Walking without a plan? Yes, that's right -- walking without a plan! :-) It's possible. Trust me; it is. And, you can still work on an unplanned plan to completion. You can still coordinate without coordinating explicitly. You can still communicate without communicating vehemently. You can still promise without promising earnestly. Doesn't silence speak a thousand words? And, doesn't signaling work? All of these work, provided you know how to walk without a plan.
Have you ever driven any kind of vehicle on the Indian roads? In India, hardly anyone follows any traffic rules, but, still, considering how people drive out there, the number of accidents is still very, very low -- I repeat considering the way people drive out there. We are used to of "walking without a plan" -- it's what we have been experiencing since our childhood, isn't it? :-)
That was just an example to hint you at something. :-) Are you game for it -- walking without a plan? :-) Let's see. In the meanwhile, I just hope that you be a sport!
Saturday, February 27, 2010
What Comes First: Price or Costs?
For marketing, in general, letting the price, and/or the profit margin, determine the costs of the product, rather than letting the costs of the product determine the price, and/or the profit margin, is the most prudent way to go forward.
First, decide the price of your product, and the subsequent profit margin, that you must make to satiate, or justify, your investments. Doing so gives you a costs window that you may put at stake in producing the product. Thus, the price – and/or the profit margin – of the product drives its viable costs structure. In the worst case, you might not be able to produce the product within the estimated costs. But, your money remains intact, and you can still use it for something better.
If you do the other way round, that is, if you first produce the product, and then aggregate the costs incurred in producing it, in that case, the total costs drive the price of the product, and subsequently drive the profit margin, which may or may not justify the investments made, keeping in mind that there is a certain maximum price the consumer is ready to pay for the product. This second method is prone to the risks of making the entire investments sour! The worst situation has the potential to wreck havoc -- that is that you might lose all your investments!
It is certainly not that the first method always is the best way of deciding on the price, and thus the justified costs, of a product. But, it certainly is the more logical way of going forward.
However, in some situations, the second method is the only possible way of zeroing in on the costs, and subsequently the price of a product, especially when both the producer and the potential consumers are completely new to the concept of the product that is going to be produced.
The call is yours, so take the shot! And, don't forget that you will be held accountable for it too, because if you miss it, the investors will not let you off the hook! You can run; you can hide, but you can't skip, my "love." :-)
First, decide the price of your product, and the subsequent profit margin, that you must make to satiate, or justify, your investments. Doing so gives you a costs window that you may put at stake in producing the product. Thus, the price – and/or the profit margin – of the product drives its viable costs structure. In the worst case, you might not be able to produce the product within the estimated costs. But, your money remains intact, and you can still use it for something better.
If you do the other way round, that is, if you first produce the product, and then aggregate the costs incurred in producing it, in that case, the total costs drive the price of the product, and subsequently drive the profit margin, which may or may not justify the investments made, keeping in mind that there is a certain maximum price the consumer is ready to pay for the product. This second method is prone to the risks of making the entire investments sour! The worst situation has the potential to wreck havoc -- that is that you might lose all your investments!
It is certainly not that the first method always is the best way of deciding on the price, and thus the justified costs, of a product. But, it certainly is the more logical way of going forward.
However, in some situations, the second method is the only possible way of zeroing in on the costs, and subsequently the price of a product, especially when both the producer and the potential consumers are completely new to the concept of the product that is going to be produced.
The call is yours, so take the shot! And, don't forget that you will be held accountable for it too, because if you miss it, the investors will not let you off the hook! You can run; you can hide, but you can't skip, my "love." :-)
Friday, February 26, 2010
A very positive, comprehensive, inclusive budget for 2010
Finance Minister of India has unleashed the Indian Union Budget for 2010. The budget looks quite promising. As per the budget, the masses are going to be taxed lesser for their incomes in 2010. The personal tax breaks are prudently categorized as:
Incomes <= INR 160,000: No tax
INR 160,000 < Incomes < = INR 500,000: 10%
INR 500,000 < Incomes <= INR 800,000: 20%
INR 800,000 < Incomes: 30%
Additionally, investing up to INR 20,000 in infrastructure bonds will be tax-exempt, and this exempt is going to be over and above the exempt of INR 100,000 as per Section 80C.
It is hoped that almost 60 percent of tax-payers would benefit from this tax-relief program, which will definitely increase their purchasing power, which, in turn, will positively impact the businesses operating in the country. This is the strategy of taking the economy even more toward the domestic-consumption-driven growth-path – a very, very good strategy of being self-reliant, and highly proven strategy in this Great Recession.
The budget looks forward to compensate for these relaxations to the common people through marginally increasing excise-duties in certain sectors, such as tobacco products, high-end SUVs, luxury cars, petrol and diesel, just to name a few.
Moreover, the Minimum Alternative Tax (MAT), which was actually introduced to tax companies like Reliance, is raised to 18 percent, from the current 15 percent.
The fiscal deficit for 2010 is budgeted at 6.8 percent of the GDP, but has been guided to 5.5 percent of the GDP for the next fiscal year, to 4.8 percent of the GDP for 2012, and to 4.1 percent of the GDP for 2013. Overall this phased fiscal-deficit-reduction strategy looks pretty good, keeping in mind the current financial situations around the world.
So far, the government has raised USD 7 billion by divesting stakes in the public-sector enterprises, and there will be many more such moves in the coming days to fund the planned fiscal-deficits. Moreover, the government will issue more banking licenses for the private-banking sector, and will also auction telecoms 3G-licenses for raising funds to finance the fiscal-deficits.
Overall, the Indian Union Budget for 2010 appears to be a very positive, comprehensive, inclusive budget. Good job!
Incomes <= INR 160,000: No tax
INR 160,000 < Incomes < = INR 500,000: 10%
INR 500,000 < Incomes <= INR 800,000: 20%
INR 800,000 < Incomes: 30%
Additionally, investing up to INR 20,000 in infrastructure bonds will be tax-exempt, and this exempt is going to be over and above the exempt of INR 100,000 as per Section 80C.
It is hoped that almost 60 percent of tax-payers would benefit from this tax-relief program, which will definitely increase their purchasing power, which, in turn, will positively impact the businesses operating in the country. This is the strategy of taking the economy even more toward the domestic-consumption-driven growth-path – a very, very good strategy of being self-reliant, and highly proven strategy in this Great Recession.
The budget looks forward to compensate for these relaxations to the common people through marginally increasing excise-duties in certain sectors, such as tobacco products, high-end SUVs, luxury cars, petrol and diesel, just to name a few.
Moreover, the Minimum Alternative Tax (MAT), which was actually introduced to tax companies like Reliance, is raised to 18 percent, from the current 15 percent.
The fiscal deficit for 2010 is budgeted at 6.8 percent of the GDP, but has been guided to 5.5 percent of the GDP for the next fiscal year, to 4.8 percent of the GDP for 2012, and to 4.1 percent of the GDP for 2013. Overall this phased fiscal-deficit-reduction strategy looks pretty good, keeping in mind the current financial situations around the world.
So far, the government has raised USD 7 billion by divesting stakes in the public-sector enterprises, and there will be many more such moves in the coming days to fund the planned fiscal-deficits. Moreover, the government will issue more banking licenses for the private-banking sector, and will also auction telecoms 3G-licenses for raising funds to finance the fiscal-deficits.
Overall, the Indian Union Budget for 2010 appears to be a very positive, comprehensive, inclusive budget. Good job!
Saturday, February 20, 2010
Innovative Financing: Changing the Relationship Between the Rich and the Poor
Very soon, people who fly will have a chance to help the world's some of the most unfortunate inhabitants. Flyers, when purchasing airline tickets either on the websites of airlines or through travel agents, will be asked to make a direct contribution to the fight against the world's three deadliest epidemics: HIV/AIDS, malaria, and tuberculosis. This is part of a movement called innovative financing, which is a new kind of aid-tool that could fundamentally change the relationship between the rich and the poor throughout the world, a few dollars at a time.
Each of these diseases – HIV/AIDS, malaria, and tuberculosis – still causes more deaths in developing countries than any other single disease, according to the World Health Organization. In 2004, the last year for which statistics were available, together these three diseases caused one in eight deaths in low-income countries.
So, the whole point is to help such poor people the next time you fly. Trust me; changing the so-called “third world” in this way is cheaper than changing such world by bombing them! The logic is very simple: when people have lots to lose, they think multiple times before losing such things. Let’s help people in getting a real life, and they will think hundreds of times before even planning to give it up! Please raise the costs of “switching” – in a business jargon, for people who understand only business!
Each of these diseases – HIV/AIDS, malaria, and tuberculosis – still causes more deaths in developing countries than any other single disease, according to the World Health Organization. In 2004, the last year for which statistics were available, together these three diseases caused one in eight deaths in low-income countries.
So, the whole point is to help such poor people the next time you fly. Trust me; changing the so-called “third world” in this way is cheaper than changing such world by bombing them! The logic is very simple: when people have lots to lose, they think multiple times before losing such things. Let’s help people in getting a real life, and they will think hundreds of times before even planning to give it up! Please raise the costs of “switching” – in a business jargon, for people who understand only business!
Thursday, February 18, 2010
Telcos Preparing for the Next Low-cost, Low-end Telecoms War
Vodafone has introduced the `cheapest’ mobile phone ever at the Mobile World Congress (MWC) being held in Barcelona. The handset, aimed for the developing countries, will be initially launched in India, Turkey, and eight African countries including Lesotho, Kenya, and Ghana. The phone is available for less than USD 15 and allows voice calls, SMS as well as mobile payment services. An expensive version of the phone has a color screen and FM radio and is priced at USD 20.
Reliance Communications (RCOM), India’s second biggest mobile communications company, has signed a deal with Huawei to purchase two million CDMA handsets worth INR 3.4 billion (USD 73.27 million). The handsets are priced in a range of INR 1700 (USD 36.63) to INR 1950 (USD 42.02) each unit and are equipped with camera and FM radio. RCOM plans to launch these handsets in Tier-II and Tier-III cities in India. (1 USD = 46.40 INR).
Now, as mobile call-rates in India are already close to free, a new wave of low-cost, low-end war is apparently emerging on the horizon to capture even the remotest of countrymen and countrywomen. Once the telcos are satiated that not even a single Indian is left without having a mobile phone in hand, a new wave of unimaginably massive, extremely painful telecoms market-consolidation will happen. There will then be only two options: buy or get sold! And, such buying and selling will happen based on the market segments the telcos would like to play in and play with. Telcos valuations will be computed almost linearly: X number of customers times $Y per customer – and this will be based on customer segmentation -- plus, the net assets, if any. That’s it. Only the best and biggest will survive the onslaught "massacre." Thus, the survivors will live happily ever after, until the next disruptive technologies emerge on the markets. The end of the saga!
Wednesday, February 17, 2010
Is Buzz Buzzing?
Buzz has started off with a negative buzz! For end-users, the biggest “buzz” is a concern for privacy.
By default, based on your contacts list, it connects you to people! When you add others to your Buzz – that is, when you start following, or when you start getting followed – you can see who all your “Buzz-mates” are connected to! Now, this is a serious concern for people who experimented with – or better, say, who got victimized of – Buzz!
Well, Google has promised to fix this bug immediately. The “patches” are on their way, in phases, of course. But, I think its strategy has already paid off in getting million of customers on Day 1 of the Buzz release. I call this business strategy “leveraging” and “monetizing” the power of the brand, the faith people have in the brand, and the fickleness of, and the lack of comprehensiveness in, the rules and regulations that govern the industry in which the brand operates. It’s about weighing the costs and the associated benefits. It’s all business! And, businesses do capitalize on loopholes in law. Companies will keep on exploiting such loopholes in order to gain customers and improve their bottom-line.
Wasn’t the privacy issue involved obvious to Google? The answer is as obvious as the question itself! It’s called go-to-market strategy – it is about how to acquire customers in a crowded market. Thus, Buzz was released with a buzz! And, it successfully created the necessary buzz for getting all our attention, especially when we are busy on Facebook, Twitter, MySpace, Orkut, and others. Mission accomplished! :-)
By default, based on your contacts list, it connects you to people! When you add others to your Buzz – that is, when you start following, or when you start getting followed – you can see who all your “Buzz-mates” are connected to! Now, this is a serious concern for people who experimented with – or better, say, who got victimized of – Buzz!
Well, Google has promised to fix this bug immediately. The “patches” are on their way, in phases, of course. But, I think its strategy has already paid off in getting million of customers on Day 1 of the Buzz release. I call this business strategy “leveraging” and “monetizing” the power of the brand, the faith people have in the brand, and the fickleness of, and the lack of comprehensiveness in, the rules and regulations that govern the industry in which the brand operates. It’s about weighing the costs and the associated benefits. It’s all business! And, businesses do capitalize on loopholes in law. Companies will keep on exploiting such loopholes in order to gain customers and improve their bottom-line.
Wasn’t the privacy issue involved obvious to Google? The answer is as obvious as the question itself! It’s called go-to-market strategy – it is about how to acquire customers in a crowded market. Thus, Buzz was released with a buzz! And, it successfully created the necessary buzz for getting all our attention, especially when we are busy on Facebook, Twitter, MySpace, Orkut, and others. Mission accomplished! :-)
Short to Shorter
For quite a while, I have been noticing something interesting. Day by day, things are getting shorter and shorter. Be they:
- The cycles of boom and bust.
- Interactions amongst human being (twitter, Facebook, MySpace, blogs, the volumes of voice calls are dropping worldwide, etc).
- The sizes of products (vehicles, computers, handheld-devices, etc).
- The life cycles of products and services, as we seek for frequent changes and upgrades.
- Newspapers are getting reduced to, and sometimes even replaced by, blogs, tweets, buzz, et al.
- Peoples’ memories have remarkably been getting shorter and shorter. We just move on so easily and so quickly, shrugging things off as if they never happened, and saying C’est la vie – and it must move on! :-) Well, nothing is wrong with this philosophy! But, shouldn’t we try hard enough to shape it the way we want it to be? Could you vouch for your own answer? Really? :-) Liar!
- Commitments – be they to life, passion, jobs, responsibilities, tenacity, education, logic, humility, empathy, promise, austerity, allegiance, or love.
We are getting bored of things so easily that we continually seek for changes. How is this mindset going to affect our lives? Only time will tell. But, I can surely tell you one thing – there are things that when get shorter become better, but, then, there are other things that when get shorter become worse! So, watch out what you wish for, before you really wish for! :-)
Subscribe to:
Posts (Atom)