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Advertising Research in the World of Information Economy

An Introduction to Mutual Funds in India

Educating the Educator : University of Madras

Repositioning MGR in the Cyber Age : Erandayirathil Oruvan

Ex-Madura Garments Team Launches Ready Wear Brands

Why Research?

Collection of information, analysing and reacting to that information plays a vital role to arrive at a superior advertising decision. Any improvement in information would definitely improve the quality of decisions. David Ogilvy in his book ‘Ogilvy on Advertising’ stresses the need of research: “Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals.” Research can measure the awareness and reputation of the client among consumers, press and investment analysts.

Statistical models in research can, not only project  the sales of new products, but also the advertising budget needed to reach maximum sales. Further, research can reveal consumer reactions to a new product or service when it is in the preliminary stage. Also, the rating of the product by consumers against other competitive brands will be captured by research. Based on the research findings, the advertising agency can ask the client, of course with authenticity, to make modifications in his product/service.

Through research, appealing colours and package designs can be identified, which will guide the advertising agency to choose successful colours and create attractive packaging designs.

By conducting research, the target audience can be identified: rich or poor, men or women, teenagers or old, life styles, education, etc. Thus, research helps to arrive at an optimum positioning strategy. Also, if the target audience is known, the media selection can be done efficiently, so that optimum reach is attained.

Research can help in identifying important explanatory variables which influence the purchase behaviour. Depending upon that, the advertisement can be created giving stress in the copy to the major independent variables. further, the most important contribution in an advertisement is headline; and to decide the promise in the advertisement, research helps.

From research, expectations of the consumers can be found and the advertisement can be crafted in such a way that it will be distinguished from other competitive advertisements, so more visibility is achieved.

In short, research can be of valuable guide in making more effective advertising.
 

Research Brief

Many times, the research brief do not tell the exact need of the clients/executives. It is advisable to spend more time in problem definition, so that a better brief can be given to the research team with all what is needed, to avoid problems later.

Time

Executives always ask for information today, when they want it yesterday, and they complain that researchers take two weeks when they have only two days. This problem of fighting for time can be solved to a great extent if infrastructural facilities such as skilled manpower, computer and communication facilities, etc. available to the research department is improved.  Without modernised facilities, it is not only difficult to maintain information, but, it will consume more response time.

Statistics

Once, even the usage of graphs are considered incomprehensible to laymen. Things have changed and today graphs have almost become out of fashion, and statistical analysis involving modeling and latest quantitative techniques have come to use, thanks to the inventions of statistical packages. Advertising executives find it difficult to cope with the swift changes taking place in the research style and methodology.

Information Flow

Is it true that the relationship between information and decision-value has a positive correlation?

Obviously, it is a well known fact that increase in information leads to better decisions. However, after a while, more and more information will have less and less effect. Further, it becomes difficult to identify and utilise important information from the rest, when information overload takes place, especially in the current internet-based information economy. Thus, capturing the right information in the event of information overload becomes a vital research task.

Research Spectrum

It is to be remembered that the research that work in one market will need not work in another, calling for different research work. In summary, research has a big role to play in shaping effective advertising strategies.  

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Mutual fund investment forms a major part of personal investment portfolio of any investor. It also helps small individual investors who can not invest in capital markets to participate in the securities market in order to reap the gains. A mutual fund pools the savings of the community and invests in various securities and offers the individual investor advantages of reasonable dividends and capital appreciation, coupled with safety and liquidity.

Mutual funds are of several types. Broad classifications can be open-end and close-end mutual funds; and tailor-made funds.

Open-end and close-end Mutual Funds

A mutual fund which is open at all time is called as an open-end mutual fund. That is, the participants can join the fund any time they like; and the fund has no limit as to size.

In the event of close-end mutual fund, investment amount and number of investors are limited. That is, investors can join the fund when the fund makes a public issue of its units.

Tailor-made Mutual Funds

When a mutual fund functions with certain well carved out objectives with respect to the portfolio selection, they are called  as tailor-made funds.

· Growth Fund : Investors in this category look for a steady, long-term capital appreciation     than any immediate take-off. In this category, a mutual fund invests with an objective of long-term capital growth.

· Income Fund : A regular income is expected by the investors. Thus, funds are invested in defensive shares.

· Growth-cum-income Fund : While long-term growth is expected by the investors, regular income is also expected.

· Specialied Fund : Also called as sectoral fund. These funds caters to investors interested in particular industries; that is funds are invested in certain industry stocks.

· Regional Fund : Funds are invested in securities of a region; that is, the fund specialises in companies of a particular region.

· Index Fund : Money is invested in the scrips which form the stock market index. Thus, returns of the investment is directly correlated to the index.
 

Mutual Funds in India - Some Pointers

Performance of public sector mutual funds in the recent past has not been up to investors expectations.

With the entry of private sector mutual funds, the investors perceptions about; and the expectations from the mutual funds have undergone a tremendous change.

The market price of all mutual funds are at a discount over Net Asset Value (NAV). A new mutual fund with at least six per cent issue expenses is expected to start with a NAV of Rs 9.40 and therefore a listing price below par. Thus, if investors perceive mutual funds as a new issue allotment available at par, they can also purchase it below face value after listing. However, Reliance Capital has launched no-load fund; that is, the issue and pre-issue expenditure was borne by the Asset Management Company. In such cases, the listing price will not be less than the par value.

In developed markets world-wide, mutual funds are the primary vehicle for individual investors interested in the stock market. but in India, they continue to be still largely a preserve of the Unit Trust of India (UTI). UTI accounts for nearly 10 per cent of the country’s market capitalisation.

The private mutual funds permitted since 1993 are still to make their mark. While the ones floated by public sector banks continue to be shunned by investors, who would rather put their money into new issues. However, there is no doubt that like elsewhere in the world, mutual funds will have to eventually become the mainstay of the stock market in India as well.
 

Reasons for Poor Performance of Indian Mutual Funds

Comparatively, international capital markets are

(i) informationally,
(ii) allocationally and
(iii) operationally more efficient than Indian markets.

Many research studies have found that  the Indian stock market is not efficient even in its weak form. Thus, in an informationally inefficient market like India, the analytical tools and forecasting models of west may yield expected results. Therefore, a different approach has to be adopted in the Indian environment in portfolio selection.

There are more number of mutual fund products available in the international markets as compared to India. thus, there is a scope for hybrid schemes in India.

In US alone, there are around 3500 schemes against 250 schemes in India. Further, US mutual fund industry is over 75 years old.

Compared to well developed stock markets, scientific research is negligible in India, especially, in the area of modeling financial time series forecasting models) to suit Indian environment.

However, a mutual fund having a good product, scientific research wing coupled with professional market timing skills, good investor service and excellent positioning in the correct perspective will succeed in the Indian market.

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Education plays a crucial role in not only shaping an individual. But also an economy. An educational institution is suppose to educate. But, here we find an institution which needs to be educated. One of the oldest educational institutions (over 100 years old) of India is University of Madras in Tamil Nadu. However, this institution is under a multidimensional  mess : educational, political, and human resources to name a few.

Any good educational institution and research centre will update its syllabus on a regular basis. We find this not happening at the campus of University of Madras. It’s syllabus is outdated. In fact, it is lagging by at least 50 years. For example, there have been many developments taken place in the field of Economics all over the world. But, the syllabus of Madras University has not undergone changes to cope up with the trends happening in the field of Economics. Can any one believe that it’s syllabus does not include the theory of Markowitz, the advocate of portfolio choice which is a Noble Prize winner. Due to this non-updation of syllabus, the candidates produced by this university are not able to match industry standards once they are seeking employment.

When contacted by the author of this article, one genuine faculty member opened up with facts which are highly disturbing. To quote him, “We, few members do agree with you that the academic syllabus has to match the latest developments taking place in practice. However, when we recommend for such a change in syllabus, the academic council - which is comprised of various faculty members of colleges under the control of University of Madras - do happily reject such changes without assigning any logical reasons. This is mainly due to the fact that if the syllabus is updated, they have to get equipped before they take classes for which the teaching community is not interested.” What an attitude educators of our prestigious(!) institution posses? Another reason for the faculty to reject the syllabus updation is that some have got parallel business activities, such as running a business centre. Thus, they do not have time to teach. For all these illiterate and unethical attitude of them, they are endowed with high pay packets, which is not ethically justified.

The University do not have a Human Resources Division which can plan for its man power. In many departments we find excess staff, especially teaching staff. To continue with our example, the Department of Economics has ten teaching staff,  just  to handle one batch of a post graduation of students, one batch of M.Phil students and few Ph.D. students. Thus, one faculty will have to put up with only two to three hours of classes per week. However, the quantity of staff can be justified if their quality is high. That is, if they produce quality research work or quality research candidates. There can be found candidates in the Department of Economics for over a decade who have still not completed their research degrees, thanks to the inefficient guidance and exploitation by the faculty.

It is further worsened by the fact that, many of the teaching faculty in the department are not even able to speak proper English. They posses a high degree of non communicative skills. First they should be taught how to communicate, before they are allowed to teach. We do not find any such communication training programs for the faculty organised by the University management. One of the major reasons for the poor quality of the faculty is due to the politically motivated selection process and inadequate man power planning by the University.

When the Tamil Nadu Chief Minister is positioning his state as  an IT savvy state, we find out dated communication methodologies used by the University of Madras. For instance, a Ph.D. candidate is suppose to submit his/her thesis is a printed format, which is sent to the evaluators by post or by sea-mail (in the event of overseas examiner). This leads to several unpleasant experiences to the candidate, such as, undue delay in obtaining the degree (in certain cases they get their degree after three years of submission), and delay in seeking an employment. There are Universities in India which accept thesis in a computer disc and the same is sent by e-mail to examiners and the comments obtained fast.

One way to come out of these nonsense is that the pay packets of the teaching faculty has to be tied up with their contribution. This has to be evaluated by an independent body. Faculty selection process has to be delinked from political interference. Improve the communication skills of the educators and the University.

Once the educational system of this country is opened up along with other sectors in due course with the swift liberalisation process, these kind of once prestigious educational institutions have to fight with the private sector which will make them literally run for their money and life. They will vanish in the long run, become history and remain only as a monument in front of the world famous Marina beach.

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MG Ramachandran, popularly known as MGR ruled not only Tamil Nadu but also the entertainment industry. MGR, the Indian Origin Sri Lankan, in his times was known as the man in a thousand, a famous Tamil terminology “Ayirathil Oruvan”.

Through the powerful media called cinema, MGR created history. He used his films as an effective communication tool. He conveyed several socio-economic ideas through his films. His communication was further strengthened through the songs of his films, which are still popular in both urban and rural centres. In fact, “even today video tapes of his films like Enga Veetu Pillai gains record sales”, according to Mr Rajendran, Proprietor,  Raj TV and Raj Video Vision, Chennai.

The relevance of MGR in the context of year 2000 is that he is the man in the year 2000 or ‘Erandayirathil Oruvan’.  Identifying this, a tribute concert along with many entertainment activities to find a synergy and reposition MGR in the cyber age is taking place in Tamil Nadu.

The event is a mix of three concepts: MGR Erandayirathil Oruvan Film Festival, MGR Erandayirathil Oruvan Night and MGR Erandayirathil Oruvan Album.

The film festival features all time-hit films of MGR back to back in 10 cities of Tamil Nadu for a period of one week (January 7 to January 13, 2000). There are seven different films across one week in each city and four shows per day aggregates to 308 screenings during the festival of MGR cinema.

On Seventeenth January 2000 - on the birthday of Tamil cinema Hero - there will a Hero’s day celebration and its going to be a party time. Unlike other star nights, this event will be an idea driven entertainment show. There will be a MGR fashion and fight show. How can there be party without music? Yeah! there is a different musical concert to he held on the same day at IIT Stadium, where one can listen to MGR songs with  cyber treatment. Chennai-based Raj TV will telecast the celebrations.

MGR Erandayirathil Oruvan Album is unique. It gives cyber treatment to eight selected MGR’s hit songs. The remix, quality of production and the arrangement of music are geared to satisfy the youth of today. The album vindicates the fact that style is a constant element even in today’s cyber world; and the varying element is only the fashion. This quality album is  presented by the Chennai-based music factory called  Bodhi “n” Soul.

MGR as a personality outside cine industry is considered only as MGR. However, when the name MGR is connected to entertainment, he is not perceived as a single individual. Four individuals put together forms MGR : Kannadasan, MS Viswanathan, TM Sowndararajan and MGR. The mass, especially the rural segment can associate with MGR only if he is presented in an unified manner. In the MGR Erandayirathil Oruvan Album, the Kannadasan’s lyrics,  MS Viswanathan’s melody and MGR were retained. But, the only missing element in the album is the authoritative voice of TM Sowndararajan (or rather MGR).

The Erandayirathil Oruvan event comes from South India Cultural Centre (SICC), a Chennai-based NGO which is committed to the development of fine arts and culture in the South India, of which Kavignar Vairamuthu is the President. The event is managed by Cuecom Entertainment and the ground logistics is taken care by The Real Entertainment Company.

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The ex-Madura Garments team headed by Sriram Srinivasan (only Indian recipient of the Chief Executive Award from Coats Viyella Plc, London) under the name and style of Indus League Clothing Limited has entered the ready wear segment. The Bangalore based Indus League has introduced Scullers - a range of classic office wear comprising international ready wear shirts, trousers and ties. The brand draws its inspiration from the sport of Sculling - a thrilling competitive sport, the beauty of which lies in the synchronized precision of the Scullers strokes.

The brand is targeted at the executive who prefers un-fussy, crisp and cool formal clothes. The reasonably priced Scullers (shirts start at Rs 599, trousers at Rs 799 and ties at Rs 399) gives him the ‘Preppy’ - youthful, sociable and smart look. - youthful, sociable and smart look.

The Scullers product range includes a collection of relaxed shirts and a range of classic styles, teamed up with a ‘crush-free’ range of Chinos and Khakis. A youthful collection of Italian silk ties and cool T-shirts completes the look.

The relaxed collection consists of deep solids, textured plains washed down oxfords and prominent twills. The classic collection comprises basics in plain textures, pastel tones in solids, pin and hairline stripes and monotone checks. Scullers khakis are a rugged pair of pants in heavier cotton and cotton blends. Each pair is enzyme washed for the unique broken-in feeling. Ties come in silk and polyester in classic ranges such as : florals, geometrics, textured and woven solids.

Indus League has also introduced Indigo Nation, a range of international ready made garments. Indigo Nation is targeted at the young Indian executive and professional who would like to be a global citizen. The designs offered are contemporary, with high performance fabrics, vibrant colours, new textures and a softer comfortable feel which is the latest trend internationally.

Indigo Nation is available in ‘Classic’ and ‘Relaxed’ ranges. ‘Classic’ is the fashionable work wear from Indus League and is mid-priced. The price ranges from Rs 399 to Rs 649 for shirts and Rs 499 to Rs 799 for trousers. ‘Relaxed’ is the fashionable leisure wear and the price ranges from Rs 499 to Rs 649 for shirts and Rs 499 to Rs 799 for trousers. Knit shirts of Indigo Nation are priced in the range of Rs 299 to Rs 499.

Scullers and Indigo Nation collection are available in leading retail stores in India.

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