Law-speak: "We are a small side-dish, slightly different and exotic"

Everyone who works for UK-based ad-agency St Luke's is an owner, yet no employee has a designated place. That, other seeming eccentricities-the office is structured according to clients, not departments-and some blazing hot creative work for clients such as British Telecom, bskyb and Clark's International, have established the agency as the singular (creative) alternative to Big Advertising. In Mumbai to flag off the Indian branch of St Luke's, founder Andy Law spoke to BT's Roshni Jayakar on his advertising and literary pursuits. Excerpts:

India has no shortage of ad agencies. Why should people come to St Luke's?

Agreed, I am aware India is not waiting for one more ad agency to open (shop). (But) I don't work for everybody. The analogy here is, there are lots of dishes on the table. We are just a small side dish, which is slightly different, slightly more exotic. Some people will like it. They might just be waiting for something like St Luke's. So far, the client response has been phenomenal-from big conglomerates to start-ups.

Is St Luke's creative and different because it is co-owned by employees?

St Luke's is a company that kind of refuses to toe the party line as to how advertising is produced. Our idea is, if you co-create a brand involving your clients right from the beginning, you bring in innovation into the process and create a better product. I am interested in knowing what the receptionist of a company has to say. We work in a digital way where everything happens at the same time, unlike a conventional advertising office, which works in an analogue way. With us, the creative people work (with the others) right from the beginning; they hear the issue and diagnose in a different way. St Luke's is an idea. A movement. We have an average attrition rate of five per cent. When we first set up, we were branded a loony cult, because we chose to stand outside, produce mould-breaking work. It just reminds me that advertising has become boring and nervous. Lawyers and counsellors run it and yet this is meant to be a spicy business.

Q&A-I
''Innovation Is The Lifeblood Of What We Do''

Shantanu Narayen: The importance of being India

This man was actually happy when our photographer told him we'd probably have to digitally manipulate his photograph if it didn't turn out well. He had reason to be: Shantanu Narayen, is Executive Vice President, Product Marketing & Development, Adobe, the company behind popular software such as Adobe Photoshop and Acrobat Reader. Number 2 to CEO Bruce Chizen, Narayen was in India to inaugurate Adobe India's new office-a gleaming seven storey, 100,000 square feet intelligent facility in Noida, near Delhi. The Hyderabad-boy whose ongoing obsession is to crack an under-90 at Golf (he took to the game two years ago) spoke to Business Today during his visit. Excerpts:

Adobe is a strong technology brand, much like Apple, Nokia, or Intel. How do you keep it relevant?

The brand is a key part of our success. Innovation is the lifeblood of what we do. That's what the brand stands for.

Surely, India can't be a very important market for you, especially given the fact that Photoshop is anyway the more pirated software?

The Indian publishing industry is huge. Of course, we'd like the revenues to be higher. PDF-based workflow is becoming the standard in newspapers and magazines. Everyone is moving from paper-based workflow to digital workflow.

But it probably plays a more significant role from the R&D perspective.

This is one of our most productive R&D centres. Look at it, we're in a brand new building. This centre has contributed significantly-in terms of developing new versions (of our software), designing products from scratch, working on an Acrobat reader for Palm, Pocket pc, a Symbian phone. The Adobe India Center is critical from the new product development perspective.

Adobe acquired Glassbook sometime back, but the entire e-book concept seems to have gone out of vogue now.

We are convinced that people are going to want to read information on a range of devices. There was hype surrounding the e-novel, but it is going to be difficult to replace the paperback. But people will want to read research reports, trade reports electronically. That's where we see more adoption of the e-book concept. Educational institutes, for instance, will use e-books.

A few years back, when the Application Services Provider hype ruled large, Adobe said it was considering an ASP model. What has come of that?

Basically, we have always been driven by what the customer wants. A few years ago, some of our customers wanted a service on the web. We do have a couple of (asp) offerings. Like Design team which people can access through the adobe.com website. But the adoption hasn't been significant.

What does the Adobe way stand for?

John Warnock and Charles Geschke, the two founders of Adobe, set the culture of the company. We are driven by innovation and provide an environment that can nurture new ideas. The second key aspect of the company is that we focus on understanding the customer. Finally, Adobe is a company that has lots of respect for the individual.

Adobe has a venture capital arm. Has that invested in India?

The operations of Adobe Ventures have primarily been restricted to North America. We haven't looked outside the US.

BSNL
Damn The Digits
The state-owned telecom company, BSNL, cocks-a-snook at cellular rivals.

BSNL's Prithipal Singh: Gotcha!

Just who is advising BSNL on marketing?" that's one question foxing even telecom. For, the state-owned TELCO is fast getting its act together in an area everybody expected to be its Achilles heel: marketing. The question became more intriguing when BSNL revealed that it intends to have 94 as the first two digits of the numbering plan for its cellular foray, CellOne, which will go on air on October 19. The Telecom Regulatory Authority of India, the erstwhile monopoly bragged, has already approved this numbering plan.

The knee-jerk response from rival cellular operators, whose first two digits are 98, was that they would not connect their subscribers to the BSNL network. Reason? The numbering plan, they claimed, would give an unfair advantage to BSNL. Since it owns (that's the word) nearly all the fixed-line subscribers in the country, BSNL can direct its exchanges to give priority to cellular numbers starting with 94.

That fear seems unfounded. TRAI stipulates that no operator can give priority to one numbering plan over another. Second, as BSNL's Deputy Director General (Marketing), Anil Jain, explains, ''technically, it is possible to give priority even to a particular number, not merely a numbering scheme, but we have no such intention.''

It seems the real reason for the panic was not technical, but the marketing leverage the new numbering plan can provide. For example, BSNL can tell customers that connections starting with 94 enjoy a special status. Secondly, it can encourage greater than normal churn since existing subscribers will be able to move to the BSNL network with only the second digit of their phone number changed. "It puts a great marketing tool in our hands," says a BSNL executive. Finally, an elephant learns to dance.

-Suveen K. Sinha

VIP
VIP No More
Boxed between the unorganised sector and global players, VIP Industries is hard-pressed to pack in profits.

VIP Industries' Dilip Piramal: Back to the wall

As ironies come, this one beats all. Here's a company that owns a brand generic to the segment and three-fourths of the organised market. Yet, speak to Chairman Dilip Piramal and he'll tell you horror stories about the moulded luggage industry, of how his flagship VIP Industries, despite sales of Rs 287 crore, earned a measly net profit of Rs 4 crore last year. Or how, despite a book value of Rs 57, Dalal Street won't pay more than Rs 19 per share.

Part of VIP's woes is industry related and the other part, of its own making. Piramal points out that his rivals in the unorganised sector, which at Rs 750 crore is bigger than the legit market of Rs 600 crore, sell at cut-throat rates because they pay no taxes. At the top end, which is growing at 15 per cent Samsonite is clipping ahead at a rate of 35 per cent per annum. VIP does have a tie up with Delsey of France to counter Samsonite, but the top-end is a small market. Growth in the economy segment (below Rs 650) is at around 6 per cent, but that in the popular segment (Rs 651 to Rs 1,200) is stagnating. Besides, Dalal Street is miffed with VIP's repeated dud investments in unrelated businesses such as television software production.

Now, the company is working on a segment-wise strategy, refurbishing its brands, and overhauling distribution in an effort that the company's MD Arun Warey calls ''horses for courses''. VIP has also launched a couple of personal accessory brands like Footloose and Buddy for teens and pre-teens. Plus, a JV in Bangladesh has been set up, and more are planned in SE Asia. Sure, VIP is going places, but will it bag big bucks is still the question.

-Dipayan Baishya