Executive Summary: A perspective of the ecosystem behind CES 2010, to help you manage the complexity of change it would deliver at your doorstep, and to help YOU find opportunity- for new products, or for expanding the reach of existing products- in this ecosystem.
Introduction: The Who.
Who would be you, a.k.a. the target audience, here? You are interested in CES 2010 for various reasons. Here a spectrum:
1. The Consumer- "Should I buy that 37 inch 120Mhz 1080p LCD TV in Spring?"
2. The Product Guru- "So what's out there that I should watch out for?"
3. The Marketing Guru- "Mobile ads for my ad dollars?"
4. The Finance Guru- "Productivity for the company dollars?"
5. The IT Guru-"I have cloud on my mind... um... what could this lead to?"
Granted, this is a little bit of overkill for The Consumer, but don't discount the Gadget Gurus among us.
Introduction: The What and The How.
The Consumer Electronics Show / CES 2010 promises to be as exciting as ever.With over 2800 exhibitors and about 20,000 new products, it can be a dizzying experience. You may have a priority list structured by companies, products, target consumers, sectors, etc., to manage the scale, but the complexity can be mind boggling.
Why are we interested in it? In terms of innovation and externalities, the aggregate impact of CES could well be similar to NASA's moon landing effort in the 1960s. (Note to self- research the innovation parallels :-)) Consumer, consumer oriented businesses, and even intra-business and B2B structures may be impacted.
Framework Overview: The How.
Below is an ecosystem view of the players at CES. Industry veterans with broad experience across the consumer and technology space may find this familiar and similar to approaches they have developed over time- for the rest of us, its and interesting tool to snapshot this evolving industry.
The Strata
The picture can be broken down into the following strata:
1. Consumer
2. Applications + Content
3. Platforms
4. Core Infrastructure
So What?
For the snapshot, or even as a first pass, each strata can be structured as a linear ecosystem with its supply chain. The fun begins when you map it out and start seeing the interconnectedness, even a cliched convergence, across the board.
The next "order" of approach would be to note the elements outside the ecosystem. However, that's for later.
Content for an Electric Toothbrush?
Yes. In this case, content is all the MindShareWorks (TM) that goes into getting a consumer to buy and sustain usage of the mighty electric toothbrush.
As Easy As 1-2-3-...?
Yes... and No. You still have to do the hard work to optimize this tool for your objectives. If you are, say, an investment analyst, you still have to put in the hard work to learn and leverage this approach in the sector.
The Strata Attributes
We could use standard market mapping tools like
1. Competitiveness,
2. Number of Market Participants, etc.
The Devil's Advocate
Hello! This reminds me of the Five Forces Framework: Well, hang in there- there is value in getting specific and structuring it this way. The So What? should have sold you on this already.
Stay Tuned! More to come in the mapping.
What do you think... so far?
Showing posts with label consumer. Show all posts
Showing posts with label consumer. Show all posts
Tuesday, January 05, 2010
Thursday, July 02, 2009
Consumer insights and Social Media trends... Updated: Preview Note to Brand Marketers
From the "Lies, damn lies and... statistics?" Dept. of Quibble-Over-Who-Said-What, The Mark Twain vs. Benjamin Disraeli desk.
At a wonderfully hosted interactive media event last evening, I sprung 2 stats at a social media strategist, while emphasizing the need to critically look at trends and consumer behavior. The bright strategist I was chatting with was aware of each of them, however, when we put them together and... here, I will let you decide:
1> Average number of Twitter followers: 126.
2> Over 30% of Twitter users tweet once, never to return.
On that note, let me splash some more statistics around this page for further insightful conversation with you: http://blogs.harvardbusiness.org/cs/2009/06/new_twitter_research_men_follo.html
What do you think?
Update: I usually restrict my unrestrained editorializing to face to face conversation. However, thanks to a twitter (Thanks D.B.) note, I will let loose a little. :-D
From the Dept. of Stick-Yer-Neck-Out-And-Live-To-Tell, the Die-Hard-With-A-Clue desk.
Why should you really care about the Social Media industry beyond what you are doing in it? Why should you care about how it is evolving?
The statistics below kicked off an interesting conversation with a social media strategist. The math jumps at you. The average number of twitter followers could be skewed by the 30% who never return, and the Twitter BigBirds TM (Sidebar: CNN and Ashton Kutcher are Twitter BigBirds; No disrespect to Tweet TM). Our conversation converged on the fact that business acumen remains key to success here.
The theme of this conversation dovetailed with the theme of another with Susan Lewis who is at work finding sponsors for her Twitter game. The fundamental question here is: How do we help a corporate entity justify its spend in social media, beyond harking to the old Internet boom eyeball metrics?
Finally, is it just about measurement? What are we looking to achieve with the measurements? Stepping back from the metrics, how should brand marketers be thinking about their social media presence?
More on this in part Duh:
http://randomjunkyramblings.blogspot.com/2009/07/to-strategize-or-not-to-strategize.html
At a wonderfully hosted interactive media event last evening, I sprung 2 stats at a social media strategist, while emphasizing the need to critically look at trends and consumer behavior. The bright strategist I was chatting with was aware of each of them, however, when we put them together and... here, I will let you decide:
1> Average number of Twitter followers: 126.
2> Over 30% of Twitter users tweet once, never to return.
On that note, let me splash some more statistics around this page for further insightful conversation with you: http://blogs.harvardbusiness.org/cs/2009/06/new_twitter_research_men_follo.html
What do you think?
Update: I usually restrict my unrestrained editorializing to face to face conversation. However, thanks to a twitter (Thanks D.B.) note, I will let loose a little. :-D
From the Dept. of Stick-Yer-Neck-Out-And-Live-To-Tell, the Die-Hard-With-A-Clue desk.
Why should you really care about the Social Media industry beyond what you are doing in it? Why should you care about how it is evolving?
The statistics below kicked off an interesting conversation with a social media strategist. The math jumps at you. The average number of twitter followers could be skewed by the 30% who never return, and the Twitter BigBirds TM (Sidebar: CNN and Ashton Kutcher are Twitter BigBirds; No disrespect to Tweet TM). Our conversation converged on the fact that business acumen remains key to success here.
The theme of this conversation dovetailed with the theme of another with Susan Lewis who is at work finding sponsors for her Twitter game. The fundamental question here is: How do we help a corporate entity justify its spend in social media, beyond harking to the old Internet boom eyeball metrics?
Finally, is it just about measurement? What are we looking to achieve with the measurements? Stepping back from the metrics, how should brand marketers be thinking about their social media presence?
More on this in part Duh:
http://randomjunkyramblings.blogspot.com/2009/07/to-strategize-or-not-to-strategize.html
Sunday, June 28, 2009
Consumer Insights from News: Market Sizing
Three events this year have generated a lot of interest from consumers:
1. President Obama's Inauguration
2. Iran Elections
3. Michael Jackson's demise
There are interesting insights to be gleaned from analyzing patterns in data across channels that deliver news -or music, in the case of recent tweets over the Michael Jackson tribute song- to the consumer.
Kick off for Rigorous Analysis?
Keeping thoughts of rigorous analysis aside- how about plotting each of these event on 3 axes? These three events can be compared to other, more "regular" events like the NBA finals. The key point to note is that some of the delivery channels are pretty nascent and they may not have a large universe of comparison points.
The Objective?
The deep dive may help size the market for various solutions, like developing quick reaction advertising patterns that respond to breaking news, to more effective tools for the media and advertising industry. Of course, from experience, I would like to emphasize the sizing can only supplement your own acumen about the market opportunity.
What do you think?
Note: Updated with the 3 axes plot approach to kick of analysis.
1. President Obama's Inauguration
2. Iran Elections
3. Michael Jackson's demise
There are interesting insights to be gleaned from analyzing patterns in data across channels that deliver news -or music, in the case of recent tweets over the Michael Jackson tribute song- to the consumer.
Kick off for Rigorous Analysis?
Keeping thoughts of rigorous analysis aside- how about plotting each of these event on 3 axes? These three events can be compared to other, more "regular" events like the NBA finals. The key point to note is that some of the delivery channels are pretty nascent and they may not have a large universe of comparison points.
The Objective?
The deep dive may help size the market for various solutions, like developing quick reaction advertising patterns that respond to breaking news, to more effective tools for the media and advertising industry. Of course, from experience, I would like to emphasize the sizing can only supplement your own acumen about the market opportunity.
What do you think?
Note: Updated with the 3 axes plot approach to kick of analysis.
Sunday, May 31, 2009
US Consumer Confidence, Economists' Optimism, and the Economy.
Chatting with a brand manager at a Consumer Goods/ Beverages company recently, I got the sense that the consumer was focused on value and was still buying. So I took another look at the news to put the conversation in perspective:
A. Did someone say "green shoots"?
1> US consumer confidence reports has interesting, and intriguing numbers, this week:
http://www.bloomberg.com/apps/news?pid=20601068&sid=aYRGnAW70og8&refer=home
2> Economists are turning optimistic about the economy as well:
http://news.yahoo.com/s/usnews/20090506/ts_usnews/economistsoptimisticaboutuseconomy
3> Even Roubini has mentioned that we are in the trough phase of the U shaped recession. While he still stands by the possibility of a "perfect storm" in 2010, I am inclined to call this positive news.
B. Are we there yet?
For contrast to the signs of Spring we see above:
1> Dr. Altman recently demonstrated, backed by research, that corporate defaults had hit 8 percent in January.
2> He also pointed out that many creditors are in no position to take companies through a bankruptcy.
3> Additionally, on the consumer front, credit card defaults are still a concern.
Now that we have a contrast between most economists and Doctors Doom and Gloom, what does the impressive rise in consumer confidence mean? 70% of the economy is consumption- so a rise in consumer confidence may, at best, be good news in the short term. So, based on this recent news, we seem to have the right economic tools at work to "salvage" the situation and those tools seem to be having an effect.
However, I still think of this as a zero sum game when it comes to investing (bailout) in pulling the economy from the brink. Here are some thoughts:
1> In 2001, the US government took some steps to "salvage" the situation, that eventually led us to 2008. What are economists suggesting needs to be done to prevent us from ending up in an downward spiral of increasingly severe recessions? Could Roubini's W shaped "perfect storm" really be plain old speculation about "when", not "if", the next storm lands at out doorstep?
2> How will the world pay for this? Could an effect show up in international finance, where some countries pay more for this rebound that others?
While I hope economists continue to huddle to figure out options and tools that will solve some of the problems, these questions give you the context to make decisions that steer you and the enterprise through the storm.
What will you do?
P.S. This note is based on a post on a macroeconomics forum on the morning of 05/31/09.
I later found some interesting articles that provide more structured and well thoughtout arguments. The leader here is Nouriel Roubini:
http://www.forbes.com/2009/05/20/depression-recession-green-shoots-housing-jobs-opinions-columnists-nouriel-roubini.html
Also, Fareed Zakaria's GPS episode, dated 05/31/09, will give you more food for thought, besides the added bonus of seeing Kissinger talk about US options in NE Asia.
A. Did someone say "green shoots"?
1> US consumer confidence reports has interesting, and intriguing numbers, this week:
http://www.bloomberg.com/apps/news?pid=20601068&sid=aYRGnAW70og8&refer=home
2> Economists are turning optimistic about the economy as well:
http://news.yahoo.com/s/usnews/20090506/ts_usnews/economistsoptimisticaboutuseconomy
3> Even Roubini has mentioned that we are in the trough phase of the U shaped recession. While he still stands by the possibility of a "perfect storm" in 2010, I am inclined to call this positive news.
B. Are we there yet?
For contrast to the signs of Spring we see above:
1> Dr. Altman recently demonstrated, backed by research, that corporate defaults had hit 8 percent in January.
2> He also pointed out that many creditors are in no position to take companies through a bankruptcy.
3> Additionally, on the consumer front, credit card defaults are still a concern.
Now that we have a contrast between most economists and Doctors Doom and Gloom, what does the impressive rise in consumer confidence mean? 70% of the economy is consumption- so a rise in consumer confidence may, at best, be good news in the short term. So, based on this recent news, we seem to have the right economic tools at work to "salvage" the situation and those tools seem to be having an effect.
However, I still think of this as a zero sum game when it comes to investing (bailout) in pulling the economy from the brink. Here are some thoughts:
1> In 2001, the US government took some steps to "salvage" the situation, that eventually led us to 2008. What are economists suggesting needs to be done to prevent us from ending up in an downward spiral of increasingly severe recessions? Could Roubini's W shaped "perfect storm" really be plain old speculation about "when", not "if", the next storm lands at out doorstep?
2> How will the world pay for this? Could an effect show up in international finance, where some countries pay more for this rebound that others?
While I hope economists continue to huddle to figure out options and tools that will solve some of the problems, these questions give you the context to make decisions that steer you and the enterprise through the storm.
What will you do?
P.S. This note is based on a post on a macroeconomics forum on the morning of 05/31/09.
I later found some interesting articles that provide more structured and well thoughtout arguments. The leader here is Nouriel Roubini:
http://www.forbes.com/2009/05/20/depression-recession-green-shoots-housing-jobs-opinions-columnists-nouriel-roubini.html
Also, Fareed Zakaria's GPS episode, dated 05/31/09, will give you more food for thought, besides the added bonus of seeing Kissinger talk about US options in NE Asia.
Tuesday, March 18, 2008
The Thought Provoking Case of The Consumer Electronics Company
This case focuses highlighting, in sharp relief, how strategy and analytics, as tools to lay the groundwork for all that follows, can help in execution. For the tool savvy, I expect lightbulbs for strategy and analytics to flash every time we trigger a tripwire within the case.
The real skill here is in identifying all the tripwires you can trigger in a structured manner. i.e. Analytics backed solutions you can generate, and then rank them by impact.
Your inputs are welcome- have fun!
The usual case/ problem solving approach is top down:
Strategy-> Marketing-> Sales-> After Sales-> Customer Support
Here’s a case that will help you think recursively through this process!
The approach to this post is: Case -> (followed by) Key 1: Points to Discuss-> Key 2: Structure.
Note: This case is a Work in Progress. The keys will be published separately.
Case 1
The Thought Provoking Case of The Consumer Electronics Company
You have a $450 CyberSleek AB1 camera from The Consumer Electronics Company- their first CyberSleek, released in 2002. It has served you well over the years. You moved recently and lost the little USB cord that connects the camera to your laptop.
You search for the cord at the website in vain, and finally call The Consumer Electronics Company's support number to request a USB cord for your camera. Over a 45+ minute call, the customer support person creates your profile on the The Consumer Electronics Company website, keeps you on hold while searching for the correct USB cord, and finally gets you free shipping for the $20 cord as per the promotion run at that point of time.
Unfortunately, when you receive the package, you find that you were shipped the wrong make of the USB cord.
Thinking that customer support may not have the right tools to help you, you look to give the website another try. You go back to the site, struggle for over and hour and finally find your cord this time by eliminating, as an option, the one you were mistakenly sent. You order the new cord and have to pay shipping charges this time around for a total of $30 in charges.
You call back to claim a refund because customer service shipped the wrong cord to you, and are asked to ship the first cord back, at your own expense, to claim a refund. You have already been charged for the new cord you bought from the website. Requesting customer support to check these details does not help your case.
Shipping the first cord back, where you pay the $20 charges for the customer service mistake, does not make sense to you. You have spent enough time on this task already. The cord is useless with you anyway. Finally you relent. You request that atleast the shipping charges be borne by The Consumer Electronics Company. If you thought that should be easy- the customer support person will now have to contact another department to ensure you don't pay shipping charges.
You receive a standardized email about this conversation with customer support which miscategorizes the request and are requested to call another number.
When you call the next number, you have to explain the situation from scratch. You are now beginning to get frustrated. You want to talk to a supervisor regarding the quality of support you have received. You are put on hold and the call drops.
You call back the next day, and explain the process from scratch. You are finally advised that The Consumer Electronics Company will pay the charges for shipping back the incorrect cord sent to you. You demand to speak with someone who can take some action to alleviate the misery of going through this process. You believe you should also be refunded the shipping charges for the cord you bought yourself, because, it was, after all, customer support’s fault that you lost out on the promotion.
You are transferred to customer relations, where you explain the situation from scratch. Again. You mention that any customer who goes through this process will talk, even blog about it, and create a lot of negative publicity for the firm. Customer relations responds that they can do nothing more that pay the shipping charges for receiving the incorrect cord.
You are transferred back to customer support, where someone commiserates. You mention that you want action not commiseration. The whole process so far does not make sense from your point of view. Customer support agrees.
You go to FedEx and ship the cord incorrectly sent to you. Shipping is free. You receive the new cord for $30. $20 is credited to your account in a few days.
You are left wondering that you are a consumer of a $450 product and The Consumer Electronics Company put you through a lot of hassle for a $20 accessory.
The process seems un-American and un-East Asian to you. What are the things you would like this company do, in its own interest?
--
The real skill here is in identifying all the tripwires you can trigger in a structured manner. i.e. Analytics backed solutions you can generate, and then rank them by impact.
Your inputs are welcome- have fun!
The usual case/ problem solving approach is top down:
Strategy-> Marketing-> Sales-> After Sales-> Customer Support
Here’s a case that will help you think recursively through this process!
The approach to this post is: Case -> (followed by) Key 1: Points to Discuss-> Key 2: Structure.
Note: This case is a Work in Progress. The keys will be published separately.
Case 1
The Thought Provoking Case of The Consumer Electronics Company
You have a $450 CyberSleek AB1 camera from The Consumer Electronics Company- their first CyberSleek, released in 2002. It has served you well over the years. You moved recently and lost the little USB cord that connects the camera to your laptop.
You search for the cord at the website in vain, and finally call The Consumer Electronics Company's support number to request a USB cord for your camera. Over a 45+ minute call, the customer support person creates your profile on the The Consumer Electronics Company website, keeps you on hold while searching for the correct USB cord, and finally gets you free shipping for the $20 cord as per the promotion run at that point of time.
Unfortunately, when you receive the package, you find that you were shipped the wrong make of the USB cord.
Thinking that customer support may not have the right tools to help you, you look to give the website another try. You go back to the site, struggle for over and hour and finally find your cord this time by eliminating, as an option, the one you were mistakenly sent. You order the new cord and have to pay shipping charges this time around for a total of $30 in charges.
You call back to claim a refund because customer service shipped the wrong cord to you, and are asked to ship the first cord back, at your own expense, to claim a refund. You have already been charged for the new cord you bought from the website. Requesting customer support to check these details does not help your case.
Shipping the first cord back, where you pay the $20 charges for the customer service mistake, does not make sense to you. You have spent enough time on this task already. The cord is useless with you anyway. Finally you relent. You request that atleast the shipping charges be borne by The Consumer Electronics Company. If you thought that should be easy- the customer support person will now have to contact another department to ensure you don't pay shipping charges.
You receive a standardized email about this conversation with customer support which miscategorizes the request and are requested to call another number.
When you call the next number, you have to explain the situation from scratch. You are now beginning to get frustrated. You want to talk to a supervisor regarding the quality of support you have received. You are put on hold and the call drops.
You call back the next day, and explain the process from scratch. You are finally advised that The Consumer Electronics Company will pay the charges for shipping back the incorrect cord sent to you. You demand to speak with someone who can take some action to alleviate the misery of going through this process. You believe you should also be refunded the shipping charges for the cord you bought yourself, because, it was, after all, customer support’s fault that you lost out on the promotion.
You are transferred to customer relations, where you explain the situation from scratch. Again. You mention that any customer who goes through this process will talk, even blog about it, and create a lot of negative publicity for the firm. Customer relations responds that they can do nothing more that pay the shipping charges for receiving the incorrect cord.
You are transferred back to customer support, where someone commiserates. You mention that you want action not commiseration. The whole process so far does not make sense from your point of view. Customer support agrees.
You go to FedEx and ship the cord incorrectly sent to you. Shipping is free. You receive the new cord for $30. $20 is credited to your account in a few days.
You are left wondering that you are a consumer of a $450 product and The Consumer Electronics Company put you through a lot of hassle for a $20 accessory.
The process seems un-American and un-East Asian to you. What are the things you would like this company do, in its own interest?
--
Sunday, January 13, 2008
Product tracking: TATA Nano Part Hahaha Duh
I recommend you read part I of this post here:
http://randomjunkyramblings.blogspot.com/2008/01/product-tracking-tata-nano.html
Some publications that talked about the TATA Nano since I last posted on it:
1> http://www.time.com/time/magazine/article/0,9171,1702264,00.html
2> http://wheels.blogs.nytimes.com/2008/01/10/tata-nano-the-worlds-cheapest-car/?hp
3> http://news.independent.co.uk/business/analysis_and_features/article3331789.ece
I usually avoid talking about reaction to news, and I wanted to cover the car rental market and the used car market in India. However, the reaction to the TATA Nano provides irresistible grist for the mill. So here goes.
My friend V. (who I respect a lot for staying true to our computer science roots, unlike me who sold out to the management brigade), made some interesting points about the TATA Nano:
1. A cheap car does not mean you have the roads and infrastructure to drive it on.
2. Fuel is super expensive. According to his calculations, driving 20 miles/ 30 KM/ day would cost about a third of the car's price in a year.
3. The launch of the car will lead to increased pollution, traffic congestion, and fuel prices.
These are all great points, and I would start looking at them in the reverse order.
On point 3: Why is TATA Nano being singled out and slapped with these objections? Some more drivers (TATA would certainly hope that a lot of drivers) would join the global brotherhood of high-falutin' gas guzzlers to enjoy the priviledge of driving, and some would say, enjoy the right of getting from Point A to Point B. Only, the procession of Newbies in their shiny new Nanos would be doing it at 50 MPG.
Perhaps the though of achieving 50 MPG so easily is giving the hybrid hippies (before the greens come after me, I know someone who claimed she was a hippie for owning a Prius)- who've probably pawned off their Jordan XX3s to go green- sleepless nights.
However, I do accept the reality that driving conditions would change, for a start, in India. That family of 4 that would make you suddenly brake by appearing in front of you out of nowhere? They would now suddenly appear in front of you out of nowhere in a TATA Nano. Only, given the Nano's limitations, it would not be so sudden anymore. So congratulations, you, driving that more expensive car, will now find more reason to exercise the horn.
As an added benefit, you will feel happier that you don't have to worry about that family of 4, riding a scooter with the baby hanging loose by the sari's "dupatta" at the back ,while you drive.
Now, coming to point 2: fuel being super expensive. Would you trade in your more expensive car for the Nano? I hope you make the smart move and dump the Fords, Suzukis and the Hondas of the world, given that high gas prices are only going to get higher. Oil is $100/ barrel and some are betting it will reach $200/ barrel by end of 2008. A couple of lakhs in rupees/ a few grand in dollars saved in upfront car cost will fuel your current lifestyle for a few years.
Let's expand that to TCO (Total Cost of Ownership). Someone joked that in a couple of years, the engine might have to be replaced by bullocks. Well, more power to bullocks then! In a few years, even used cars would be too difficult to fix in the owners' backyards. That should be fodder for thought right there.
As for point 1, infrastructure: Look at how crazy traffic is in Bombay. The price of the car is really not going to be the key driver in terms of reaching an equilibrium on the Quantity of cars on Bombay streets (until we hit a tipping point, of course, and given Bombayites bottomless ability to endure, the tipping point will take some time coming, I assure you). The city that contributes over a quarter of the country's taxes has horrid infrastructure. Pointing to the quantity of cars on Bombay is really a misdirection for a lack of planning and infrastructure.
Before I wrap up, I would like to quote an incredibly funny take on this by my friend Sameer Gaunekar. This has Bombay and Bollywood references, and if you have seen "Thank you for smoking", the parallel is the senator trying to remove references to smoking in old movies:
Remember the motorbikes with the side carriers; with the advent of Nanos they surely will disappear, so if Ram Gopal Varma or even if the Sippy’s ever had to direct a re-make of Sholay then the “Yeh Dosti” song would be shot in a Nano instead of a motorbike with a side carrier….
End quote.
Borrowing Bono's phrase, Sameer's brilliant. :-)
Wrapping up: The reaction to this car from some quarters seems to be similar to the reaction to Negroponte's One Laptop per Child. The issues raised are those we have been grappling with since the first oil crisis in the 1970s, an will continue to work to resolve.
If this car makes people put money where their mouth is (instead of their foot), and do something about transport- decent public transport/ improved roads/ alternative energy sources/ whatever - then its more than served its purpose of being the "People's car". :-) What this "Freedom of Movement" does to India and its economy down the line is something I would like to see.
What do you think, my friend?
http://randomjunkyramblings.blogspot.com/2008/01/product-tracking-tata-nano.html
Some publications that talked about the TATA Nano since I last posted on it:
1> http://www.time.com/time/magazine/article/0,9171,1702264,00.html
2> http://wheels.blogs.nytimes.com/2008/01/10/tata-nano-the-worlds-cheapest-car/?hp
3> http://news.independent.co.uk/business/analysis_and_features/article3331789.ece
I usually avoid talking about reaction to news, and I wanted to cover the car rental market and the used car market in India. However, the reaction to the TATA Nano provides irresistible grist for the mill. So here goes.
My friend V. (who I respect a lot for staying true to our computer science roots, unlike me who sold out to the management brigade), made some interesting points about the TATA Nano:
1. A cheap car does not mean you have the roads and infrastructure to drive it on.
2. Fuel is super expensive. According to his calculations, driving 20 miles/ 30 KM/ day would cost about a third of the car's price in a year.
3. The launch of the car will lead to increased pollution, traffic congestion, and fuel prices.
These are all great points, and I would start looking at them in the reverse order.
On point 3: Why is TATA Nano being singled out and slapped with these objections? Some more drivers (TATA would certainly hope that a lot of drivers) would join the global brotherhood of high-falutin' gas guzzlers to enjoy the priviledge of driving, and some would say, enjoy the right of getting from Point A to Point B. Only, the procession of Newbies in their shiny new Nanos would be doing it at 50 MPG.
Perhaps the though of achieving 50 MPG so easily is giving the hybrid hippies (before the greens come after me, I know someone who claimed she was a hippie for owning a Prius)- who've probably pawned off their Jordan XX3s to go green- sleepless nights.
However, I do accept the reality that driving conditions would change, for a start, in India. That family of 4 that would make you suddenly brake by appearing in front of you out of nowhere? They would now suddenly appear in front of you out of nowhere in a TATA Nano. Only, given the Nano's limitations, it would not be so sudden anymore. So congratulations, you, driving that more expensive car, will now find more reason to exercise the horn.
As an added benefit, you will feel happier that you don't have to worry about that family of 4, riding a scooter with the baby hanging loose by the sari's "dupatta" at the back ,while you drive.
Now, coming to point 2: fuel being super expensive. Would you trade in your more expensive car for the Nano? I hope you make the smart move and dump the Fords, Suzukis and the Hondas of the world, given that high gas prices are only going to get higher. Oil is $100/ barrel and some are betting it will reach $200/ barrel by end of 2008. A couple of lakhs in rupees/ a few grand in dollars saved in upfront car cost will fuel your current lifestyle for a few years.
Let's expand that to TCO (Total Cost of Ownership). Someone joked that in a couple of years, the engine might have to be replaced by bullocks. Well, more power to bullocks then! In a few years, even used cars would be too difficult to fix in the owners' backyards. That should be fodder for thought right there.
As for point 1, infrastructure: Look at how crazy traffic is in Bombay. The price of the car is really not going to be the key driver in terms of reaching an equilibrium on the Quantity of cars on Bombay streets (until we hit a tipping point, of course, and given Bombayites bottomless ability to endure, the tipping point will take some time coming, I assure you). The city that contributes over a quarter of the country's taxes has horrid infrastructure. Pointing to the quantity of cars on Bombay is really a misdirection for a lack of planning and infrastructure.
Before I wrap up, I would like to quote an incredibly funny take on this by my friend Sameer Gaunekar. This has Bombay and Bollywood references, and if you have seen "Thank you for smoking", the parallel is the senator trying to remove references to smoking in old movies:
Remember the motorbikes with the side carriers; with the advent of Nanos they surely will disappear, so if Ram Gopal Varma or even if the Sippy’s ever had to direct a re-make of Sholay then the “Yeh Dosti” song would be shot in a Nano instead of a motorbike with a side carrier….
End quote.
Borrowing Bono's phrase, Sameer's brilliant. :-)
Wrapping up: The reaction to this car from some quarters seems to be similar to the reaction to Negroponte's One Laptop per Child. The issues raised are those we have been grappling with since the first oil crisis in the 1970s, an will continue to work to resolve.
If this car makes people put money where their mouth is (instead of their foot), and do something about transport- decent public transport/ improved roads/ alternative energy sources/ whatever - then its more than served its purpose of being the "People's car". :-) What this "Freedom of Movement" does to India and its economy down the line is something I would like to see.
What do you think, my friend?
Thursday, January 10, 2008
Product tracking: TATA Nano.
Here we go!:
http://timesofindia.indiatimes.com/articleshowpics/2689238.cms
And more, if you can't get enough:
http://timesofindia.indiatimes.com/articleshow/2687930.cms
1. Would the family of 4 riding the motorcycle/ scooter switch to the TATA Nano?
2. Would those able to afford cars 3x the TATA Nano pricepoint switch to the car?
3. Would this car develop the market further than where it stands right now?
Over a decade ago, I found myself (by chance) sitting across an Ex MD of IFCI in the Rajdhani train. During our conversation, he mentioned that Pepsi had signed the document to enter India in his office. The talk then flowed to the struggle MNCs faced in India, and how their market estimation as well as consumer behavior analysis had been off target.
One reason for MNCs struggling in India, he pointed out, was that the Indian consumer was conservative and did not really believe in disposable products. i.e. consumers would evaluate alternatives and go for the cheapest option after factoring in TCO (Total Cost of Ownership). Consumers would pick products that lasted long, and could be fixed quickly by the local handyman, over jazzy products without as much ROI (return on investment).
A lot has changed since then- and that includes Pepsi becoming "the choice of the new generation". India's youth could be called the "liberalization youth"/ "satellite channel youth". As we learn more about the product, about the people buying (as well as not buying) this product, we are likely to find a huge indicator of India today; also specifically, an indicator of TATA Motors as a business, and of India's consumers.
Of course, I have not even touched upon the next step- going global.
What do you think?
P.S. The Part Hahaha Duh (a.k.a. Part II of this post on reaction to the car) is here:
http://randomjunkyramblings.blogspot.com/2008/01/product-tracking-tata-nano-part-hahaha.html
http://timesofindia.indiatimes.com/articleshowpics/2689238.cms
And more, if you can't get enough:
http://timesofindia.indiatimes.com/articleshow/2687930.cms
1. Would the family of 4 riding the motorcycle/ scooter switch to the TATA Nano?
2. Would those able to afford cars 3x the TATA Nano pricepoint switch to the car?
3. Would this car develop the market further than where it stands right now?
Over a decade ago, I found myself (by chance) sitting across an Ex MD of IFCI in the Rajdhani train. During our conversation, he mentioned that Pepsi had signed the document to enter India in his office. The talk then flowed to the struggle MNCs faced in India, and how their market estimation as well as consumer behavior analysis had been off target.
One reason for MNCs struggling in India, he pointed out, was that the Indian consumer was conservative and did not really believe in disposable products. i.e. consumers would evaluate alternatives and go for the cheapest option after factoring in TCO (Total Cost of Ownership). Consumers would pick products that lasted long, and could be fixed quickly by the local handyman, over jazzy products without as much ROI (return on investment).
A lot has changed since then- and that includes Pepsi becoming "the choice of the new generation". India's youth could be called the "liberalization youth"/ "satellite channel youth". As we learn more about the product, about the people buying (as well as not buying) this product, we are likely to find a huge indicator of India today; also specifically, an indicator of TATA Motors as a business, and of India's consumers.
Of course, I have not even touched upon the next step- going global.
What do you think?
P.S. The Part Hahaha Duh (a.k.a. Part II of this post on reaction to the car) is here:
http://randomjunkyramblings.blogspot.com/2008/01/product-tracking-tata-nano-part-hahaha.html
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