Executive Summary: In 2007, M-Pesa started in Kenya as a CSR pilot project by Safaricom, a Vodafone subsidiary, to transfer

money over mobile because it was unsafe to carry cash. But soon it changed into a financial service and became a big hit. Vodafone
brought the platform to India in 2010 as a pilot in Rajasthan, and launched it in April 2013. But it has had a slow start
considering only 1.5 million of Vodafone's 170 million subscribers use this service. This case study looks at how a service that
originated in Kenya was tweaked for India and whether it can succeed.
Geeta Devi, Choti Devi and Lilima Kachaap, three poor women in the nondescript area of Namkum near Ranchi, Jharkhand's capital,
had recently given birth to healthy offspring. But their joy was tempered by exasperation. Their wait for due money from Janani
Suraksha Yojana (JSY), a financial assistance plan under the National Rural Health Mission (NRHM), was getting never-ending. The
scheme, which promotes institutional delivery among poor women, gives Rs 1,400 on the birth of every child to the mother.
Thankfully, the trio would get their due unlike thousands of others who do not, and from quite an unexpected source. It all started
when Vodafone, India's second-largest mobile operator by subscriber base, tied up with NRHM to do a pilot project in Namkum. The
objective: disburse money directly to the beneficiaries through M-Pesa - its financial mobile service better known as a mobile wallet. M-
Pesa is a USSD-based (an SMS-based service that does not need Internet) technology that helps people send and receive money over the
mobile, apart from making utility bill payments, and recharging mobile and DTH accounts.
The Jharkhand government shared the list of beneficiaries with Vodafone. In turn, Vodafone identified its customers on the list, and
activated the M-Pesa service for them. For people who were not on Vodafone, the company put up camps in Namkum so that they could
get Vodafone SIMs and the M-Pesa service.
Once that was done, the government sent information on the beneficiaries - and the money - to the banking system that was linked with
the M-Pesa accounts. Vodafone's agents - some of who are also business correspondents - then hand over the money to the recipients.
So, Geeta, Choti and Lilima - and several others - finally got their money through M-Pesa.
WHY MOBILE MONEY MIGHT WORK IN INDIA
Mobile money has worked elsewhere in the world. M-Pesa was started in Kenya in 2007 by Safaricom, a 90- per cent Vodafone
subsidiary, as a corporate social responsibility (CSR) activity. Due to Kenya's high crime rate, it was near impossible to carry money
physically. So M-Pesa started as a money transfer project and was hugely successful. Today, M-Pesa has 70 per cent penetration in
Kenya and is no more a CSR activity.
India might not have the same problem as Kenya, but mobile money still holds up an interesting solution for money transfer to rural
areas.
Consider the facts. India has 100,000 bank branches, five per cent of which are in rural areas. Sending money through banks becomes
impossible for the millions of villagers who migrate to big cities for work. The post office system is also used a lot to transfer money, but
is not considered entirely reliable. As a result, most migrant workers send money home in cash through travelling relatives or
acquaintances - a method fraught with chance and risk.
At the same time, government assistance schemes like JSY and employment plans like MNREGA (Mahatma Gandhi National Rural
Employment Guarantee Act) have given rise to a new breed of middlemen. This unscrupulous lot takes commissions to disburse the
money to the beneficiaries, but don't always deliver. And the cheated beneficiary is none the wiser, largely due to ignorance and
illiteracy. Plus, there are the inevitable delays due to red tape.
In Odisha, for instance, a large chunk of rural employment comes from MNREGA, which ensures 100 working days to every enrolled
individual in rural India each financial year. In the current financial year, according to estimates by experts, 6.48 crore payments are
delayed by more than 15 days, worth Rs 4,629 crore, much behind the government's desire to clear all payments within 15 days.
In Odisha, Vodafone did another pilot and tied up with the state government to disburse wages of MNREGA workers through M-Pesa in
the Hinjilicut and Chikiti blocks in Ganjam district. It solved two problems. For those with accounts in local cooperative banks and post
offices, it reduced delay in payment. And it helped deliver the money to the people who didn't have bank accounts.
What works in mobile's favour is that India has 900 million mobile subscribers, 40 per cent of which are rural consumers. "Time will tell
if it is the best possible way, but it definitely seems that m-banking is the best available medium, because of mobile telephony's
penetration in rural India," says telecom regulatory expert Mahesh Uppal.
HOW VODAFONE DID IT
After travelling through Tanzania, Fiji, South Africa and Congo, M-Pesa finally made its launch in India in April 2013, after a pilot in
2010. That was when Vodafone had tied up with HDFC Bank to become a banking correspondent in a small village called Sikar, in
Rajasthan's Jaipur district. The pilot was small, and wasn't scalable then due to regulatory problems - the government had yet not
given mobile wallet licences to operators. Vodafone was dependent on HDFC Bank to get the wallet activated, which took anything
between eight and 10 days. As a result, people would often lose interest and never come back. "We wanted to understand distribution
and customer need," says Suresh Sethi, head of M-Pesa in India. "It was a good learning process for us."
Things changed in June 2012, when the Reserve Bank of India (RBI) started giving out licences to start mobile wallet, and Vodafone
applied. In November, the operators, including Airtel, were given licences to operate a semi-open mobile wallet - which allowed
consumers to send and transfer money, pay bills and do recharges, but did not allow the user to take out cash. But the RBI did allow
interoperability with a bank, which enabled Vodafone to tie up with ICICI Bank to allow cash out options.
Finally, Vodafone's M-Pesa service was rolled out in April 2013, in the circles of West Bengal, Kolkata, Bihar and Jharkhand. A lot of
people from these states migrate to bigger cities for jobs. M-Pesa users, who could enrol in M-Pesa by a one-time payment ofRs 100, also
needed to open an account with ICICI Bank.
So Vodafone started collecting Know Your Customer (KYC) forms, a mandatory requirement to open a bank account, and started instant
activation. "We are doing a quasi-banking service. We collect KYC forms like any bank does," says Sethi. Thousands of Vodafone dealers
became M-Pesa agents or business correspondents, and started banking the unbanked.
The only problem at the time was that all M-Pesa agents had to be within 30 km of their parent bank, especially since ICICI Bank does
not have deep penetration in rural India. (The RBI subsequently removed the 30-km restriction this June.)
Within a year of M-Pesa's launch, Vodafone completed its pan-India rollout. Today, it has 80,000 outlets or banking correspondents, 60
per cent of which are in rural India, and all of them have the ability to cash out. Even though M-Pesa has other services like utility bill
payments and recharge options, money transfer accounts for 60 per cent of the business.
To Vodafone's advantage, therefore, is the limited banking infrastructure in the country and the migrant workers' need to send money
home in a secure manner. What helps is that Vodafone has a distribution network that spans 1.7 million touch points, and deep
penetration in rural India - of its 170 million users, 53 per cent are in rural areas.
Of course, Vodafone isn't the only company offering money transfer on mobile. India's biggest mobile operator Bharti Airtel launched
Airtel Money in January 2011. But its inherent disadvantage is that it doesn't allow cash out, as it does not have a pan-India tie-up with
any bank, except a very small footprint with Axis Bank. Airtel's older tie-up with State Bank of India (SBI) has also long come to an end.
SBI itself runs a banking correspondent service called Eko India Financial Services. Eko works as a mobile wallet, but is not dependent
on any mobile operator. But the network is much smaller than Vodafone's.
Idea Cellular, India's third-largest mobile operator, also has an M-Wallet. "In its current form, the segment that it appeals to is the
urban and semi-urban user," says Ambrish Jain, Deputy Managing Director of Idea Cellular. "But m-banking is needed for the unbanked
population who don't have debit and credit cards. And they require cash out, which is not available today."
Telecom companies are expecting that once the RBI comes out with the final guidelines, it will allow them to provide cash out services
without any intervention needed from banks.
LONG WAY TO GO
However, the success of M-Pesa in India on a scale comparable to Kenya looks like a long haul. Of Vodafone's user base of 170 million,
only 1.5 million are enrolled in M-Pesa. And less than one-third of these are active users. A lot of this is because people still rely on the
bank to deposit money, and are not comfortable transferring money over mobile.
Write your view
The problems with microfinance in India had raised a question: is it too early for financial inclusion in India? And now, there is a new
question: is it too early for inclusion through mobile? Marten Pieters, CEO of Vodafone India, doesn't think so. "No, we feel that we are
well positioned and aligned to enable financial inclusion," he says confidently.
Vodafone is also upgrading the M-Pesa platform. The old platform was an import from Kenya, and is not scalable. The new platform
being built will also work on the Internet. "We have built capability to provide Internet-based services also, given that reduction in price
points of smartphones and increased availability has led to (their) greater adoption," says Pieters. "M-Pesa will also be available on a
mobile app shortly."
In 2011, industry estimates and experts had said that by 2015 there will be anywhere between 200 and 300 million people using
financial inclusion, but numbers haven't yet reached a sixth of that. Even though Vodafone has got initial success with M-Pesa, the
bigger challenge is to get the numbers like its mobile service has garnered.

EXPERT VIEW:
OPTIMUM ADOPTION OF M-PESA WILL TAKE AT LEAST TWO YEARS
Sanchit Vir Gogia
"M-Pesa's adoption has been low owing to factors such as awareness and lack of
information and communication technology"
SANCHIT VIR GOGIA
Chief Analyst & CEO, Greyhound Research
Financial inclusion is the need of the hour in a country like India and it has been emphasised enough
by government, companies and individuals. The RBI's pilot project on M-Wallet has been an important
factor within the e-commerce industry and I believe it is heading in the right direction.
Talking about M-Pesa, which is Vodafone's M-Wallet offering, the adoption has been low owing to
factors such as awareness and lack of ICT (information and communication technology) networks. For
this platform to thrive it is imperative that India also reaches a healthy stage of digital inclusion, that is,
connectivity for all. Adoption is a key factor for such a service. It is important to understand that for
any new service, a mind-shift to use that particular service takes time. This will happen when the government brings vendors, suppliers
and the customer on a single platform to promote M-Wallet or, in this case, M-Pesa.
Word of mouth is the greatest tool for influencing people. If the service picks up in tier-1 and metropolitan cities, it is bound to have a
ripple effect in tier-2 and tier-3 cities. However, the success and the growth of M-Pesa will depend on the merchants who will promote
and integrate M-Pesa with their business needs. We still need to understand the fact that there are many uneducated people in the tier-2
and tier-3 markets who do not understand the concept of M-Wallet in its complete functionality. Educating them is a primary concern
for vendors. If this problem is approached strategically, it is only then that M-Pesa can achieve its optimum growth.
Therefore, Vodafone needs to approach the Indian market very strategically by ensuring that people are digitally educated on the
advantages and convenience of a platform like M-Pesa. In order to achieve optimum adoption of M-Pesa platform, Vodafone needs to
give at least two years.
M-PESA FIRST NEEDS TO FIND ACCEPTANCE IN URBAN AREAS
Rajesh Chakrabarti
"The enrolments and benefits of M-Pesa are not likely to grow smoothly over time"
RAJESH CHAKRABARTI
Executive Director, Bharti Institute of Public Policy, Indian School of Business, Mohali
Campus
Mobile money, or M-Pesa as Vodafone introduced it, has been a much awaited product in India. Given
India's enviable mobile penetration and massive financial exclusion and significant cash management
problems in certain areas, mobile money appears like the most sensible solution. However, one has to
understand that a product like M-Pesa becomes useful only when a significant number of people begin
using it, particularly the people you are usually transacting with or sending remittances to.
So, the enrolments and benefits of M-Pesa are not likely to grow smoothly over time, but are likely to
exhibit significant "breaks" as the service crosses certain critical thresholds. Hence the thrust on
hooking up large-scale vendors like railway ticket service, a node that touches hundreds of thousands of people and helps M-Pesa jump
over to a new threshold in its network effect.
Given this nature of the product, it remains too early to evaluate the success and impact of M-Pesa. Customer acquisition will be the
name of the game and Vodafone has chosen to replicate its successful African model in India by spreading a large number of agents,
over 75,000, across the country and has already crossed the million-customer mark. A strategy for customer acquisition, particularly
focused at the bottom of the pyramid, is likely to be the key driver. However, here too, a conscious, focused approach of taking M-Pesa to
the financially excluded may actually be less productive than seeking to create M-Pesa as the "in" thing and find initial acceptance in an
affluent urban demography and then have it "trickle" or "gush down" to the financially excluded.
Service providers are likely to see more benefits of signing up if their customers are into mobile money. As a result, convenience rather
than ending exclusion may end up being the USP. There, of course, M-Pesa will have to battle it out with other bank account or credit
card-based forms of mobile payments, but that should be a familiar battleground for Vodafone.
Executive Summary: PepsiCo launched Kurkure 15 years ago and has retained a dominant market share for the brand despite
intense competition from both organised and unorganised players. In this period the brand also overcame some challenges including
allegations that the snack was unhealthy. The case study looks at how PepsiCo managed to grab and retain the market space.
When it comes to describing the 15-year-old brand Kurkure, the Rs 1,000-crore snackbrand of PepsiCo India, the old-timers often talk
of luck. One of the members of the founding team, Geetu Verma says, "The birth of Kurkure was part necessity, part serendipity."
Currently the Executive Director (food and refreshments) at Hindustan Unilever, Verma had strategised the brands launch in 1999. The
need was to carve out a space as a competitor to namkeen and capture the market faster than potato chips. Initially the team's challenge
was to differentiate the product in a market where potato chips at Rs 300/kg were also a significant premium to the namkeens, the
traditional Indian salty snack, at Rs 100/kg. The luck was in how Kurkure did stunningly well in the market.
Rs 1,000 cr
Kurkure now commands 60 per cent of the market share in the so-called bridge segment
of snacks.
Unlike potato chips or namkeens, Kurkure offered a different and compelling taste experience thanks to the different technology used to
make it. The ingredients are fed into a machine that makes puffed extrusions or collette, which are then cut to desired length. It was a
new experience for India and PepsiCo India managed to offer a compelling taste at a competitive price. "We had the same mix as a
200gm bag of namkeen for Rs 20 but we delivered a bag size that was almost 1.7 times bigger," says Verma. While a local snack of same
quantity was of the same price, potato wafers were almost double the price.

Instead of a purely corn-based product, the team came up with a spicy flavoured Masala Munch made of lentils, rice and corn. "We were
not sure if people would take to the new brand and so we had called it Lehar Kurkure," says Deepika Warrier, Vice President
(Marketing), PepsiCo India. Lehar, the Indian partner's brand name, was added to Kurkure for access to local taste and cues. The team's
concerns were justified as it was angling for a space between the traditional salty snack and the more western potato wafer. The
company called it the 'bridge' category and Kurkure, the 'finger snack'.
Today, the company commands about 60 per cent market share in the 'bridge' category, which is worth Rs 1,950 crore. The total market
for salty snacks in India is worth Rs 13,000 crore and traditional snacks account for Rs 5,200 crore. The puffed snack market too is
valued at Rs 1,950 crore. The potato chips/wafer market is worth Rs 3,900 crore where Uncle Chips and PepsiCo's Lays are market
leaders.
Hear the crunch
Though Kurkure created a new space in the market, the larger challenge for the company was to get the customers hooked to its
unusually shape and crunchy texture. "In fact the brand name Kurkure was the outcome of a group discussion in which consumers
sampled the brand and repeatedly said that it was nice and 'kurkura' (crunchy)," says Dr T.S.R Murali, Head of R&D, PepsiCo India. The
first objective was to start consumer trials. "We stuck to the consumer feedbacks and used the advertising line Kya Karen Control Nahi
Hota," says Warrier.
However, advertising was not the only strategy that the company relied on. While consumer trials were on, the sales team also launched
an orange parade. "I remember being in Chandigarh, which was one of our first launch markets," says an industry veteran. All the three-
wheelers carrying the product were painted orange. Almost the entire sales team had assembled in Chandigarh to ensure 100 per cent
coverage of outlets in 10 days. Its success led to it being repeated in other regions too. "It was perhaps one of our fastest market
placements ever. We knew in the first 30 days itself that there was no looking back," says a former PepsiCo India employee.

The brand created a new space in the market and succeeded in winning the hearts of customers

The company was relying on communication and also pushing the boundaries of marketing innovations. "They were the first in the
segment to start selling ladis (string of packs) that we could hang out in our stores," says a shopkeeper. He lauded the company which in
2001 had provided racks outside the shops to display the brand.

After the product was established in the market, the phase II plans took off. There was a need to make Kurkure a central part of the tea-
time. The company by then had clearly delineated between Lays and Kurkure brands. "We decided early on that it had to be part of the
tea-time. It was this irrepressible, loud, desi brand that was affordable. Lays appealed to the youth, was Western in its taste cues and an
impulsive out-of-home snack," says Warrier. As part of this, in 2005, the company roped in actor Juhi Chawla as a celebrity brand
ambassador. The brand also kept pace with the flavour of the season - teleserials. The tagline 'Kahani Mein Kurkure' was launched
where Chawla spoofed the character of Tulsi in the Kyunki Saas Bhi Kabhi Bahu Thi soap and the brand humorously wedged itself into
the mainstream.
The 'Kya Family Hai' campaign tried to capture the dysfunctional family that came together at tea-time.
Party Poopers
In 2007, the company was caught off-guard when ITC Foods launched Bingo. "Their communication was gaining traction and the
product caught consumers' attention," says Warrier. PepsiCo started the Tedha Hai Par Mera Hai campaign that allowed the company to
win back attention of customers from Bingo, which had a variant called Tedhe Medhe. There was a minor communication challenge too
when the brand switched to 'Kya Family Hai' campaign. "We thought we might create a more real family if the protagonist wasn't a
celebrity like Chawla. So then came the job of telling Chawla that she was not going to be Nikki, the protagonist in our new campaign,"
says Sonia Bhatnagar, Executive Creative Director, JWT. But that could not be managed. Though Chawla did her role well, the feedback
was not satisfactory.
The brand was also embroiled in a controversy in 2008 when allegations surfaced on social media that Kurure contained plastic. "We
have countered it in whatever platform it surfaced on. This issue has withered away," says Warrier.

The brand created a new space in the market and succeeded in winning the hearts of customers

However, many local competitors were mushrooming. Significant among them were Balaji Foods, Yellow Diamond and established
brands DFM Foods with Crax brand and Haldiram's and Bikanerwala.Between 2009 and 2011, the number of local players rose from
1,378 to 2,863 and PepsiCo lost two to three per cent market share. The competition forced it to be innovative again. Around 2005, the
brand had begun widening its consumption base in a manner similar to that of Cadbury's ad campaign through which it tried to put
itself in place of traditional sweets. Kurkure made a similar attempt with its campaign Meetha Sheetha Chodo, Kurkure Kha Ke Ho Jao
Mast. It also scaled down price to launch Rs 3 packs in 2004 and Rs 2 packs in 2011. The brand created excitement with its own versions
of Desi Beats in 2009. "We used some tactical exercises where we combined our brands and offered attractive discounts," says Warrier.

"We have allowed Lays to take a correction but not Kurkure's. We worked on scaling down the packaging costs while keeping quality
intact," she says. Industry sources say Kurkure continues to hold 60 per cent of the market share in the segment. All others such as
Bingo, Yellow Diamond, Balaji and Bikanerwala together accounts for less than 25 per cent. "We will continue to take the high road of
product innovation and have recently entered the puffed snacks range. There will be regionally strong players and there will be times
when some others could come up with something new, but we are not taking off our eyes from the ball," says Warrier.

STAY WITH CONSUMER LIKES

Siddharth Singh

"Kurkure must continue to come up with new products regularly"

SIDDHARTH SINGH,
Professor of Marketing, Indian School of Business

The market for namkeen is huge in India. But the quality of the offering by the local vendors is
questionable. Indian consumer associate salty snacks from the global companies to high quality. But
these snacks have limited appeal as they prefer spicy snacks. Kurkure has been successful because it
offered alternatives that appealed to the Indian consumers' preference for spicy snacks in an innovative
form. The packaging too was perceived as high quality. Though the category is competitive, it offers the benefit of easy experimentation.
Kurkure has done well so far. To maintain its dominance, Kurkure must focus on innovations in the marketing mix and address the
needs, tastes and behaviour of Indian consumers. Kurkure must continue to come up with new products regularly. Despite growing
competition, the Indian market still offers tremendous opportunity that Kurkure can exploit. For example, there are special-occasion
snacks and region-specific snacks that Kurkure can offer.
While Kurkure offers products at different prices, the company has not focused much on product packaging. The company could keep
distribution challenges and consumer behaviour in sight while developing new packages for its products. For example, it is common for
consumers to keep namkeen in large packs and use small quantities when needed. Kurkure could explore resealable bags and sell
Kurkure (or some version of it) in larger quantities. However, this might require efforts to maintain product integrity.
The Indian market is changing. Consumers prefer products that are healthy and environment-friendly. Packaged snacks are generally
not considered healthy. So there is an opportunity to create value for consumers in new ways. Perhaps new product formulations and/or
environment-friendly packs can be used to enter new and growing segments. Overall, the company can maintain its leadership through
innovative new products that maintain the taste and quality parameters.

A CULTURAL BRAND IN MAKING

Ashish Mishra

"The embracing of the unusual and the imperfect as a brand philosophy seems to be an
opportunity"
ASHISH MISHRA,
Managing Director, Interbrand

Today it is important to generate conversations around a brand. When are people most likely to engage
in conversations? When they're passionate about something. So if one can hook a brand on to a cause, a
conviction, an opinion that people really care about, there is a better chance of creating the highest
order of connect through cultural branding. That's what some of the progressive Indian brands are
attempting to do and Kurkure alongside Idea and perhaps Tata Tea are a few of the frontrunners.
While cultural brands have a universal prevalence with Coke being perhaps its most iconic example, the flux of the emerging markets
works as a more conducive cruicible. Especially the pluralistic societies like ours with strong history and culture, when subjected to high
degree of social change simmer with numerous sociocultural tensions. Examples of it are many. Unassisted nuclear family parenting in
competitive high growth societies has turned hyper and is causing substantial parent-child relationship trauma. An apt Kurkure
Ambassador Juhi wears a defiant mask in a parentteacher meeting to ward off the critical comments of a hyper teacher and defends her
'tedha' child. Don't we all feel like defending our overburdened little ones succumbing to needless competition?
Or for that sake the conflict of swarthy Indian maleness suffocating under the borrowed cloak of metrosexuality. Once again a less than
coy Kurkure Ambassador defies her extra choosy dad by voicing her endosrement of a cute but crude prospective 'tedha' groom. The
embracing of the unusual and the imperfect as a brand philosophy seems to be an opportunity. This is a wonderful possibility for a
brand like Kurkure that has its genesis in its innovation as a 'bridge product'. The highlighting of the demand driver of crispness in its
sound and layering the product uniqueness level through the spicily defiant 'tedhapan' remarkable evolution.

Just the Right Image

This case study looks at the strategy and tactics behind the creation of Brand Modi.

Shamni Pande Delhi Print Edition: June 8, 2014

Narendra Modi Photo: Reuters

Executive Summary: Bharatiya Janata Party leader Narendra Modi's election juggernaut in the 2014 Lok Sabha polls is an
example of howto prepare and successfully implement a marketing and branding campaign. Irrespective of your faith, ideology and
voting decision, there has been no escaping Modi. His image and in-your-face messaging have overshadowed all other brands - even
that of his own party. This case study looks at the strategy and tactics behind the creation of Brand Modi.
Pitching a specific leader as a driver of change and to mobilise voters' support is hardly a new political strategy. After all, the Bharatiya
Janata Party (BJP) had projected L.K. Advani and Atal Bihari Vajpayee its prime ministerial candidates in the past (remember the Ab ki
baari Atal Bihari slogan in 1996?). The Congress party's projection of Indira Gandhi as the country's tallest leader with its 'Indira lao
desh bachao' tagline in the 1970s is another such example. But the personal rhetoric had been tied, and sometimes made subservient, to
the political parties to which these leaders belonged. With his landslide win in the 2014 Lok Sabha elections, Narendra Modi has
rewritten the rules of the game and redefined Indian politics. Brand Modi has not only captured popular imagination but also trumped
Brand BJP. How did it happen?
David Aaker, American marketing guru and author of several books on branding, wrote in an April 2012 blog post that every person has
a brand that affects how the person is perceived and whether he or she is liked and respected. This brand, he says, can be actively
managed with discipline and consistency over time, or it can be allowed to drift. Modi and his marketing team showed oodles of both
once he was anointed the BJP's prime ministerial candidate on September 13 last year. In fact, they had been at it from much before.
Modi's transformation over the past year from a regional, right-wing politician to a decisive leader with a clear development agenda, the
one best suited to take India forward is nothing short of extraordinary. Senior BJP leaders Piyush Goyal and Ajay Singh handled the
overall media strategy, and a task force was constituted to handle Modi's campaign in Varanasi. Advertising legends such as Ogilvy &
Mather's Piyush Pandey, McCann Worldgroup's Prasoon Joshi and Sam Balsara of Madison World lent their skills at various levels.
Advertising agency Soho Square, part of the WPP Group, handled television, radio and print campaigns with catchy slogans such as "Ab
ki Baar Modi Sarkar".

"The archetype he offers is of a strong, all-knowing father figure who is unwavering," says Santosh Desai, who heads Future Brands, the
brand consultancy arm of Future Group. To create the father figure, Modi's team invoked tales of childhood, in books and comics.
Invariably, and understandably, they were tales of heroism involving a precocious Bal Narendra (Modi as a child). What else would you
call a story about a child swimming across a crocodile-infested lake to plant a flag on a memorial? The child, when he came of age,
walked away from his family to devote himself to public cause, lending what brand consultant Harish Bijoor calls "bachelor blandness"
to his story.

From Gujarat to India

Modi's team faced three main challenges when it set out to project him as the country's next prime minister. One, the three-time
Gujarat chief minister was a regional brand trying to go national. Two, the 63-year-old was seeking to connect with the youth
considering that this year's election had almost 150 million first-time voters. Modi, who rarely chooses to speak in English, was trying
also to connect with the urban, middle-class audience that is becoming more politically conscious. Finally, and most importantly, he
carried the taint of the 2002 anti-Muslim riots in Gujarat.
The one event that, perhaps, helped Modi the most in making a mark on the national scene was the shifting in 2008 of Tata Motors'
factory for the Nano minicar from West Bengal to Gujarat. Farmers in West Bengal, backed by firebrand politician Mamata Banerjee,
now the state's chief minister, had been protesting land acquisition for the plant by Tata Motors. Modi provided the company land and
other incentives almost overnight. In the process, he also established himself as a champion for industry and development.

Sridhar Samu, Assistant Professor of Marketing at Hyderabad's Indian School of Business (ISB), says it's not easy for most product
brands to go from regional to national. He says the dilution of the only other national brand, the Congress, and a common underlying
need for change also helped Modi. "If a brand can tap into a common underlying need and connect it to benefits, then it could go
national. We see how both Haldiram's and Saravanaa Bhavan have managed this. They targeted the underlying need for tasty snacks
and south Indian food," he says.

Full Coverage:Lok Sabha Elections 2014

According to Y.L.R Moorthi, Professor of Marketing at the Indian Institute of Management, Bangalore, there is a difference between a
regional brand going national and a politician going national. He says Modi was known outside Gujarat even before he decided to move
beyond the state, just as Nitish Kumar and J. Jayalalithaa, chief ministers of Bihar and Tamil Nadu, respectively, are known. But these
regional leaders didn't venture out of their home states in the recent elections. Modi did. And he did it at a massive scale - he attended
more than 5,000 events and 470 political rallies across the length and breadth of the country.

Striking a Chord
On February 6, 2013, more than six months before he was named as the BJP's choice for the prime minister's post, Modi addressed
students at Delhi's Shri Ram College of Commerce. He talked about Gujarat's model of development. He spoke passionately about the
need for speed in government decision-making and about the need to improve skills of the youth to accelerate economic growth. That
speech won him many young admirers. One of them is the second-year student Sulabh Newatia, who says he decided to cast his vote for
the BJP after listening to Modi's speech. "I see him as a visionary who can take the nation forward," says the 19-year-old from Kolkata.
Modi, an excellent orator, has delivered scores of similar speeches since then. He highlighted slowing economic growth, high inflation
and lack of new jobs - issues which immediately resonate with young and urban voters - while blaming the Congress-led United
Progressive Alliance government for the problems. After the elections were announced, his marketing team bombarded voters with
print, television and radio advertisements with the same themes. It reached voters
through text messages and Modi's recorded voice seeking votes for himself. It also tapped
into social media platforms such as Facebook, YouTube and Twitter - Modi has about four
million Twitter followers - to magnify the impact of the advertising and branding
campaign.
The impact of this relentless campaigning has been felt across different age groups,
geographies and sections of society, says political analyst Manisha Priyam. "I have even
heard young children, far removed from such debate, mentioning the word 'NaMo'," she
says, referring to a sobriquet for Narendra Modi. The carefully crafted moniker also
appeals to the traditional Hindus - the BJP's main vote bank - because of its religious
connotation, as the Sanskrit word Namo is used as a salutation reserved for the Hindu
gods.
Modi's efforts to connect with the youth and urban voters were helped in no small
measure by his pro-business persona. Business leaders from industry doyen Ratan Tata to
billionaire brothers Mukesh and Anil Ambani have praised Modi and his administration in
Gujarat. This has allowed Modi to build his brand as a progressive leader who has the
ability to deliver economic results - the single biggest leitmotif of this campaign that has
allowed it to cut through caste bias among other things. "The Congress is not lacking in
spending power or ability to get marketing brains to campaign for it. But the biggest push
for Modi has come from the overt push and advocacy of corporate leaders," says
independent political observer and media veteran Paranjoy Guha Thakurta. "It is a truism
that marketing cannot sell a bad product. Irrespective of the money you spend on
marketing, if what you are selling fails to strike a chord in the minds of a large section of
the electorate, all efforts to market Modi would be in vain."

Shaking Off the Stigma

The biggest challenge Brand Modi faced was diverting public attention away from the
2002 communal riots in Gujarat that claimed the lives of more than 1,000 people, mostly
Muslims. Initially, Modi's supporters in BJP attempted to engage in public debate and
highlight the clean chit given by courts to wash off the stigma. Then, they changed tack.
They toned down the Hindutva rheotoric and focused instead on Modi's more recent past
and his development record in Gujarat. "He knows that people want a better life and he
offers Hindutva with the right dilution," says Desai of Future Brands.
Marketing gurus cite the examples of Cadbury, PepsiCo and Coca-Cola that battled
problems relating to brand-taint. Cadbury had fought its way out of a controversy related
to worms in its chocolates while the two beverages giants faced allegations of pesticides in
their colas. "The best way for a tainted brand to overcome a challenge is to not talk too
much, but to acknowledge it happened, and then move on," says Samu, the ISB professor.
"The more one talks about, the more the memory for that event gets activated among the
target market, and they remember it more. The BJP and Modi did not talk about it. Or if
they did, they kept it to a minimum," he adds.
IIM-Bangalore's Moorthi says the weakness of the Congress leadership also helped boost
Brand Modi. "When the brands in the domain appear worse, the contending brand might
shine by comparison. In Modi's case, he was helped by the tightlipped nature of the
Congress leadership and their indifferent performance in the second stint," he says.
While most companies routinely apologize for problems detected in their products, Modi
stopped short of doing so. "He did give an account of reflections on the event [the riots].
He seemed to say that he was pained about the event but didn't say sorry," says Moorthi.
Veteran adman Prahlad Kakkar concurs. "It does not matter if he [Modi] is wrong. He will
never publicly admit that," observes Kakkar, who has been associated with several political
campaigns, including that of Indira Gandhi. "But he will, at the same time, take corrective
measures to navigate out of it, without ever saying so."
The Ideal Model
Not so long so, the words that could have been used to describe Modi were authoritarian,
megalomaniac and communal. The way the creators of Brand Modi dealt with the third
taint was by not dealing with it. "What more was there to say [about the post-Godhra
riots)? There have been various panels instituted to probe into the matter," says a BJP
leader.
Instead, they focused on building Modi's image as self-made, strong, efficient, inspiring,
and incorruptible. "He [Modi] created an impression of being a sincere, credible and
committed leader. He convinced people that he could improve their lot," says social scientist Ramadhar Singh, Distinguished Professor,
IIM-Bangalore. This is the leitmotif the marketing arsenal of the BJP worked to amplify. "No media can help create that kind of
consistency," adds Kakkar, the veteran adman.
Tweets about "#newgovt"
Automatically, as if by derivation, the Congress-led United Progressive Alliance began to look more and more indecisive and corrupt.
"Today, India attributes weakness and failure to Congress," says adman and lobbyist Suhel Seth. "Modi stands for good governance."
All stories about Modi's life in the public domain have consistently fed into this new image. And although questions remain about Modi's
ability to perform at the national level and his Gujarat model of governance, his personal branding and marketing strategy seems to have
worked and voters across the country appear to believe his claims. "Even if you cut out 40 per cent of what is untrue about Modi's
promise of growth...the rest is very real," says Guwahati's Chiranjib Hazarika, 24, who is looking to start a career in banking.
"Development is his only agenda and people are following him."
Modi's message has attracted even those disinterested in politics. "I have never been very politically conscious. But it is frustrating to see
our economy slide back from the progress it made. So, I stepped out to vote, for the first time, for Modi," says Shankar Narayanan, 28,
who works for a multinational information technology company in Chennai. "Modi has a proven track record of governance and
growth."
Cut to 40-year-old Manoj Rana, who runs a small guest house in Shillong, and you have the answer to the most central ingredient of
Modi's branding: "We are not interested in politics. We want change. Modi can deliver that change. People are sensible, they are not
carried away by mere talk," he says. That indeed is the bottom line of any brand's success story. It bears out that Modi's brand is by him,
for him and from him. The BJP machinery has served as mere coaches for the branding-led engine of Modi.

The branding of Modi and a presidentialstyle campaign

was a brilliant response to redefine politics: Siddharth
Shekhar Singh, Associate Professor of Marketing and
Director of the Fellow Programme in Management, Indian
School of Business

BRAND MODI MUST MEET ITS PROMISE OF GOOD

GOVERNANCE

The national branding of Narendra Modi was born out of

compulsion. Opponents had successfully branded the BJP as
communal and checked its rise under the uninspiring old
leadership. The BJP needed to redefine Indian politics along dimensions of good
governance and development that suited it better.

The party was the first to recognise and adapt to the fundamental shift in the
composition and aspirations of voters. It seized the opportunity to project a new face
to address voters' aspirations. Thus was born brand Modi. A humble origin,
extraordinary achievements through sheer hard work and dedication, and a
corruption-free image made Modi an apt mascot to challenge the status quo. The
branding of Modi and a presidential-style campaign was a brilliant response to
redefine Indian politics.

The branding of Modi was a well-crafted strategy of the RSS and the BJP. The
campaign attracted many newcomers. It was the first election campaign in India to
use social media and information technology heavily and first to listen to the voters
and respond in real time.

Brands require huge investment to build, and continuous nurturing to sustain value.
Not only can brand Modi sustain the BJP in power for a long time, it can also help the
RSS reposition itself. However, before that can happen, the promise of brand Modi -
good governance and economic development - must be realised. Further, many
voters are uncomfortable with the communal agenda of some of his supporters.
Modi has to show what true secularism is and why it is different from pseudo-
secularism. If he succeeds in these three areas, he would change Indian politics
forever and make the BJP the natural party to govern - the main objective for
building brand Modi.

Siddharth Shekhar Singh, Associate Professor of Marketing and Director of the

Fellow Programme in Management, Indian School of Business

He [Modi] is a very strident, tenacious, and in-your-face

avatar of a brand: Prathap Suthan, Managing Partner and
Chief Creative Officer, Bang In The Middle

MODI IS A BRAND WHO KNOWS HE IS IN THIS FOR THE

LONG RUN

It is not uncommon in the world of marketing for a brand to

become not only bigger than its creator but also to
revitalise and rejuvenate it back. What iMac and iPod did to
Apple Inc is what Narendra Modi has done to the BJP. Prior
to Modi, the BJP brand was on the brink of irrelevance for what it stood for. Its
Hindutva identity resonated deeply with the partition generation but its effect had
weakened for the successive generations. Demographically, India is one of the
youngest nations with more than 65 per cent of people below 35 years. Modi's ability
to become bigger than the BJP lies in his ability to listen to murmurs and whispers of
this India, tapping into their simmering anger and hopelessness.

Modi created an identity that resonated with far more people and deeper than that
of the BJP. Like brands make sense at surface and deeper levels, Modi's discourse on
economic development and prosperity intersected at the surface level of
consciousness. The Gujarat model threw in words like governance, roads, electricity,
women's safety, peace, industry and education, supported by statistics. This satisfied
the questioning mind that hankers for reason.

But reason is often the alibi for non-reason. Modi's ability to become taller than his
party lies in his symbolism. He tapped into despair, hopelessness and sinking feelings,
and arrived on the scene taking on the symbolism of the outlaw and the ruler
combined. He is perceived as an icon of disruption and rebellion against the way
things are done. It is this counter-cultural streak that appeals to youth who desire
change. And his traits like being organised, proactive, and confident, and in
command of things, subtly connect with the ruler archetype.

Prathap Suthan, Managing Partner and Chief Creative Officer, Bang In The Middle
 Prior to Modi, the BJP brand was on the brink of irrelevance
for what it stood for: Harsh V. Verma Associate Professor,
Faculty of Management Studies, University of Delhi

MODI DID TO BJP WHAT iMAC, iPOD DID TO APPLE

It is not uncommon in the world of marketing for a brand to

become not only bigger than its creator but also to
revitalise and rejuvenate it back. What iMac and iPod did to
Apple Inc is what Narendra Modi has done to the BJP. Prior
to Modi, the BJP brand was on the brink of irrelevance for
what it stood for. Its Hindutva identity resonated deeply with the partition
generation but its effect had weakened for the successive generations.
Demographically, India is one of the youngest nations with more than 65 per cent of
people below 35 years. Modi's ability to become bigger than the BJP lies in his ability
to listen to murmurs and whispers of this India, tapping into their simmering anger
and hopelessness.

Modi created an identity that resonated with far more people and deeper than that
of the BJP. Like brands make sense at surface and deeper levels, Modi's discourse on
economic development and prosperity intersected at the surface level of
consciousness. The Gujarat model threw in words like governance, roads, electricity,
women's safety, peace, industry and education, supported by statistics. This satisfied
the questioning mind that hankers for reason.

But reason is often the alibi for non-reason. Modi's ability to become taller than his
party lies in his symbolism. He tapped into despair, hopelessness and sinking feelings,
and arrived on the scene taking on the symbolism of the outlaw and the ruler
combined. He is perceived as an icon of disruption and rebellion against the way
things are done. It is this counter-cultural streak that appeals to youth who desire
change. And his traits like being organised, proactive, and confident, and in
command of things, subtly connect with the ruler archetype.

Harsh V. Verma, Associate Professor, Faculty of Management Studies, University of

Delhi

Quenching Chennai's Thirst

This case study looks at how the Chennai Metropolitan Water Supply and Sewerage Board leveraged the citys coastal location, developing a model that not only enables it to
get low-cost water but also encourages private-sector participation.

N. Madhavan Delhi Print Edition: Mar 16, 2014

 A file photo of Chennai residents filling water from a tanker in Mylapore. With two desalination plants augmenting the city's water supply, such scenes are a fading memory. Photo: H. K.
Rajashekar/www.indiatodayimages.com

EXECUTIVE SUMMARY: Water, a politically sensitive commodity, has always been underpriced in India. This sector has bankrupted
most state-run water utilities and made the private sector wary of getting into it - thereby leaving large parts of the country water-
starved. But this state of affairs need not continue. This case study looks at how the Chennai Metropolitan Water Supply and
Sewerage Board leveraged the city's coastal location, developing a model that not only enables it to get lowcost water but also
encourages private-sector participation.
The water scarcity Chennai faced in 2003/04 was unprecedented in the citys 400-year history. Its four reservoirs went bone-dry as the
monsoon failed for two consecutive years. The ground water level, too, fell sharply. Piped water supply was shut down and remained so
for almost a year. The Chennai Metropolitan Water Supply and Sewerage Board (or Metro Water, as the citys water utility is popularly
called) barely supplied 175 million litres on alternate days. At the time, the citys population of 4.5 million needed 600 million litres daily
(MLD). Much of the water - around 100 MLD - had to be transported from aquifers 150 km away, on trains and trucks. The citys
residents had to pay substantially to buy water from private suppliers, spending an estimated Rs 50 crore a month.
The crisis pushed the state government, then led by Jayalalithaa (in her earlier stint as chief minister), to look for ways to drought-proof
the city. The state government launched the New Veeranam project, which envisaged a supply of 180 MLD from the Veeranam tank, 225
km from Chennai. The tank is at the tail end of the Cauvery river system, and is fed by the southwest monsoon. The citys reservoirs
depend on the northeast monsoon. But it still meant that all water sources - Veeranam, the citys reservoirs and the Telugu Ganga project
(which made Krishna river water available) - remained dependent on the rains. This was a source of worry.
Rs 50 cr The amount Chennai residents paid private contractors every month for water in
2003/04
The government began to look for a perennial source of water. The city's long coastline offered a solution. "Desalination opened up the
possibility of having a perennial source of water," says B. Chandra Mohan, Managing Director at Metro Water. The state government
decided to bet big on desalination.

But that threw up many challenges. Water, being a politically sensitive commodity, is always underpriced in India. Such pricing has
driven the private sector away from water projects and left state-run utilities deep in the red. Not surprisingly, large parts of the country
are water-starved. As data placed in Parliament by the Urban Development Ministry in September 2013 showed, 22 cities in the country
have water shortages of 30 per cent or more.
Desalinating water is costly, and involves advanced technology, so
private-sector participation in Chennai was critical. But Metro
Water was not exactly in the pink of financial health.
Still, it went ahead. With no experience in desalination, it opted in
2005 for a build, own, operate and transfer (BOOT) model of
private-sector participation to set up the first desalination facility. It
entered into an agreement with IVRCL Infrastructure & Projects
Ltd, which had environmental technology company Befesa Agua of
Spain as a partner, to set up a 100 MLD desalination plant at
Minjur, a suburb north of Chennai. In turn, it would pay IVRCL 4.8
paise per litre of water supplied for 25 years. The project began
supplying water from July 2010.
Even as the Minjur project was being developed, Metro Water
began studying alternative business models of desalination that
would not only reduce the cost of the desalinated water, but also
give it a say in the choice of technology, to ensure cost efficiency. It
also wanted to use its learnings from Minjur for future projects. A
BOOT project offered no such scope.

After months of research, Metro Water finally arrived at a hybrid

model. "We decided to marry the advantages of the BOOT and EPC
(engineering, procurement, construction) models," says Metro
Waters Chandra Mohan. The new model allowed private-sector
participation, and also leveraged the governments strength in terms
of capital mobilisation and risk management. The government
would pay for and own the plant, but construction and operations
would be in private-sector hands. For the 100 MLD desalination
plant the Metro Water planned at Nemmeli - south of Chennai, en
route to the famous Mahabalipuram temple - it zeroed in on this model.
"The cost of capital and the associated risks [as bankrupt state utilities are the major buyers] are big elements," says M.S. Srinivasan,
Senior Vice President, VA Tech Wabag, a Chennai-based water treatment company. "They add up to two paise per litre of water, and
push the end price of water to around five paise. This model took these costs out of the equation."
831 million litres daily Amount of water supplied to Chennai residents by Metro Water
Metro Water used money from the Rs 1,000-crore grant that Finance Minister P. Chidambaram had allocated to solve Chennais
drinking water problem in the 2005 budget, to fund the 100 MLD Nemmeli desalination plant.

To keep costs low, Metro Water took the bidding route right from the detailed project report stage. In August 2007, Mecon Ltd, a public-
sector undertaking, was awarded the contract to draw up a detailed site-specific project report. Unlike most other projects, Metro Water
also asked Mecon to do a detailed engineering assessment of the project. This meant that finer details of the project, such as the choice
of technology, machinery and plant design, had to be firmed up early on.
Advanced Integrated Membrane Technology was chosen for the Nemmeli project. Not only was it five per cent cheaper in terms of
capital costs, but it also had relatively low running costs and consumed 20 per cent less power than rival technologies (energy accounts
for 65 per cent of desalination costs). It also consumed fewer chemicals (and hence was more environment-friendly) and required less
land. The Nemmeli facility took up just 20 acres of land compared to Minjurs 60 acres. (IVRCLs Minjur plant uses conventional
filtration systems.)
To keep costs low, non-proprietary equipment was preferred. Metro Water ensured a pre-treatment process was in place. As the Bay of
Bengal is a rough sea, a lot of dirt enters the system through the intake pipes. The Minjur plant had faced enormous challenges initially
due to this.
Once the project report and detailed engineering plans were in place, EPC tenders were invited in January 2009. Bidders were given the
report and drawings, and asked to quote a price to build the plant. "Metro Water put a lid on the choice of technology, design, machinery
and got EPC contractors to offer the best quote," says Srinivasan of VA Tech Wabag. "In the normal course, contractors would have
given a quotation using different technologies, and Metro Water would be comparing apples and oranges."
Simultaneously, Metro Water invited seven-year operation and maintenance (O&M) bids. This process factored in energy efficiency by
fixing energy consumption. "Median energy consumption parameters were arrived at. If the O&M operator exceeds them, he is
penalised," says Chandra Mohan. "This way we ensured that bidders did not quote low prices for the EPC part and recoup them through
O&M." Six of seven bidders qualified, and VA Tech Wabag in collaboration with IDE Technologies, an Israeli consortium, bagged the
contract in December 2009. To ensure that the EPC contractor adheres to the design, Mecon, which drew up a detailed project report,
was appointed as project management consultant.
Work on the Nemmeli plant started in April 2010. The plant reached full capacity in December 2013. It cost Rs 533 crore to build.
Today, water from Nemmeli costs just two paise per litre. "It has cut the cost to a level that is politically palatable. It offers tremendous
scope for replication across the country," says Srinivasan. Experts say the execution of the project offers interesting lessons.
Water shortage returned to Chennai this year, after a poor monsoon last year. Storage in the reservoirs is low, and the groundwater level
is falling. But with two desalination plants producing 200 MLD, Metro Water has kept up the citys supply at 831 MLD. Desalination
accounts for a quarter of the citys water supply.
As a follow-up to Nemmelis success, Chief Minister Jayalalithaa has announced two more large desalination plants for the city, of 150
and 400 MLD capacity, based on the Nemmeli model. These are expected to be up and running by 2018, accounting for 70 per cent of
Chennais water needs and making the city drought-proof for the first time in its history.

Fast penetration of desalination plants requires strong

political will and private-sector participation: Sasidhar
Chidanamarri, Industry Manager, Environment & Building
Technologies Practice, Frost & Sullivan

Coastal cities must use the sea

Water scarcity is a global issue which needs regional

attention and management. For many coastal cities, desalination has been a key
problem-solving technology. To tackle the impending water crisis, India too adopted
desalination, albeit slowly. Unlike in industry, the growth of desalination in the
municipal segment has been slow in India, mainly because most of the municipal
corporations are unable to pool in the funds required for setting up large-capacity
desalination plants.

Factors such as high subsidy for water and poor water metering systems have
resulted in sub-optimal revenue generation. But with support from the Jawaharlal
Nehru National Urban Renewal Mission, which aims at improving infrastructure in
Indian cities, municipal corporations can overcome financial constraints.

India has a vast coastline. There are about 20 coastal cities with varied potential for
desalination. Key cities for desalination are Mumbai, Chennai, Kolkata, Surat,
Visakhapatnam and Kochi. Around 94 per cent of the total water requirement of
coastal cities in the country is from these six cities. The combined water requirement
in these 20 cities stood at 9,059 MLD in 2013 and is expected to grow at a compound
annual rate of 7.6 per cent to reach 23,607 MLD in 2026. One can expect heavily
populated cities such as Mumbai, Chennai, Kolkata, Surat, and Vizag to turn to
desalination plants to narrow the supply-demand gap. Fast penetration of
desalination plants requires strong political will in addition to promoting private-
sector participation, as seen in the desalination projects executed in Chennai.

If the top coastal cities decide to build desalination plants to meet 20 per cent of
drinking water needs, then by 2026, Mumbai will need an installed capacity of 2,500
MLD, followed by Kolkata with 750 MLD and Chennai with 400 MLD. Chennai has
already begun. The other municipal corporations, too, must start planning the means
to match supply and demand. For this to happen, the road definitely goes through
desalination.

Sasidhar Chidanamarri, Industry Manager, Environment & Building Technologies

Practice, Frost & Sullivan

Chennai has dealt with the supply side of the water

equation. It now needs to also focus on the demand side:
Ranen Banerjee, Executive Director, PwC, India

Supplying more is not enough

The focus of all water utilities and state governments while

addressing the gap between demand and supply, has been
to address the supply side of the equation through new
capacity addition. This brings in the requirement for new capital investments and a
consequent increase in the overall cost of supply.

There are certain issues that are not being prioritised by the water managers in the
country. The first is of Non-Revenue Water (NRW), a euphemism for water lost
through leaks in the distribution network. Any new supply being pumped into a
leaking distribution system will have its impact limited by this problem. NRW is
reported to be more than 40 per cent in most cities in India. The second issue is that
supply is limited to only a few hours in the day. This leads to the tendency of
consumers storing more water than they need, and emptying the stored water the
next day when fresh supply commences. This leads to inflated consumption.
Consequently, 24x7 water supply systems lead to significant reduction in water
consumption.

The third issue is building awareness about water conservation. Awareness building
 has to be integrated in the school curriculum and supplemented by other media
efforts, so that the coming generation is more sensitive to water wastage. Finally, the
most difficult and politically sensitive issue is of 100 per cent metering and right
pricing of water. The tariffs and metering also contribute to water conservation in a
big way. The focus on improving water distribution network has yielded wonderful
results in many cities across South and Southeast Asia, such as Manila, Phnom Penh
and some cities in Bangladesh (where a beginning has been made).

Chennai seems to have placed its bet on desalination towards addressing the supply
side of the equation. It now needs to also focus on the demand side of the equation
by addressing the issues mentioned earlier. It may not need the new plants in the
future!

Ranen Banerjee, Executive Director, PwC, India

Pushing the accelerator instead of brakes

N. Madhavan Print Edition: June 28, 2009

Over the last nine months, R. Subramanian has aged much beyond his 43 years. The Managing Director of Subhiksha Trading Services-
which pioneered the discounted retail format in India- has been struggling to get his brainchild operational again after it collapsed in
February following a cash cycle squeeze. In fact, the change in Subhiksha's fortunes has been as dramatic as its rapid rise from being just
a regional player to a national one.
"We were a darling company that could do no wrong till September 2008 and suddenly we were in trouble," rues a dishevelled
Subramanian, as he looked back at Subhiksha's early days-clearly successful- and the
recent crisis-without doubt an avoidable tragedy.
Vendor payments were defaulted and shelves ran empty

It was in 1996 that the idea of Subhiksha (prosperity in Sanskrit) came to his mind.
Organised retail, in India, was non-existent. Subramanian, an IIT Madras and IIM
Ahmedabad alumnus, was then into the financial services business of asset securitisation.

Research revealed that grocery was one of the largest categories of spending for the
average customer, that they were extremely price sensitive on groceries and that discount
stores were the largest growing format. But unlike in the West, people in India preferred to
shop groceries close by. The model slowly fell into place-a large number of small stores
with easy accessibility offering products at a discount.
"We opened our first shop in Chennai in March 1997 with funds from the financial services business, a team of passionate youngsters
with little retail experience and a plan to set up a Chennai-centric retail business with low prices and high level of neighbourhood focus
as the USP," recalls Subramanian.
In the first year 10 stores were opened and the count rose to 19 by March 1999. By then Subhiksha was breaking even, volumes were
picking up and customers were responding. Problems did arise initially though, as its unique discounting model enraged the retail trade
in Chennai, which accused it of unfairly undercutting their business.

Subhiksha

Year of founding: 1997

Founder: R. Subramanian, IIT

Madras and IIM Ahmedabad
Business: Discounted retail
Funding: R. Subramanian,
ICICI Venture (equity);
consortium of banks (debt)
Employees: 14,000 (by end of
2008)
Revenue: Rs 2,305 crore
(2007-08)
 By 2000 Subhiksha grew to nearly 50 shops in Chennai retailing groceries and
The flameout medicines. ICICI Venture's decision then to pick up a 10 per cent stake in Subhiksha
Year No. of Stores for Rs 15 crore gave the retailer enhanced credibility in the market.

1997: 10 This money was used to expand outside Chennai, into the rest of Tamil Nadu. By
1999: 19 2002-03, Subhiksha had 140 stores across 30 towns in Tamil Nadu. Sales grew
2000: 50 steadily. Cash flows were reasonable and debt, at Rs 15 crore against the net worth of
Rs 23 crore, was comfortable.
2003: 140
Mar 2007: 670 Expanded too fast too soon
In 2004, the retail sector was seeing an enhanced level of activity. In what proved to
Mar 2008: 1,320 be a watershed decision later in its brief history, Subhiksha decided to expand
Sept 2008: 1,650 nationally and more so, scale up at a rapid pace.
"We realised that we had done our bit in Tamil Nadu and it was time to go national.
Feb 2009: 0 The question we faced was do we expand sequentially (one state at a time) or parallely
(many states simultaneously)? We opted for the latter," reveals Subramanian.
Key problem: 'Rapid debt Between late 2004 and early 2007, Rs 160 crore worth of equity was raised. That
funded expansion and cash flow apart, a debt of Rs 220 crore and a bridge loan of Rs 125 crore (pending raising of
equity from capital markets) was arranged to fund the national rollout. On an average,
mismanagement' 60 to 70 stores were added in a month.
The pace of rollout is evident from the fact that till September 2006, Subhiksha had a
store count of just 160, but by March 2007 it had shot up to 670 and by March 2008 to 1,320. By September 2008, it was 1,650-in all
1,500 stores were added in just 24 months. "Business was growing like mad.
Despite the cost pressures in 2006 after Reliance, the Birlas and others announced plans to enter retail, between 2006-07 and 2007-08
we doubled our stores (from 670 to 1,320), tripled our revenues (from Rs 833 crore to Rs 2,305 crore) and almost quadrupled our
profits (from Rs 11 crore to Rs 39 crore)," says Subramanian.
By then Subhiksha had become the country's largest mobile phone retailer with an annual turnover of Rs 1,000 crore. Buoyed by its
performance, Wipro Chairman Azim Premji, in March 2008, picked up the 10 per cent stake in Subhiksha that was offloaded by ICICI
Venture for Rs 230 crore, pegging the company's valuation at Rs 2,300 crore.
Chose debt over equity to fund expansion
R. Subramanian

It was clearly the highest point in the retailer's history (and, in a way, beginning of its decline too).
The company, which had been contemplating and postponing initial public offering (IPO) since 2007,
failed to capitalise on Premji's investment and the goodwill it created to raise money from the market.

"We kept thinking: why dilute equity for shareholders? We wanted to keep equity low and raise more
debt. This strategy will return better money for shareholders as stock market is booming. But we
should have raised equity in March 2008. There was a lot of investor interest in Subhiksha. Not doing
it then was a mistake," concedes Subramanian.
Subhiksha entered 2008-09 with a Rs 1,000-crore investment plan for increasing the store count to
2,200 (from 1,320 as of March 2008) and add a new line of business-consumer durables information
technology (CDIT) products retailing. It was to be funded by Rs 400 crore equity and Rs 600 crore
debt. In June 2008, it announced a merger plan with Blue Green Construction Ltd, a company listed
on the Madras Stock Exchange, and which had done some research on the CDIT business.
By then the stock markets had begun to weaken. "A weak market, we thought, would at best lower our
valuation by 10 per cent or so. There was nothing to tell us that we were in for a complete collapse of
the equity markets," explains Subramanian. The banks were getting worried too. The bridge loan of Rs 125 crore was coming up for
repayment in September 2008 and there was no sign of equity. They were finding it difficult to lend.
Used working capital for expansion
"By July 2008, we were finding it difficult to borrow. But we kept the expansion going as we were confident of raising equity. In fact, in
September we had some good offers for equity but before we could grab it Lehman Brothers collapsed and the markets fell off," reveals
Subramanian.
In the absence of borrowings, Subhiksha made the cardinal mistake of diverting working capital to fund expansion. Consequently
vendor payments were defaulted. They stopped supplies and the shelves ran empty. Salaries and other statutory dues were not paid.
Security staff deserted their jobs and over 600 stores were vandalised in November-December 2008.
"We desperately worked with various stakeholders to put something together to prevent a collapse. All we needed then was Rs 125 crore
to be back in shape. Between September and November 2008, we had four meetings of the collective financial stakeholders. But
unfortunately it was a period when liquidity was tight. Investors, too, could not do much as the markets were crazy," rues Subhiksha's
founder, adding, "In a way we got into trouble at the wrong time."

By end-February 2009 operations came to a standstill. Says Subramanian, "At this stage, everybody's reaction was emotional. There
were people who said we should have been more careful in managing our money, which is perfectly right, and that we did not have a
plan B."

Independent directors quit, relations with ICICI Venture soured (it withdrew its nominees from the board and reportedly sought
government investigation into the affairs of Subhiksha). Premji and ICICI Venture objected to the merger of Subhikhsa with Blue Green
Construction Ltd.

Cash flow mismanagement

Subramanian is now banking on the much-delayed corporate debt restructuring (CDR) process (involving 13 banks with cumulative
exposure of over Rs 800 crore) to bring Subhiksha back to life. "I don't see ourselves getting back to 1,650 stores. We will probably
restart about 1,200 stores once the CDR process is through. We should clearly be back in business in the second quarter of the current
fiscal," claims Subramanian. He adds: "Regaining the credibility of vendors, lenders, investors and the employees will be the toughest
challenge for us."
Has the discounted retail model failed? His response is quick: "Subhiksha's problem was cash flow mismanagement. We ran a profitable
business. We were completely overconfident when it came to raising equity. If anybody wants to be a serious grocery player in India,
they have to follow our path. The model is eminently successful."

SOLUTION 1

Geoff Hiscock

'Junk Brand Subhiksha. Start afresh'

Geoff Hiscock
Author, India's Store Wars

In March 2008, the Boston Consulting Group named Subhiksha one of the
world's top 50 "local dynamos". Less than a year later, the Subhiksha brand
was in tatters, proving once again that in business, timing is everything.
Launch or expand at the right time and a rising tide lifts even the slowest of
ships. Likewise, the most brilliant idea and the best execution can come
unstuck if the business mood swings to negative, as it most certainly did in
the second-half of 2008. Once the credit shutters go up, only cash will save
the day.
With a business strategy running on breakneck debt-funded expansion, this
is when Subhiksha Founder R. Subramanian hit trouble. Subramanian's
early business life included working through a turnaround and restructuring
of the troubled Enfield motorcycle company between 1989 and 1993. With
that experience, he should have anticipated the need for a bigger buffer to
handle a downturn. He had an opportunity in 2007 and early 2008 to raise
money through a private placement or an initial public offer, but the timing
didn't suit and by July 2008 the chance was gone. Last August, as credit
everywhere started to tighten up, I got a glimpse of what might be ahead for
Subhiksha when I ducked into one of its Bangalore stores. The shop was in
unexpected disarray; the shelves already were understocked and the staff
seemed unmotivated.
Most disturbing of all was the distinct lack of customers, despite the thrum
of retail activity elsewhere along the street. India's modern retail boom still
has a long way to run, and Subramanian may yet pull off a corporate debt
restructuring. But the Subhiksha brand, like its stores, has been trashed
since February. It is now not worth reviving. If he wants to stay in retail,
Subramanian might be better off using his skills to prepare a fresh iteration
of the low-cost supermarket model under a new name.

SOLUTION 2
Arvind Singhal

'Successful model turned into usuccessful business'

Arvind Singhal
Chairman, Technopak

Why did Subhiksha apparently succeed in the first place, and why did the
business unravel so quickly? More importantly, is there any way the business can
 be resurrected or even salvaged partially? Subhiksha's early success was due to
the fact that the big opportunity for Indian retail lay (and still lies) in a no-frills/
deep-discount business model. Other than Future Group's Big Bazaar to some
extent, and another South-based regional player (Trinethra in Andhra Pradesh),
no other entrant in the retail sector acknowledged this fact. Subhiksha made no
bones about reaching out to the relatively lower income strata families, and cut
costs everywhere, as in store locations, fit-outs and in-store service and
experience.

It also operated on very low backend and corporate overhead costs. As long
as it remained focussed on this core group, and operated within a small
geography, the model worked.
However, as its ambitions grew, the focus of its promoter and other
investors also apparently shifted from delivering value to its customers to
creating valuation for themselves. Reckless expansion across disconnected
geographies required a reckless increase in debt. The humungous quantum
of money raised was spent largely on store expansion (without caring about
store-by-store viability) and not on strengthening the backend including
supply chain, distribution and replenishment logistics or improving
customer experience or even building employee capabilities.
Sadly, once the business started to unravel, all these flaws began to surface:
Angry suppliers and other vendors, dissatisfied customers, agitated
employees and worried lenders. All these led to a sudden seizure of the
operations. Revival, even in a truncated form, at this stage looks nearly
impossible. While the original premise for the business (no frills/deep-
discount retailing) remains powerfully intact, it is unfortunate that this once
promising business itself is poised to become history.
Business jargon
A recent survey in the UK found these jargons to be the most disliked. Watch this space for more jargon busting in
forthcoming issues.
Print Edition: June 28, 2009

A recent survey in the UK found these jargons to be the most disliked.

 Thinking outside of the box
360º thinking
At this moment in time
Touch base
 At the end of the day
Going forward
All of it
Blue sky thinking
 Credit crunch
Heads up
Singing from the
same hymn sheet

 Pro-active
Downsizing
Ducks in a row
Brainstorming
 Thought shower
Flag it up
Pushing the envelope
In the loop

A Shoe for a Shoe, And a Smile

US-based TOMS Shoes gives away one shoe to a poor child for free, for every shoe it sells. This case study looks at how TOMS Shoes made a cause the centre of its
activities.
Arezou Naeini, Auditee Dutt, James Angus, Sarkis Mardirossian, and Sebastian Bonfanti Print Edition: June 7, 2015

A circle of happiness: Children wearing TOMS shoes at a distribution event organised by NGO Magic Bus in Jasola, Delhi (PHOTOGRAPHS BY JOY JT/MAGIC BUS INDIA FOUNDATION)

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Executive Summary
US-based TOMS Shoes created an out-of-the-box solution to its objective of helping people even while running a for-profit business.
The company founded on the principle that it would give away one shoe to a poor child for free, for every shoe it sold. This case study
looks at how TOMS Shoes made a cause the centre of its activities, even as the cause itself contributed to its revenues and profitability.
And how it used social media for marketing.

Blake Mycoskie created what can arguably be called a unique business model that combines both for-profit and not-for-profit
philosophies. A native of Texas in the US and a serial entrepreneur, Mycoskie was travelling in Argentina in 2006, when he noticed poor
children having to grow up without shoes, and facing a lot of hardship in the process. Deeply moved, Mycoskie returned home and
founded TOMS Shoes, a company that made and sold, um, shoes of course. But with a twist.

For every pair of TOMS shoes sold, the company would donate one pair to a child in need. This revolutionary concept was called "One
for One", and Mycoskie ensured poor children in different parts of the world got the benefit of its business. What made it work even
better is the fact that a buyer, typically a young adult looking for an affordable yet cool pair of shoes, would feel good in the knowledge
that his purchase has actually helped a poor child get a much-needed shoe for free. The business model worked perfectly, because the
cost of the free shoe was built into the price of the one that is sold, making a seemingly charitable effort also contribute to its
profitability.
So far, the company's website states that it has provided more than 35 million pairs of shoes to children in 70 countries across the world,
and this includes India as well. As long as people continue to purchase TOMS shoes, children in need will receive a pair in return. The
shoes that the company designs and sells are based on the Argentine alpargata design.
In later years, Mycoskie expanded the One for One model to other products as well. In 2011, the company introduced eyewear. It
followed a similar principle for eyewear as its shoes, but again with a twist. Instead of donating a pair of glasses for every pair sold,
TOMS would use part of the profit from that sale to save or restore the eyesight of a person in developing countries. So far, the company
website states, TOMS Eyewear has helped restore sight to more than 275,000 people. Further on, the concept was extended to other
product categories as well.
Mycoskie followed the same principle for his book as well - Start Something That Matters. The cover of the book states: "With every
book you purchase, a new book will be provided to a child in need."
While cause-related marketing is followed by many companies, at TOMS the philanthropic component is critical to the success of the
for-profit business. The TOMS business model and its heavy focus on marketing and use of social media is innovative and unique.
Using Social Media to Tell the Story of TOMS
TOMS offers more than a comfortable and trendy pair of shoes. It is about status and a story to tell. Mycoskie realised the power of the
TOMS story since the early days of the company and has focused on it ever since.
Mycoskie wrote in his book, acknowledging Kendall Haven, who authored Super Simple Storytelling: "Human minds rely on stories and
story architecture as the primary road map for understanding, making sense of, remembering, and planning our lives - as well as the
countless experiences and narratives we encounter along the way." He added that smart, future-oriented companies use this ancient
impulse in new ways, by telling stories that people can watch on YouTube and share on Facebook.
He quickly realised the strength of social and digital media to convey his story by saying: "People are no longer all listening to or
watching the same few radio or TV stations each week - they're following their own carefully curated Twitter feeds, commenting on and
creating blogs, channel surfing among more than 500 TV stations, watching Hulu on laptops, clicking on YouTube, reading Kindles and
Nooks, and surfing on iPads."
In 2009, Mycoskie partnered with AT&T by filming a commercial, which ran throughout 2009 and was an enormous success. The
commercial profiled TOMS as a for-profit company that donates one pair of shoes to a child in need for every pair purchased, and
founder Blake who uses his AT&T BlackBerry to conduct business from around the world. Lots of people tweeted about the commercial
creating awareness about TOMS and AT&T, and support for the TOMS business model.

All smiles: TOMS Shoes has provided more than 35 million pairs of shoes to children in 70 countries, including India.

TOMS's Storytellers: Celebrities

TOMS didn't pay celebrities to advertise its products. However, due to the prevalence of photographs in social media of celebrities
wearing the company's shoes, it received a great deal of "free" publicity and perceived celebrity endorsements. Many celebrities such as
Keira Knightley, Scarlett Johansson, Liv Tyler, Anne Hathaway, Tom Felton, and Julia Roberts became TOMS storytellers by adopting
the brand and spreading the story.
Celebrities having a penchant for charitable causes, TOMS Shoes allowed them to help others and look trendy. The photos of these
celebrities wearing TOMS Shoes spread on social media sites, which created huge awareness for TOMS.
Tom Felton tweeted "the @toms shoes come with a bag that says TOMS. that is me all over. and a sticker that says TOMS. I stuck it to
my head."
TOMS has certainly benefited from these celebrity endorsements, perhaps more so because of their unofficial nature (which fits well
with their brand image), and social media has made the wide reach of this possible.
TOMS's Social Media Marketing Excellence
In an interview in July 2013, Mycoskie had said: "Our community could be 20 million people on Facebook, if we employed the tactics
that a lot of companies do - add mass followers, bribe them with raffles, contests and gifts. But instead, we purposefully kept our
community kind of small, around two million, because that allows us to have a more intimate connection."
It's very clear when you go to the TOMS website, that there is a strong presence of social media links, such as Facebook, Twitter,
YouTube, Pinterest, Instagram and Google Plus. Also, it has created a blog to share stories and educate others about TOMS's activities.
Mycoskie realised the power of social media, which is less costly in comparison to the traditional advertising and fits better with his
business model.
On top of that, many TOMS fans and consumers create their own digital content about their experiences with TOMS products and
TOMS initiatives, allowing them to do much of the marketing for the company and spread the story.
Content Creation and Audience Engagement
TOMS's "One day without shoes" campaign creates awareness on global children's health and education issues. Participants can share
experiences and upload images on Flickr and Facebook. Also, TOMS partnered with major companies such as Google and AOL, and
created a separate website for it.
One participant uploaded images on Flickr and commented, "I'm going most of the day without shoes since about 740 million people
fight hookworm, can't go to school, etc., since they don't have shoes."
A student at Columbia University uploaded her image on Flickr and commented: "It gets people thinking about children in the world,
and may be leads someone into a career of helping children. That's the event; it's a simple gesture of wearing no shoes and
communicating to people the situations and leading to changing a child's life."
The Future of TOMS
TOMS is no longer just a shoe company, it has expanded into other areas using its "One for One" business model. A for-profit business
with a philanthropic component. The company is also actively looking for people to help them do this by offering grants to people with
like-minded ideas.
It is expanding into many categories, including apparels, accessories and tech as well as expanding geographically. To keep the business
model sustainable, it is of paramount importance to keep innovating and designing new products that appeal to worldwide consumers.
On top of that, TOMS should closely monitor compliance of its activities and keep the promise of One for One.
TOMS's success in using social media in spreading its story and reaching a vast audience could be equally risky to its reputation and the
whole business model in case of compliance and ethical issues as well as improper management of social media.
Key Learnings and Conclusion

What Made TOMS a Success?

>> Fit between the valued customer and marketing mix (social media). The group that TOMS targets is very active on social media.
>> Fit between social cause marketing and using social media; active and socially aware consumers.
>> Having an active community that acted as brand storytellers - utilising peoples' people networks on social media.
>> Creating awareness, reaching to large audience and geographical coverage through social media with minimal marketing cost.
What Could Have Been Done Better?
>> Global expansion, better retail coverage and partnerships - they could do more in each of these areas and expand the business whilst
remaining consistent with the 3Vs (valued customer, value proposition, and value network) that have made it successful.
>> Risk of competition - competitors such as Skechers are attempting to move in and replicate the One for One business model.
Although TOMS is the first mover, it will need to be careful of other companies aggressively moving in on its key differentiator.
What Can Other Firms Learn from It?
>> Using social media more effectively by having an interactive and evangelistic community rather than having a large indiscriminate
user base.
>> The power of the social cause and CSR activities being directly linked to the purchase of company products in the for-profit business.
Customers feel they are directly driving higher investment in the CSR activities and this is key to the success of this model, and that
aspect of it (the direct link from purchase to CSR) could be mirrored in many other business areas.
>> Making use of social testimonials, not as a sideline to traditional media but as a more effective way of growing and expanding brand
presence through people's social network relationships.

EXPERT SPEAK

TOMS Must Press Its First-mover Advantage

Jason Goldberg
Group Vice President of Commerce Strategy, Razorfish

Toms, fuelled by the One for One programme, is a very successful brand that gets a lot right. But there
are always opportunities for improvement.
One for One Programme: The programme is the unique selling proposition for TOMS products and is a
core part of the TOMS brand promise. Unfortunately, there is nothing proprietary about the
programme to offer TOMS a sustainable competitive advantage. Arguably, it would be unethical, or at
the very least poor optics, for TOMS to try and prevent competitors from instituting a One for One
programme.
As a result, TOMS must continuously press its first-mover advantage to stay ahead of potential
competition. There are a number of opportunities to make the One for One programme work harder for TOMS.
Specifically, TOMS has a lot of great content about the people who have been helped by the programme and people that need help,
photos of children happily wearing shoes, getting glasses, etc. But this impactful content is effectively segregated from the shopping
experience. When you visit the TOMS website, the taxonomy of the site forces you to either "Shop" or learn "How We Give", but the two
paths are essentially siloed from each other. If a visitor is reading about how much good the programme does under the "How We Give"
link, there is no call to action to take you directly to a product you can buy. Instead, you have to leave this section and visit the "Shop"
section. Conversely, if a visitor is shopping for a particular pair of shoes on the site, there are no images or story telling about the
benefits of the programme.
A live ticker with "35M pairs of new shoes donated to children in need" in the header of the site, including the shopping pages, could
serve as a powerful form of social proof to help undecided buyers, who don't happen to drill down into the "How We Give" pages.
Similarly, the programme could be much more prominently and consistently promoted in the visual merchandising provided to third-
party retailers. Some partners, such as Nordstrom Rack, have no point-of-purchase information about the programme. Even when the
store does have One for One signage, it's a simple statement with no imagery or social proof. It is especially important that the
programme be emphasised on the TOMS brand pages and on their retail partners' sites, and not solely on product detail pages (as is the
case now).
TOMS is very dependent on consumers already being familiar with and trusting in the One for One programme in most of their
shopping experiences.
Social Marketing: TOMS was a clever user of social media to cost effectively get its message out. But the content marketing approach
that TOMS depended upon to build its audience has been substantially depreciated. When social networks like Facebook were building
their audience, they were happy to allow brands to publish great content and then have users organically spread that content on their
own news feeds. But in recent months Facebook has dramatically curtailed the organic reach of a brand's content. In fact, less than six
per cent of the three million users who have liked TOMS brand on Facebook will organically see TOMS content in their news feeds.
Facebook now requires sponsored posts in order to reach a meaningful audience.
When consumers are exposed to a TOMS message via social media, there are not strong calls to actions to actually purchase products.
Even when you click "Shop Now" from TOMS Facebook page, you are taken to TOMS website homepage rather than an actual shopping
page on TOMS, so users will have to do at least three more clicks before they can add a product to their bag. This is simply too much
friction.

EXPERT SPEAK

TOMS Shouldn't Ignore the Lifecycle Aspect

Anaggh Desai
Cofounder, 1+99, a customer experience design consultancy

TOMS has used the 3Vs effectively with little competition. Its Value Customer was relevant in the past,
where uniqueness of approach via social media worked well. But there has been enough growth and
awareness among brands that want to experiment with social media to reach out to socially aware
people. The challenge now is to expand the base of the target group.
TOMS's Value Proposition of functional and emotional again works well, but people grow - the
functional need becomes aspirational and emotions change when calamities strike. Take the recent
Nepal earthquake that had brands coming out on social media asking customers to buy or contribute
and promising to match that contribution. This led to a fair bit of questioning from the younger
generation - "If the brand wants to contribute, it should do so, why ask for our help?" So, there is a need to revisit this proposition again.
Its Value Network is strong and there is no reason for it not to continue. However, why restrict it to donating shoes? Isn't it possible to
create value in those South American countries by getting things made there, which can then become a self-sustaining for-profit/not-
for-profit and help progression of and lend pride to the people who contribute and are a part of it? The strong family culture is good, the
values are fine. But families grow, have different thoughts and the parent has to look at how they are allowed to spread their wings.
While TOMS has been successful in product additions - sunglasses, bags - its consideration of the lifecycle aspect of the customer seems
to have been low. Ideally, a teen to 40+ should be covered via different approaches and content. A teen or collegegoer would be more
prone to share content on a variety of platforms in an innovative manner. However, as you grow older, your offline reach becomes
stronger and you create content that extends to disproportionate reach. Say, for example, a teen begins with buying a shoe twice a year,
shares, engages, encourages five of his peer group to purchase shoes. As she/he grows, the possibility of drifting away remains (say half
of the six) and this has to be brought back in via different platforms, products, engagement and sharing. A local offline ambassador
programme could help generate content and awareness, in addition to the celebrity endorsements. Remember, on social media
everybody is a celebrity in her own right and the influence extends in different directions.
TOMS's work on non-competing alliances also seems to have been slow. Here one does not mean selling of the product but more in
terms of reach, engaging socially aware or, more importantly, aware but too-lazy-to-dosomething-about-it target groups. Similarly, with
a substantial online reach and base, it becomes relevant to focus on offline, low-cost or zero-cost activities that translate into reach,
engagement, creation of fresh relevant content from additional target group.
The use of social media for marketing is nice. However, from a like/love status the brand needs to move towards achieving cult status,
thereby ensuring competition does not catch up. The cult status is a difficult proposition when only online space is used, given the fickle
nature of the beast. The time has come when social media needs to become supportive, unique, testimonial with offline doing its
aggressive bit. Competition may move in fast if there is a single differentiator - socially aware target group - but the need is to splice this
group into regular, innovative engaging aspects, maybe even flip it around. For example, contribute monthly or weekly for a shoe
donation and get your shoe when it is completed. And many more.

(This case study is from the Aditya Birla India Centre of London Business School