Sunday, January 3, 2010

Panel Discussion – Should Dollar be the Global Reserve Currency?

Why Yuan? Why not Euro....?? Euro seems to be a better pick than the Yuan...! But there is lack of unity among them. Well, then why not the IMF SDR’s...??! Hmm, seems to be complicated. Will the US Dollar continue....??!!!

Confused...?

Well, we the BFS students were working on this for over a week. Our first Panel discussion kicked off with a debate on whether the dollar should continue being the global reserve currency or should there be any other takers for the same. In the presence of our Chairman Mr. Mohan Menon, BFS Varsity head Mr. Sadashivam and our dean Mr. Sridar Natrajan, we argued why it should and why it shouldn’t. Charan, Dipesh and Benoy supported the dollar; while Priya, Shanmugapriya, Gourav and Sri Krishna Prasad were of the view that there has to be a new reserve currency.

The dollar has come under sharp criticism of late due to its volatility and the countries world over find it difficult to withstand the fluctuation in exchange rates. In this context, there is a hue and cry from some nations to replace the dollar with another currency as the global reserve currency. The supporting arguments for the dollar were:

1. Backup of the largest and strongest economy in the world.

2. Freely tradable and freely convertible currency.

3. Highly liquid and fully convertible for both capital account and current account purposes.

4. Despite the recession and the dollar volatility, economies still invest in dollar to accumulate their reserves.

5. Even the deficit of $120.3 billion dollar, works out to be only 0.8% of the country’s GDP. This reflects the depth of the economy inspite of the downturn.

The counter arguments for the dollar dominance were:

1. As the dollar is predominantly used world around, the fluctuations hurt other countries badly.

2. The gulf countries want a change to Euro or Chinese Yuan.

3. Russia too has joined the Euro supporting nations. It has reduced its reserve composition, which was substantially in dollar, to 45% Euro and 55% USD.

4. China wants the global reserve currency to be the IMF Special Drawing Rights (SDR’s).

5. China would be in a better bargaining position as they have $768 billion of US treasury bills as reserves.

They wanted the Chinese Yuan or the EU Euro to be the reserve currency. Chinese Yuan, according to them was a good contender, as it was the strongest growing economy and politically stable. This statement made some eye brows raise!

As the discussion picked up Mr. Sadashivam threw open a different angle to the discussion. What were the key characteristics for a currency to be the global reserve currency? - he asked, and guided us through some key points. The main features include- extremely transparent economic and political system; preferably a democratic system which should be a facilitator to the world. The economy should have strong domestic markets. The currency should be fully convertible both in terms of current account as well as capital accounts and it should be highly liquid too.

The issue on constraints of INR being the reserve currency was also discussed. INR has all the above mentioned features; however a deep probing threw more light on this. India does not have a strong international trade, unlike China. The Indian export segment should be strengthened and the government should take initiatives for this.

We finally arrived at a common consensus that the US Dollar will continue to have the dominant status owing to the strength of the economy and polity. However there is a possibility that it can lose its hegemony as the Euro can be treated as an alternate currency. Economies world around would want to balance their dollar holdings with that of the Euro. Even the Chinese Yuan, has the prospective contender, provided there are drastic changes in that country. Some areas which China should look into are: should be more transparent economy, address the convertibility of Yuan and moreover, they are a highly export oriented economy, especially to the USA. It has to develop its domestic markets rather than banking more on exports.

The session proceeded for a long time with the panel members enlightening us about varied issues from the current political and economic situation in India, to the Climate Change Conference in Copenhagen. Our enthusiasm has touched the roof after this wonderful session. There was fun, there was learning and there were wise men imparting wisdom. We eagerly look forward for the next session, to learn and to share.

Contributed by Benoy Paul, BFS Varsity, CBS Batch IV (2009-10)

S’MARKETING CONVENTION 09 SMART STRATEGIES TO BEAT EMERGING MARKETING CHALLENGES

S’Marketing Convention was the first ever two-day conference held by the Confederation of Industries of India (CII) that solely focused on the current challenges faced by the marketing world. Marketers, formerly the fulcrum of any organisation, are now being questioned on their effectiveness in respect to their ability to handle the huge proliferation of brands, changing customer profiles, rising consumer power, which leads to declining differentiation and few breakthrough ideas. The apparent solution is a dramatic change in strategies as marketing reinvents itself. Smart marketing – the key to future growth!

The convention was attended by several leading businessmen and Marketing Professors teaching abroad, whose extensive experience in the field added great colour and value to the occasion. After the inaugural lamp lighting ceremony, Mr. C. K. Ranganathan, Chairman, humbly welcomed everyone while introducing the key issues of the conference, the six factors that were an integral part of marketing: the attitude and mind-set of the marketer, creating trust and living upto it, differentiation, functional cohesiveness within an organisation, simplicity of concept and beating the competition just enough to make a mark in the consumer’s mind and not overdoing it.

Next, Mr. K. S. Ramesh, Chairman S’Marketing Convention, spoke about marketing becoming more tactical rather than strategic and that the dependence on excessive data should be leveraged to create new avenues of growth. Mr. Santosh Desai, Managing Director & CEO of Future Brands, gave the keynote address, emphasizing that marketing is not about business, but about adding value and meaning to customers’ lives. Marketers should have a clear reading and understanding of the consumers’ needs, fill those gaps and thus bridge the distance between them and the organisation. It’s all about delivering genuine expertise!

Mr. B. Santhanam, the chief guest, President of Flat Glass South Asia & Managing Director, Saint-Gobain Glass India Ltd., spoke about engaging the non-consumers and occupying a larger space in the market in which there was no competition. While giving the vote of thanks, Ms. Anita Gupta, Senior Vice President & Managing Partner JWT, expertly summarised the key learnings of the first session.

Prof. Sanjay Putrevu, Associate Professor-Marketing of the University of Albany, started the next session by saying that marketing has to find new ways of being relevant in these changing times and the emerging media and the instant availability of information should be leveraged to reach the customer’s and make them feel that the organisations are investing in their lives. Ms. Mythili Chandrasekar, Senior Vice President & Executive Planning Director JWT, brought out the changing notions of privacy in India and the widening dimensions of culture. She also spoke about consumers being the ambassadors of a brand and therefore the importance of making them co-marketers of the organisation.

Mr. Shripad Nadkarni, Director Market-Gate Consulting, emphasized on creating a harmonious synthesis with the hard data gathered and the deep understanding of the consumer as an individual and as a part of the whole “clan”. Mr. Subhash Kamath, Managing Partner Bartle Bogle Hegarty (India), spoke about increasing the consumer touch-points and the necessity to come up with strong brand ideas that can be promoted in any medium.

The post-lunch session was inaugurated by Prof. Gopalakrishnan Iyer, Professor-Marketing & Director Center for Services Marketing & Management, Florida Atlantic University, who continued the thread from the previous discussion, by saying that old TV medium was fast losing the audience due to advertising clutter while the digital media showed great promise for future growth.

Mr. Arun Tadanki, Managing Director, Yahoo India Ltd., spoke about the internet having significant capability to target, engage and create impact on the Indian youth and that the advertisers must wake up to its true potential. Mr. Deepak Goel, Chief Executive Officer, Drizzlin Media, discussed how to leverage the social media to make each consumer the organisation’s brand ambassador. Adding to the ongoing discussion, Ms. Subha George, Chief Executive Officer, Media Edge, expounded on the measurability aspect of the new medium and the possibility of greater differentiation in it.

The final session of the day was commenced by Prof. M. J. Xavier, Professor-Marketing, Great Lakes Institute of Management, who gave a brief introduction on Customer Relationship Management. Mr. K. Krishnamohan, Chief Executive Officer, Fifth C, focused on the key aspects and advantages of high impact analytics which had contributed to the success of some famous companies such as Google and Amazon, while Mr. Suneel Aiyar, Associate Director Pricewater Coopers, focused on the benefits of efficiently managed CRM.

On the second day, Mr. N. K. Ranganath, Managing Director, Grundfos Pumps India Pvt. Ltd., presented a completely new viewpoint, by saying that we have to give attention to things which are not connected to our business, because they indirectly affect it.

Carrying forward the critical issues faced by marketers, Mr. T. Krishnakumar, CEO Hindustan Coca Cola Beverages Pvt. Ltd., emphasized on four aspects of any trade, which are establishing transparent relationships with customers, delayering the market and so having direct relationship with dealers, and creating a win-win situation for both the consumer and the organisation.

Mr. Ramesh Viswanathan, Executive Director, Cavinkare Pvt. Ltd., focused on the needs of the hour which are innovation at every level of the business and the infrastructure for extensive distribution. The last speaker of the session, Mr. K. Radhakrishnan, Chaiman, ECR India, took a diametrically opposing stance by stating that consumers do not have any power, and to empower them, we have to have “co-creation”, which is a better understanding of the consumer needs, normalisation of the demands and supplies and the lack of any wastage.

In the next session, Prof. Trichy Krishnan, Associate Professor-Marketing, National University of Singapore, talked about the exploding Indian economy, followed by Mr. Raghunath Mandava’s (CMO Airtel Ltd.) speech on the challenges of exploiting new avenues of growth, while strengthening the core competencies, having clear strategic goals and establishing credibility in the market.

Mr. Rajiv Narang, President Erehwon Consultants, expanded on the process of innovation, such as thinking out of the box, getting new insights, not falling in the trap of proof-seeking, but taking the entrepreneurial outlook of how to make it work. In other words, it’s all about climbing an unknown mountain – “Innovation is about leadership!”

Offering a fresh perspective, Ms. Sonia Manchanda, Co-Founder, Idiom Consulting & Design, described through some stunning visuals, the importance of design in brand building.

The post lunch session was started by Mr. V. Balaraman, Chairman & CEO, Boardroom Advantage, who introduced a different aspect to marketing – having and retaining talented marketers. After him, Mr. Jayant Singh, Managing Director, Henkel India Ltd., spoke about paradigms shifts that resulted in talent management being the responsibility of the entire organisation, especially all the leaders and not only of the HR. Mr. Prasad Narasimhan, CMO, Virgin Mobile Ltd., concurred with the previous speakers, adding that the getting the right talent is a big challenge. Ms. Anuraddha Oza, Senior Associate-Human Capital, Mercer India Ltd., differed on this point, saying that talent was available but that the people needed the right kind of training. Prof. S. Sriram, Executive Director, Great Lakes Institute of Management, believed that there was often a disconnect between the CMO and the company’s strategies, which had to bridged with marketers earning credibility through thorough customer knowledge, focus on customer experience, embracing technology and strongly encouraging an ROI culture in the organisation.

In the final session of the convention, after the welcome speech by Mr. C. K. Ranganathan, Mr. Laxman Narasimhan, Managing Director, McKinsey & Company, gave the keynote address. He threw some light on the critical roles of the CMO which were, breaking the markets into smaller sections (granularity) in search for potential markets, creating a cross-functional integration, and lastly using advanced supporting tools to gather data, get breakthrough insights and thus drive the company’s strategy and goal to fruition.

Finally, the chief guest of the day, Mr. D. Shivakumar, Managing Director, Nokia India Pvt. Ltd., spoke at length about the changing FMCG markets and the emerging growth opportunities in rural India. He also reiterated the need for maximising the no. of customer touch-points and the need to enter into the adjacent space or category of any existing brands. He concluded with a few words on creating an eco-system that gave complete solutions to consumers.

The two-day conference ended on a high note with a heartfelt vote of thanks by Mr. K. S. Ramesh, Chairman of the S’Marketing Convention.

Apart from being invaluable because of the expert advice and knowledge shared by all the speakers, the convention attempted to create a renewed interest and vigour in the marketing field, which was fast losing its premium position. I am sure that the numerous take-aways from the conference would encourage the new generation of marketers to reinvent themselves and strategically face the current crisis.

Above all, this first-time opportunity of interacting with some of the giants of the industry, was for us, an unforgettable experience!

Contributed by Ishita Deshmukh, Marketing & Communications Varsity, CBS Batch-4 (2009-10)