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Friday, January 6, 2017


The festive season has arrived and the brands have decided to leverage it with “surgical strikes” on consumer wallets. To quote Jim Collins: “Greatness is not a function of circumstances. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” The brands, retail as well as product, had made their choice in the run-up to festivities. The harbinger was the most unlikeliest and unpredictable ally a retailer can wish for: India Meteorological Department (IMD). With IMD predicting an “above normal” monsoon for 2016 in the month of April, and the actual monsoon not displaying a significant variance from it, the track was laid for the consumption carnival to begin. The government too pitched in and said – enough is enough, it is time to bless the babus with Lakshmi before the festive season. Lo and behold, the 7th pay commission said “tathastu” to almost a crore families directly. The cascading effect is likely to be staggered but exponential when you consider the downstream organizations – the state governments and the private sectors which are likely to follow suit, sooner or later. The final piece of the jigsaw puzzle was put together by none other than RBI. The icing on the cake, and just as you were about to placate your senses by gulping it down your salivating mouth, was provided by the Monetary Policy Committee (MPC) with a 25 basis point reduction in repurchase rate and thereby, easing the stress on your finances. Experts may vary on the absolute and relative impact of each of these factors on your discretionary income. However, there is considerable unanimity on one fact: all of these have contributed to a feel good factor, a positive euphoric vibe right before the onset of the festivities. A confident consumer is lapping it up with both hands, and with a carry-bag to spare too. The urge to splurge has gained momentum. Having said that, no points for guessing who is laughing all the way to the bank. While Amazon claimed an average of over 38 orders per second during its five day “Great Indian Festive Sale,” the Future Group is reported to have achieved 9-20% Y-on-Y same-store growth. It is a win-win situation. The buoyancy in the market landscape has strengthened India’s position as the only bright spot in a rather dull world economy. The objective factors influencing the spending apart, to their credit the marketers have left no stone unturned to subtly build a proclivity towards buying behaviour. The marketer generated stimuli has dominated the media with offers. Leveraging the strong association between festivals and buying, the marketer has cleverly supplemented emotions with reason – a perfect mix of use of central route of persuasion substantiated with peripheral cues. So there are full front-page advertisements in leading dailies which hint at all that I am going to lose if I fail to avail the opportunity within the mentioned time period. The good thing is, it doesn’t stop at that. The assimilation of buying behaviour with socio-cultural values is complete. So, if you do not belong to the community of buyers who have been smart enough to capitalize, you are a pariah. Consumer socialization initiated and sustained through sales promotion. To borrow a phrase uttered by Don Corleone in the blockbuster movie Godfather: “I’m gonna make him an offer he won’t refuse.” And indeed, the marketer has made an offer that the consumer has not been able to refuse.

Wednesday, December 14, 2016

Internet of Things (IoT) – Transforming Digital Marketing

The Internet of Things (IoT) - The trend which has become an increasingly growing topic of conversation and the one that everyone is waiting for. We all are aware of how internet has connected people to people, but now taking another step forward internet is going to connect things like never before. The IoT is the idea of physical objects, devices, or even people being connected to one another and to the internet(Courtesy: Wikipedia).  This can be anything ranging from your smartphone, wearable gadgets, headphones to smart television sets. It has the ability to change how everything physical in our life works. Well for those of whom who don’t know, IoT is already among us with Fitbit, Google Glass, Self Driving Car, Apple iWatch -- all being popular examples of our increasingly connected lives.

What does this mean for digital marketers?
Well, the IoT opens up even more digital channels for marketers to track. The increased volume of data brings an exciting opportunity to collect and analyse a variety of new behaviours. So the real challenge will be how to analyse and use this new information efficiently. The IoT will present many opportunities to marketers as more and more devices become connected. The IoT will give brands the ability to process information about connected products and then personalize them to each consumer. Companies will now be able to deliver enhanced services and messages to customers. It will require marketers to focus even more on different channels and devices when creating their marketing strategies. So, marketers will have to listen and respond to the needs of their customers accordingly – with the right message, at the right time, on the right device’. 
For marketers to succeed in a world that is becoming fundamentally technology driven, they will need to learn to leverage the technology itself in order to benefit from its obvious ‘data and analytics’ benefits so as to create a seamless customer experience that will be beneficial both to the brand and the consumer as well. 

 How will digital marketers actually use the IoT?
  • Use it to analyze the buying behavior of customers across the platforms they use, Marketers will better understand the consumer buying cycle and where in the cycle the customer is. The marketers can analyse user behaviour which allows them to further customize the product for them, and the data serves as the baseline for future product development efforts.
  • IoT will enable real-time interactions: Engaging potential buyers at the right time is a big problem for both marketing and sales teams.  IoT will enable data-driven marketing by providing real-time customer data which in turn will boost company sales significantly. With IoT, marketers can engage with prospects at the right time, such as the instant they are engaging on your website or with a targeted ad.
  • Personalized promotions: Beacons make the perfect example of how IoT could be used by brands to improve their point of sale experience. Brands are using this technology to deliver personalized promotions to customers as they enter and move around the store. Beacons allow for a new way of in-store interaction between customers and retailers. On the one hand, it allows retailers a new way of collecting data about its customers, based on their in-store actions. On the other side, it allows customers to receive personalized offers based on their preferences and their online/in-store behavior.  Push notifications and location-based promotions are just two simple examples of how objects will communicate with customers.
  • Predictive Social Media: IoT is optimized for use with social media. Marketers who are able to predict the development of social media communities, and target their efforts towards these communities, will be able to reach potential customers whom they may not have been able  to previously target. With these better targeted campaigns, marketers will be able to identify and monetize new emerging trends. IoT has added an edge of personalisation to social media marketing. Presently customers in the light of their browsing history are recommended products that they may like to buy. IoT helps to turn social media marketing more customer-centric as now you can shoot ads and promotion messages based on individual’s preference. 
There are some ethical concerns around this, as customers may find the concept intrusive. Marketers will know everything about a customer’s day to day habits, and this raises more concerns around the subject of privacy and security. Is our data going to be monitored constantly, and what information will be used? For some, they will welcome and understand the exchange of their data with brands, and enjoy receiving specific offers. But for others this will be too invasive. It will be important for marketers to incentivize customers to share their data and present clear benefits to the user.

Saturday, December 3, 2016

Lok Sabha passes Taxation Laws (Second Amendment) Bill, 2016

The Lok Sabha on 29 November 2016 passed the Taxation Laws (Second Amendment) Bill, 2016 to amend the Income Tax Act, 1961 and Finance Act, 2016.

The Bill was introduced in Lok Sabha on 28 November 2016. It imposes a higher rate of tax and penalty in respect of undisclosed incomes. The Bill proposes to introduce the Pradhan Mantri Garib Kalyan (PMGK) Yojana, 2016.  Under the scheme, taxpayers will be required to declare their undisclosed income possessed in the form of cash or deposited in banks, post offices or Reserve Bank of India before a notified date.

The money from PMGK will be used for projects in irrigation, infrastructure, primary education, primary health, housing, toilets and livelihood. 

Provisions of the Bill
• The cess will be known as the Pradhan Mantri Garib Kalyan Cess and will be used for welfare of weaker sections.
• The taxpayer has to deposit 25 percent of the undisclosed income into the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposit will not earn any interest and can be withdrawn only after four years from the date of deposit.
• People, who will declare their undisclosed wealth in denominations of banned Rs 1000 and Rs 500 currency notes under the PMGKY scheme, will have to pay a tax at the rate of 30 percent of the undisclosed income.
• Additionally, 10 percent penalty and PMGK Cess at the rate of 33 percent of tax will be levied on the undisclosed income.
• If taxpayer does not admit his undisclosed income, he will be levied with flat 60 percent penalty plus a cess of 25 percent of tax, which will amount a levy of 75 percent tax in total.

The bill provides for three possible scenarios:
Voluntary declaration of black money: The declarant shall be required to pay tax at 30 percent of the undisclosed income and penalty at 10 percent of the undisclosed income. A PMGK cess at 33 percent of tax will be levied on the income. In addition, declarant shall have to deposit 25 percent of undisclosed income for a period of 4 years in welfare schemes.

Non-declaration of black money: Those who continue to hold onto undisclosed cash and are caught, will be levied with flat rate of 60 percent plus a surcharge of 25 percent of tax will be charged. Besides, an additional 10 percent penalty can also be levied.

Black-money unearthed during a search and seizure: 30 percent penalty will be charged above taxes if an admission is made and this will be doubled to 60 percent in any other case.
The disclosures in PMGKY scheme will ensure that no questions will be asked about the source of fund. It will ensure immunity from wealth tax, civil laws and other taxation laws. But there is no immunity from FEMA, PMLA, Narcotics and Black Money Act.