New Products

Two news items attracted my attention today and both of them are close to the kind of work that I did earlier.

First one is the "Food Card" launched by HDFC essentially a pre-paid card to replace food coupons. While I was at Ivy, we mulled over many ideas on how to overcome the issues related to distribution of food coupons. This product seems to be addressing that need precisely. The food coupon business currently is being served by Sodexho and Ticket in India but with this launch, things will change. We'll have to wait and see what is involvement of the current players in the HDFC offering and if they are not involved what their next step would be. The need in discussion aroused mainly due to the personal tax law of India. This product would have a limited market size and if HDFC does some aggressive marketing, it can occupy a dominant position and effectively reduce attractiveness for other players to enter. This is a good example of a product built on taking advantage of the low marginal costs. The current systems (operational and marketing) that are required for servicing the debit and credit cards would have certain buffer capacity to launch more similar products to benefit the customer and the supplier. It benefits all parties involved and I am confident that this product will be a success.

Coming to the second product, rather a brand in examination is Nokia. First I noticed one full page ad by Nokia starring Shahrukh Khan and in the afternoon I saw reports about failure of Nokia products in a interior location of Andhra Pradesh. The ad was not about a model or product but was attempting to assure the customers but the news coverage was achieving the exact opposite effect.

This is a classic case of gaps between PR and action. While the corp comm department is spending lakhs of money the service department that is responsible for customer satisfaction is still unable to grapple with the situation. This whole thing might have rose due to the new manufacturing facility set up in India. I hope you can see the connection - manufacturing has quality problems leading to overload on the service network but the firm tries to contain reputation loss through advertisements, an overall reduction in firm value. It would be interesting to see how Nokia India solves this and what approach they would take in long-term.

While these problems and opportunities seems simplistic to write and discuss about, the scene would be so different on the ground. Information and communication wouldn't follow thoughts and people involved wouldn't see the logic as straight as you can. That's when, I think all the theories, past experience and soft-skills come in to the picture - to convert ideas into action, to move people from talk to walk.

All this prep is to get myself ready for the ground reality, I suppose, which is awaiting me in no more than 4-6 months.