Remember Tamagotchi, the cute little Japanese toy? It will soon have an electronic Indian cousin who lives on your mobile phone and, like the egg-shaped original, can be engaged in a virtual relationship. Make your phone partner happy, you get points. Make it cry, the opposite happens. The real story in this relationship, however, is being scripted by mobile phone service providers, who, faced with falling average revenue per user, are pushing premium-priced value-added services (vas) like this one to shore up their revenue.

On offer is a host of services: from weather forecast to news, from download of ringtones to always-on internet through GPRS. Understandably, some operators are more successful than others. Hutch, with its focus on the business consumer, already claims to derive more than a tenth its revenues from such services. Bharti, otherwise the top operator, gets just 5 per cent from it, although this is projected to double in another two to three years.

Multimedia messaging service (MMS) is another vas that phone companies are offering. There are, however, two inhibitors to its growth: high price of handsets and a lack of interoperability (Idea signed an interconnect for MMS with BPL only last month). In fact, pricing is an issue with vas too. But once the traffic picks up, it should be possible for the phone companies to lower their vas rates. After all, the cell phone industry is no stranger to price cuts.

-Vandana Gombar

ATMs Everywhere

Did you know that there are 8,500 automated teller machines (ATMs) in India and that of these, 6,488 are operated by just the top 10 banks? Even if you didn't, you've probably noticed ATMs popping up all over your workplace and neighbourhood. What's driving the ATM boom? The public sector banks-led by SBI which has 1,600 ATMs-are using the machines to retain customers and cut costs, and the private players (ICICI Bank has the most ATMs: 1,675) are using them to acquire customers. Is it working? You bet. ICICI reports an average of 250 daily transactions a machine; SBI, around 200. Banks that can't afford the expensive machines are going in for shared networks. Once metros used to hog the ATMs; today, smaller towns are getting an increasing number of them, too. Expect tomorrow's ATMs to do more than just dispense cash and tell you your account balance.

-Roshni Jayakar

Print Run
Dainik Bhaskar storms Ahmedabad with a local daily.

New Rules: Divya Bhaskar is custom-made

This has to be every marketer's dream. Even before you launch your product, you are crowned the market leader. And (surprise!), this happens in the impossibly difficult market of newspapers. The battlefield: Ahmedabad city. Contenders: Current leader Gujarat Samachar (city circulation 2.42 lakh) and No. 2 Sandesh (1.59 lakh) on the one side, and the Bhopal-based Dainik Bhaskar Group, which is all set to launch its Gujarati daily, Divya Bhaskar, on June 22, 2003.

Although it is yet to sell a single copy, Divya Bhaskar claims a pre-launch circulation order of 4.65 lakh (3.29 lakh in the city alone). Just how did it do it? Simple, it surveyed 12 lakh households in and around the city and custom-made the newspaper. Better still, it went back to these households and asked them to sign up. Rivals are incredulous, but if the claims are true, then the new newspaper already has a page one story it may never print.

-Shailesh Dobhal

Back To Square One
Savvy advertisers dig their wells for ad spends every year.

Coke Ad: ZBB or not, Aamir is worth it

Are advertising bigwigs scaling back their outlay? Well, contrary to the general perception, they are not. For, the advertising pie did grow by 6 per cent in 2002 to Rs 9,472-crore. So why is there this sinking feeling in the market that ad spends have actually been coming down? Well, blame it on zero-based-budgeting. Marketers are working around the science of ad spends, justifying and earning from their CFOs at the beginning of every year, each rupee that will be spent on advertising and marketing. "The market dynamics are such that you need to justify marketing spends afresh every year, and hence zero-based budgeting," says Shripad Nadkarni, Vice President (Marketing) at one of the country's largest advertisers, Cola-Cola India.

The zero-base approach means that the yield on each rupee spent is scrutinised closely. Spends are being broken down to individual brands and geographies and then co-related to sales targets to strategise better. Given that ZBB is the norm globally, the trend had to arrive in India sooner or later.

-Vandana Gombar