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The Euro crisis is getting out of control. As long as Germany and France thinks that there is an awful lot to be gained by preserving the euro, they will only be prolonging the crisis. Frankly, If there was a neat solution to the problem that doesnt involve breaking up of the euro, it would have been devised and implemented. It is very apparent that the euro experiment has failed and must be aborted right away. Countries as diverse as Italy and Germany cannot have the same currency. Even a fiscal union couldnt have averted the inevitable breakup. It could have only delayed the crisis.

India's organized retail is estimated at $28 billion with around 7% penetration but is expected to grow to 21% and become a $260 billion business over the next decade, says a recent report by Boston Consulting Group. What modern retail offers to companies experimenting with new categories is the chance to educate customers which was not the case with a general trade store. Category creation and market development starts with modern trade but as more consumers start consuming this category, they penetrate into other channels. Market development for new categories takes time so brand wars for leadership and consumer franchise will be fought on the modern retail platform. A new brand can overnight compete with established companies by tying up with few retailers in these categories

The work of winner of 2011's economics Nobel prize, Christopher Sims  is empirical and, therefore, directly useful to policymakers. He  has used a powerful but relatively simple analytical tool, called vector autoregression, to explain why different things like income and inflation take different periods of time to respond to a change in, say, interest rates.  His work establishes that the effect of a rate hike on the GDP is immediate and causes a contraction; inflation takes longer to respond and starts cooling only after five or six quarters. The research has been so influential that most central banks worldwide structure their policies with his results built into them. 

Companies often need considerable perseverance to exploit a BEMI(big enough market insight). Consider Pampers, which P&G introduced in 1961. The product took advantage of two major trends at the time: the growing affluence of consumers, which was driving their desire for greater convenience, and the fact that women were increasingly joining the workforce. But having that BEMI and creating a profitable product to exploit it were two entirely different matters. The problem was that, in those days, disposable diapers had to be made by hand because the paper used in them made mass production impractical. Even after five years of intensive research, P&G was only able to bring the manufacturing costs down to 10 cents a diaper, which wasn't competitive with diaper services (at about 3.5 cents per diaper). P&G finally developed a machine that could mass-produce disposable diapers at the right price point, opening up what would eventually become a multibillion-dollar market. Tha...

Joshua Bell, one of the world's best violinists, played incognito inside a Washington DC subway station. During his continuous 45-minute performance, Bell played six pieces by Bach, Shubert, Massenet, and Ponce—some of the most powerful music written for a solo violin. His instrument: a 1713 Stradivarius worth about $3.5 million dollars. Two days prior, Bell had performed at a sold-out concert in Boston, where the tickets averaged $100. But back in DC, 1,097 people went through the subway station. Only seven stopped and listened for a while. About 27 gave money but continued to walk past the musician. There was no applause at the end, and the total sum collected during the performance was $32.17. This reinforces the theory that when you market service, you should ensure that there are enough number of strong cues and props that conveys the value.

Right sizing departmental silos usually doesn't affect the cost structure permanently. Because the underlying work hasn't gone away, the fat creeps back. The cost reductions last only until everyone goes back to their old ways in a few years.  The pattern is like the behavior of someone who goes for repeated liposuction surgeries without changing his lifestyle to permanently keep his weight under control. An alternative approach to cost cutting is built into the "Six Sigma" methodology as popularized by GE. Companies launch process improvement projects with hard financial targets. These projects get costs out, but  when the project leaders ("Black Belts") leave and move on to their next project, the costs creep back. The quoted financial savings from Six Sigma projects, while valid, aren't having long-term effects on their cost structure. To perennially keep costs down companies need to change the way that work is accomplished — the business proce...

Forrester Research predicts that by 2012 half of all consumer purchases will be either transacted online or digitally driven in some way — influenced by search, social media, or emerging digital platforms like location-based services and digitally augmented store environments. In a digitally connected world, the companies that compete and win are in two businesses: their core business, which sells the products and services the company has always sold, and a new business, that can be called as the Software Layer — a layer of technology that surrounds the core business and serves as the focal point of interaction with the outside world. The most effective companies run their core business as effectively as they always did, and they also run their Software Layer. To win, they must run their Software Layer as vigorously and effectively as the Googles of the world run their organizations. With great digital user experiences, companies can generate more levels of interaction, more engag...

There are Below-the-Line (BTL) campaigns and then there are the likes launched by Ford in India which redefine benchmarks in terms of consumer engagement. In a bid to attract more consumers towards its best selling vehicle Figo, the US auto major launched its largest ever advertising campaign christened ‘Swap your drive’. The campaign is based upon the idea of prospective customers swapping their old cars for any of Ford’s model for a week. Challenging people’s perceptions head-on is the best way to transform opinions. Nothing influences a customer’s notions about a car as much as an extensive ownership experience. Ford seems to have turned the very idea of customer engagement on its head

While on a market visit in rural UP, towards the end of 2009, the Coca-Cola India & South West Asia, president, Atul Singh observed that there were pockets with intermittent or no electricity connectivity, which meant that selling the beverage chilled, was a task. While the eutectic coolers were already there, freezers specially designed and developed for the places where power shutdown is for longer duration up to 10 hrs, the bigger issue was selling chilled cola in areas with no supply of electricity. The brief was given to the technical team and solar coolers were created, that have been piloted in rural Agra for now. While the coolers' solar power could help the rickety shop remain open much longer even after dark; in addition it had a mobile charging unit, which led to many walk-ins. Result: sales went up nearly 5 times in the areas where this concept was tested. This bottom-up innovation, once rolled out on a large scale, is likely to be exported to other markets a...

The most common branding mistake, in my view, is to focus solely on functional benefits based on the assumption that customers will have the motivation and capacity to seek out relevant objective information and apply that information to a structured decision process leading to a logical decision. The mistake is particularly prevalent in the high-tech and B-to-B world. However, we know that the driving assumption is nearly always very wrong. Further, superiority on functional benefits that matter to customers is difficult to create. Even when they emerge, competitors usually copy or appear to copy them quickly. The alternative is to surround the brand with bases of a customer-brand relationship that go beyond the offering. Consider dimensions such as: • Shared interests—Pampers on baby care, Muji on lifestyle. • Personality—Zara as trendy, Virgin as irreverent and creative. • Passion—Whole Foods Market’s passion about food, Nike’s passion about athletic excellence. • Or...

The only way to achieve real growth is to engage in brand relevance competition, using innovation to create new categories or subcategories for which competitors are irrelevant and build barriers to keep them out of the game. The alternative — fighting the brand preference battle with "my brand is better than your brands" strategy based on incremental innovation and expensive marketing — virtually never changes the marketplace. There is too much inertia. Customers simply lack the motivation to change habitual brand purchases even in the face of brilliant market programs that ask them to do just that. In virtually every industry the only meaningful change in market share patterns occurs when one brand succeeds in changing the game by establishing a new category or subcategory Hyatt is currently seeking to carve out subcategory in an established arena with its Hyatt House concept which aims to provide a "home" experience for travelers. There will be a central lo...