“In Pricing”, Success Breeds Success : “Pricing Full Potential Analyzer” does the Heavy-Lifting when it comes to pricing | A.T. Kearney

“ The more market power you have, the more you can still gain from your #PricingStrategy…”

A.T. Kearney surveyed more than 1,600 businesses in FIVE Countries to get an “outside view” and answers to TWO Fundamental Questions: How much money can a business realistically gain from better pricing? Is there a simple, reliable way to predict these gains? The short answers are “much more” and “yes…”

This study, which includes major companies in various for-profit industries, has yielded THREE Compelling and practical insights on how companies can make significantly higher profits from better pricing..

  1. Know what’s at Stake for your Business.Improved pricing increases gross profits by 15 percent on average over a three-year period, often multiplying net profits and raising market capitalization by hundreds of millions of Euros..
  2. Don’t stop. There is always More to Gain.The more market power a company has, the more profits it can still gain from further pricing improvements..
  3. Go Deep, Not Broad.The best pricing performers succeed by focusing on a small number of pricing improvement efforts rather than broad-based pricing programs..

These findings not only illustrate what factors separate the pricing out-performers from others, but also paved the way for development of a new tool, the Pricing Full Potential (PFP) Analyzer. The PFP Analyzer provides simple, reliable estimates of how much profit is at stake..

Know What’s at Stake for Your Business:

The PFP Analyzer estimates the size of the prize for any given company by looking at the actual achievements of companies or business units with similar market positions (measured by a combination of market share and gross margins). For example, a global automotive powerhouse based in Europe with 8 percent market share and 20 percent gross margin can add almost three points on gross margin through better pricing within three years. This translates into more than $275 million in additional profits. An innovative high-tech leader with 60 percent market share and 45 percent gross margin in a niche market can add on average 10 points to its margin..

Of course, market power can vary significantly within a company, especially in large conglomerates. Metro, for example, is very strong in the cash-and-carry wholesale segment in its home market of Germany, but weaker in France where Carrefour is the long-established leader. It is essential to look at business units and markets at the right level in order to identify the pricing potential..

Two other questions helped us validate our belief that better pricing drives higher profits…We asked half of our study participants how much their suppliers could still capture from them in price negotiations. In other words, how much money were suppliers leaving on the table? We asked the other half how much they themselves were leaving on the table in price negotiations with their customers. The assessments were almost identical, at 5.2 and 5.1 percent of the deal size. Needless to say, these amounts would make a substantial difference to profits. The average EBIT margin for Europe’s top 300 companies was 9.9 percent in 2012. Adding another 5 percentage points to the top line would have increased EBIT by about 50 percent. Even if companies captured only a fraction of that potential, it would still be a substantial increase in profits…

Don’t Stop. There is Always More to Gain:

Our findings reveal that a company’s market power—measured by gross margins and market share—is a reliable predictor of its potential gains from better pricing. The more market power a company has, the higher the profit improvement potential. What’s more, the relationship is linear. Profits gained from pricing continue to rise as market share and gross margins rise. In other words, there is more, and then there is still more to gain..

This finding refutes the typical arguments heard when an organization thinks it has done enough or is already good enough when it comes to pricing. The main arguments are: “Why? We are already doing well,” “Better pricing does not work in my industry,” and “It does not work in this country.” The fact is, industry and country of origin turned out to have little influence on the profit improvement potential from pricing (see figure 1)..

The THREE Typical arguments above are dangerous, because they lead to behaviours that hinder pricing efforts and harm profits…A company that manages to lower its costs tends to pass along the cost savings to customers, which means there is a preference to preserve gross margins rather than improve them. In fact, our findings demonstrate that when cost of goods sold (COGS) rise, gross margins are almost three times less likely to change than when COGS fall..

Such companies are also prone to sacrifice profit to preserve market share, rather than the reverse. An obsession with market share is still very much alive. Looking at the laggards in our sample—companies that improved either share or profitability—the share of companies that gave ground on gross margins is almost twice as high as those that lost share…So when in doubt, laggards sacrifice profit to preserve market share, rather than sacrificing market share to preserve profits..!!

Go Deep, Not Broad:

Having #MarketPower, is clearly important…It is No surprise that companies with High #MarketShare, also enjoy High Margins…Consider Apple in smart-phones, BMW in cars, and Coca-Cola in soft drinks. What a company does with its market power is perhaps even more important..

The #TopPerformers, in our analysis, an elite group that we call the #ZenMastersOfPricing, have THREE Things in common…They enjoy very high market share and #GrossMargins, they have spent the past three years expanding their market power, and they attribute the majority of their profit improvement (more than 70 percent of it) to their #PricingStrategies…In other words, their market power, which is already high, continues to rise as their pricing improves..

The Zen Masters differ from the other Businesses in TWO Ways : First, they are much more likely to undertake at least one initiative to improve pricing…Second, almost two thirds of the Zen masters focus on One OR Two Key-pricing actions rather than a major program addressing more than FIVE Price actions (see figure 3)..

Interestingly, firms that possess better overall pricing skills (or think they do) have higher market share and gross margins…Yet these firms still invest to deepen their skills even more…Unlike price promotions, which are not applicable to many business-to-business firms, pricing training is an opportunity to change not only how people think about pricing but also how prices are managed. And it is essential to every industry..

Beyond training, other possible pricing initiatives include improved price-setting process, more-targeted discounts and promotions (if applicable), better sales force price execution, and tighter price monitoring…

Success, and More Success :

What we know intellectually is that success breeds success. A company that understands the mechanisms of smart strategy, and uses them to its advantage, is bound to succeed..No where is that more True & Pertinent than in #Pricing,..Smart Pricing leads to increased #Profits & Market-share…Our study proves it…!!

“India Retail-Property Market” Overview | by: Vivek Kaul | ET Retail

The Retail #RealEstateMarket, in India has developed steadily over the past decade as the quality of stock improves and local developers realize the importance of Modern #ShoppingCenter Management, such as zoning, branding, marketing and promotions, as well as the all-important strategy of following a pure lease model instead of the earlier practice of divesting units to individual investors… This evolution has led to the creation of a number of high quality shopping mall developments in the major cities of Delhi, Mumbai and Bangalore which have set the benchmark for future retail schemes..

The adoption of rental models (such as revenue-sharing) has provided support to retailers in India seeking to establish themselves in the market, and has also enabled shopping mall developers to attract international and domestic retailers to set up flagship stores…!! 

Retail Real Estate Supply: 20072014 (P) : CBRE Research

In the run-up to the global financial crisis of 2008, around 300 new shopping centers were scheduled to be completed in key cities across India. This pipeline was decimated by the credit crunch, however, leading to a shortage of modern retail estate stock. In 2011, the development pipeline sprung back to life as construction work resumed on a number of projects. At the end of 2013, the supply of modern retail space across the country’s seven largest cities stood at about 54 million sq. ft. Around 70% of this space was in New Delhi, Mumbai and Bangalore…

Leading cities including New Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad and Kolkata have all seen a steady rise in retailer enquiries in recent years. Shopping mall rents in prime sub-markets of New Delhi have witnessed growth, while values in high streets have increased in Mumbai, Bangalore and Pune. Transaction activity as well as sizes are expected to increase on the back of an increase in consumer spending and expanding mid-income purchasing power. In Mumbai, premium international brands continue to focus on affluent southern parts of the city; but the lack of quality retail space remains a major challenge to growth. Despite the scarcity of quality supply, most retail chains continue to launch their first Indian store in Mumbai and New Delhi usually in a street shop or mall before expanding elsewhere. Even as domestic big box retailers gradually expand to tier II locations, the major foreign brands remain primarily focused on tier I cities.

New supply is steadily coming on stream in the NCR, and will provide opportunities for retailers to operate in an organized retail environment. High street formats continue to dominate the retail landscape, while most luxury retailers prefer to operate from five star hotels and premium malls. Bangalore has a large quantum of organized retail supply in the pipeline which will provide retailers with further opportunities for expansion..

Amongst #RetailCategories, international #F&B outlets have continued to expand in 2013 both at the fast food and fine dining ends of the market. Luxury retailers remain focused on tier I locations but continue to refine their strategy and product offering for the Indian market, which in selected cases has seen them consolidate and reduce the size of some stores. Fashion and apparel remains a high growth sector and major apparel brands from the US and Europe continue to seek opportunities to enter or expand in major markets across the country, including certain tier II locations…

Lack of Quality Retail Real Estate Impedes Market Entry by Global Retail Giants:

There is approximately 54 million sq. ft. of retail stock in India spread across leading metropolitan cities and their surrounding regions. Even after the steady growth in supply of organized retail space over the past ten years, however, retailers of the size of Ikea often find it challenging to secure space in a prime mall in any of these cities. This is essentially because the majority of retail space developed in India to date lags behind global standards, and does not provide the quality, ambience, design, services or post-construction maintenance that global retailers are accustomed to. This is one reason why out of the more than 300 malls in the country, only a handful can be described as successful retail projects. These include Select CityWalk, DLF Emporio and DLF Promenade in South Delhi, Ambience Mall in Gurgaon, Inorbit and High Street Phoenix in Mumbai, and Forum in Bangalore. The total size of these successful malls is just 45 million sq. ft. About 31% of the upcoming supply addition is expected to be centered in smaller cities such as Pune, Chennai, Hyderabad and Kolkata over 2014, with approximately 1011 million sq. ft. of organized retail supply lined up across leading cities..

According to research estimates, India will require an annual supply of about 20 million sq. ft. of organized retail space in order to sustain growth in the sector. This will necessitate a concerted effort from developers to construct successful shopping centers to global standards. However, domestic developers are still in the middle of a steep learning curve with respect to undertaking shopping center development. Many developers view shopping centers simply as another asset class, no different from building offices or housing units. In fact, shopping centers have an organic and perpetually changing quality that needs to be planned, developed, owned and managed as a single property..

It is in this context that the role of global #RetailChains, such as Tesco and Ikea will be crucial….These retailers possess extensive experience of running successful retail stores and properties in markets like the US, China, Europe, Middle East and South East Asia, with local partners to create successful shopping formats..

By utilizing this knowledge they will be able to help usher in a revolution in the development of organized retail real estate in India..

The “Go-to-Market Revolution”: Igniting “Growth with Marketing, Sales & Pricing” | by: Rich Hutchinson | BCG

Whether you ask a company’s CEO or its investors, they’ll likely identify revenue growth as the single biggest driver of #CorporateProfit, and #ShareHolderValue..!!

Over the long term, revenue growth powers 75 % of total #ShareholderReturn (TSR) for the upper-quartile value creators of the S&P 500. Even in the short term, growth accounts for nearly a third of TSR for these out-performers—double the boost from improving Margins or #Cashflow…A growing business also Empowers Employees, Attracts Top-talent, and helps Fund Expansion, Transformation, and more Growth…!!

Growth is an imperative. But it needs to be profitable growth—and that is not a given…!!

In the recent era of uncertainty and financial constraint, many companies have focused on efficiency. They have energetically cut costs, even in the “go-to-market” commercial functions crucial to driving revenue—sales, marketing, pricing, branding, and customer insight. These companies have achieved productivity gains, but they’ve reached the point of diminishing returns. We’re learning again that we can’t cut our way to growth..

exhibit

A small set of successful companies are taking a different path…They are transforming their commercial functions and capabilities to create an engine of short-term revenue growth and long-term profit. They are doing so with little risk…These near-term victories are “ Self-Funding” the creation of #StrategicCapabilities..

These leading companies are taking advantage of what The BCG, calls the “Go-to-Market Revolution”…!!

The Go-to-Market Revolution is a wave of technological and customer-driven change that is altering the level of sophistication with which companies deploy their commercial capabilities. This new era hasn’t altered the fundamentals required for go-to-market excellence, but it is creating new possibilities. It is taking what is now possible—the current state of the art in commercial functions—to the next level.

THREE Tides of Deep-rooted Change are driving the revolution…The first is the dramatic shift, in almost every industry, of what BCG calls customer pathways—the ways customers learn and communicate about products and services on the path toward a purchase. Second, technology and advanced analytics are providing new tools for sales and pricing teams, marketers, and researchers. Third and finally, companies now navigate a globalizing world that requires most of them to compete in new markets, often against unfamiliar rivals. (See “A Revolution Driven by Three Tides of Change,” below)..

A Revolution Driven by THREE Tides of Change :

The rich opportunities—and the perils of failing to act—emerge in the details of the three historic and concurrent tides of change driving the Go-to-Market Revolution..

1. Customer Pathways – The first tide is the rapid recent evolution of what BCG calls customer pathways. The ways consumers learn about and buy products have shifted dramatically and quickly, triggered by changes in technology, communications, and media..

2. Advanced Data and Analytics - The second driver of change could be called the go-to-market arsenal…It is the rapid and transformative evolution of “smart” data, advanced analytics and modeling, and other tools capable of increasingly sophisticated approaches in segmenting and analyzing information and reaching customers…The data revolution has transformed business sectors, from retail to financial services. For example, one vehicle company in India was able to map more than 95 percent of all its potential customers in the country—who bought what and where—in less than three months..

3. Global and Emerging Markets - The final driver of the “Go-to-Market Revolution is Globalization”, which creates two fundamental commercial challenges..First, “Globalization” has changed the competitive landscape in every market…The rise of globalization has opened labor markets and expanded offshore production, resulting in lower product costs in developed countries even as it destabilized brands and prices. Globalization is also ushering foreign competitors to the doorstep of domestic businesses. It is shortening product cycles and speeding shifts in consumer tastes. Go-to-market strategies need to adapt to these dynamic market conditions..

Second, ” Globalization in Emerging Economies” has been accompanied by rapidly expanding wealth. Consequently, emerging markets represent a huge source of growth…The challenge is this: most companies have commercial capabilities in emerging economies that are less sophisticated than those in established markets. Accurate data can be scarce, rendering marketing ROI calculations difficult. Distribution channels are a mix of modern options—such as mobile—and Old World…And the recipe for commercial success differs significantly by country… Winning in India and China may require fundamentally divergent approaches…To succeed, companies must create emerging-market commercial capabilities that are as sophisticated and promising as the growth opportunity…!!

A Self-Funding Go-to-Market Transformation :

A go-to-market transformation aggressively retools a company’s commercial functions—sales, marketing, pricing, branding, and customer insight—to exploit the new possibilities while navigating a fast-moving landscape. It adapts processes to changing customer pathways and needs, prepares the company to face new global markets and competitors, and arms its go-to-market teams with the latest and most effective technology…

Go-to-market transformation is a particularly potent lever for growth because it exploits tactical, short-term victories to fund broader commercial transformation over the medium term…For example, one company started with a sales force effectiveness program that drove more than $20 million in near-term value—an early success that energized the organization and created a financial foundation for a broader go-to-market transformation. From such beginnings, the ambitious company funded a larger set of programs, which in turn produced a step-change in both commercial capabilities and value delivery..

This transformational approach contrasts with conventional attempts to adapt through continuous improvement—a recipe for simply keeping pace with market growth. Our view is that, for most companies, the current scope of change in the commercial landscape is too disruptive for incremental change to be effective. Maximizing value requires an aggressive and dedicated response..

Commercial transformation has a confirmed record of success in generating growth for a broad range of companies worldwide. They include a global manufacturer of mobile handsets, a European gas and energy utility, a U.S.-based retail bank, retailers, postal operators, and media companies…

The resulting revenue benefits are powerful in today’s era of difficult growth, when even modest revenue growth can create substantial shareholder value. Mature companies that increased their #Topline, by just 2 percentage points or more delivered shareholder returns 40 percent higher than the market average…!!

Growth Zealot or Go-to-Market Laggard ? :

Your company can ignore the potential benefits of the Go-to-Market Revolution, but it can’t avoid the perils of failing to take part. The gap between capability leaders and laggards is growing…If you are prepared to be a zealot for growth, here is a sample sequence of actions and best practices to consider…

  • Start with vision and ambition. Does your company currently have the vision to transform your go-to-market capabilities? Do you have the ambition to increase your top line 10 or 20 percent beyond current projections in the next few years? A necessary First-step is helping your #LeadershipTeam, understand the opportunities inherent in the #Go-to-Market, Revolution..
  • Undertake a quick initial diagnostic step. Map how your customers’ purchase pathways have changed. Assess your commercial capabilities: marketing, pricing, sales, branding, and insight…Determine where you stand compared with best-in-class competitors and identify which commercial functions offer the greatest near-term opportunity : 
  • Tailor a series of programs to build capabilities and improve performance simultaneously. For example, start with a high-impact pricing initiative. Some leading companies we know have begun with a pricing program that added tens of millions of dollars to the bottom line. Simultaneously, the programs have funded development of new pricing tools and capabilities, such as sophisticated discounting, mobile technologies, and advanced analytics.
  • With initial success in place, expand your efforts rapidly. For example, launch a program that boosts marketing effectiveness—such as a brand advocacy campaign. Then launch another—such as a sales-activation initiative—to equip your sales force with a technical arsenal of twenty-first-century tools.
  • Make no mistake, you may need several waves of activity to meet your objectives in each commercial discipline. Indeed, achieving your overall profit and strategy goals will take years, not months. If it’s done right, however, the journey will be self-funded. What is more, every growth gain and each advance in capabilities can create a reinforcing cycle of improvement for the entire enterprise.
  • Crucial to Success in this Endeavor is capable “#ExecutiveLeadership”. Company leaders must be committed to guiding and supporting the transformation across all three tides of change that drive the Go-to-Market Revolution: the new and uncharted pathways your customers are taking to discover and purchase your products; the evolution of data, advanced technologies, and analytics that can re-arm your commercial teams; and the rise of emerging markets, which brings new growth and also new global competitors..

These are real challenges…For the bold, though, they present powerful paths to competitive advantage…The growth zealot must be a Leader—able to inspire Executives, Managers, and Employees ; capable of transforming the whole by reinventing its parts; and committed to forging a new commercial future for the enterprise..!!

It’s a “New Brand World”: “14 Things You Need to Know” About “Marketing-Communications Today”| by: Linda Kearns | MarketingProfs

I worked in marketing for 20+ years for a Fortune 100 company—in various roles, including #BrandManagement, Global-Communications, #MarketingResearch, and #Communications—for some of the best-known brands…!!

In a word, I’ve had lots of experience with some of the Best #CreativeMinds and Agencies in the world while working at a large corporation…Yet, in the past three years, as a Marketing Consultant for a very small boutique agency in New York, I have learned more about what it takes to operate successfully and create value in today’s “new brand world”..

1. Marketing Materials don’t have to Cost a Lot :

Yes, you can create a TV/video commercial, and a pretty damn good one, for under $50,000. Basically that leaves $300,000-$400,000 or more to get exposure for your message..

With New Technology, Hungry Talent, and people looking to “make their mark” in the Entertainment Business, the Execution of a spot can be done very- affordably…If you know your Brand and it is being Managed with the Right-Message to the Right People, putting it on video does not have to be expensive; and it can still be fun, fresh, educational—and get noticed…You can get Logos and Graphics designed by Talented up-and-comers ; you can get Celebrity Endorsements for little OR no dollars…!!

If the #BrandFit, is Authentic, the message is on target, and the ultimate program is win-win for those involved, you can often do a lot with little up-front investment…

2. Pay what something is Worth, not what it Costs :

Prices are always negotiable. In general, you can get the product done or the media needed for a price that is in line with the value it creates. Recently, we negotiated 40% off the original quote for the media costs of a print ad in a major consumer publication with no sacrifice in placement. If you don’t ask, you won’t get…

3. Work with People who offer “Value” :

The work day is long. With Internet, email, and mobile devices, ideas come at all times of the day and night. There is little divide between work life and home life. Work is life and life is work, and it all fits together. Just make sure your intrusions are giving you value, interesting insights, and offering return on your time..

4. Work for People you Trust & Respect—and Who Trust & Respect You: 

That is the most important thing—and, together, your positive energy will help make things happen..

5. PR has always been Easy to Get…as long as you have News, but Today it is even Easier, Quicker & Less-Expensive:

With one click, the world can learn about your message, as long as it is newsworthy and creates interest. Social networking, blogging, and viral pick-up can work magic. There is often no need to send a formal release. But just remember: one click and the world will know your message..

6. If your “Product / Service has Style”, the Stylish will “Rave & Share” :

I know many people who can spot something that has the “it” factor: They think it’s cool, great, stylish… and that it will be a must-have. If it has style, Fashionista, Refinery29, People StyleWatch, Glamour.com, Elle.com, the Cut, and many, many bloggers and fashion influencers will write about it, covet it, pin it… because they know it “has it” and they love it. The Cambridge Satchel in its hey-day was a great example..

7. Do something you are “Passionate About” :

If you’re doing something you love, you will be more likely to have the energy to make something happen. Energy and enthusiasm in communications are contagious. If you are passionate about your brand, others will want to be, too..

8. Work with a Team that has Diverse Skills, various Points of View, and Different Backgrounds :

Together, they can form a holistic perspective and bring new and exciting ideas to the table. Again, nothing new… but I have learned just how well and successfully a small team can operate. Our agency’s strength is built on the strength of individuals, but it succeeds only because of the strength created as a result of how we work together as a team. Winning teams collaborate, build, and support one another. Doing so seems easier in smaller agencies because of less politics, similar goals, and faster response time…

9. It’s not what you know, “it’s who you know” :

That has always been the case. But this is even truer in our new world of communications. The difference today is that it is relatively easy to get to know new people. You can find someone’s contact details online or by phone. Getting a celebrity to cast… you can probably get his or her cell phone number. Finding a CMO’s email… a breeze. Lists of bloggers, websites, etc. are there for the picking. No need to buy lists; go online and search…Then tell them what you know…

10. Marketing Research is No Longer a Formal Science—”It’s a Way of Life” :

There is research at your fingertips. Use it. Consumers want to be engaged. In fact, they are probably already talking about your product and your competition. Just take a look. Get alerts. Do searches. Check Twitter streams. Ask questions. Start a dialogue. Engage consumers on a fan page. A blog. Tumblr. Pinterest. Instagram. Facebook.

Don’t pay for research until you have done your research on information that’s already available, for free. Then pay for new research smartly to find out the why, to get into the back-story, and to do further analysis..

11. Global Marketing is relatively Easy Today : What used to take years now takes Days or Months or Less :

You can take a product from the UK or Brazil, and get PR for it in the US, and get retail placement for the product fairly quickly. All with the Internet… sharing pictures, prices, endorsements, and press pick up. The world is much smaller. Great products in one country are usually great, and accessible, in another. Increasingly, consumer needs and desires are similar globally. And top celebrities and editors have worldwide influence.

12. Keep your Brand Relevant :

It is one thing to create buzz, awareness, and news for your brand. But if you want to keep it vital, it has to remain exciting, newsworthy, and interesting to your audience. For Cambridge Satchel, this was done with new styles, celebrity usage, designer collaborations, and product placement. But you need to keep such activities up to maintain brand relevance.

13. Continuously Audit and Protect your Brand :

To the best extent you can. Your brand lives in a viral marketplace now. So much is out of the control of the brand managers and the communications managers. If you aren’t continuously on the lookout and don’t manage and monitor your brand… it will still be out there, living without your input and protection.

14. Success breeds Counterfeits, so Beware of cyber-fraud:

Social Media is an amazing tool that can shortcut the success of a brand by creating awareness and interest that can spread exponentially. The flip side is that social media has created a viral “Canal Street” that ignores copyright and trademark, and sets up fraudulent websites, Facebook accounts, and Twitter profiles using your brand and photos. Others will trade off your success. Buyer beware, and #Brand be aware…!!

SEBI fine-tunes “Draft-Regulations” for “Infrastructure Investment Trusts” in India | VCCircle

Leasing of land on which a Hospital or Hotel is located shall not be considered as an “ Infrastructure Project for the purposes of #InvITs”…!!

Securities market regulator #SEBI ( Securities and Exchange Board of India), has come out with more elaborate Draft Regulations for setting up “Infrastructure Investment Trusts (InvITs), which prescribe at least 80 per cent of the corpus to be invested in completed or income generating assets for InvITs issuing public units, strategic investors to bring at least 5 per cent of the amount, InvITs offer size to be at least Rs 250 crore (around $42 million) and that the proposed holding of an InvIT in the underlying assets shall be not less than Rs 500 crore ($83 million)..

This follows a previous consultation note circulated late last year and incorporates the provisions delineated in the Union Budget which provided tax pass-through status to such investment vehicles..SEBI has called for comments on its draft proposals by July 24…

Here are some key points:

InvITs are proposed to provide a suitable structure for financing/refinancing of infrastructure projects in the country..It shall invest in infrastructure projects, either directly or through SPV. In case of PPP projects, such investments shall only be through SPV…

InvITs which propose to invest at least 80 per cent of the value of the assets in the completed and revenue generating infrastructure assets, shall raise funds only through public issue of units and minimum subscription size and trading lot for such InvIT shall be Rs 5 lakh. Rest 20 per cent may be invested in under construction infrastructure projects (subject to maximum of 10 per cent) and other permissible investments. The minimum public float in such issues would be 25 per cent, which is at par with equity issues on the bourses.

These other permissible investments include listed or unlisted debt of companies or body corporate in infrastructure sector (provided that this shall not include any investment made in debt of the SPV); shares of companies listed on a recognised stock exchange in India which derives over 80 per cent of operating income from infrastructure sector; government securities besides money market instruments, liquid mutual funds or cash equivalents..

An InvIT which proposes to invest more than 10 per cent of the value of its assets in under construction infrastructure projects shall necessarily raise funds through private placement from Qualified Institutional Buyers and body corporate and the minimum investment and trading lot for such InvITs shall be of Rs 1 crore. Such InvITs shall mandatorily invest in at least one completed and revenue generating project and not less than one pre- commercial operation date (COD) project. In such InvITs there should be at least five QIBs and a maximum of 1,000 institutional investors holding units.

Listing shall be mandatory for both publicly offered and privately placed InvITs…!!

The InvIT shall refund money to the applicants if it collects subscription of amount less than 75 per cent of the issue size as specified in the final offer document or in the case of public issues less than 20 subscribers buy the units of the InvIT. SEBI has also said the maximum oversubscription amount which can be retained by the InvIT would be capped at 25 per cent over and above the target.,

An InvIT prior to making an offer of units, either through public issue or private placement, may have strategic investors such as banks, international multilateral financial institutions, foreign portfolio investors including sovereign wealth funds, etc., which together invest at least 5 per cent of the size of the InvIT or such amount  as may be specified by SEBI.

An InvIT shall be a trust with parties such as sponsor(s), investment manager, trustee and project manager(s). A trustee can either be a debenture trustee registered with SEBI and not an associate of the sponsor(s)/investment manager; or an associate of the sponsor/investment manager having not less than 50 per cent of its directors as independent and not related parties to the InvIT. However, a trustee of InvIT cannot be trustee to another InvIT or an Alternative Investment Fund engaged in infrastructure sector.

The proposed holding of an InvIT in the underlying assets shall be not less than Rs 500 crore and the offer size of the InvIT shall not be less then Rs 250 crore at the time of initial offer of units.

The aggregate consolidated borrowing of the InvIT and the underlying SPVs shall be capped at 49 per cent of the value of InvIT assets. However, this may exclude any debt infused by the InvIT in the underlying SPV. Further, for any borrowing exceeding 25 per cent of the value of InvIT assets, requirement of credit rating and unit holders approval has been made mandatory.

SEBI has said leasing of land or building on which a hospital or hotel is located shall not be considered as an infrastructure project for the purposes of InvITs but if revenues are generated from operation and management of a hospital or hotel, then the same shall be considered as infrastructure project under these regulations.

If the sponsor of the InvIT is a developer it needs to have at least two projects which have achieved financial closure…

It calls for the investment manager to have net worth of at least Rs 5 crore if it is a body corporate or a company or net tangible assets of value not less than Rs 5 crore in case the it is a Limited Liability Partnership..

It should have at least five years experience in #FundManagement/#AdvisoryServices/development in the #InfrastructureSector and have at least two employees with five years or more experience each, in fund management/advisory services/development in the infrastructure sector; at least one employee who has five years of experience in the relevant sub-sector(s) in which the InvIT has invested or proposes to invest; an office in India from where the operations pertaining to the InvIT is proposed to be conducted…!!

From “Demand-Generation” to “Revenue-Generation”: How to “Become a Revenue-Driven” Marketer |by: Glenn Gow |Marketing Profs

In this article, you’ll learn…

  • How leading marketers are turning their organizations into revenue engines
  • Best-practices for transitioning Marketing into a revenue-focused organization

The days of being grudgingly accepted as a necessary #CostCenter, are numbered for #Marketing…Today, the writing is on the wall: Either demonstrate how Marketing will contribute to the company’s top-line revenue growth… or be prepared to change careers…!!

#CMOs and VPs of Marketing need to step up and take responsibility for #RevenueProduction…That means coming to the table with a #RevenueMarketing Forecast and aligning tightly with #Sales, to ensure the revenue goal is met…

Some companies are even assigning Revenue Quotas to Marketing and compensating marketing executives on meeting those quotas…Your company might be next…!!

As a #Marketer, you can view this trend as a negative, or you can approach it as an opportunity to finally achieve credibility within your company, especially with the #ExecutiveSuite…Showing a return on investment is the entrée to a strategic place at the executive table…

The big question is How to make the transition from being a Demand Generation-focused Organization to becoming a Revenue-Generating Organization…??

There is no cookie-cutter solution, but there are proven best-practices being used by savvy marketers to successfully drive revenue-focused marketing (also see the infographic at the end of this article)…

FIVE Best-Practices for Becoming a Revenue Marketer :

1. Start at the Top to create a Revenue-generation #MarketingPlan – The first step in the revenue marketing process is to look at your company’s overall business plan, including the revenue goal. Your marketing plan should align with the business priorities and goals for your company as set out in the company plan.

You then determine the percentage of the overall revenue goal that marketing should contribute. Though the percentage will vary by industry, in our experience it’s not uncommon to see targets starting at 30% or even higher. Based on that target, you can set performance goals for the demand waterfall, including the number of visitors, leads, opportunities, and closed deals you need to make your revenue quota..

2. Get your measurements in place – Many marketing departments don’t know how to focus on revenue as a goal because they don’t understand how they can measure it. You must have the proper systems in place so that you’re able to track a lead from the moment it comes in all the way through the buying cycle, when that buyer purchases, renews, or cancels.

A connected view of the buyer lifecycle allows you to demonstrate marketing’s contribution to revenue..

The problem is that many marketers have disjointed systems or they lack the right marketing solutions altogether, which limits their ability to track performance across the buying cycle…A VentureBeat study found that only 20% of large companies use marketing automation today..#MarketingTechnology, will be imperative to connect the dots across the buyer’s journey and Measure Key-performance-indicators, that support Revenue Generation…!!

3. Speak the same language as Sales – Becoming a revenue-generating marketing organization means working much more closely with Sales than in the past. And to get their attention, you need to speak their language. When you talk about open rates, lead generation, and automated nurture campaigns, Sales hears “marketing-speak.” Don’t talk about leads. Talk about qualified opportunities and closed business..

As marketing organizations make the transition into revenue generation, the shift to speaking the same language will start happening organically. Planning, forecasting, pipeline, bookings, and revenue become the common ground for the two organizations to work together..

4. Maintain the Relationship with Prospects and Buyers – It’s no longer acceptable to hand off the lead or opportunity and walk way. Marketing has to take responsibility for working with Sales to find ways to help move the buying process along. When Marketing hands off the opportunity, it shouldn’t lose the relationship. It needs to maintain the connection throughout the buyer’s journey.

Once a lead is qualified and converted into an opportunity, Marketing should create pipeline acceleration programs to help Sales close deals…For instance, marketing could create an individualized program for opportunities that have been stuck for 30 days or more, to help move them forward..

5. Define Service-Level Agreements – Part of committing to a partnership is agreeing on how you’ll work together…#SLA (Service-level agreements), can help you better define your working relationship with Sales. For example, you might decide that Marketing will provide only leads that meet certain criteria as an opportunity, then once that opportunity is handed to sales, Sales must make contact within 48 hours, else the opportunity reverts to Inside Sales..

The point is to agree on when an opportunity will be handed off, how long Sales will hold it, and what happens when the required action does not occur. The agreement needs to be ratified at the most senior levels within Sales and Marketing to ensure buy-in and commitment from the top down…

It’s All About Revenue Now :

Nearly every marketing executive is feeling the pressure to show a financial return. But signing up for a revenue number should be viewed as a positive: It’s an opportunity to expand Marketing’s influence and justify a larger budget..

As you build your Revenue-Engine, you can scale your Success, Grow Marketing’s contribution to the #BottomLine, and make that Seat at the Executive-Table permanent…!!

 

“Indian Consumption Pie”: “Food to stay No.1″ item on Family-shopping List | by: Abheek Singhi | Livemint

“Food will remain the Largest Spend Category” even in 2020 with spending of Rs.40 trillion, followed very closely by “Housing & Consumer Durable” with spending of Rs.35 trillion..!!

Most Indians, even those with incomes of $3,000 (around Rs.1.8 lakh) per-annum OR Lower, consume basic products such as cooking oil, bathing soap, washing powder, and tea. But, as they get richer, they start to purchase durable goods, with the typical hierarchy being TV and cooking gas as the top focus..

Ten years ago, Rakesh Sahu, who runs a small restaurant on the outskirts of Lucknow, ate cheap rice, avoiding fruits because of the cost involved. Now, he buys branded refined oil, basmati rice, and eats all the fruits and vegetables he wants because he can afford the extra spending…

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“I don’t think twice before buying good food for my family today”, says Sahu, whose income has increased more than five times in the past 10 years from Rs.90,000 per year to Rs.5 lakh now…!!

He used to get clothes stitched for the family for special occasions earlier. These days, he buys ready-made garments —though he does not spend extra for brand names..

The amount Sahu spends on consumer goods and what he chooses to spend his money on fit into a pattern that has accompanied rising incomes in India. The aggregate consumer expenditure is likely to increase from Rs.45 trillion in 2010 to nearly Rs.150 trillion by 2020—an over-threefold jump in a decade..

Sahu, for instance, does care about brands in the durables space. His television set is an LG, which he bought after watching a programme on a neighbour’s LG. He has moved his son from a government school to the City Montessori School—an English-medium private school. “I want my son to have the best education possible”.

Where once he had no money for “Leisure or Entertainment” (discretionary spending), Sahu now takes his wife out for an occasional movie and even the spot of jewellery shopping…

We analysed consumer spending across different categories and how it is expected to change with rises in income levels and over time. Today, the No.1 item on the family shopping list is food, accounting for nearly one-third of the total consumer spending. Second on consumers’ spending list is housing and household appliances, closely followed by transport and communication..

Interestingly, the spending across different income segments is quite different and has changed with time…!!

To monitor this transition, we use a tool we call consumption curves. This helps us establish how consumers change their spending habits as they earn more. Different types of products have differently shaped curves—and this demonstrates that consumer demand for different products and categories changes at varying rates..

For items such as #Household goods, the consumption curve is an upward line, indicating a steady rise in spending as incomes rise. Other #ConsumerCategories, that rise steadily, if less steeply than Household Goods, are Transport and Communication, as well as #Education..

Expenditure on “Health”, another Major Category, only really starts to rise as people enter the upper-middle OR affluent classes, with only the tail-end of the Consumption curve bending upwards. By contrast, the #ConsumptionCurve, for Food..follows a gentler trajectory, and “actually flattens out as people get richer”… You can only spend so much and consume only so many calories…!!

Exhibit 1: shows the consumption curves for broad categories across different countries for the three different types of curves for Household-goods, #Health-care and Food. We find that the consumer off-take pattern changes with increase in income—even within the same broad category.

Exhibit 2: show the three patterns observed in India. The first type of increase is “inflection point”—observed in the mass #FMCG (fast moving consumer goods),categories such as Tooth-paste—which also have low-cost substitutes such as Tooth-powder..

In this situation, category consumption changes dramatically as the consumer enters the middle class and then remains largely flat…!!

The second pattern is “continuous growth”, which holds true for most durable goods and more premium FMCGs. Here, the consumption increases steadily with increases in income. The third pattern is “stable with income”, observed in highly penetrated FMCG categories such as biscuits and vanaspati..

In this case, the level of penetration is not significantly different across income segments…

Our research indicates that as people enter the #Middle-class, they switch their focus to Consumer-goods that enhance their quality of life Far-beyond subsistence..

Most Indians, even those with incomes of $3,000 (around Rs.1.8 lakh) per annum OR lower, consume basic products such as cooking oil, bathing soap, washing powder, and tea. But, as they get richer, they start to purchase durable goods, with the typical hierarchy being TV and cooking gas as the top focus..

Beyond this, they prioritize goods and services relating to the family, especially children…

We have calculated that 37% of the middle class household’s expenditure is devoted to children, mainly their food and education…One young couple we met in Mumbai, earning about Rs.15,000 per month and living in a one-room chawl, spends nearly Rs.1,000 per month on the school fees for their only daughter. “We want the very best we can afford for her,” they explained…!!

We have estimated how the shape of consumption is likely to change for India in the future, based on the consumption curves from 2010 to 2020…Food will remain the largest spend category even in 2020 with spending of Rs.40 trillion, followed very closely by housing and consumer durable with spending of Rs.35 trillion.

The fastest growing categories are related to “Education, Entertainment & Leisure”, increasing more than FOUR Times in the 10-year period…!!

It seems clear that Both the Size & Shape of Consumption is going to undergo dramatic changes going forward…!!