Whoever said ‘when the going gets tough, the tough get going’ was not just a true genius at word play

but also one who had possibly seen-it-all happen to the so-considered ‘great brands’, from atop the citadel of capitalism... A ground reality check by Aditi Prasad

Swapan and Kanha are having a harrowing time these days. Exams are round the corner and to add to all their mugging-up stress is their mother’s unrelenting commitment to feed them wholesome meals, which she says would increase their memory (thank you mom… irrespective of all those leafy meals, the Berlin Wall still fell in 1989!). Their daily dose of the yummy Horlicks-flavored glass of milk, three times a day, is perhaps the only bright light in this gloom-filled examination period.

Unlike these strained teenagers, examination time (January-March) every year is a great time for health drink powders like Horlicks and Boost, Glaxo Smithkline’s (GSK) flagship health drink powders for kids. It is GSK’s peak sales period, following which demand slumps by about 10-12%, thanks to a near-halt in hot drinks by consumers in the ensuing summer months. And so begin the good times for kids and bad times for brands like Horlicks.

A couple of summers ago however marketers at GSK decided to challenge these bad times head on. They launched a cold-consumption campaign for Horlicks – first by teaming up with the launch of the successful movie Ice Age 2 in India and then by roping in the Taare Zameen Par child star Darsheel Safary and adding summer variants to their portfolio. The chilled drink positioning for Horlicks not just translated into red-hot national sales for Horlicks during the summer of 2008; but also gave the brand a chance to keep its visibility high throughout the year.

Here’s another story. In Y2K, McDonald’s globally began facing the worst time in its juicy-burger history and reported its first quarterly loss in 2002. The book Fast Food Nation had captured the imagination of America and sales slipped on the back of increased health consciousness. What did the global QSR chain do? It fought back! It launched healthy burgers (?!); removed super size options from its menu; re-cast its mascot Ronald in a new ‘fighting fit’ avatar; launched a global ‘I’m Lovin’ It’ campaign; went on a market development spree by opening 1,200 overseas restaurants in 2003 alone; launched extensions like McCafe and McTreat, and more. The important thing is that today McD’s is on top of the situation again!

For more articles, Click on IIPM Article.

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

For More IIPM Info, Visit below mentioned IIPM articles.
The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School
Detail of all IIPM branches
IIPM Admission Detail
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION

As the economic meltdown rings the ‘panic bell’ for Toyota Motor Corporation, the company is struggling with an unwieldy - inventory build up.

4Ps B&M’s Karan Mehrishi analyses...

It’s not often when business stories victimise Toyota for bad business acumen. The Japanese is perhaps one of the very few automotive behemoths which does every thing right or at least until now. So when the news about Toyota sales decline came in, we were surprised and skeptical for all the wise reasons. It has been more than 70 years since Toyota has reported a negative forecast about its performance. As per reports, Toyota expects its global sales to be close to 7 million units, a full 540,000 less than previously projected. The numbers which are 7% less than estimated figures will be a mind numbing 20% less than 2008’s 8.9 million in sales.

Global slowdown and poor consumer confidence have taken their toll on Japanese manufacturers as well, and Toyota along with Nissan and Honda are facing the heat. Toyota, which lost 35% sales in its largest market, US, in December 2008, seems to have bowed a bit to the market forces. Even in Japan, the home market sales failed to reach the 1.5 million mark, an event that occurred after 25- 30 years.

“Currently, the financial crisis is negatively impacting the real economy worldwide and automotive markets, especially in the developed countries, are contracting rapidly. This is an unprecedented situation and we are already taking measures,” said Mitsuo Kinoshita, Executive VP, Toyota Motor Corp. As a result, Toyota has already established an emergency committee to revive profits in the near future by working on production cost reduction and profit maximisation in order to improve operating margins. Even though Toyota overtook GM as the largest automotive manufacturer in the world in terms of net sales, it is perhaps following the former’s path to the bottom.

Toyota’s Global Master Plan is being blamed for this adverse situation. According to this plan, Toyota was to achieve the position of market leader by way of product planning and aggressive expansion. Though the strategy was in line with Toyota’s successive product planning, which included the new Lexus IS series and the new Toyota Yaris-derived small cars. The plan has proved to be ill-timed considering the current situation. Despite the fact that higher volumes were required to meet the unprecedented demands for Toyota products globally, it was also true that some large markets were already stagnating. The supplementary utilisation of the excess capacity generated here could also not be used in fast emerging markets because of strict import laws already incorporated in those countries. Also, the appreciation of the Japanese Yen vis-à-vis the Dollar and Euro, played an important role in falling margins. Since Toyota still manufactures its key components at its Japanese mother plants, an expensive Yen was a spoilt sport. Additionally, the plan called for expansion and the company pushed forward with disrespect for future scenarios. As the global economy took a turn for the worse, just like GM and Ford did earlier, Toyota too was stuck with stock that nobody was interested in buying. Years of excess capacity resulted in unsold inventory, which continues to bog Toyota’s coffers.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM set to beat economic slowdown
IIPM Admission Detail
IIPM - Admission Procedure
IIPM : EXECUTIVE EDUCATION
IIPM, GURGAON