Posted on 29-01-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

When I was a sweeper in a Paris lithography print shop from 1974 to 1976, I sometimes had to rub two very heavy stone slabs for hours to create the texture for lithography. One day, renowned French painter Lucien Fontanarosa who’d come there for his lithography and knew me as a painter, was very sympathetic seeing me, a skinny artist engaged in hard labour. He raised my spirits saying the duplication I was sweating over was very noble work.

Route to industrial duplication=QCW (quality customers want): Fontanarosa explained how duplication first came from German Johannes Gutenberg’s invention of the printing press around 1440. Gutenberg made it possible to precisely duplicate written words in large quantities for people to communicate far and wide. Then in 1796 Bavarian author Alois Senefelder invented a method for duplicating paintings through lithography copy by using stones or metal plates. French inventor Joseph Nicéphore Niépce produced the first permanent photographic image in 1826. Then American Thomas Alva Edison invented sound reproduction in the phonograph, 1877. The departure of duplication for industrial production improvement was introduced by American mechanical engineer Frederick Winslow Taylor. His famous Taylor System in the assembly line at Ford Motors changed industrial efficiency for all time.

From here to the vinyl disc to Xerox, cassettes, Microsoft to the iPod, a huge industry has been created for large scale reproduction. In the backdrop of such inventions, the biggest headache Western companies had faced was introducing an uncontestable quality parameter. They had to ensure QCW across geographies would always be met. Actually this mass industrial duplication ended up as globalization. Reproductive power was transferred from the West to Southeast Asia, first Japan, then Korea and Malaysia, and now China is the big manufacturing hub churning out high quality duplication. The quality of the duplicated product is often not visible to customers during purchase, but without QCW, a brand will never gain global acceptance. So it’s clear the inventive Western reproductive model simultaneously addresses quality through product durability in its lifecycle. Southeast Asia is excelling in quality reproduction. Will India always remain the user only for lack of quality duplication ability?

In today’s digital world, the QCW concept for industrial duplication has totally changed. From providing durability and functionality in the mechanical era, the quality customers want today is better user interface through innovations such as iPod has provided. Also, digital duplication is easy and cheap now, and in fact can make a bad sound copy into a good one by erasing noise, or cleaning up the background of a picture. However, as industry is still largely physical manufacturing oriented, industrial duplication will continue to need the QCW oxygen.

Mathematical quality system is stale, not QCW: Indian companies often make quality processes boringly routine, akin to pure mathematics which merely gives a count, and never did deliver anything by itself. Mathematics when driven with physics, chemistry and economics has changed the world through human intelligence and inventions. QCW is that vast chemistry-physics-economics combine of the customer’s spending logic and pattern. Traversing its multiple avenues can change a company’s perspection, like Samsung’s meteoric rise within 20 years to acquire top-of-mind in consumer electronics across the world by delivering the QCW value. Upto 1990, people only knew of Grundig, Philips, Sony; now even Sony expects to sell out 50% of its stake in an LCD joint-venture to Samsung.

Leaders unnecessarily force an inside-out approach: Often your company’s quality system may compel you to follow an “inside-out” approach which you may not like to disturb as it puts you in a comfort zone. At the same time you’ll be asked to create differentiation in your product or service delivery for better market share, growth and profit. The root cause of why many inventor companies like Polaroid or Kodak in the photography print domain have become obsolete is sedimentation in their QCW delivery. Today’s digital technology world is bringing newness every fortnight. Only an “outside-in” approach cannot measure up to market reality commanded by QCW. The QCW quotient is changing very rapidly too as customers are experiencing products and services from diverse trend setting industries such as mobile phones, cameras among others.

Be sensitive to the unseen side. QCW also means addressing areas that are not visible or apparent. In different engineering workshops I’ve taken an expensive brassiere to demonstrate how women are ready to flaunt money on the quality value to get tremendous inner comfort and beauty in a garment that’s not exposed to the public. Why do women spend on non-visible fashion? This just proves that a product’s hidden glamour can evoke extreme hedonistic desire. The inner finish of products often lacks QCW. If you were to lift the smart seat of a stylish car, and it doesn’t look as terrific on the inside, wouldn’t you be disappointed? These industrial duplication areas require huge improvement in India. As do mass service areas like toilets with imported German sanitary-ware in our new malls and airports that you cannot enter because of the stink from poor maintenance. So service that has to be reproduce-able also has a front and reverse side, and both merit to have QCW.

The unseen part of the product or service creates customer trust, “I believe in it,” bringing in repeat purchase. "It works well for me" is the customer’s functional usage advantage while “It looks good” is the emotive pull. From stone lithography to carbon copy, cyclostyling, photocopy to digital scan reproduction shows that functional excellence upliftment with better technology easily makes the old obsolete. My priority in working for Indian companies is to sensitize them to make the QCW (rational) attribute as infallible for industrial duplication products and services for the masses. Duplication is an inherent part of business so driving QCW practice with latent trends into your industry will always be relevant to bring the future near and create the nextmark.

To download above article in PDF Industrial duplication needs QCW oxygen

Financial Express link:http://www.financialexpress.com/news/industrial-duplication-needs-qcw-oxygen/904994/0

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Posted on 22-01-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

You can have multiple ways to look at quality customers want (QCW). Appearance, functional experience and trust of any product or service are QCW parameters. When you see a cart vendor shining his customer-facing apples to always look inviting, you know it’s not just an ephemeral emotive factor, an apple looking good gives quality assurance. So you want to instantly bite it. Its appearance seduces you to buy it. When you devour the apple experiencing its succulent taste as functional quality, you’re simultaneously convinced psychologically about the high quality of this breed of apples, which was not visible at the time of purchase. But on biting, if you didn’t like the quality of experience, you’ll automatically stop eating it, and lose confidence on it. So only looking good is never enough to win the trust of quality. From looks to the bite function upto the root that allowed quality growth, all have to be orchestrated for the customer to experience quality. There could be a catch on bite enjoyment, which can be disastrous if the produce is bad. Or another nuance could be customers preferring a different type of taste. Some like the juice to sputter when bitten, others like a grainy bite and so on, proving that one quality parameter cannot be suitable for all.

That’s because customers have 4 types of requirement: expressed need and desire, and unarticulated need and desire. Products or services in a category always require different pricing segments. For example a woman’s handbag can cost Rs 200 from street vendors and upto Rs 200,000 from Louis Vuitton; both are available within a short distance in the same market. Today we also have trendsetters like Apple, Google, Facebook, Nike and Samsung among others, that influence every industry. They’ve changed the customer’s habit, perspective and expectations in everyday use products and services. If you use the QCW framework, it will oblige you to very specifically diagnose the customer’s psychographics in micro detail. Let’s elaborately look at the 4 types of customer need.

Expressed need: Women’s consciousness about hair is more imperative than men’s. Can she ever accept going bald? So any therapy on hair care is an expressed need. Science can continue to evolve on how to protect hair fall because there’ll always be market scope here if the scientific believable factor with naturalness is tangible. This market often faces a traffic jam with multiple lifestyle advertising showing beautiful women with plenty of hair. But is it so easy for the many brands in this category to make customers believe without proving their tangible benefits? Customers will never pay attention if products in expressed need areas are not disruptive and scientifically proven.

Expressed desire: When people learn to walk at childhood, their first desire is to run. Professionals set the running trend; people follow them in the hope of overcoming health issues. That’s when intelligent industries put the treadmill in the market. Continuing running from open natural surroundings to a treadmill in the gymnasium’s limited space is the real conversion of expressed desire. This expressed desire, which is another angle of QCW, can be further uplifted to become more desirable. So the treadmill can be made to calculate performance, body and pulse movement, even putting a touch screen TV system for continuous addition in the expressed desire category. In future you’ll be running in a treadmill in front of a virtual life-size screen image taking you to different countries or situations virtually.

Unarticulated need: After Thomas Alva Edison invented sound duplication in the 19th century, the entertainment industry expanded with endless varieties of music, with phenomenal array from rhythm to cultural contexts in different countries. When we have so many collections of old vinyl records, cassettes or CDs, will we ever listen to them all through different playing instruments? Will we ever have the time or inclination to go back to different periods of our music collection? By simplifying all applications, Apple iPod responded to this unarticulated need of experiencing any part of one’s own musical collection anytime, anywhere, with a finger tip. We can carry diverse, unlimited musical entertainment in the pocket. Apple did not invent any musical paradigm, merely catered to an unarticulated need.

If perfectly designed with simplification, any unarticulated need product can make obsolete a lot of standard systems in the world. The iPod practically killed the cassette Walkman and CD player. You as an entrepreneur can always create a new habit by giving birth to a new unarticulated need in any domain if you have the urge to grab society’s latent trend. But you have to submerge yourself in a continuous QCW bath.

Unarticulated desire: You cannot ignore the human desire to see everything in big size. Pulling the chewing gum to experiment its stretch-ability, or blowing bigger and bigger bubbles in the mouth is an unexpressed desire. That’s why inventions like the magnifying glass, binoculars, telescope, even the microscope, have been so successful, and used for diverse purposes. All these enlarging habits already exist. Taking habit and putting it in the telephone screen is unarticulated desire. By inventing the picture or text enlargement system in the mobile phone, Apple fulfilled this unarticulated desire. With two fingers you touch an object on the screen, move your fingers apart the picture will enlarge. This action feels truly hedonistic. This trend has become like a need, so people have the tendency to see if this progressive enlargement is there in other products where there is a virtual screen.

The possibility of transferring some human habit in one industry to another industry can change the whole category. If QCW drives your quality process and discipline in your enterprise, you can address perceptible value in any of the 4 needs of the customer.

To download above article in PDF Quality beyond its process

Financial Express link:http://www.financialexpress.com/news/quality-beyond-its-process/902404/0

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Posted on 15-01-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Shining QCW_Col

The biggest hunger of global brands across industries is on how to make low priced products that have “QCW,” quality customers want. This is the key to repeat purchase.

Impacted by the high standard of global brands in India, customers are experiencing and getting habituated to elevated quality where the efficiency of rational factors is exposed. Let’s take 3 sectors where QCW is enjoyed at affordable rates: McDonald’s offers an American burger lunch at Rs 25 in air-conditioned, extremely hygienic setting. French Hotel Ibis provides perceptible quality comfort and ambience at 3-star hotel rates. Toyota’s Quality Revolution is setting benchmarks for the automobile industry.

This QCW illustration shows that in any given category customers have their own or influenced perception of the quality spark. Switching to QCW brands, customers are making several Indian brands ruling the roost in the Licence Raj era lose their market leadership. In automobiles or consumer electronics, Hindustan Motors or BPL, Videocon, Onida and Godrej dominated the market till the 1997. Today people willingly pay a higher price for competing foreign brands but they’ll haggle with Indian brands in every market segment when QCW is not perceived. Sony, Samsung and LG conquered the consumer electronics market, bringing in new technology, customer focus and perceivable sparkling quality from reliability (rational factor), functionality and the aesthetic (emotive) edge.

The clash emerging now is that India is following the lifestyle of developed countries where rational factor efficiency is very high. Take a look at QCW illustration Point 3, of industries that impose the trend. Examples of trendy brands are McDonald’s in fast food, Louis Vuitton, Gucci, Rolex in luxury products, and Apple, Google, Nikon, Facebook, IBM, Microsoft, Samsung in technology. In personal care its L’Oreal, Forbes and Vogue among magazines, in financial institutions HSBC, American Express, in apparel Zara, Esprit and Hugo Boss while vehicles coveted are Harley Davidson, BMW and Audi and sports wear Nike and Adidas. Through inventions that go against Nature, Western society created products and living style that reduce effort and increase comfort for people in every domain. Whatever social culture we may follow, we cannot ignore the comfort standards provided in the refrigerator, automobile, mobile phone, the lift to Facebook among others in our daily life. The more our country develops, it’s obvious we’ll minutely follow the well defined materialistic lifestyle of developed countries. So the only choice Indian brands have to sustain in the market is to uplift the rational quality spark.

Every company has to take into account the customer’s perception of quality, the competitive environment and trendy industries that influence the customer. My priority in working for Indian companies and their employees is to sensitize them to make infallible the non-visible rational attribute of a product or service. Employees have to be trained on QCW beyond any standard quality process. To actually achieve quality customers want, the company has to inspire and control its vendors on the QCW definition with precision in the purchase order. Most global brands outsource from China giving precise quality parameters, and China delivers accordingly. But Indians often criticize Chinese products, which may not be China’s fault as they admit they’ll compromise quality standards based on the cost the manufacturer bargains for.

Offering high salaries, multinational companies in India are stringently imposing their proven processes and customer centricity to bring global quality standard. I’ve heard that Indian professionals are leaving MNCs to return to Indian organizations, that have since revised their salary structure to keep up with MNCs, to get better freedom at work. The catch here is if “freedom at work” means ignoring QCW, how can Indian companies improve? According to me, business cannot sustain, whether it’s corporate performance, the brand, industrial product design or organised retail, if the quality spark is missing. Indian brands need to ignite QCW to ensure repeat purchase and be globally competitive.

To download above article in PDF Ignite QCW, Quality Customers Want

Financial Express link:http://www.indianexpress.com/news/ignite-qcw-quality-customers-want/899725/0

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Posted on 08-01-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Indian industry is married to quality processes, but not to perceptible quality in the customer’s hand that Japanese and Korean companies deliver. Implementing quality process engineering is a hygiene factor that delivers no competitive edge. Unless the society’s state of mind is driven by the consciousness of quality supremacy, no quality system will fall in place for Indian brands to meet the challenge of global competition. Quality in customer hand first creates trust; in long term usage it becomes believable. It’s totally non-visible, a hidden factor. The customer experiences this quality at the discretion of the enterprise providing it.

In postgraduate institutes or customer centricity training workshops for Indian companies, whenever I’ve tried to expose the hidden quality factor that creates customer trust and loyalty, I’ve confronted a wall called quality process. R&D engineers, marketing, customer service and top management revere ISO, TQM, Deming or Six Sigma quality which translate to working in a system that brings discipline and defect free processes. But when every company follows the same system in a category, does it create differentiation that the customer receives? As a product’s repeat purchase is dependent on customer choice, surely the customer’s appreciation of the “quality spark” beyond any process is the paramount quality parameter to run after?

Some of my professional friends who’ve undergone my training sessions and are now working expatriates in Germany and Korea, have called me to endorse this “quality spark” that customers want. They’ve said they’re actually experiencing what they couldn’t appreciate in India. Realizing the value of quality as the rational factor for a customer to confidently and repeatedly buy a brand, they’ve said, “Developed society is highly differentiated, products are matched minutely to specific customer unstated needs. Their eco system is driven by quality that world class products and technologies compete in.” Another comment was, “Pent up demand is huge in India, and low price is the driving factor. Indian industrial development has accordingly been based on need, not experience or expression. Products are considered okay when it satisfies the basic intended purpose.”

Neither manufacturer nor employees easily understand or focus on the hidden rational quality. They call Mercedes, BMW, Louis Vuitton, Mont Blanc among others as costly lifestyle and status brands, but never ask how they’ve become so recognized globally. No education or training system has apprised them of the invention, innovation and sustaining quality guaranteed on the lifecycle of these products. I’ve never heard anyone here talk about the many trials, failures, tests and customer clinics these brands have undergone. They admire the brands only from visible glamorous advertisements.

That tells me that India’s cultural experience ignores the grid of quality excellence. In general, saris sell on weaving style and folkloric designs from different states. Sari shops give no guarantee on color as they say there’s no single, processed cleaning system. Consumers happily street-shop beautifully designed footwear at amazingly low prices. They don’t bother with quality, just design and color. In jewelry, weight of gold is the first check, next is design. Rarely do women focus on the clasp’s robustness which is intrinsic to quality. Unhygienic selling conditions at mom&pop stores or small eateries are tolerated if the food tastes fine. These few examples among others show that quality consciousness is vulnerable. Will Indian brands sustain the future when global brands fiercely compete in India with sparkling quality, affordable price?

My long European society experience has taught me the importance of hidden quality that’s their cultural phenomenon. On curious probing, I always got the answer that keeping historical records meticulously creates the grid of benchmarking with the best. It established that Mozart remains the master music composer of all time, whereas George Stephenson is respected for his invention of the steam locomotive, although that’s since been bettered with the Chinese CRH380A becoming the world’s fastest train running at 302.8mph.

Industrial production of unlimited quantity made the West conscious of customer expectation of unquestionable quality that sustains the long term and becomes widespread. Product development with differentiating character requires time and money. The more solid and unparalleled the quality of reproduction compared to competitors, the more can you eventually sell. The product’s market longevity improves to encash high return on investment.

"It works well for me" is the functional factor of a customer delivery. Functionality is the prime criterion of a selling proposition. Human society development always happened with excellence of functional upliftment eg. From stone lithography copy to carbon copy, cyclostyling to photocopy to digital scan reproduction shows functional upliftment where better technology easily makes the old obsolete.

The key factor is rational, which I’ve found very difficult to make people here understand. Rational means non-visible quality support for emotive and functional attributes to sustain product longevity eg. In the hospitality industry, if a hotel uses sophisticated German sanitaryware but maintenance is poor, you have to close your nose to get rid of the stink. This totally bypasses the rational factor in the service industry, and mitigates the heavy spend on sanitaryware to look good.

The “looks good” factor is the fragile emotive attribute that instantly differentiates a product or service. But repeat purchase cannot happen if functionality fails, eg. If a perfume bottle looks beautiful but the spray jet, the functional part, hurts your body, you will never buy the perfume again. To make the functional part soothing requires superfine technology that customers cannot see. This non-visible rational part is the manufacturer’s discretion to make the spray system acceptable.

You can experience functionality upfront, see and appreciate the emotive factor, but you have to trust the company’s brand for the product’s intrinsic quality at the moment of purchase. How do you build that?

I don’t believe people regularly buy a product or service based on emotion through its ad or sophisticated presentation. Customer believability for repeat purchase lies on “sparkling quality” that’s non-visible. Quality is the assurance of the product’s functionality during its lifecycle. So you need to define “QCW” (quality customer wants) specific to your brand.

To download above article in PDF Sparkling quality a global nextmark?

Financial Express link:http://www.financialexpress.com/news/sparkling-quality-a-global-nextmark/897050/0

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Posted on 01-01-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Consumers in India are suffering unhygienic experiences, erratic price and irregular availability in daily food and FMCG products. Small farmers are suffering the middleman who’s depriving them a fair price. Political opponents to allowing FDI (foreign direct investment) in multi-brand retailing are shouting that mom&pop stores need protection and consumers will be cheated with high prices. Is that really so?

India’s allowed 100% FDI in lifestyle sectors such as automobiles and consumer electronics among others. That’s raised consumer choice and desire levels sky-high. Speedy foreign motorcycles and cars are dangerously dashing down appalling road infrastructure in urban and rural areas. Consumers are flouting minimal safety and traffic control norms, hiking up fatal accident rates. Before allowing this FDI, did the government first secure the roads, safety and traffic control measures? Did political parties make a noise then? Yet when consumers and farmers would gain price advantage rather than remaining in the sacrificing dock, some political parties are barricading FDI in multi-brand retailing. Of course the powerful trader middlemen will be eased out when this happens, is that the stumbling block?

Countries like China, Vietnam and Chile that initially hesitated but have since opened 100% FDI to multi-brand retailing are today enjoying the investments, job creation, introduction of technology, processes and infrastructure. Consumers are benefitting better pricing, better quality, better shopping convenience. As per Chinese analysts, entry of Walmart and Carrefour has changed the way Chinese companies manage business, from farm procurement to logistics. Local Chinese retailers like Shanghai Bailian group, Suning, Gome and Dashang still dominate the retail market as they’ve quickly learnt how to set up new supply chain systems. In fact small retail outlets have risen in China from 1.9 million to 2.5+ million since 2004. US market researcher RNCOS has projected that Vietnam’s retail market sales will increase from $39 billion in 2008 to $85+ billion by 2012. In 2009 alone, FDI in Chile was $6.21 billion. Similarly Argentina, Brazil, Indonesia, Malaysia, Russia, Singapore, and Thailand have allowed 100% FDI in multi-brand retail since 1990s. According to a Columbia University study, 10 years after Indonesia opened FDI, small traders continue to retain 90% of the business.

The large majority of farmers in our agrarian economy own a mere 2 acres of land per family of about 7 members. They barely generate Rs 50,000 per year, input costs can reach Rs 30,000. Poverty deprives them of transportation means, so they’re dependent on intermediaries to sell their produce. In a bumper harvest, wholesale market prices dip drastically, leaving the farmer unable to recover his cost. For a kilo of tomatoes, farmers in Barpeta, Assam have even got only 50 paise, whereas Guwahati consumers buy that kilo at Rs 25. Farmers may even jettison unsold produce, as carrying that home would entail transportation cost. Both farmers and consumers lose here, the chain of middlemen dealers from farmer to consumer clearly wins.

No government has resolved unemployment, so common people set up mom&pop stores as a route to survival. The Government grants their license, but without establishing any inspection system on the conditions under which they should sell products. Take the case of edible oil where about 68% is unbranded and sold loose. Mom&pop stores are a kind of godown for simultaneous stock-and-sell. Unhygienic conditions prevail in a large number of mom&pop stores because commodities sold loose from sacks and tins attract rats, lizards, cockroaches and other insects. It’s been reported that when a rat falls into the open loose oil tin, retailers merely strain out the oil. The poor consumer becomes the victim when there are no mandatory checks on quality standards. Unlike organized retails where you can interface what you buy, mom&pop stores actually exercise an anti-democratic consumption pattern. Manufacturers spend excessively for brand promotion, but consumers are always dependent on the counter salesman’s recommendation at mom&pop stores to get the product, especially if they don’t know a category.

Organised multibrand retails, particularly hypermarkets invented by the French, have the extraordinary mission of benefiting consumers through lower cost, higher quality. Economies of scale make this possible. Large retailers go directly to the source, especially with food products. Here the farmer, retailer and consumer all benefit with competitive pricing. In the West, such retails became gigantic only because consumers defended them. From the 1980s, when retailers found that manufacturers were continuing to raise prices for their own interest, they challenged them with the “private label” concept. Retailers created private label brands in different categories and offered them to consumers at 30% lower cost from national brands. Consumers found no quality deficiency here and lapped them up. The result is that FMCG category private labels comprise nearly 60% market share in developed countries.

Like several developing countries did, India will gain from 100% FDI for multi-brand retailing as it’s the biggest sector for the economy’s growth. A new hygienic discipline will be put in place for everyday consumption products. Consumers will enjoy outstanding choice in a self-help purchase pattern, competitive pricing of national and international brands, highly discounted private label pricing and a regular loyalty program. Small farmers will get a fair deal in directly selling to retailers. Retailers will have massive control over short duration perishable products. Current mom&pop store employees with their acquired knowledge of retails will get better jobs in organized retails. Intelligent mom&pop store owners will learn how to convert to elegant convenience stores by selecting the “in case” requirement of consumer merchandize or become franchisees of foreign convenience stores. Their standard will improve, they’ll not be wiped out.

Consumer demand is so high in developed countries that industry, government and politicians cannot ignore it; they have to respond in accordance. Actually it’s not only manufacturer magnanimity that offers consumer benefit, huge pressure from consumers has ensured that consumer benefit becomes the bottomline in retailing. The time has come for Indian consumers to stop sacrificing and start demanding. Let’s enjoy 2012 with 100% FDI in multi-brand retailing, freedom of choice and spend less money at the multi-brand retail.

To download above article in PDF Why should the consumer sacrifice

Financial Express link:http://www.indianexpress.com/news/why-should-the-consumer-sacrifice/894283/0

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