A case of Hostile – Mind Takeover Marketing by Aircel

Today morning one got up to a slightly different news paper. The Front page of the newspaper instead of saying “The Times of India“, said “Move On India“. As the day progressed one realized what was “Ambush Marketing” taken to the next level, which I have referred to as “Hostile Mind Takeover Marketing“.

On my way to work, I generally switch on the radio and navigate through the peak hour traffic listening to the Radio. However today all I heard on Radio were Aircel Commercials. Long boring commercials, which were playing more frequently then music (read here). Switch from one channel to another and what do you hear there, the same commercial. Aircel had completely hijacked all Radio Stations.

The day went on and I got busy with work. On my way back home, near the media display outside the elevator, Aircel had put a long sticker tape on the border of each display. I reach home and switch on the Television, what do I see. Aircel ads being played on every channel on every commercial break. Great so by now I was starting to understand this strategy very well. In any case I switch on the news channel and there is a Aircel ticker on every news channel too. Phew talk about a brand overdose.

What are we talking about here. Aircel is one if India’s telecom operators launched it’s operations in Delhi and NCR. For once I felt that spamming had reached a new level. I was also trying to do the numbers on how much all this marketing would have cost them. I believe that in these troubled times where advertising fees has been cut by almost 50%, Aircel made a killing. I still invite guesses on what all this Hostile – Mind Takeover Marketing costed Aircel.

India’s burgeoning, mobile wielding generation got yet another service provide in Aircel. Hope all of this leads to a healthier competition between the Telecom giants of India. We already have Airtel, Idea, BPL Mobile, Spice, Vodafone, BSNL, MTNL amongst the leading telecom operators in the country. We just got another Aircel.

Public Companies And The Law Of Diminishing Marginal Returns

In Economics, there is a famous Rule called The Law Of Diminishing Marginal Returns and one of the ways it is explained is using the example of Glasses full of Beer. Think of being thirsty. If you go for a beer, the first gulp will taste best and bring the most benefit. In economists lingo, the return is high. Any further gulp will taste good as well, but not as good as the one before. Thus, the return diminishes. You will reach a point, when you had enough beer. This time, the sip will not do any benefit to you. The return is 0. If you – nevertheless – go ahead with drinking beer, the returns will turn negative. The more you sip, the more you will get drunk.

I have been thinking a lot lately about public companies. As someone who use to teach corporation and securities law, I take for granted the fact that the public company is the most efficient way:

• For a company to raise capital.
• For an investor to put his money in the hands of expert management that will ensure his investment grows by generating value.

The whole legal concept of public companies and the stock markets is that this tool will allow the free agents to create more value for society. And in theory, this is a great idea. If I have the money but not the ability to manage a company, I hire other people to manage my company and find a bunch of other people like me. The managers, who are experts in creating value, manage our assets, and we can profit from the value generation, by enlarging the business on one hand and by taking dividends on the other hand. This in turn creates value for the society as a whole.

But as always, there is a difference between theory and practice.

The problem is that the structure of public companies and the stock market creates the wrong incentives. Instead of investors looking for expert managers to ensure their investment grows by creating more value, the investors (directly or indirectly using all kinds of funds) are searching to make profits out of the volatility of the markets. When you have 1,000$ (or less) invested in a company, you are not interested in the value generation or in drawing dividends, but in the impact on the value of the share, so you can sell it.

This in turn puts pressure on the management to perform for the short run and to take steps and risks that a company without these incentives would not have taken. It creates a culture of a race after growth and of ignorance to the cash at hand. The short run outlook does not allow companies to sustain their profits over time and thus, does not create value for their investors and the society. I think that from society’s outlook, the current structure of the markets endangers the goal for which society has created these markets in the first place.

What is interesting is that the bigger the market, the more diversified it is, the more people are in it, the worse this phenomenon gets. And our markets are getting bigger, because of the internet, globalization and capital in emerging markets. I think that stock markets have a diminishing marginal return and we have crossed the point where they become less effective the bigger they get. Perhaps the near future will lead to a surge in the number of private companies.

From what I have seen in the last few months in the world and from the little I covered in my MBA (at AGSM, Sydney), if I was the leader of a private company thinking to go public today, I would reconsider. Maybe try to raise money in different ways or from a small number of strategic investors, but avoid going public at any cost. That is the most responsible thing to do, as a manager and as responsible citizen of society.

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Social Entrepreneurship – The Need Of The Hour And The Demand Of The Future

Economics states that the Theory Of the Firm is essentially to perform those activities that maximize profits. A firm should focus on improving the productivity of it’s inputs so as to decrease the cost of production and increase profits.

Well, this is what has been taught in Economics at Business Schools for the past many years and it is unlikely that these basic theories would ever change. However the Business Environment today demands new rules and new ways of thinking and that’s what makes it exciting to be a B-School student at reputed International university as of today. The theory of the firm is essentially what has led to the current Recession and it is this ideology that needs to be changed over the next decade.

Any kind of change would always trigger the birth of new ideas and concepts and one such Idea is that of Social Entrepreneurship. So what exactly is Social Entrepreneurship:

Social entrepreneurship is different from business entrepreneurship because the main goal of the former is to promote social development, not profits. Social Entrepreneurship is not Charity, Philanthropy or CSR, it is all about optimizing profit rather than maximizing profit.

Social entrepreneurs drive social innovation and transformation in various fields including education, health, environment and enterprise development. They pursue poverty alleviation goals with entrepreneurial zeal, business methods and the courage to innovate and overcome traditional practices. A social entrepreneur, similar to a business entrepreneur, builds strong and sustainable organizations, which are either set up as not-for-profits or companies.

Today the Students of AGSM, Australian School Of Business had the wonderful opportunity to listen and interact with Dr.Pamela Hartigan(see picture below), a pioneer in Social Entrepreneurship and the former MD of the Schwab Foundation of Social Entrepreneurship.

Her experience and stories truly left the audience spell-bounded and drove home the point that Social Entrepreneurship is the need of the hour and the demand of the future. Watch the video below, to hear her amazing stories and thoughts about Social Entrepreneurship.

Networking Your Way To The Top Job

Attending Business School is like an experience in itself, especially if you’re doing the AGSM MBA. The decision to go for an MBA is always a well-thought out one although very few people would actually follow a traditional decision making process usually followed in business. Unlike any other Undergraduate course or postgraduate course, the MBA places great stress on all-round development.

So while it is important to learn about finance, accounting and the other core business subjects it also important to know how to create and deliver an effective presentation, how to handle difficult conversations and most importantly how to network . These are qualities and skills that most people, who have been in the workforce for a couple of years tend to take for granted. But step into a global MBA and only then would you realize that what you knew is just the tip of the iceberg.

One of the core competencies that any global Manager must possess is excellent networking skills. These are not only essential to find the right job but later on become an important tool for growing a business, winning important contracts etc. The MBA places great stress on this area and more than 30% jobs in International B-Schools are found through effective networking. However that is easier said than done. Psychologists and experts have identified certain barriers that prevent people from Networking effectively, some of these are:

1. We feel pushy.
2. We feel shy.
3. We feel intimated.
4. We fear rejection.
5. We consider it to be a waste of time.

Most International MBA programs run sessions to remove these fears amongst their students and at AGSM this starts of from the very first day when each student is encouraged to know all his classmates, something that is not possible at Wharton or Harvard given the number of students in an MBA class.

The video below is an excellent guide on how to overcome your anxiety of meeting people and establishing effective contacts.