BILL GATES If Microsoft tops the image charts, attribute it to Gates

THE GATES EFFECT

Surprised that Microsoft scores over the likes of Wipro, Infosys, Reliance Industries, Reliance Infocomm, and Maruti in terms of image scores? Well, you shouldn't be. The company's visibility and image points can be traced back to one man: Chairman Bill Gates. In November 2002, Gates made a four-day visit to the country. He met with policy makers, shuttled from one high-profile function to another across four Indian cities (Delhi, Mumbai, Hyderabad, and Bangalore) in his Global Express jet, pressed the flesh with CEOs like Mukesh Ambani, Azim Premji, and N.R. Narayana Murthy, addressed large groups of coders in Bangalore and opinion makers in Delhi, announced an investment of $400 million in the country, and a corpus of $100 million for the Bill & Melinda Gates Foundation's local arm that would fight aids, and flew off into the sunset. Not surprisingly, that got reams of press, mostly good, including a cover story in this magazine. Still surprised?

JAGDISH KHATTAR MD Jagdish Khattar has reason to smile: Look at Maruti's QoE.

SMALL (CAR) WONDER

It wasn't outstanding profits, or a super-successful product launch, or significant gains in marketshare that ensured that the bulk of the coverage Maruti Udyog Limited received was positive. It was a successful Initial Public Offering. First, the IPO had trouble finding underwriters, then, the competition upped a gear and went to town about how Maruti was losing ground in the car market. Not too many analysts gave the company's sale of 79.4 million shares much chance. Eventually, Maruti proved everyone wrong. The IPO was oversubscribed three hours after it opened. Eventually, the issue was oversubscribed 10 times. Even better, it listed at a premium of 25 per cent of its issue price of Rs 125 on Bombay Stock Exchange and by the end of the first trading day, some 51 million shares, nearly 65 per cent of the issue size, had been traded. At the time this article went to press, the scrip was trading in the Rs 360-levels, an indication that Day 1 hadn't been an aberration wrought by irrational exuberance.

GLOSSARY/METHODOLOGY

Visibility Score: This is a function of the size of the article, its position in the publication (cover story, first page, etc), and the readership of the publication.

Image Score: Visibility scores for each article are multiplied by 1, 2, or -1 depending on whether the article is neutral, positive, or negative.

Quality of Exposure: This determines the relationship between visibility score and image score. Mathematically, it is the image score divided by the visibility score expressed as a percentage. Thus, a QoE of around 100 per cent indicates that the coverage has been largely neutral, a score significantly higher than 100 per cent that the coverage has been largely positive, and that significantly lower than 100 per cent that the coverage has been largely negative.

Categories: The scores are pigeonholed across various industries (banking, consumer durables, automotive, telecom, etc).

Genres: The scores are pigeonholed across various genres (marketing and sales, finance and financial results, corporate, product launches, personalities, etc).

Coverage: English and vernacular newspapers. And English and vernacular magazines. Unlike the coverage of politics, sports or entertainment, that of business is still dominated by the print medium.

Time Period: November 1, 2002, to October 31, 2003.

COKE INDIA
ANNUS HORRIBILIS FOR COKE

SANJI GUPTA President, Coca-Cola India

If there is one thing about this survey that makes Coca-Cola India happy (or so we think; the company refused to comment on the findings), it must be the timing. The survey covers all articles that appeared between November 1, 2002 and October 31, 2003. Consequently, all coverage related to the you-call-it-sexual-harassment, we-call-it-contract-dispute incident involving Coca-Cola India, its marketing chief Shripad Nadkarni, and former Miss Universe Sushmita Sen, is excluded.

Despite that, it has been a lousy year for the world's best-known brand in India, this despite the hosannas its advertising, created by McCann wunderkind Prasoon Joshi and featuring actor Aamir Khan has received. Why? Blame it on a lady called Sunita Narain, and her organisation, Centre for Science and Environment (CSE). In February, the Non-Governmental Organisation (NGO) came out with a report that showed that most bottled water sold in the country (including ones sold by Coca-Cola and Pepsi) weren't exactly uncontaminated. In July, it followed up with another study that most soft beverages sold in India (including almost all Coca-Cola and Pepsi brands) had unacceptably high residues of pesticides. And coming as it did, in the wake of a BBC report about a controversy involving a Coca-Cola plant in Kerala and whether or not it was releasing toxic effluents into the environment, it didn't do the company's image any good.

Coca-Cola's initial response was to badmouth the test and the laboratory where it was carried out. And there were veiled references to CSE's motivations, even the applicability of EC norms to India. President Sanjiv Gupta did the rounds of the television channels. The company's full frontal attack backfired. What should Coca-Cola have done? Well, rival Pepsi adopted a different approach (See The Pepsi Strategy) and that seems to have helped a bit. And B-schools routinely roll out the Tylenol case as an example of how companies could handle crises. In 1982, an innovative serial killer laced certain bottles of Johnson & Johnson's pain-reliever Tylenol with cyanide. The company's then CEO James Burke went on network television, J&J ran ads in the papers, and it withdrew all Tylenol bottles across the US, an exercise that set it back $100 million. Expectedly, when new Tylenol was launched with tamper-proof packaging, it proved a bestseller. Should Coca-Cola India have done something different? Its scores indicate it should.

-Kushan Mitra

FMCG FLAME

Thanks to Coca-Cola, Pepsi, and, to a lesser extent, circumstances surrounding the exit of Britannia CEO Sunil Alagh, the FMCG sector didn't receive very good press last year. With most large companies in the business struggling to grow their revenues, the sector's Quality of Exposure suffered.

RAJEEV BAKSHI Chairman, Pepsico Holdings

At just around 100 per cent, the companies would have probably preferred not having been written about in the first place.

THE PEPSI STRATEGY

It wasn't involved in a pollution controversy, but like Coca-Cola, Pepsi was at the receiving end of CSE's exposes on bottled water and soft beverages. Expectedly, the company's Quality of Exposure isn't very different from Coca-Cola's: it stands at 70.24 per cent, just around half a percentage point higher than Coca-Cola's. Still, Pepsi may have benefited from lower visibility and image scores. Put simply, it didn't get written about as much as Coca-Cola. Attribute that to the latter's standing, along with McDonald's, as a symbol of the American way of life. And credit Pepsi for its let's-lie-low strategy. That seems to have eased the pain some.

N.R. NARAYANA MURTHY Chairman, Infosys (Left) and AZIM PREMJI Chairman, Wipro

TECH'S GLIMMER TWINS

The personality score is based on the coverage of a company driven by personalities. Although Infosys CEO Nandan Nilekani and Wipro Vice Chairman Vivek Paul are quite high- profile, there can be no debating the fact that the chairmen of the two companies are responsible for a sizable chunk of the score. It may come as a surprise to most people that Infosys' honchos, while topping in terms of both image score visibility score, actually trail the likes of Deepak Parekh, Wipro's Premji and Paul, and HSBC's Niall S.K. Booker and Naina Lal Kidwai. That can be ascribed to the not-so-complimentary coverage the company, and its Chairman and CEO received in the wake of a poor quarter (January-March 2003), and in the wake of its settlement with Reka Maximovitch, who had filed a sexual harassment suit against Infosys and its former global head of sales and marketing, Phaneesh Murthy. Indeed, for some time in the past 12 months, it became fashionable to knock Infosys. Then, that's a problem any company that receives good press for 10 years running has to face sometime.

THE SMARTEST OF THEM ALL

DEEPAK PAREKH Chairman, HDFC

Last year, he got more press than the Ambanis and Ratan Tata, but just around a third what Infosys' N.R. Narayana Murthy and Nandan Nilekani, and Wipro's Azim Premji and Vivek Paul did. But no one came even close to him in terms of quality of exposure. At 163.24 per cent, his QoE was significantly higher than HSBC's Niall S.K. Booker and Naina Lal Kidwai's 134.02 per cent. That means Deepak S. Parekh didn't just receive adequate press; he received adequate good press. So, how does the 59-year-old Chairman of the Rs 2,975-crore Housing Development and Finance Corporation (HDFC) manage it? And what explains this popularity? One reason could be his accessibility. Parekh returns all calls. For instance, this writer caught him on the telephone just as he was about to catch a flight from Delhi to Goa to attend the Confederation of Indian Industry's two-day National Council Meet. Parekh brushes off the news about his image. "That's probably because I talk to too many journalists," he laughs. "Like you.'' Maybe, but it is also a function of several other factors. Success is one: HDFC has financed over 22 lakh homes, disbursed loans over Rs 54,000 crore, and spawned successful companies in areas such as banking, asset management, and insurance. The fact that Parekh is considered a thinking-CEO is another: he is on several government committees and the boards of various companies. And his inability to say no to acquaintances and friends, still another: although he isn't a party animal, Parekh can be spotted at most dos where his natural amiability sees him networking. And that, in turn, further enlarges his circle of friends and acquaintances.

-Roshni Jayakar

THE MONOLITH SCORES

The vernacular press' business coverage is typically dominated by issues of pressing concern to investors and consumers, not so much corporate news or personality-based news. That explains why BSNL-it launched a cut-price cellular service-received a third of its coverage, Reliance (for the same reasons) and Maruti (think IPO), a quarter of their coverage, and Coca-Cola (the pesticide controversy), a little less than a quarter of its coverage from the vernacular press.

EDITORIAL PREFERENCES

The editorial page of newspapers and magazines is considered sacred. Ergo, companies that receive the most image scores from editorials and articles carried on this page must be doing something right. Infosys tops, but the real story is the presence of companies that aren't part of the top 10 in terms of overall visibility and image scores: Ranbaxy, TCS, ONGC, Standard Chartered Bank, Tata Motors, and i-flex. TCS' presence, given its now-impending, now-not IPO, isn't surprising. All the other companies, however, have strong stories to tell. In Ranbaxy's case, this has to do with research and a global generics (drugs going off patent) business. In Standard Chartered's, it is about a successful integration of Grindlays' Indian ops. In i-flex's case, the story concerns a made-in-India software product; and in Tata Motors', a successful turnaround and a global foray. The message: strong stories=good press.

HOW TO HANDLE A CRISIS

BHARAT PURI Cadbury India's MD (Right) will be happy to know that time heals.

The way Cadbury's managing director Bharat Puri sees it, the company didn't do any wrong. He's right: it didn't. Infestation in chocolates is a rare, but not-unheard-of problem wherever chocolates are sold in the world. Invariably, this is the result of improper storage and handling, typically at the level of a retailer. And like Puri pointed out during a visit to this magazine's office not too long ago, no fast moving consumer goods company really interacts directly with small retailers. So, when reports of a worm infestation in Cadbury's Diary Milk surfaced, the company first wished to verify the facts. When a few more unsubstantiated incidents surfaced soon after and the affair threatened to snowball out of proportion, the company launched an effort to improve storage conditions at the retail level. And finally, Cadbury India went to the extent of reinforcing the packaging of CDM in an effort to reassure consumers that all was well. Some of these efforts will, no doubt, help improve the company's QoE, as indeed, they may have in November and December, months that fall outside the purview of the BT-Cirrus study. However, the company's QoE for October shows a steep plunge from its normal levels. Puri can take heart from the fact that his company's crisis-management efforts will show results with time. And he can (and should) take heart from the fact that the media, as indeed consumers, forget and forgive quite easily. Take the case of Coca-Cola India and PepsiCo. In August, their QoEs fell to the 50 per cent level. By October Coca-Cola India's QoE had risen to 88.28 per cent and PepsiCo's, to 91.35 per cent. With time, Cadbury's QoE will rise as well. Thanks to Puri's efforts, this may happen sooner, or the QoE could go up far more than it otherwise would have.

LOOKING BEYOND NUMBERS

BY SRINI BALRAM Head/Cirrus

The Indian corporate news olympiad is a fascinating daily event. The morning coffee has a special appeal or tastes insipid depending on what's being written about by the media for that day.

A news item from a company could have a strategic or tactical intent; finally to the end reader it has a residual image/impact value. Traditional brands as we know them are created based on sound product management, sharp communication strategies, and brilliant advertising. Move away a little and look at hugely successful brands like Infosys or Wipro or other it companies-brands that have made India proud. What did they do? How did they create their corporate brand with little or no advertising investment?

IT companies got out of their trenches long back and have taken their corporate brand across the Indian seas to earn their place under the Western sun. Soon to follow would be the companies from the pharma sector. This is substantiated by the fact that in the top 10 companies that were written about in the editorial pages (the prime spot as it were), more than half were from the it sector-Infosys, TCS, i-flex, Microsoft, and Wipro. That's saying something about building corporate brands! The sole pharma company in that list is Ranbaxy.

Why are sales and marketing stories so 'all consuming'? Thirty five per cent of all the image scores belong to this genre. This is great for the companies and their respective product brands, but in the larger picture of a corporate brand this percentage tends to skew the picture. For instance, corporate stories on HR practices within an organisation, social responsibility and social projects undertaken by an organisation do get written about, but at the end of the day they do not go beyond 2 per cent on image scores. Isn't there a huge opportunity here?

The quality of a company's media exposure is a critical variable. As long as a company has high media visibility with attendant high image, the media exposure quality for that company is supreme. But the reality is different. Most companies have a mix of neutral, positive, and negative stories.

It's really the proportion between these three that determines the Quality of Exposure. Tata Motors is a good example. It isn't among the top 10 companies in terms of image scores, but it is the first from a Quality of Exposure perspective. A solid corporate brand is getting better.

Can we build a corporate brand using just the vernacular? Tough call. But a good mix with the English press can do magic for the corporate brand. What should the mix be? A 50:50 split? As of October 30, 2003, the ratio between the vernacular and the English press was at 20:80. Isn't that a little skewed? Maybe a move towards 40:60 would be desirable.

Cirrus is a Delhi-based monitoring agency and part of agencyfaqs.com. Feedback to bt-cirrus@icirrus.com