The Hindu Business Line : The business of business education

Quality business education at non-American prices is India’s advantage. (Above) A file photo of candidates attending the Common Admission Test for premier B-schools.

What do you believe is more important and cutting edge? Branding or distribution? The obvious answer seems to be branding.

- Rana Tripathi, New Delhi

Rana-ji, there is nothing obvious about it. What looks obvious is a wee bit deceptive.

I do believe aspects of running a business such as product quality, new product development and brand-building skills can be bought. At times these can be outsourced as well. What is difficult to manage and buy and monitor day in and day out is a good distribution system.

Let’s take the example of the two big players in the FMCG space today. One an existent major player: Hindustan Unilever Ltd. And another a wannabe of serious intent: ITC - Foods.

In relation to HUL, ITC is a laggard in distribution strengths. But let’s credit the company for having set up what it has in such a short time of being in existence as a biscuit player for a start.

Distribution essentially requires three parameters to be governed carefully. One is the width of distribution. How far and wide you reach. Are you able to cover the 16.2 million retail outlets in this country altogether? Remember, India is a nation of shop-keepers. A nation of Mom-and-Pop stores. The density of retail outlet to population is the deepest here in the world. The distribution task is, therefore, tougher here than in the US, where a marketer just has to cobble together a total of 23 chain stores to reach out to 92 per cent of the country’s masses.

The second parameter of significance is the depth of distribution. It is not enough to be present across outlets. It is important to be present in each of the outlets with a depth of stocking of your product as per need. Every outlet’s need is different. This needs to be assessed and catered to carefully without a stock out situation.

The third parameter to monitor is consistency of distribution. The need to touch every outlet with the distribution call every week is paramount today. Retailers do not like to hold inventory of stock that lasts more than a week. Distribution companies must therefore be able to touch every outlet every week. Companies such as HUL are now touching a whole host of outlets twice a week, even! That is efficiency!

HUL has over the decades mastered efficiency in this realm. ITC needs to clone that process. ITC needs to tackle the issues of width of distribution, optimal depth across all outlets and indeed the consistency of distribution it will offer. Give it time. It will.

God is indeed in the details of good distribution. This is a process that demands a sheer labour of love. It cannot be bought overnight and put into place. Distribution is a mindset. A mindset that requires a focus on labour and continued excellence. Distribution is a culture.

You can have a great product, very good R&D, excellent advertising and branding inputs, but if you don’t have a good enough distribution system, you can mess up your brand on offer.

Distribution is therefore the cutting-edge of it all.

What is retail branding? How is it different form what we already know of retail and branding?

- J. S. Saroj, Mimbai

Saroj, retail branding is a different subject altogether. I have been evangelising this for the past three years.

Retail is one competence. Branding is another. Retail is a competence that the modern format retailer is good at. Branding as we know it in India is best known by the FMCG and durable marketer in this country. Retail branding is a cusp subject. Something that is not yet mastered by the retailer. Further still, the traditional brand guy in the FMCG and durable space finds increasingly that what he has learnt in traditional space cannot be implemented here.

Retail branding is therefore a new science altogether. Something we need to invest in to master and use to advantage. Markets of the US, Germany and indeed Japan are rich in this experience. We need to learn retail branding shedding our pomposity as brand people and retail people alike. This is new space. Master it differently. Globally, there are bench-marked practices we can learn from. Ikea is a classic example. So is Harrod’s. And a host of others for sure.

There seems to be a lot of action in the space of business management education in recent years. Where is the opportunity and how is it panning out?

- B. L. Khera, New Delhi

Mr Khera, I do see two big realms of opportunity ahead. One is in the space of business education and another in assisted medicare and medical services. Both these terrains are demand-terrains of the present and the future. At the macro level, I see both these opportunities that can earn the rupee and the dollar, the euro and whatever equally. There is an inherent internal demand for business education in the country, just as there is an opportunity to leverage on the possibility of education-tourism, as I would call it. A whole host of prospective students who look forward to quality business education at non-Amercian prices can actually gravitate to India. Business education is a high-value education enterprise. What’s more, this business is a complete experiential business that earns its custom through the word of mouth of satisfied and well-placed individuals in corporate and business enterprises.

India already witnesses a layered management and business education industry. Right at the top sit the A-grade management institutes such as the IIMs and the ISB. Just below this is a layer of the B-grade management institutes. And just under it is a layer of C-grade institutes. Each of these have a role to play. Each of these segments has possibilities.

As of now we have a total of 2,816 management institutes of all these kinds. I see this going into overdrive with newer and newer institutions emerging. I also see new verticals emerging which are specialised and niche. Schools of retail management, telecom management, petro management et al!

I do also believe there is a huge opportunity for rural management education. Out here we need enterprises that will offer rural students the best of management inputs to build business enterprises of significance in the rural environments that dominate Indian space today. Remember, three-fourths of our people live in the villages of this country.

(Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc. Email:askharishbijoor@ thehindu.co.in)

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