When the Cheapest is not the best-selling

I have a theory on consumer behavior and product pricing. It is basically that the second cheapest item in the market will sell the most. Well, I have  not done comprehensive research on the topic but I think its generally true.

It comes from my own behavior when it comes to buying any item, be it something of daily use or a one off purchase. I look at the cheapest option first, for obvious reasons, and then somehow settle down on the next best in terms of price. Reasoning being that the cheapest item would definitely be prone to defects, and also because no good item of some considerable value can be priced so low, so the item must be dodgy. Of course, discounting the cases where its a regular purchase, and I know the product well.

Consider the Tata Nano. Do read the story - http://www.technologyreview.com/business/39215/?mod=related - suggesting that its not selling as a hot cake Ratan Tata hoped it would (70000 units a year against 250000 odd projected), atleast not yet.

Apart from the various reasons suggested for the for the failure (or limited success !) of the Nano, I would say it did not sell because of the fact that it was the cheapest. And if I know the psyche of the Indian consumer (atleast of them who can spend INR 100000 on a car), I know that one would think twenty times before buying a 'cheap' item from the market, especially when its not 'imported' and looks like an autorickshaw (tuk-tuk).

The Alto, best selling small car by Maruti Suzuki, which comes in a 800 cc, outsells the erstwhile Maruti Suzuki 800 and now the Nano, precisely because of the same reason. Although, the Alto is a far better car, and apart from being economical, is very agile and smart-looking for a small city car. However, it sells well not only because its cheap, but because its costlier than the earlier Maruti 800.

For many Indian families, a car purchase is a moment of pride for a family, especially when it is something which your neighbors can not match. Purchasing the cheapest Nano wont give you that satisfaction, but buying the next costlier item in the list (without disturbing your budget) might.

 

 

Finally India Wins a Series - after a long time

It seems a long time since I have seen the Indian team win. The last time I went to witness the games, when Indian toured England in the Summer earlier this year, we lost. And boy, we lost comprehensively. The ODI tournament was a bit of a fightback, after a complete 4-0 whitewash of test series. The fact that we just lost 3-0 in 5 ODI games, proves that we played better in the ODIs - one game was drawn, and another washed away by rain.

However, coming back to the ongoing series in India, we have won 3 out of 5 and have got - what cricket reporters love to say - unassailable lead of 3-0. Feels good !

What feels more good is to see the news coverage on print and other media. Just love it. Love the way English team is being hammered and the Indian team being glorified. However, fact being nothing much has changed between the last series in England, apart from the conditions. While, we can definitely win abroad, and the last series was lost because of injuries (and bad luck !), the English can not win in foreign conditions, especially in India.

A few news pieces which I loved , especially on the English wicketkeeper who I think jumps around more often than needed.

http://www.espncricinfo.com/india-v-england-2011/content/story/537235.html

Cricinfo : "... The most culpable man was the wicketkeeper, Craig Kieswetter, who missed an early chance to remove Gambhir on 17, before dropping Virat Kohli off a Jade Dernbach bouncer at a crucial juncture. "

http://www.guardian.co.uk/sport/2011/oct/20/england-india-one-day

Guardian Reports - "The experiment with Kieswetter is not working and there is no real reason to continue with it now, given his keeping in this match. Both Gambhir and Kohli were dropped and there may have been a stumping chance as well."

The Independent : "India sealed victory with four balls left when Dhoni imperiously smote the first and second balls of the final over for four. He has now scored 250 runs in his last four innings against England without being dismissed – 78no, 50no, 87no and last night 35no. The world supply of asterisks may be under threat. " - http://www.independent.co.uk/sport/cricket/dhoni-wraps-up-series-then-sticks-knife-into-england-2373567.html

BBC : http://news.bbc.co.uk/sport1/hi/cricket/15384514.stm

http://news.bbc.co.uk/sport1/hi/cricket/15396104.stm

Cricketnext.in : http://cricketnext.in.com/news/india-win-revenge-series-against-england/60957-13.html

Transition post MBA

MBA is officially over, and I am now out of the student-mba-nothingtodo zone. Now I will have to think about the real stuff, jobs !

Well, before that I will have the find out what has changed in me in the last one year. Am I the same individual that I was before the MBA, or have I really changed ? If so, what ?

Is it really important ? Yes, to find out what my potentials are and what can I offer to my potential employer. What value add I can bring and what can I really provide as a differentiating factor.

Talking to an alumni forced me to go this way and I was forced to introspect. I do have gained some soft skills and some leadership and management skills. What are they, and how can I use them in my next job.

Looks like a lot to think and introspect!

Post MBA, Partying, and Job Search ...

Now that the MBA is officially over and I have settled down, its time to look back, and also to look forward.

First week of post MBA was amazing. After a lot of shifting and stuff, I tried to settle down.

Also it was time to say goodbye to dear friend Subhash who was returning back to India and we ended up partying the whole week, meeting someone or the other in Central London and returning back late night every day.

And then came the time to write resumes, rewrite them, numerous times, and trying to get hold of recruiters. And, before I could realise it was already October ! Swoosh...

Time has flown, really fast. Especially the last 8 weeks or so. Job hunting has been tough, and it is going to be even difficult, it seems so.

Regatta

The last weekend of July was dedicated to Regatta. This time it was the 20th edition of Cranfield Regatta, with schools like LBS, Insead, Manchester participating. Insead was the winner this time, and Cranfield came second.

Ours was one of the 20+ boats that Cranfield had and we fared very badly, perhaps ranked 30 out of the total 37.

But it was pure fun, and a lot of work.

 

Sailing is fun !

Worlds biggest companies

Here is a list of worlds biggest companies in terms of revenues.

http://en.wikipedia.org/wiki/List_of_companies_by_revenue

Walmart leads the chart with more than 400 billion in revenues. Quite astonishing. Some more personal observations and trite remarks:

1. None of them have yet reached 1 trillion USD. Why not a single of them, is it too huge ? Considering that GDP of India is 1.5 trillion (USD), it looks a big number, isn't it.

2. Largest Indian company, IOCL is 139th in the list with 54 billion, and then Reliance at 180. Quite a lot of catching up to do for Indian companies to be somewhere in top 10. China is already there - with 2 companies in top 10.

3. How is Walmart at the top ? How can a retail company generate more revenues than oil and gas ? Difficult to imagine. But then the scale and geographies in which Walmart operates is bigger than any other company. Also it proves how much the Americans consume !

 

I am back...

After a long long break , I am back to my blog. It has been a busy period. A lot has happened in between. And among all the distractions, the MBA goes on.

And yes, an amazing last term awaits. Here are a few things that are going to happen.

1. IBE - As part of the mandatory International Business Experience, am going to Mexico with 3 other people. Will be a fun filled week ahead.

2. Wimbledon (probably) - After I spent 3 hours seeing Federer lose in French Open (and I lost a lot of pounds on my beer at the social), I am so looking forward to the Wimbledon where I can possible watch him win the title. (At least get in and watch on the big screen, thats the plan)

3. Regatta - Cranfield Annual Regatta is during the last week of July, and we are sailing ! Has to be fun.

4. Lords - India VS Eng - 1st test - last week of July, must watch game. Tickets booked and we are definitely going.

This is just a list of planned things, and a lot of unplanned things will come up for sure.

During the last 2 months or so, I have been busy as well. Here is a list.

1. Visited Wales - 3 day trip to south Wales, Cardiff etc.

2. Visited Lake District - lovely place and a lot of good drives. Amazing.

And also visited a lot of places in London, like touring the Big Ben, London Eye, Greenwich et al.

Also went to a visit to the London Metal Exchange to see live trading. Awesome.

 

Planning a trip to Amsterdam ?

One of my dutch colleagues, Floris has charted a tour program for visiting Amsterdam during the long weekend in April end. It is the Queen's day celebration weekend with live music and a lot of drunk people on the streets. Seems like a good fun.

 

• Guided tour through the Red Light district (I will be the guide)


• Boat tour through the canals of Amsterdam, passing Anne Frank house, the Western tower and the houses of everybody that matters in today’s world of journalism, TV, media, art.


• Lunch Pick-nick in Vondelpark, the hippest place in summer


• Visit to Van Gogh museum, the world’s largest collection of his paintings


• Guided walking tour through the Jewish quarter, Rembrandt House, Amstel River area with famous bridges, theatre, John Lennon Bed-in Hotel, 17th century trading places and shipyards (17th century is Holland’s Golden Age); again I will gladly be the tour guide.


• And of course I will take you guys to a coffee shop for hashish or in my case space cake.


• Visit to Keukenhof, the large tulip exhibition that is open from end of march until the beginning of May. It is about 30 km away from Amsterdam and requires public transport or car

Then of course there are some special programme items for this weekend because of Queen’s day:

• On Friday night 29 April there is a large party with live music in many places in The Hague and in Utrecht (both are about 35 minutes by train from Amsterdam).


• On April 30 Amsterdam is the place to be with live music, free market and lots of drunken people.

 

 

 

Asia: The next destination for higher education

http://www.bbc.co.uk/news/business-12671198

Asia, more particularly India and China are going to be the most sought after destination for higher education in the coming decade (if not earlier).

China increasing its quality of education - China has been trying to attract foreign students since a long time and more importantly to retain its students who go abroad for studies in huge numbers. The quantity of schools and universities is not a problem for China, but the inherent quality of education to match with the Harvards and Oxfords of the world is a key challenge. However, with Capital in hand it can reform this and make itself the next best option after US and UK and may be exceed them in near future.

India - with reforms in the education sector which now provides permission to foreign universities to setup campuses and courses in India, we are already seeing foreign universities setup in India. We might soon see a Harvard and Cambridge in India, and coupled with the quality of facutly India has, it can be a very lucrative destination for foreign students.

UK set to reduce immigration levels - with UK set to curb immigration for non-EU citizens from April 2011, which might impact students coming for higher education (UK's education export amounts to almost £40billion). We will definitely see more students choosing to study at home in Asia rather than going abroad.

We have already seen decline in number of student intakes in the last few years in Australia due to visa/work restrictions and other reasons. And with a fear of double dip recession still looming over USA, we might see a decline in people opting for the states as the destination for foreign education (however, I believe USA will still remain the hottest destination for near future).

Another factor to consider is the level of opportunities people are exposed to after they come out of universities with MS, MBA, PhD and other degrees in hand. Pay levels (which are higher in USA/UK) are definitely a factor and if we start seeing such levels in Asia (Singapore/HK already have such levels), this can be a defining factor in attracting people to study and work in Asia.

Also read - India- the next university Superpower?

Almost half way through my MBA

Yeah, I am doing an MBA from Cranfield School of Management and already neck deep into it. Next week, we have mid term exams and I will be half way done through my MBA.

Here are a few musings from my MBA so far:

Its fun : Those who think doing an MBA is tough, competitive and way too difficult after lots of work experience, I would say its not. Its quite a lot of fun actually. The work load is manageable, competitive and we do have lots of parties here (especially since we live far away from London).

There is always something happening here: We are always upto something. We had the VCIC competition recently, some people are doing Hult global challenge, a few are deep into preparing for Regatta, Ski Trip, Eastern european extravaganza etc. We had pancakes day last week, having a St Patricks day this week, an auction for supporting London Marathon this friday apart from Career's fair tomorrow, and Venture capitalist's briefing, Exam reviews, couple of assignment submissions, and job interviews for a few of us. Boy ! Its a lot to chew.

And if I add what all we had in the first term, I would be going on and on about it... People here have amazing levels of energy and are extremely supportive.

 

Vote for Project 'Paani' (Water)

http://apps.facebook.com/hultglobal/contests/101940/voteable_entries/17796207



A few of my colleagues are working on Project Paani for a Hult Global Case challenge.

Sincerely request you all to vote for this amazing idea of solving water crisis in countries around the world that need it.

India VS China : Continued

Read an excellent article in The Hindu about how its insane for India to chase China in growth rate. India should compete with it on other issues like Social Indicators of Health, Employment, Literacy, Infant Mortality etc. The article is written by Nobel laureate Amartya Sen.

Sen argues that India is growing at a better rate than Bangladesh, but still lagging in most of the social factors which indicate the overall well-being of the society. We should try to improve these (While continuing to grow, ofcourse) , rather than focusing too much on how much India's GDP is growing vs the Chinese.

Here are a few stats give out by Dr Sen.

India,         China ,    Bangladesh

GDP growth rate

(approx)                                8%   , 10%  ,   6%


Life expectancy                     64.4 ,    73.5 ,  66.9

Infant mortality                  50/1000 ,   17 ,   41

Under-5 mortality rate     66/1000 ,  19 ,  52

Adult literacy rate              65 ,  94,   54

Children immunised

with DPT vaccine                66% ,  97% ,  94%

Health care

spend (as % of GDP)           1.1% , 1.9% ,   NA


GNP per capita    (USD)    3,260 , 6,770 ,   1,580

Though India is better off than Bangladesh in adult literacy rate, its worse off in female literacy rate. This has been the reason for immense social well-being in Bangladesh, empowerment of women. India is still lagging in female literacy rates which is the prime reason (among others) for poor performance in other indicators like IMR, U5MR, population growth rate etc.

Now, given these facts can we say that India is doing better than Bangladesh just because our GNP is growing faster ? Absolutely not. It can be argued that higher GDP overall means higher spends in education, healthcare and infrastructure, but somehow these basic issues are ignored while we blow the trumpet of growing at 8% (or so) and overtaking China by 20XX.

 

[Source:  http://www.thehindu.com/todays-paper/tp-opinion/article1453228.ece?css=print]

Is EURO the cause of European Crisis ? - Krugman believes so.

Paul Krugman on European Crisis

Can Europe be Saved ? What are the Causes of the current crisis in Europe ? How did America cope with recession ? Krugman writes about these things in this article. Its a nice read.

Creating a common currency was a good idea, or atleast thats what European elites thought at that time. But did it really make any sense, as the trade between european countries has increased just by 10-15%, not enough - says Krugman. Also due to the diversity in culture and language in the Eurozone, there is not enough mobility of people to fill employment gaps created by other countries. Krugman compares Ireland with the state of Nevada in USA which have similar economies and use a common currency for trade with their neighbours,  but Nevada is supported by the common culture and any unemployment gaps can be filled as people can move in and out easily without any barriers of culture or language, which is not the case with Ireland.

Another problem with a common currency, argues Krugman, is that the indvidual countries can not adjust to the falling/raising Euro. UK is lucky, as it did not fall into the 'Euro-trap' and is free to re-valuate its currency depending on the situation to implement wage cut/inflation/deflation etc.

FT Global MBA Rankings 2011

Here is how Cranfield fared in the FTMBA 2011 rankings:

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  6th in the UK

  
  


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  13th in Europe

  
  


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  34th in the world

  
  


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  3rd in the world for teaching Economics

  
  


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  5th in the world for value for money

  
  


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  8th in the world for career progresion

  
  


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  8th for top salaries in Europe

  
  

See full rankings in FT website here.

[Source : CMAWorld]

[Source : FT Rankings]

Spend Wisely, Waste Less

70% of poor students in India miss out on their primary education because of lack of funds. Sometimes its as small as 500 Rupees (12 USD), which is sometimes the same or even less in some cases as that spent by an average urban youth in movies, haircut or partying...

[youtube=http://www.youtube.com/watch?v=qjYNGj4tuOc]

There is a small message to this video - Think before you spend. I would add more to it - do not waste. Especially to the urban Indians.

Repost : Donate for London Marathon

Our dear friend Ram is running the London Marathon and by doing it he is also raising funds for charity.

http://uk.virginmoneygiving.com/fundraiser-web/fundraiser/showFundraiserPage.action?userUrl=Ramotherunner&pageUrl=3

Also join the facebook page - http://www.facebook.com/pages/RamoTheRunner/164638250222333

Please donate generously. Your donation will not only help the needy but would also encourage him to perform better.

Here is how you choose how to donate :

1. £1 for every 4.2 kms ie -  £10. This says “I encourage you Ram.


2. £2 for every 4.2 kms ie -  £20. This says “Go Ram. Go”


3. £4 for every 4.2 kms ie - £40. This says “Ram! You can do it”


4. £6 for every 4.2 kms ie – £60. This says “Ram! You rock.  I will be there (morally/physically) to support you.”

John Glen on Economics of Cricket

http://www.youtube.com/watch?v=P06WMO8b8fk

Professor John Glen is an economist and teaches at Cranfield School Of Management. Personally, the best professor I have come across, and also the one without whom I would not have liked economics.

Love to hear him, now and then. The other day at the coffee machine, we were talking about the ongoing IPL auctions and the Ashes. Here in this interview he talks about what the recent Ashes win will do for Cricket in UK and sporting in general. Also the upcoming tour of No 1 Test Team India in summer will generate huge interest and huge returns for the two boards.

 

Feeling Sleepy in class ...

Here is the video of my friend and neighbour Subhash who is notorious for sleeping in the class.

This was taken by yours truly sitting in the bench behind him during a Supply Chain lecture by Mike Bernon.

A 16 hour slog and still going ...

This has been one of the most hectic days of my MBA life so far. And I suspect that term 2 is going to be this busy the whole period. Wow.. I am loving it.

We had a simulation exercise today which started with a submission of a project plan etc in the morning followed by the project simulation which involved a lot of running around, number crunching, trending, charting, planning, replanning, allocating resources, re-scoping, and more !!! We, in teams of 6, needed to plan to build a warehouse using optimum resources with maximising profit being the aim (a proportion of credits depend on that).  We planned for 14 weeks of activity, allocated labourers needed, calculated overheads and other costs, loans needed, repayment schedule, equipment/materials/cranes needed and lot more. Each week is sped up in 15-20 minutes by the simulation software and we get the progress of work after each week, after which we re-allocate taking into consideration the random delays the software puts in, and other incidentals.

8AM :Review project plan, collate documents, print and submit at 8:45

0845: Simulation Starts.

1000 : Already in the middle of the project and experiencing lots of delays in procurement etc. Our planning skills put to test.

1100 : First major disruption in plan - increase in scope. An unplanned activity comes up, everything else gets delayed by 2 weeks alteast.

1200 : Anothe major change, 2 of us have been deallocated from the project and people from different teams have replaced them for an hour. We managed it well as no one was indispensible in the team - good project management !.

1400 : All look good even after delays, but there are huge cost overruns because of delays.

1600: We finish with a positive profit figure but very low from what we expected earlier. Disappointment dawns. Damn it !

1700 : We also have to present the results, variances, and learning tomorrow and so we continued with preparing for presentations. And yes, for lunch people grabbed what they could get hold of and kept working.

1900 : IBE briefings were also squeezed in for today in the timetables and so we had to attend those as well. International Business Experience (IBE) is a programme of one week where we visit various companies and institutions in a different country (in June). I will be going to Vietnam !

0000: Finished preparing for presentations after that, and its 12 midnight now. Need to hit the sack as it will be an early start tomorrow at 0830 for presentations.

 

50 Things to do while in college

Here is a list of 50 things posted by Ben Jones one must do in College.

I wish I had come across this list before I went to my undergraduate. Some of them are still valid for graduate courses and I will try to achieve those. Afterall, one of my reasons for coming to b-school was to do things that I missed out while I did my engineering.

Notable ...and I quote

'1. Your friends will change a lot over the next four years. Let them.'

'18. Take Risks'

'30. If you need to get a job, find something that you actually enjoy. Just because it's work doesn't mean it has to suck.'

'34. Ask for help. Often.'

And many more...

 

Tips for Letters of Recommendation

Applying to b-school for 2011 is still on and I got a few queries on LORs. So here it is. A lot of this was mentioned in an earlier article, but thought its worth mentioning it again.

Letters of Recommendation

This is one of the significant constituents of a b-school application. References or Letters of Recommendation (LORs) are a must to submit. Unless otherwise specified you must submit a reference from your immediate manager from your current company (or the previous company, if you have quit recently). Most schools need 2 recommendations, while others ask for 3.

You can provide references from your professors of the last school/college you attended. Also it is advisable to get at least one recommendation from your current supervisor/manager.  If you cannot manage a reference from your current company, you must explain the reason for the same in your application, and provide alternative recommendations, like from some client/vendor you might have worked with. If you also work in an NGO or sorts, it’s sometimes good to include a recommendation from such people as well. Remember, that b-schools want to know about you as a person, more than what your resume or application or degrees say. Also remember that what’s written in the letter of recommendation matters more than who writes the recommendation.

Remember, if you are making 5 applications, you will need at least 10 LORs. Make sure that you give enough time to those writing your recommendations and discuss beforehand the specific areas you want them to focus the LOR on. Make sure that your application, your essays and your LORs make a coherent theme. Your recommendations should, preferably, enforce the claims you make in your essays. Word of caution – do not write your own letters of recommendation.

Planning for Essays and Recommendations:

Needless to say, this phase begins once you have figured out the list of schools you want to apply to. Do not do the mistake of selecting the schools based on the number or level of difficulty of the essays to write. Even before you start selecting schools, or get started with GMAT you should have your resume (preferable one page) and SOP (statement of purpose) ready. Write your SOP in a detailed and exhaustive manner, listing down all you have done and achieved in your life so far, all the significant events in your life and all that you want to achieve in future. This should answer all the basic questions which most b-schools ask in their essays like ‘Why MBA?’, ‘Why Now?’

Here are a few other points to be taken care of while submitting your LORs.

1. Do not write your own letter of recommendation, and ask your referee to just submit it. Believe me, the readers who go through the application are experts and read a hell lot of such letters daily and they will know by the style of writing that you have written it yourself. Moreover, there are chances that you will miss some of your own strengths and weaknesses, if you access yourself. Remember, it’s a good point in your career to find out more about yourself and hence advisable to start this process as early as possible so that you can take corrective actions if needed.


2. If you want, you can write the basic qualities of yourself, or a basic skeleton/format which you want your referee to follow. But not the whole thing. Make sure you give your referee enough time and liberty to write a full detail of what he thinks of you and how he thinks you are ready for an MBA and/or a senior leadership role.


3. Make sure each LOR focuses on your different qualities, and not on the routine things like hard working, good leadership etc.


4. Make sure you ask your referee to add a few personal qualities, other than technical/business skills. Also ask for examples. Just writing about qualities is not enough unless corroborated by evidence.


5. Make sure you submit in time. Also make sure you remind your referees, and give them enough time to submit. (Typically 4 weeks). Most LORs are to be submitted online, or to be sent via their official email ids. Make sure you find the process of providing recommendations beforehand, and have a meeting early to discuss everything.


6. If you are applying to a large number of schools, make sure your referee is OK to that, as it might be overwhelming, and the same LOR might not be usable everywhere.(Different Schools follow their own way, some accept essay type LORs, some have questionnaires etc.).

 

2010 in review

The stats helper monkeys at WordPress.com mulled over how my blog did in 2010, and here's a high level summary of its overall blog health:



The Blog-Health-o-Meter™ reads This blog is on fire!.

Crunchy numbers

A helper monkey made this abstract painting, inspired by your stats.

A Boeing 747-400 passenger jet can hold 416 passengers. This blog was viewed about 6,300 times in 2010. That's about 15 full 747s.

 

In 2010, there were 78 new posts, growing the total archive of this blog to 108 posts. There were 7 pictures uploaded, taking up a total of 4mb.

The busiest day of the year was March 22nd with 65 views. The most popular post that day was UK B-Schools : List and Rankings.

Where did they come from?

The top referring sites in 2010 were pagalguy.com, gmatclub.com, google.co.in, how2immigrate.com, and mail.yahoo.com.

Some visitors came searching, mostly for cranfield mba, cranfield mba interview, cranfield mba blog, strawberry picking in london, and strawberry picking london.

Attractions in 2010

These are the posts and pages that got the most views in 2010.

1

UK B-Schools : List and Rankings November 2009
2 comments

2

Welcome changes in Tier-1 Immigrant Visa for UK – From April 2010 March 2010
8 comments

3

Interim CAP on Tier-1 and Tier-2 Visas for UK implemented July 2010
4 comments

4

About Me September 2009
4 comments

5

Questions in mind before accepting Cranfield MBA April 2010
2 comments