops during this period.
What the unprecedented rains and floods have done is to damage these three main crops. In the case of rice, basmati and non-basmati have been affected. At least one-third of Pakistan’s cotton crop has been washed away, while sugarcane fields too have taken a pounding.
The problem with the damage is that there is very little time left for farmers in Pakistan to go in for re-sowing. At the most, they can go in for pulses or other short-term crops, say vegetables before they can sow wheat for the season that is parallel to our very winter or Rabi sowing.
The developments also bring along with them more benefits for Indian industry, particularly sugar, textiles as also rice exporters. There are also a couple of other developments that are favouring India’s rise this year in the world of commodities. One is again problem of rains and floods in China, where, too, cotton and rice have been affected. The second is drought in Russia. Already, the wheat market is on fire due to an estimated fall of 5 million tonnes in the former Soviet Union’s mainstay. It has banned exports, while barley production is now reported to be hit.
Let us first see rice. India will stand to gain in the export market, particularly basmati exports. India exports over 30 million tonnes a year and Pakistan is India’s main competitor, pricing its produce at least $50 a tonne lower. With its production being lower, we will have now to see how much really Pakistan can offer its rice lower.
We have to bear in mind that Pakistan will also face pressure on account of the fall in non-basmati rice. Will it resort to imports? If that happens, then rice prices could gain all-round globally and in turn, boost basmati price.
Back home, we are looking at a higher basmati crop this year. This means, we can really get the fragrant rice at a cheaper rate. For exporters, this is half the battle won.
So, whichever way you look at, Indian rice industry will look up this year.
With regard to sugar, India is already getting demand from Pakistan. We are already looking at a far better crop of nearly 24-25 million tonnes of sugar likely to be produced in the season that begins in October. With some of Indian sugar mills having to fulfil the mandatory obligation of having to export white sugar against imports of raw sugar, Pakistan can look forward to Indian sugar at a competitive price.
Cotton could prove to be the king of kharif crops this year. One, India is looking at a record crop. Second, the Government is removing the ban on exports, though indications are that the shipments will surely be capped. With Pakistan and Chinese cotton crop suffering damage, India will surely be a dominating factor in the global market. The higher production means that Indian exporters can really be competitive in the global market. So, the grower too will stand to gain.
Not just this, the industries that depend on these for raw material will also stand to gain. We already dealt with rice and sugar. In the case of cotton, a cap on exports mean the spinning mills and textile units can be guaranteed raw material at a price fairly lower than the global market. This will make Indian textile products very competitive compared with say Chinese or other destinations. Therefore, we are on the verge of seeing some good 12 months for these three sectors.
In addition, global demand for feed in the wake of what has happened in China, Russia and Pakistan will force prices of all cereals to rise. Therefore, be it jowar, bajra, maize or barley. All will definitely rule higher. That makes us to take note of the potential that India has realised in corn (maize) in the last few year. Maybe, we could see a rebound after the lull in the last couple of years.
At this point, one wishes that our Government can be a little innovative and forward-thinking. Surely, it can help India emerge a crucial player in the global commodities market. Agreed, that our industries have to be ensured raw materials availability.
With huge stocks lying the warehouses, it can begin exploring the export market. There is scope without offering any subsidy, as we had witnessed at the beginning of this decade.
This will ensure good returns to our farmers and in turn, sow seeds for better coverage and productivity in the years to come. Will our Government see the long-term benefits of such policies? Or is it going to play take ad hoc decision just to cater to its short-term electoral benefits?
We will get to know in the next few months.

Sunday, July 25, 2010

Plantation companies as a whole hold promise

Folks, it’s time I really gave you something on what is happening in the market. In case you are a player in the stocks market, then here is something for you to ponder.
This was an expected thing but it has happened without many taking notice. I am talking about coffee consumption in India.
The Coffee Board says it has touched 1 lakh tonnes. That’s a great news for the coffee sector because domestic consumption had for long been dormant around 50,000 tonnes. The efforts of various Coffee Board Chairpersons starting from 1997 have finally yielded results.
In fact, the most surprising thing about this rise is consumption is the pace of growth since 2002. It is proof of the fact that Indians now have more cash at hand to spend.
Well, why should we attach much importance to this event? It is simple. Till now, coffee had been totally dependent on exports that made up two-thirds of the production. The rise in consumption at nearly 6 per cent a year means, we are heading (or have we reached the situation?) for a tight demand-supply scenario.
It means that we are likely to be a net importer in the next couple of years. Changes have to be made in the rules since coffee imports are allowed now only for re-imports. Surely, the situation will thrust such a move by the Government. No doubt on that, take it from me.
I don’t want to get more into this subject but the fact is that coffee is surely going to be in demand. This means, coffee companies such as CCL products and Tata Coffee are bound to do well, really well.
In the long-term, these stocks will really pay handsome dividends. Therefore, it will be good to bet on coffee.
In fact, if you ask me, one can take chances with companies associated with the plantation sector. During the current quarter (April-June 2010), some of the tea companies, especially those having estates in the North-East, have reported loss. But we can expect that to be a passing phenomenon if they can recover from the pest attack and weather woes. However, other firms that have rubber plantations such as Harisson Malayalam should benefit from the high rubber prices.
With the transport sector witnessing a rebound and sales of vehicles picking up, we are set to witness a long-term imbalance in the demand-supply situation. Therefore, rubber plantation companies too hold promise.
And then, pepper is really facing supply shortage and its prices are on fire. So, there is additional incentive since pepper is an inter-crop mainly in coffee plantation. Cardamom too is all flavours for the growers. Only vanilla seems to be lagging but how many really grow vanilla?
Therefore, my personal take, is that you can hedge your bets on plantation companies.
Maybe, fix a stop loss or keep a target for profit and see.

Monday, March 29, 2010

The confidence is telling

My trip last week to Tirupati to fulfill a long-standing vow was an eye-opener. I had mentioned a part of it in yesterday's blog. The other thing that amazed me was the confidence of the rural people in eking out a living.
I was on my way back to Chennai and happened to witness and hear a discussion between an old woman and a middle-aged guy. Both were on their way to Ekambara Kuppam from Tirupathi.
The guy runs a small eatery there and sees a boom in his own small way in his business of selling bajjis (a batter of chick pea powder deep fried after raw banana, green chilli, potato or onion is dipped in it). The woman asked him about his business. He was telling her that his assistant was reporting business running into nearly Rs 750-900 a day.
It is doing well. I think I need to buy things from here (Tirupathi). That will help me a lot. His statement made sense because the price of chickpea powder was cheaper than in Ekambara Kuppam where the price will tend to be higher with a few shops in view of it being a remote area.
"I have asked the price. I think I can earn 30 paise for every one rupee. That's enough for me. I can easily get the business touching Rs 1,000 a day soon," he told the lady.
That means a business turnover of Rs 30,000 a month at a small eatery. That only affirms my unshaken belief that any business that has connection to food will definitely do well. A 30 per cent gain in Rs 30,000 turnover is Rs 9,000. Not bad when the guy puts in just four hours of hardwork!
Today, food is proving to be a big business. And it will continue to be because India is expanding as also its population and average income. But its potential is yet to be tapped fully.
The woman told the guy to start selling masala bondas. "People will simply lap it up. I had done that early and I got good income. If I light up the stove at 4 pm, it will go on uninteruppted till at least 6.30 pm," she said, looking back at her progress.
Both of them have a mobile phone, an essential for any Indian today, and the guy even called up a relative to take money from him to pay some dues including for the next month. As he was going to his shop, he was also taking with him some 5 kg of chillies to make bajji.
We haven't included the turnover that cups of tea will get at such outlets. Many Indians wash their throat at least thrice with tea or coffee. Then there is also the case of soft drinks being sold frequently during a day, especially during hot days.
That means good business and good margins. That leaves us with one question. The rural entrepreneur seems to be confidence personified. He, without any study, is sure of how his business will do. How many of our corporates are sure of the demand for their product from the rural areas? And why haven't many succeeded in marketing in the rural areas, save a few? Turn to the rural entrepreneur guys. He is your guide.

Sunday, March 28, 2010

Are you listening, Marketing guys?

This blog is a professional one that will talk of trends and moves in the markets. Just not stock or commodity markets but even rural or urban markets. This will be a window in which I plan to write about things I come across during my interaction with various sources.
Often what happens is that we tend to think of a trend only in a particular way. We dismiss the fact that there could be an otherside to a prevailing or emerging trend.
Let me begin with this trend that I happened to experience during my trip to Tirupati. I travelled sitting in the second class up and down in Sapthagiri Express that leaves Chennai at 6.25 am and leaves Tirupathi for Chennai at 5.25 pm.
Seeing the rising number of mobile phone connections each month, I was not surprised over the fact that almost everyone in the compartment had a mobile with him or her. But the surprising fact is that most them had provisions to listen music through MP3 in their mobiles. (Remember, the FM channels were just not working after Tiruvallur.) Doesn't that mean rural India prefers not just a simple mobile but one with a facility to listen songs? That's something the companies producing mobile phones have to ponder upon.
The next thing left me really surprised but very happy. While going to Tirupathi, a lady sitting near the door was playing songs loudly on her mobile. No one objected to the noise. And every song that was played was composed by Illayaraja.
During my journey on return, again I found a group of four or five persons playing songs loudly. It was Illayaraja songs agin. One was Aasha Bhonsale song in the film "Namma Ooru Pattukaran" and the guy who owned the mobile sang each and every word of the song without a flaw.
After the group got down at Ekamabara Kuppam, I found another guy playing Telugu and Tamil songs from his Sony Ericcson mobile from Aarakonam onwards. Again, most of the songs composed by Illayaraja.
What made me happy was that almost everyone in the rural area was listening only to Illayaraja, something that I have always believed and trusted in. I swear that I didn't hear even one song composed by A R Rahman.
What surprised me is that day in and day out we have the FMs and the Music Jockeys drilling in our ear that the latter is great while dismissing the former in a word or two. The reality is that once we go past the city and enter the suburban, people have a totally different taste. I am sure it will be so even in North India.
That means aren't we cheating ourselves by saying X or Y is great just because a few rave about the X or Y in the city. Isn't India's heart in Bharat or rural areas? Then, why pay sky high fees for endorsement by people who may have a clout with only a limited audience in the city. Why should we go by only what the elite think or say?
Music is not all about dancing and jumping. Music is something from the heart. So, aren't we fooling ourselves when we ignore people who rule the hearts of those in rural India? Isn't it a fact that we are not giving the real ones their due? Marketing guys have something here to really think about. By the way, is or has a proper study been done on these things?
Points to ponder, guys & gals.