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Early this month, the Mumbai-based Indian Merchants' Chamber announced winners of its annual national quality awards. The IMC Ramkrishna Bajaj National Quality Award in the manufacturing category went to Thai Acrylic Fibre, an A.V. Birla group company. The one for services went to Infosys, and the Juran Quality Medal 2000, was bestowed on F.C. Kohli, the former Vice-Chairman of Tata Consultancy Services. Considering that such awards are only conferred after rigorous scrutiny of the applicant's quality practices, and that they bestow considerable prestige to the winner, one would imagine Indian companies falling over each other for quality awards. The truth, however, is far from that. But first, the good news. As much as 80 per cent of the 89 senior executives surveyed by BT and the IMC this year acknowledged that they had heard of the IMC Ramkrishna Award. But just 20 had actually tried to apply for any kind of quality certification. A staggering 49 others said they had not even made the effort to do so, and another 20 couldn't specify why they had chosen not to look at quality certification.
More worrying, as the survey reveals, are the reasons for not applying. Almost half of those who had not applied for a certification couldn't say why. A fifth of those said that quality certification was of no relevance to their industry, and another 14 per cent didn't expect quality certification to help in any significant way. Awareness about quality or certification doesn't seem to be a problem, though. For example, 61 per cent of the respondents agreed that quality certification would mean ''the company takes full care of its customers''. A good 49 per cent (the question had multiple responses) said that such a certification would imply the company markets high-quality products and services. What's more, corporate chieftains agreed that quality in the new millennium would primarily mean customer delight. So what explains the corporate double-speak? One reason could be the fear of getting exposed by rigorous quality audits. For instance, the IMC Ramkrishna Award gives maximum weightage of 400 points to business results, and 140 points to process management. Leadership and hr are allotted 100 points each. Again, all these parameters are broken down into detailed sub-parameters. And unless companies have documented proof of quality initiatives, the audit will not give them points. Another reason could be that most Indian companies are busy fire-fighting day-to-day quality problems, and are unable to commit people and resources for any long-term quality programme. Notes P.K. Banerjee, Quality Advisor, IMC Quality Cell: ''Quality systems like Total Quality Management are long haul programmes. It could take as much as 10 years before any significant results show up.'' Ironically, 89 per cent of the respondents also felt that targeting a quality award helped internally motivate employees. Companies like Sundaram Clayton, Vikram Cements, and Sundram Fasteners have successfully used awards as a means of marshalling their workforce towards global quality. What the survey, then, points to is the growing quality divide in corporate India. In some industries, like automobiles, pharmaceuticals, and software, there is a clear premium on quality. But in some others like chemicals or home appliances, quality is not really an issue. Yet, the message is clear: companies that want to survive in these industries will have to match up with their global peers in terms of cost, product quality, delivery, and customer service. And while a quality award per se may not guarantee survival, it will at the least force companies to shake off their strategic ennui. In the long quality journey, that often is the first key step. S T O C K M A R K E T S Ask anybody on Dalal Street. The thing next hardest to telling how long you are going to live is trying to figure out what sectors (and among them what stocks) will do well in the short run. That's why most stockbroking companies hire armies of analysts to peer through the stockmarket haze, and zero down on the winning sectors. BT spoke to some such analysts to find out where you should be putting your money in 2001. Here are the eight sectors that these analysts and experts hard-sold to BT's Shilpa Nayak. And here's what these experts had to say: "Pharmaceuticals companies should announce relatively good growth figures," Rajat Jain, CIO and Fund Manager, IDBI Principal "A rediscovery of PSU stocks will come
about. Divestment plans should unlock value," "Technology companies are performing
in line with market expectations. Top-tier companies that are backed by
sound managements should give good returns,"
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Try booking yourself a ticket to London or New York this time of the year. ''Sorry, sir, all flights are booked,'' you would be told. That's good news for all airlines, except one: Air India. Saddled with an ageing fleet that has stagnated in numbers, the national carrier watches helplessly as foreign airlines take away international traffic from it. According to the Director General of Civil Aviation (DGCA) figures, Air India and Indian Airlines have just 30.8 per cent of the international traffic flowing into and out of India. Points out Savio Gomes, CEO, Enterprise Value, an aviation consultancy: ''The marketshare is in direct correlation to the fleet strength.'' Indeed, the number of aircraft in Air India's fleet has gone up marginally. It had 18 aircraft in 1982, and it has gone up to 23 now. In contrast, foreign airlines have been ramping up their own capacities. For instance, Swiss Air has doubled capacity in just three years and Northwest Airlines has done so in half that time. That apart, some foreign airlines have started operating out of new destinations in India. Thai Airways, which has started operating from Mumbai, is one of them. United Airlines will start operating 14 services with a capacity of 5,150 seats beginning April 1, 2001. Others, like British Airways, are consolidating their position. Says a British Airways spokesperson: ''We have seen a growth of 7-8 per cent in the recent years, and we see further growth in the market.'' As recently as the 1980s, Air India's marketshare of international traffic to and from India was 48 per cent. It fell to 20 per cent in 1998, and now is at a low of 19 per cent. Executives at the national carrier blame its principal shareholder, the government of India, for the airline's slow death. Points out Jitender Bhargava, Director, Air India: ''The government has long procedures and a say in what we buy. Getting an approval can take as much as five years.'' Meanwhile, to ease the congestion for passengers, the DGCA has asked foreign airlines to operate additional flights. Some of the beneficiaries of the ad hoc ''open sky'' policy are Air France, Singapore Airlines, and British Airways. With the apex travel body, International Air Transport Association projecting a 6.2 per cent increase in outbound traffic, airlines are in for a killing. Unfortunately for Maharaja, he won't be partaking in the feast. -Vinod Mahanta C O N S U M E
R B E H A V I O U R Something profound is happening to the consumer profile in India. In almost all consumer durables categories, buyers who've lived on the fringes hitherto are moving to the centrestage. According to the data compiled by Francis Kanoi Marketing Services (FKMS), marketers would do well to target consumers they haven't wooed hard so far. Take CTV, for example. The penetration of CTVs in sec a and b actually came down in 1999, compared to 1997. Even in the case of relatively new technology items like microwave, it is the smaller towns that are upping purchases. But in other categories like music systems, it's sec a that has a bigger appetite, and in the case of two-wheelers, the driver is sec b. Explains Francis Xavier, Managing Director, FKMS: ''Most products world over follow the top-down pattern of penetration, whereby top segments get penetrated first and subsequently the other segments. This means that over time you'll see a continuous change in the contribution of the different segments.'' The drivers of change are many. For instance, the last decade has seen an increase in consumerism, partly fuelled by the availability of easy credit. The opening up of markets has brought in new products and greater price competition. Agrees I. Natarajan, Chief Economist, National Council for Applied Economic Research: ''Availability is the key driver of the consumer spend. Besides, more products and brands are offering better quality.'' As long as the overall market keeps expanding, marketers should have little to complain about. - Vinod Mahanta E N T E R T
A I N M E N T Call it forward integration. In a first-of-its-kind move, ad major Leo Burnett has set up a division that will advice on content and take its shot at promoting entertainment properties like movies. Christened Leo Entertainment, the new division will try to institutionalise a business that's largely run by word-of-mouth and on gut feel. Says Arvind Sharma, Managing Director, Leo Burnett: ''We will advise movie moguls on what kind of content they should have in their movies and how the targeting should be done. It's a vast area before us.'' As a pilot project, the agency has taken up Ajay Devgan's movie-under- production, Raju Chacha. But Sharma isn't telling what specifically his outfit has done to shape the project. Predictably, cynical industry watchers aren't impressed. For instance, they say that the entertainment industry has been trying to professionalise itself for sometime now. Distribution and marketing had, in any case, been in the hands of a few big outfits. But the key objection seems to be a lack of clarity to Leo's objective. Says Amit Khanna, who now heads Reliance Entertainment: ''Providing consultancy in the area of content is a little far-fetched. It is ultimately the writer who makes or breaks a good script. How can a consultant work on that?'' For the time being, though, Sharma isn't letting such criticisms spoil his blockbuster dream. -Shamni Pande
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