Archive for March 11th, 2016

A fable worth bearing in mind in a presidential election year

March 11, 2016

Applies to all elections not just US Presidential elections:

THE FROGS, grieved at having no established Ruler, sent ambassadors to Jupiter entreating for a King. Perceiving their simplicity, he cast down a huge log into the lake.

The Frogs were terrified at the splash occasioned by its fall and hid themselves in the depths of the pool. But as soon as they realized that the huge log was motionless, they swam again to the top of the water, dismissed their fears, climbed up, and began squatting on it in contempt.

After some time they began to think themselves ill-treated in the appointment of so inert a Ruler, and sent a second deputation to Jupiter to pray that he would set over them another sovereign. He then gave them an Eel to govern them. When the Frogs discovered his easy good nature, they sent yet a third time to Jupiter to beg him to choose for them still another King.

Jupiter, displeased with all their complaints, sent a Heron, who preyed upon the Frogs day by day till there were none left to croak upon the lake.

– Aesop, in the 1867 translation of George Fyler Townsend

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Which brand will steal the show at Ujjain’s Maha Kumbh Mela?

March 11, 2016

Harish Bhat of BL has a nice article on the topic.

He says upcoming Kumbh Mela is a paradise for marketers and their brands. Which brand wins the show is there to see. So much so instead of saying devotees immersing in River Kshipra, it is consumers immersing 🙂

Millions of people will come to the Kumbh Mela to immerse themselves in the River Kshipra, but marketers should visit Ujjain for a different sort of immersion – in the world of Indian consumers.

For marketers who are serious about India, who are curious about people, and who wish to develop insights about consumers from the heartland of the country, the Ujjain Mela is the place to be. Here, you can roam around freely, observing people, speaking to them at leisure, eating with them, seeing how they converse and shop, taking in the apparel or jewellery that they wear. You can choose to interact with men or women from Maharashtra, or Uttar Pradesh, or Rajasthan, or Andhra Pradesh, or indeed with all of them.

Most Indian marketers tend to live in large cities such as Mumbai and Bangalore, so a visit to the Mela also offers you an opportunity to step out of these urban ivory towers and take a good look at small-town India in its best finery. In addition, a visit to a town such as Ujjain, which has such a central place in the Shaivite traditions of Hinduism, offers wonderful perspectives on Indian society and culture. I think every marketer who visits the Ujjain Kumbh Mela with a curious mind will go back to his or her workplace with at least a couple of unique and actionable consumer insights.

Earlier, all these melas were projected as an exercise in crisis management, urban economics, logistics and so on. Now a marketing one too.

Wondering what the Gods are making of all this? Not much perhaps as mela basically means a fair/local market where people come and meet (mel in hindi) and buy/sell stuff. So, perhaps nothing wrong with all these new modern management techniques to study Indian consumers. It should get thumbs up from the Gods too..

Using social media to protest against privatisation..

March 11, 2016

IDBI Bank staff has taken onto social media big time to protest against privatisation of the bank. First they protested on their intranet blog which was blocked. Now they have taken onto twitter and planning a mass protest day:

IDBI Bank employees have decided to put to best use the online and offline platforms to sustain their campaign against the Centre’s move to dilute stake in the bank.

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With decline in world trade, is it end of globalisation?

March 11, 2016

Daniel Gros has an article asking this question.  He says world trade has declined as commodity prices have crashed:

China has just announced that last year, for the first time since it began opening up its economy to the world at the end of the 1970s, exports declined on an annual basis. And that is not all; in value terms, global trade declined in 2015. The obvious question is why.

While global trade also fell in 2009, the explanation was obvious: The world was experiencing a sharp contraction in GDP at the time. Last year, however, the world economy grew by a respectable 3%. Moreover, trade barriers have not risen significantly anywhere, and transport costs are falling, owing to the sharp decline in oil prices.

Tellingly, the so-called Baltic Dry Index, which measures the cost of chartering the large ships that carry most long-distance trade, has fallen to an all-time low. This indicates that markets do not expect a recovery, meaning that the data from 2015 could herald a new age of slowing trade. The obvious conclusion is that the once-irresistible forces of globalization are losing steam.

The situation in China is telling. In recent decades, as it became the world’s leading trading economy, China transformed the global trading system. Now the value of both imports and exports have fallen, though the former have declined more, owing to the collapse of global commodity prices.

In fact, commodity prices are the key to understanding trade trends over the last few decades. When they were high, they drove increased trade – to the point that the share of trade to GDP rose – fueling hype about the inevitable progress of globalization. But in 2012, commodity prices began to fall, soon bringing trade down with them.

However trade and globalisation not the same thing. Though they are connected. With trade expected to remain subdued the hype over globalisation to fall as well:

This is not to say that globalization and trade are one and the same. Globalization entails many other features, including the surge in cross-border financial transactions and tourism, data exchange, and other economic activities. In fact, these other interconnections have fed back into trade, as they have enabled the emergence of global value chains, whereby different steps of the production process occur in different countries.

But this phenomenon has been overestimated. According to the World Trade Organization, the foreign value-added contained in exports is only around 15% for most large economies, such as the United States and the European Union. In other words, global value chains have little impact on these larger trading economies.

China is the only exception. Its position as an assembly platform for the world’s products meant that it imported most of the highest value-added elements of those goods. But as the country’s industrial structure matures – Chinese-assembled iPhones now contain more Chinese-made parts than they did just a few years ago – it will move closer to the US and the EU in value-added terms, not the other way around. This is yet another reason why trade might diminish in importance.

When something is widely hyped, there is nearly always a real reason for it. Most economies are more open today than they were a generation ago. But it is now becoming clear that the perception that globalization is some overwhelming and inexorable force largely reflected the side effects of the last decade’s commodity boom. If prices remain low, as seems likely, the next decade might well see global trade stagnate, as the trade pattern “rebalances” from emerging economies to the established industrial powers.

Hmm..


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