Strategic tools for the practising manager

KIT

THIS WEEK: THE PREMIUM FRAGRANCE MARKET IN INDIA

The premium fragrance market in India is worth Rs 2,285 crore.

The Indian market is small, but growing at 30 per cent annually. The growth in the next three years is expected to be around 40-50 per cent.

The purchase frequency of premium fragrance products is higher for men in non-metro cities. For women it is higher in metro cities.

Premium fragrance products are mostly preferred among men and women in the age groups 30-35 and 40-50 years. Women in the 50-plus age bracket, too, are extremely indulgent toward this category.

Engagement in the category is higher for men (65 per cent) compared to women (60 per cent).

One an average, people buy perfumes at least two-three times a year, either for themselves or as gifts.

Almost all departmental stores have a significant percentage of floor area dedicated to perfumes; as a result, 62 per cent men and 78 per cent women consider these departmental stores the main destinations of purchase for this category.

Selections from management journals
NUGGETS

The high failure rate among new business ventures is usually chalked up to the fundamental uncertainty of the process.

In actuality, say the authors, flawed ways of assessing and managing ventures may account for the disappointing amount of value they generate. Instead of taking the go/no-go approach, whereby a project either advances toward launch or is killed, decision makers should consider a range of alternatives: recycling the venture by aiming it at a new target market; spinning it off to other owners or a joint venture; spinning it in to an established business unit; or salvaging useful elements such as technologies, capabilities, knowledge and patents.

Firms that excel in value extraction "" the "value captors" "" have created formal processes to systematically mine successes, failures and everything in between.

They know that a venture should be treated like a scientific experiment, in which learning plays a critical role. They don't allow financial criteria to dominate the reviews, and they recognise that the best people to launch a business may not be the ones who developed the idea.

The value captor's process: Getting the most out of your new business ventures
By Rita Gunther McGrath and Thomas Keil
Harvard Business Review, May 2007 Issue
Subscribe to the article at www.hbr.com

Few companies have a footprint as global as Nokia's. By competing aggressively in Europe, Asia, North and South America, West Asia and Africa, the company accounted for more than a third of all sales of global mobile-communications devices in 2006.

In this interview Keith Pardy, Nokia's senior vice president of strategic marketing, explains how Nokia competes in both developing and emerging markets and describes the challenge posed by the increasing complexity of today's marketing environment.

Pardy believes that changing the behaviour of consumers often involves connecting with their subconscious minds "" which has important implications for how marketers gather and use insights about customers.

Confronting proliferation ... in mobile communications:
An interview with Nokia's senior marketer
By Trond Riiber Knudsen
The McKinsey Quarterly,
Web exclusive, May 2007
Read this article at www.mckinseyquarterly.com

Globalisation is pulling tens of millions of people out of poverty annually and creating worldwide wealth unimaginable a generation ago. But its benefits are being shared unequally, resulting in widespread public dissatisfaction that business leaders ignore at their peril.

At a recent Wharton summit, Stan O'Neal, chairman and chief executive of Merrill Lynch, and Rajat Gupta, a senior worldwide partner with McKinsey, called on business leaders to pay attention to their social responsibilities as assiduously as they watch their bottom lines.

"As business leaders, it's too easy to focus on the winners," O'Neal cautioned. "But a vast population is being left behind ... How do we ensure that the fruits of opportunity flow freely and equally to everyone?"

These questions aren't just matters of morality, Gupta added. Companies' ability to operate free of onerous restraints depends on the perception that they contribute to their societies. "If society feels that business is not living up to its responsibilities, there will be significant consequences. Business needs to reinforce its compact with the public."

For globalisation to succeed, 'business needs to reinforce its compact with the public'
Knowledge@Wharton,
May 02, 2007
Read the article at http://knowledge.wharton.upenn.edu