Where a Kirana would score significantly over a big Bazaar

There have been scores of studies done on how the likes of Big Bazaar would be a threat to local kirana shops.
My experience with one Big Bazaar outlet seems to show that my locality’s Kirana shops are better than this one Big Bazaar outlet. Here is why –
1) In reality, there are no discounts on the quality branded products. E.g. Surf Excel would cost the same in Big Bazaar as it would in the Kirana.
2) Discounts are only on the internal Big Bazaar products (e.g. Big Bazaar ghee is INR 1 cheaper than Amul ghee) – which are anyway not great on quality.
3) Or on products where prices are difficult to determine e.g. if you buy some local brand of facial tissues, you do not know if it is worth INR 30 or INR 20 per packet. If you buy it from the roadside boys selling them at a red-light, you can bargain for the same at INR 10 a packet (while the printed price will continue to say INR 30).
4) Quality of Big Bazaar packaged food products is particularly bad. For that INR 1 or INR 2 per kg of savings, the quality compromise is not worth it. Packaged pulses and rice frequently have loads of insects in them. I get better quality in my local Kirana store at more or less the same price.
4) There are products that a local Kirana will have which a Big Bazaar does not because there is not ‘adequate’ demand in Big Bazaar for them to make the effort to procure such products. E.g You will never find Til oil in this Ambi Mall outlet.
5) Contrary to popular belief, even local Kiranas give discounts. If you shop for INR 1,000 or more, why wouldn’t he?
6) The local Kirana does home delivery on as little as an INR 100 bill.

Among other things that have changed, making shopping at Big Bazaar, Ambi Mall not worthwhile –
7) When this Big Bazaar outlet was still in the ‘newly opened’ stage, each time you shopped for INR 1,000, INR 2,000 and so on, there was a free gift for each amount of shopping. E.g. for INR 1,000 worth of shopping one would get 1kg sugar and 1kg of powdered wheat free. With INR 2,000 of shopping, one would get a mixer and so on. This practice has been stopped once the mall gained some popularity.
8) Moreover, since the rest of the mall was under construction, parking was easy. One could park right next to Big Bazaar and there were no security queues or billing queues.
9) And finally, any savings that one makes on purchases from Big Bazaar get more than offset with fuel bill (INR 200), the Delhi-gurgaon toll (INR 17) and the high parking charges (INR 30).

What is our education worth?

For those of us who do an MBA; believe in self-interest, the end game of MBA is to get a better job. 'Better' is merely a euphemism for 'more money/pot loads of money'. Lets face it, why does (or did) a job in Morgan Stanley command a position of day '0' rather than a marketing job with P&G?

I am not trying to argue how as MBA students we rate companies internally so that they are accordingly assigned their day-status. But since money is the motivation for MBA and choice of job, why don't the same type of people become clerks in Customs or Municipalities? I have heard of multiple stories of MCD employees earning anything between 1-2 lacs a week. And if one can crack the CAT to get into an IIM, one can easily take the MCD/customs exam and become a employee of the Indian govt. and earn significantly higher than a better educated MBA. And the work hours would be more comfortable. Not to mention that one would not pay any tax on the additional income.

Wish a Career Launcher or IMS would start programs oriented towards 'getting into MCD/customs' and then have course-work for 'how to make more money than your predecessors in your MCD/customs job'.

Of course, a lot of people would not justify this on 'moral' or 'ethical' grounds'. We are more comfortable when we do similar jobs in a corporate that has justified the same thing e.g. if a Lehman sells junk to a clients, it s justified. After all the client is willing to pay a price for the shit Lehman sells. (I think enough has been said on Lehman so lets skip a Lehman example). Take HLL instead that sells Sunsilk. Now if HLL were to claim that the shampoo makes your hair silky/kills dandruff in 15 days/doubles the hair density on your head.............., never mind the claims are never justified. Never mind that the shampoo may work only on certain hair types and under certain controlled conditions, but no one will sue HLL for making false claims. Their sales/marketing guys will continue to believe in peddling these false-claims products to innocent consumers but will not once feel the the moral dilemma that could come (initially) in an MCD/customs job.

Is ICICI bank the next ML or Lehman?

As the Indian markets crashed (for yet another day, yawn) there was not a sector untouched. Despite CRR reduction by RBI during wee hours of morning, banking stocks were hard hit – ICICI being among the worst hit down 20% nearly EOD.

Why I write about ICICI bank is because a friend showed me a copy of a report he had received today. The 1 page report was written by one of the analysts of a large European Bank. If this report was meant to ‘assuage’ investors, it ended up doing quite the opposite given what was published.

It wrote thus, “ One of the authors of this report who visited a very large branch of ICICI Bank close to our office and interacted with the staff came back reassured. We do recognize that this is not an elaborate conclusive survey. But the fact that it is a large branch in a commercial area and the visit was done today when the market was rife with concerns, things appear to be normal on the ground.”

The report is quite interesting and goes on to comment that the ATM machines appeared to have a regular clientele (i.e. the authors did not see a ‘run’ on the bank happening ‘yet’!). The exact comments were, “ The ATMs were working and cash was being dispensed (sounds pedestrian, but there were media reports of some ATMs malfunctioning or debit cards not working, which the
management clarified was due to a switching problem).”

What I found shocking about the report was the following:
1) The analysts have declared the bank ‘functioning normal’ based on 1 visit to 1 branch!
2) The analysis for declaring normalcy appeared quite a charade. Surely, an expert analyst is expected to look for more than just mere branch visits to determine if the bank is running soundly (am sure talking to the treasury guys in various banks who deal with ICICI and talking to the bank’s significant counter parties would have given hint enough about the liquidity condition of the bank).

On a different note, today’s Mint carried a front-page article on how one Indian bank has borrowed at an unbelievable rate of 20% some INR 1,000 cr. This rate is apparently the highest rate charged to a bank for a 45-day loan. The report hints that this was in order to tide over ALM mismatch due to its overseas operations. That left me guessing, which Indian bank would need to tide over its overseas operations? Is this what prompted the above mentioned equity analyst to hurriedly rush to a nearby branch and prepare a soothing report?

Be the CEO of your life

by Vivek Gupta & Sandeep Amar

Price - NA, Publisher- reviewers online version

The book provides a refreshing change in scene after the multiple fiction authors that IIMs seem to be churning.
A highly relevant book in today’s world, the authors looks at a common problem faced by all in this competitive world – that of keeping up with the Joneses and peer pressures.
Recently, I came across a blog that spumed venom about how the guy was very happy to see that all his high paying I-banker friends were jobless while he, an average salaried guy who did not have the luck to get through an I-bank, was feeling secure in his current job. The book has aptly captured these very emotions as the authors write, “ It is strange but you must know someone, who was doing very well, and in your hearts you envied him/her. And when the same person goes down in life, you are happy and tell the stories of his debacle with great passion, finally passing on the moral of the story, “The people who grow fast, fall faster”.”
What is interesting about the book is that it does not ponder over the problem across several pages but is rather succinct in its presentation of the typical issues facing the young bread winners. Instead, the book focuses on how one can get over these common problems that we create in our own minds – by developing greater control over one-self. The book aptly suggests that one should be first look at one’s long-term aspirations before deciding on short-term goals that would eventually lead to that final destination. In reality, usually most of us look at short-term material benefits first and then try to force-fit that into our supposed macro picture.
Be it pressure to perform at a young age or pressure to catch up with –thy neighbour, the authors correctly suggest (most relevant for the call-center generation) - (1) Make your monthly budget based on your expected permanent income throughout your life (2) Try to spend 70% of that income on the things you enjoy doing. Go for that world tour or buy the rarest of music CD’s (3) Save close to 30% of your monthly income. This would suffice your future needs and the entire eventuality (4) Don’t spend under peer pressure; Spend your money intelligently on things which give you real utility rather than just one-upmanship in the society.
Written in a simplistic language, the book is a must read especially for aspiring MBAs who just want to do an MBA because either it’s the ‘in-thing’ to do or because newspapers play up the salaries of MBA and hence make it a ‘must-do’.

Condom condom condom condom………condom

Have you seen the ad(s) by NACO (the national AIDS control organization) where a puny man is playing kabaddi and repeats ‘condom’ instead of chanting ‘kabaddi’ when he goes to the opponents court to outdo them? If you missed this older ad then the more recent one that plays on TV is where the same puny man has a condom ring tone on his new mobile phone, which his rather embarrassed uncle happens to be holding when the phone rings.

These ads are expected to promote the usage of condom among Indians. A very noble cause indeed given that (a) condoms help prevent AIDS (b) control our burgeoning population.
But I really wonder if the creators of the ad/people in NACO/ govt. representatives who pass resolutions for using precious taxpayers money (my money!) to fund NACO, among others have used any of these Indian condoms. (After all, why preach what you do not practice).

Take any well-known Indian condom brand for instance. A Nirodh or a Kohinoor for example. Forget prevention AIDS/population control. The plastic cylindrical creation will not allow you to have sex in the first place because whoever produces these condoms, clearly believes that ‘more is better’ in terms of the thickness of the condoms. I think somewhere in the specs someone mistook a ‘mm’ to be ‘cm’ and manufactured them accordingly.

One may ask, so there are those ultra-thin, pleasure-enhancing condoms. Try using an ultra-thin Nirodh/Kohinoor and I bet both purposes (a) and (b) outlined above will get defeated in no time since these condoms ‘tear’ easily.

It is high time the government awakens to the fact that producing a good quality product comes first, product promotion later. A good step in this direction would be to make the ministers/government officials try these very condoms and take down their observations before the product is passed on to ‘aam junta’ (common man).

Markets on 01Oct08

Markets are expected to open positive today in view of global cues. Key resistance levels would be seen at 4030 and 4100 levels. Best strategy would be to stick to intraday trades and avoid bottom fishing in case the market falls.