Business history repeats itself...

...and looking at the direction in which the group is headed, it makes sense!

With a history that can be traced back to as early as the year 1820, the Goenkas were always a formidable force in India Inc. Right from Ramdutt Goenka (the man who established the Goenka Empire) to Harsh Goenka (the present face of the group), this Marwari family always had a prominent place in India’s business community owing to its sharp business intellect. The foundations of RPG Enterprises – one of India’s largest industrial conglomerates – goes back to the year 1979 when R. P. Goenka, son of Keshav Prasad Goenka led the group with a turnover of Rs.75 crore and comprised of companies like Phillips Carbon Black, Asian Cables, Agarpara Jute and Murphy India. Continuing the streak of entrepreneurship, R. P. Goenka soon became the takeover specialist of India as he added companies like CEAT Tyres (1981), KEC (1982), Searle India/RPG Life Sciences (1983), Dunlop (1984), HMV (1988), and Spencer & Co. (1989) amongst others. But just before Indian economy witnessed liberalisation in 1992, R. P. Goenka entrusted the responsibility of the group on his two sons – Harsh and Sanjiv Goenka.

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Source: IIPM, 4Ps, B&E

VGC boasts an elite bluechip clientele...

Little surprise then that in a relatively short span of 9 years, VGC boasts an elite bluechip clientele that includes prominent names like Birla Sun Life, the Aditya Birla Group, BBC World, Discovery Travel & Living, the Indian Express Group, the Hinduja Group, Air Mauritius and Hindustan Lever, to name just a few! In a market that is constantly reinventing itself, Preeti questions the wisdom of clients in sticking to run-of-the-mill creatives: “Clients want to reinvent their markets and their communications, but where are they?” she asks, continuing to explain the differentiator for her agency, “We are ‘specialists’, simply because VGC has been successful in thinking laterally, with great creative aplomb.” Vyas Giannetti Creative recently launched a ‘Sports Concepts’ company, with an intent to breathe creativity into this virgin territory. “The idea is to recognise sports as something that is involving, absorbing and interactive,” she says. The agency has identified sports as a powerful medium of communication – across audiences and parameters – and plans to deal with it dedicatedly. So what’s ahead, for this agency on fire? “We have just begun, and we have sown very powerful seeds,” is the tempered response offered by Preeti. She believes that these individual trees would need nurturing keeping VGC’s hallmarks of lateral thinking and creating communications solutions (taking into consideration local and global parameters). And going by its track record, the agency seems set to live up to its last name!


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The Dog Fight (IIPM News Article)

India’s numero uno car maker Maruti often launches its product range around the festival season. The mass marketed 800 and Alto show tremendous growth in this season. These utilitarian vehicles do not offer discounts like the mid-segments due to relatively lower margins, but free insurance schemes are also offered to entice the consumer. The more interesting battle that created ripples last year is the one for between Maruti Swift and Hyundai Getz. Last year, the Swift won it hands down. Demand for the Swift far exceeded supply in 2005, so discounts were out of question. This year, Maruti has expanded capacity for the Swift, and is offering discounts of upto Rs.20,000 compared to Rs.40,000 by Hyundai for Getz. Hyundai’s Accent is the segment leader in the midsizers. The company is offerring the GLE in economy trim priced at Rs.500,000. Honda, though not exactly synonymous with hefty discounts, may also have to lower their obdurate policies this season. Rajeev Chaba, MD, GM commented: “We (GM) do not have any plans firmed up for the forthcoming season.” However, the Chevrolet Aveo and its rival Ford Fiesta are expected to offer attractive incentives as well. Maruti is already offering existing Esteem owners an option to upgrade to a Baleno. Meanwhile in the D-segment, GM is giving away its Chevrolet Optra with discounts of upto Rs.40,000 with free service packages and buy-back options. The biggest windfall, as usual, will be for consumers in E-segment. Reportedly, Hyundai is giving discounts of Rs.150,000 on Sonata Embera. The sluggish Hyundai Terracan (pun unintended) is available at upto Rs.60,000 discount, while Mitsubishi Cedia is available sans insurance & registration costs.

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Editor: Arindam Chaudhuri, Source: IIPM Publication

Kamal Nath caught avoiding taxes!!! :: IIPM Editorial

The Commerce and Finance Ministries must resolve existing conflict

Perhaps the best way to watch the boom in the Indian economy is to have a look at the budgeted figures presented by every finance minister. However, if one plots budgeted figures, revised estimates & actual receivables, the graph would reveal a different story altogether. As per figures released in June 2006, the Centre’s gross tax collection stood at Rs.3,658.74 billion, as against a revised estimate of Rs.3,701.41 billion; the budgeted figure, however, was at Rs.3,700.25 billion. That is, the gross collection has fallen short by a whopping Rs.40 billion; the government now faces a strange dilemma in tax collection from its own policies. If we have to look at specific tax groups, even the share of indirect taxes in gross tax revenues has gone down significantly. According to Praveen Nigam, Partner, Indirect Taxation, Grant Thornton, this share “is expected to further decline as the government will align duties to ASEAN levels. India is obligated under WTO to reduce peak customs duties.

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Source: IIPM Publication, Editor: Arindam Chaudhuri

IIPM Editorial : Agriculture Sector in India

While the whole nation was celebrating the signing of the nuclear deal and discussing what Bush ate for lunch, breakfast and dinner, the agriculture pact was shoved to the inside pages and was mentioned in mere passing. This aptly represents the step-motherly treatment that the agriculture sector has been getting in India; a country where 60% people are still dependant on this sector for its livelihood, while the rest rely on it for their day-to-day food requirements. In countries like the US, which accounts for 30% of global food production, less than one percent of its population is engaged in farming. The figures for countries like Japan and Germany are between 2-8%. On the other hand, in the last 59 years, India has been able to reduce the percentage of population directly dependent on agriculture from 80% to only about 60%. What seems to send shock waves across the world is that despite so many technological advancements happening globally, the rain god still dictates the fate of millions and millions of farmers in India.

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Source: IIPM - Business& Economy, Editor: Arindam Chaudhuri

IIPM EDITORIAL >> Gianni Versace, of the rock ‘n’ roll fame

“You dress elegant women. you dress sophisticated women. i dress sluts” (gianni)

Gianni Versace was a designer who redefined the business of fashion by developing designs that portrayed a love for the body and an unabashed sexuality. In 1978, along with his brother Santo, he set up the fashion house, which for the first time connected high fashion with the street. He also successfully connected with the media to gain publicity for his label. It was also one of the rare fashion houses to use “A face” to advertise its collection. He also collaborated with well-known photographer Richard Avedon to come up with classy advertisements. Within 10 years he built an empire worth $353 million. Born in 1946, in a small town of Italy, Gianni was exposed to fashion early, as his mother was a dressmaker. Gianni planned to make the company go public in 1998. However, in 1997, he was shot down outside his mansion in Florida by a serial killer. After his death, his sister Donatella took over as the design head and brother Santo as the CEO. But clearly, it is the legacy of Gianni that keeps the Versace brand alive across the geographies and across continents.

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Source: IIPM Editorial

Gold is not worth more now; it is rather the dollar being worth far less (IIPM Publication)

Today it takes more than 630 dollars to get an ounce. Gold is not worth more now; it is rather the dollar being worth far less. A comparison of prices proves the enduring value of gold. An elegant suit was one ounce of gold ($35) in 1935 and is still one ounce of gold ($630) today. So far, there has not been a single paper currency without gold-backing that survived more than a few decades. With the Western central banks having sold off a good portion of their gold, the return to gold backed currencies will be all the more painful. But it will happen within the next two decades, maybe even sooner. To think this will not be the case again, only because it has been abandoned for the last 35 years and would create huge problems for the Western world – which has been so busy dumping its hardest asset since 1999 – seems a bit unreal. The smart money is already moving into gold: China and Russia are increasing their gold reserves.

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Source: Publication, IIPM