Herd Mentality

I read this post on Freakonomics blog that talked about the herd mentality when it came to boarding a bus… if you think about it people usually board the bus from the stop nearest to them. And its quite logical to use a bus stop that’s nearer to you. But when a lot of people start thinking the same, that bus stop becomes overcrowded. And somehow people still don’t realize that if they just go a few yards away to another bus stop that’s less crowded they have better chances of boarding a bus than they had earlier…

Something quite similar I experienced when I went to a mall beside my work place. The thing is this mall has nearby commercial offices. Thus, during lunch hours the food court and lavatories are the 2 places with long lines.

One day, instead of waiting in the line, I took the escalator to the next floor’s lavatory. It took me precisely 47 seconds to move up to floor 1 and find the men’s room there. And it was completely empty. Not a soul was there, and since no one used it, it was far cleaner than the one on the ground floor which probably was being rummaged by a lot of people at that time.

This is where herd mentality gets to you. Same goes for checkout counters in supermarkets. The checkout lines to the extreme end are more or less empty, while the checkout lines towards the middle are heavily crowded. Why? I mean, isn’t that common sense to move towards a line that’s not too crowded so that everyone can checkout faster!? Herd mentality again!

The World is Flat

Currently I'm undergoing a training on the Oracle E-business suite; a complete business ERP solution for enterprises and all that stuff. While the instructor was taking us through the process of item ordering and merchandise planning something just struck me...

The scene was like this... An Indian Company (Wipro) created a software on a platform developed in the US (Oracle) for a company in the Middle East (KOJ) which has employees from all across the world (India, Philippines, UAE, Lebanon, UK) and sources materials from countries like China, Taiwan, Italy, Germany, North Korea... another awesome testimony to the fact that the world is flat!

Make hay while the country messages

Throw your head a few months back… there was this ‘new 7 wonders of the world program’ that had hit the scene in India asking every single Indian citizen to vote for the Taj Mahal. Every galli ka kutta with the slightest iota of patriotism was asked to vote for his nation. Every single liner on the ‘motherland’ and ‘bhaarat maata’ was being hurled by the radio, news channels, and the likes. The media was in a rampage with all the TV channels giving consistent flashy ‘ticker ads’ to vote for the Taj Mahal literally begging us to save our ‘heritage’. All you had to do was to type in a message and send it to those 4 digit numbers so that even you could be a part of ‘making history’…

And thus began probably one of the biggest agglomerated marketing effort by the media houses of India. Now before I go ahead and make you realize how we were duped by the media houses and how we quite stupidly helped them make money while we satisfied our conscience by voting for the Taj, let me give you some background on some technicalities of the voting system.

Firstly, the voting system was majorly accepted through sms and an online voting system. There was unlimited number of votes that any person could cast. Thus scientifically the voting system is void completely. Also, the voting system has large dependencies on access to cell phone service or the internet. And lastly, the decision HAD to be skewed since every country doesn’t have the same population size. Surely you don’t expect Indians to vote for the Christ Redeemer in Brazil…! I mean this one is a no brainier… we’re the second largest population in the world; we had to win! Even if 1/10^th of the Indian population cast a vote it would be equivalent to the entire population of Brazil! And given the amount of cell phone proliferation that has happened in the recent times, I don’t think India was at a disadvantage by having a very low internet penetration. And lastly, the entire campaign of the new 7 wonders was a complete private initiative without any international organization backing. In fact, UNESCO issued a statement saying that they were not involved in any way in the ‘new 7 wonders’ campaign.

However, the media houses took this opportunity and turned it completely into a business opportunity. Here’s how. Every news channel has a dedicated sms number for all its services. For instance Star TV has its own private number, 7827. So when Star News urges to cast a vote for the Taj, it would give the number 7827. CNN-IBN might have its own, Zee News its own etc. etc… Each of these 4 digit numbers are provided by cellular service providers like Bharti-Airtel and BSNL to the media houses. So whenever you send a message to these 4-digit numbers you’re charged Rs.3 per message. Out of the 3 rupees, 1 rupee goes to the service provider and the remainder 2 rupees to the owner of the number (the media houses in this case).

Imagine a country with a population of more than 1.1 billion with a high cell phone penetration rate casting votes on these 4 digit numbers. Just think of the revenues the media houses might have raked in just by urging bumbling nitwits like us to cast votes using their numbers.

Was it really a question of preserving the ‘heritage’ and maintaining integrity and all that sentimental crap or was it a pure business opportunity? Your take…

Of potatoes and air conditioners

Everybody, or lets say almost everybody is loving the retail boom in India. I agree that its high time the retailers started giving a shopping experience that the mom and pop stores fail to provide.

And quite obviously one of the major attractions of the retail boom is the cost effectiveness being passed on to the customer. This holds true especially for daily household items and perishable goods like vegetables and regular grocery.

When it comes to the case of vegetables, Reliance Fresh is quite popular. And the fact that Reliance Fresh is more popular as compared to the other mandi fellows isn’t surprising. With air-conditioned environments and the likes it does become a favored place for people to shop for vegetables than the mandi with all its flies and cow-dung infested market space.

But someone tell me, is the core business proposition of Reliance Fresh – to sell fruits and vegetables (which however has been altered in recent times thanks to some unfortunate circumstances) a really profitable and more importantly a sustainable one? The basic problem with the service delivery is not the product, but the costs attached to it, and unlike in developed countries where these costs do not form a larger part of the expense-pie, it sadly does as far as India goes.

I mean, lets take an example of a Reliance Fresh store in Ahmedabad. An average Reliance store would have around 8 split air conditioners with 1.5 ton capacity. The commercial electricity rate for Ahmedabad is 4.85 rupees per unit. And assuming a typical reliance outlet operates for 12 hours a day, the total energy consumption of just 8 air-conditioners for 12 hours a day for a month comes to 3240 units = Rs.15,714 just for the air conditioning alone. The racks with cold storage which keeps the vegetables cool consumes almost twice or thrice as much as the power consumed by the A/Cs to keep the vegetables fresh, and thus twice or thrice as much increase in expenses. And we’ve still not taken the illumination and labour charges into account and not even the rent for the place which, by itself would also be equally high.

Now, spending almost a half a lakh on just illumination and cooling, plus an equitable sum on the rent for the place is quite a lot for just selling vegetables of which the largest selling commodities are tomatoes and potatoes which virtually have negligible margins. I do understand that there are some exotic SKUs like broccoli and things like that which give higher margins, but clearly it’s the potatoes and the tomatoes and other similar vegetables for which the customer comes to Reliance Fresh in the first place.

Lower margins and freaky expenses… it just doesn’t add up at least to me! And I still haven’t taken into account a lot of things… the supply chain expenses, the management fees, the cold storage expenses and most importantly the markdowns that happen everyday since vegetables are a perishable commodity.

I just don’t see where the money is coming… its just going out! If Reliance really wants to be in the market of vegetables for long, the current system at least doesn’t approve of it… can’t say about the future.

Your take…

Intuitive Data or something like it...

Market Research has always been condemned for being a field of Marketing that has dissuaded the marketing managers from making a proper decision. Even while in my MBA the fellow who came to teach us Marketing Research spent a larger part of his time trying to convince the students that ‘proper’ Market Research does give ‘proper’ results.

However, experience shows that in most cases people either don’t know to ask the ‘proper’ questions or they just aren’t able to interpret the same properly. There are more examples of Market Research proving a failure than an astounding success. And perhaps the most popular of the Market Research blunders being the ‘Coca Cola’ research fallout where they decided to change the formulation and all, and then realized that it was utter stupidity and stuff like that.

And today, when Market Research is already been taken as something like a black sheep in the family, the entire field of study is losing out of options. Data through internet surveys was the next in-thing that people thought would probably enable the researchers to get more accurate data; but it still didn’t just deliver as much as it was expected.

However today what’s happening is that people themselves are giving out data on Facebook, Orkut and other sites… Researchers are now plundering data out of these places to get material for their research objectives.

And while whiling away my time in the office I came up with something even more astounding which could probably blow away the ‘Billboard Hot 100’ music listing. The Billboard Hot 100 Music listing generates the top 100 albums based on album sales and airplay (on radio stations). But isn’t it a matter of fact that people are now largely listening to MP3 on their computers and not buying albums? Also the Hot 100 artist listings are generally based on sales in the US and UK. What about the international audience?

Then how come Billboard Hot 100 still remains a benchmark to assess an artist’s success? Also, the BB Hot 100’s longevity is based on weekly sales, and not beyond that. Somehow people just seem to override or rather overlook these shortcomings of the BB Hot 100 Listings.

This is where Google Music Trends come into the picture. Google Talk has the functionality to capture the information related to the music the computer user is playing at that point of time and then upload it to the Google database. This sort of data collection happens on an international level since it captures information about all the users using Google Talk, it happens over a period of more than a year, thus assessing an artist’s longevity too as far as the album’s popularity is concerned, and gives a data that is amazingly different from what the BB Hot 100 has to say…

Check the links of the BB Hot 100 and Google Music Trends and compare the data… there’s a sea change of difference!

Now which one to believe is your choice.

There and back again

Back to Malludom. The land of the brown and the crazy, where people drive Bajaj Pulsars as pizza delivery vehicles and where the roads can change directions overnight… Dubai!

To be honest it’s quite fascinating to see how things have been evolving in this city. I came here 6 months back, and still a lotta things look new to me. But even more than that has been the changes in my living, my lifestyle.

6 months back, I had all the facilities given to me. Food, shelter and transport. But now, all these things are to be managed on my own. But most importantly the matter of fact is I’ve never felt so lonely in my life till now. I thought it would be easier to settle in since I know the place around. But frankly it doesn’t seem to be happening here. There are a lot of things which need to be done, and I seriously wish I had someone around me.

It’s not really a time of distress or dire straits. But perhaps it is now that I’m living the experience of ‘really’ living away from home and abroad. Maybe while I was in the MBA, everything was kinda given. People around me were Indian, the food, the shelter… all these things were given to me. I really didn’t have to worry about things. Here, that’s not the case. Right from finding a decent and affordable place to live in, to getting the bank accounts in order, and perhaps the most daunting task of all… to find a good and ‘sustainable’ mode of transportation which is ‘economical’ too.

I’ve been asked to eat properly and stuff like that. But seriously, you don’t even feel like eating here when you are alone. I think it’s a matter of time before things might settle in, and I really wish that is the case.

Until that time, I’ll be smelling perfumes and applying glitzy powder on my arm and stuff like that… ;-)