IIPM Editorial: 10/01/2011

Monday, October 17, 2011

Of Product, Price, Pizzas & Pastas – The ‘30 Minutes’ Story

From its Early days to Creating a Strong “On-time Delivery” Recall, Domino’s Journey in India was a Case Study Screaming to be Documented. And we Did!

It seems a little like love when you see a half-starved teenager dive into the warm square-foot cartoon package, delivered-and-promised within half-an-hour. For Domino’s, the joy is mutual. 70% of all pizzas that are home-delivered in the country end up contributing to the coffers of this quick service restaurant (QSR). In fact, one out of every two (non-home made) pizzas that are consumed in any part of India, is a Domino’s-baked product. Numbers are enough to prove how dominant a force this brand has become in India. But here’s the real surprise: For Domino’s, the flight apparently is yet to begin.

Domino’s (in reality, Jubilant Foodworks; the company managing the show) considers the domestic market to be the most important in Asia. It’s rare that a US-based $1.57 billion-a-year sales generating multinational giant chooses to bet bigger on a country other than China. But this is true. Blame the company for being over-optimistic if you may, but what it is betting heavy on is the rising clan of middle-class and the youth segment which forms a large percentage of the Indian population. And considering the rising levels of conspicuous consumption and economic conditions, Domino’s is hoping its calculations are right. The Indian market is already amongst the top 10 contributors to Domino’s global topline. J. Patrick Doyle, Global President & CEO of Domino’s Pizza told 4PsB&M during his last visit to India, “By 2014, we expect India to be amongst the top five earners – and our plans to achieve this goal are in action with new launches.” With the QSR market in India growing at 25% and with 26,000 pizzas being sold per day in India (as per CII; FY2010), Doyle may be hitting the right spots in his forecasts.

To their credit, the present times represent a solid growth phase for Domino’s. A CAGR of 40% (which Domino’s has in India) in any market is considered obscenely high. And the fact that it is the market leader in India is even better news for the company. But victory for it has come at a price – more than a decade of toil. In fact, some talk about how Domino’s learnt the secrets to success in the Indian market the hard way, right from its very early days in India (when McDonald’s initially stole the show with its easy-on-the-pocket menu). Its first outlet was opened in January 1996, in New Delhi. Then, the concept of home delivery was still in its nascent stages in India. It wasn’t easy work for Domino’s to inculcate the home delivery concept in a market where eating out was only restricted to branded restaurants. But the company managed to put in place an integrated home delivery system never before seen in India.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM in sync with the best of the business world.......
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM RANKED NO.1 in MAIL TODAY B-SCHOOL RANKINGS

Monday, October 10, 2011

The man who sells MTV Roadies. Well, literally!

Sandeep Dahiya, SVP, Consumer Products & Communications, viacom 18 tells 4PS B&M about the Dynamics of The Business he heads and how The Company is driven by heavy Market Research.

With India’s most celebrated entertainment channels — MTV, Colors and Nick — under its banner, Viacom 18 has been successful in making an indelible mark on the Indian entertainment landscape. The consumer product division has become an important stream of revenue generation for the group. In an exclusive interaction with 4Ps B&M, Sandeep Dahiya, SVP, Consumer Products & Communications talks about MTV, Indian youth centric channel, and his strategies for the consumer product division.

What is the basic rationale behind having a consumer product division? What are the synergies that Viacom 18 derives from this division?
Primary responsibilities of a consumer product division includes licensing and merchandising. We have complete faith in our broadcasters as they are the brand builders. So, MTV is not only a channel but a brand. Sponge Bob, Dora, Ninja are not just shows but brands in themselves, they are characters, which people want to own a piece of and are ready to pay a premium for the same. This is what makes it worth having a consumer product business. The division was launched three years back and today, there are more than 30 licenses who manufacture and sell Nick or MTV branded merchandise. We derive royalty from the same. This move helps us in two ways- first, it’s a revenue-generating model and second, it’s a great way to connect with the viewers and also ensures consistent fan following.

If we look at Disney, they’ve got some cult characters. Timeless would be the appropriate term. And so the merchandise business. It makes a lot of sense to merchandise Nickelodeon characters. But do you think the same would work for properties on Colors and VH1?
A lot depends on which property a channel wants to use for merchandising. Licensing can be broadly classified into two parts – sustainable licensing properties and topical licensing properties. The former are called Transits and are ‘timeless’. Mickey Mouse is one such example. The latter (topical merchandise) come and go. For example, Iron Man or Toy Story come up with a movie, they may or may not produce the second installment. Therefore, such topical merchandises are seasonal. In our case, we can’t have merchandise of fiction shows like Balika Vadhu. The story revolves around a child protagonist, who will eventually grow up. Moreover, there is no stability in fiction shows, story lines change everyday. You can’t plan a merchandise on it. But, we can have merchandise such as adventure gear around shows like Big Boss. Stability is integral to successful merchandising.

What is your distribution strategy? Do you plan to set up exclusive stores in India?
We don’t distribute our products and that’s not our model. We are good at creating brands and content. Once the brand is strong placed, we conceptually co-create and monetise the model by tying up with partners in the value chain. As for the exclusive stores, we don’t do that either. We can nevertheless license it out. The idea is not to set up an MTV store but to license the format, in case someone does want to set up one.

Why is the distribution of your products are so limited? Is it done deliberately?
I don’t want our products to be available everywhere. For example, Roadies footwear will not fit into a Bata store, but it will definitely fit into a Shoppers Stop as an entire area is dedicated to our brand. Moreover, the ambiance there would be much like Roadies. It is a deliberate attempt to keep our products exclusive to some stores.

The Indian youth has perhaps evolved in a very unbalanced manner. At one hand, they look at their Western counterparts and on the other, they have a lot of opportunities, which give rise to aspirations. So, how do you keep a tab on this particular segment?
I think we are one of those few brands, which have an extensive focus on market driven research. If we want to be a step ahead of the youth, then we need to know three days before what they’d be doing three days later. For this, we come up with a heavy dose of qualitative and quantitative research every year. We have mobilised a lot of focus groups, so that we know in real time what the youth prefers in terms of latest trends in college to how fashion is being defined. The Indian consumer has definitely evolved, but despite earning and spending so much, they haven’t stopped looking for value-based products. So, if we are to sell an MTV branded Micromax mobile, it has to be true to the Roadies image. If it’s similar to four other models available in the market, it’s not going to work out in the market.