Recently in Business, branding and Marketing Category

I had an idea today.. may be something similar or even the same thing has been said before by some great Management Guru, or Enterprising guy.

But for me.. it was My Spark for the day. It is a novel idea about how Companies should be measured / rated with a simple formula.

First thought.. was "Should I try to patent it.. or write a book and sell it.." etc.,

Second thought.. was "I share it.. I will get another spark later.. " .. pretty over confident of myself most-often.

But .., lets talk about the idea.

It is like said above.. a simple formula, that everyone would understand.. to measure / rate companies and brands around us.. so we know which product or company is actually doing good.. to invest with them or buy their investment (their product).

The formula goes like this..

1. Companies should not be measured by thier earnings.. but by their "power"..

What power ?
2. Power of a company should be equal to, the product of its customer-base, the revenue they make, and the resistance they have in the market to their product.

inspired from.. P = VI (power consumed by an electric appliance = voltage x current )
and V = IR (voltage = current x resistance)

P (of company ) = V (customer-base-size) * I (revenue they make.. not negative if they make losses.. its just the cost of all products they has sold without deducting costs, salaries, taxes) * R (resistance should be calculated by taking the nearest, valid, visible competitor's cost for the product for a single unit, divided by our company's product cost for a single unit)

P = V I R (but this is irrelevant anymore to be compared with the electrical formula)

1.
If a company has more than one product / brand.. their total Power would be calculated by:

P = P1 + P2 +......

2.
By calculating power this way, we ensure that companies can be easily rated, the competitor parameter is brought into the rating so that companies are vary of competition at all stages... and importantly companies don't try to increase costs on the same customer base to make high revenues and become popular with investors.

3.
If a company increases cost of its products, say a mobile phone company raises 2$ in their costs and has 1 million subscribers.. they increase their revenue by 200 % and majority of the subscribers would not make an issue of the 2$ increase.. and the company makes higher revenues without doing any hard work at all... which is bad. and the current system which is like this, allows companies to fleece subscribers or customers after making a huge customer base over the years. Nobody I know would cancel their mobile phone subscription with their big branded operators because they charge 2$ extra per month on some reason.

Companies exist to make money.. but they cannot make more and more money without any pain affecting them. it should pain them. it should pain their power rating.. and if this power rating like thing was used in stock markets and other investor forums to rate a company, then a bad power rating would pain the company's investors.. which is correct cycle.

4.
What happens with big companies that by their business model have small customer base.. for example oil companies.

Using this formula for oil companies which usually have only whole-salers and distributors on their customer base will mean that those companies will not be able to improve their power rating much by increasing their customer base.

But then, they will only be compared with other oil companies which will also have the same problem. Or, probably this power rating model would provide motivation for the oil companies to do direct retail marketing which could bring good competitive costs, better quality of oil.. for the end consumer... without having to pass through all that intermediaries of the distribution network.

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So much for now.. about the spark.

What do you think about all this ? Intersting ?

I was terribly disturbed at knowing the marketing strategy behind the "Cannot Play Discs" problem I get on most DVDs on my DVD player.

It seems since many years back, the CD/DVD industry (and so follows the current blu-ray and HD-dvd industry too) practially decided and divided the world into money zones as depicted in the picture below.. and all DVD players sold in a particular zone were to have a setting 'NOT to play discs sold in another zone'.

The idea behind was to be able to sell the discs at different costs in different markets for especially movie and music discs. So, you cannot buy 100 english movie DVDs in china for a bummer and expect to play it on your DVD in your home in San Francisco.. because then that kills the DVD market of San Francisco it seems.

ok. The hard point is, they make the DVD player itself disabled partially.. to implement the strategy.

Even if justified that it is to survive all markets in a balanced way, they should have done the disabling thing in the CD/DVD technology, rather than the player itself which is purchased at a much costlier price that an average DVD by the consumer.

When we buy branded DVD players we all end up paying for a partially disabled player... because all companies that make branded DVD players have an agreement on implementing the region codes on the players.

The Tip: If you can find, by some means, a way to reset your player's region code to ZERO (usually done through some combination keys on the remote for the player), then you have enabled your DVD player to all the world's discs.

It so happens like my Mom got a letter from the Indian Overseas bank or IOB, two years back, informing of a Fixed deposit that has matured which they are automatically renewing. My mom tried to search for and think of when she made that fixed deposit some 10 years back and where she kept the original certificate of the deposit to claim it back.

She approached the bank, which requested her to search all places where she might have mis-placed it.. because without the original certificate it would be difficult for them to process it. My mom had agreed and over the next few months, in about 3 months she searched over at many places, including her ancestral home in her native town when she went there for a relative's wedding.

She couldn't find the originals.. She approached the bank, which said that it can provide a duplicate 'original certificate' if she filed a banker's bond document requesting for it saying she lost the originals at a cost of 250 indian rupees.

It so happens that, She made the request, got a certificate, and also the amount of the deposit on its maturity.

Two years after this, Yesterday, she gets a call from the bank saying that it wasn't her money, that they had processed it by error.. and the original depositor has approached the bank for the money with the original certificate.

They said.. 'We are calling up to notify you of this issue.. and request you to check your documents on this.. and we will call you again in one hour'..

My mom immediately recollected that it is why she could never remember anything about the deposit, and neither find the original 2 years back.. she waited to see what the bank tries to tell her in their next call.

The called to say that they would expect her to visit the bank and possibly re-credit the amount back to the bank.

It seems the original investor himself has been the bank's manager 2 years earlier. At the kodambakkam branch of IOB. And that he had deposited this in the name of 'Uma' which was his wife's name. Since my mom's name also happens to be Uma, the bank had sent the intimation of the renewal to the wrong address and lost record of the original investment temporarily (or permanently).

My mom consulted a relative who once worked in IOB, who told her that sending a wrong intimation letter can be understood as a clerical error, but they have went aboard to wrongly give the money itself to you, which is totally ridiculous.. and dont pay them unless you get it in writing from them that they made a mistake on this and are requesting a re-credit.

By common sense, most of us would say, the bank will never a letter like that confirming on its handling of the money which could be used to dis-credit the bank publicly.. and neither they can sue my mom because that would also prove they accept the error.

But my mom also had a point that they could try to make this a mistake on us by trying to screw up with other relationships I have with the bank in my savings account or other accounts in future... and my mom prefers to recredit the money back to the bank because she understands now that the money was never hers as she doesn't remember making any such investment, and she only had to believe it otherwise because of the bank's letter.

The amount was small.. 33.5 thousands and I told my mom that she is deciding to give it back only because the amount was less and she wouldn't if it was some 2 lakh indian rupees.. to which my mom quickly adds 'if it were 2 lakhs I probably would not have believed that letter at all firstly.. because I never had that kind of money to deposit then'

Whatever.. this episode proves how badly IOB is capable of goofing up.

Another similar episode:

This has happened in the Kanadukathan branch of IOB which is Kanadukathan near karaikudi town, some 10 hrs drive from Chennai.

My mom went to the kanadukathan bank to check on her account and stuff.. while she noticed the manager of the branch has changed. She came back home and asked her father (my grandDad) what was with the old manager who was a nice man and was there for almost 4.5 long years.. (it seems IOB managers are transfered only once in 5 years)

My granddad has narrated the below episode.. as reason for the manager change.

It so happened that somebody who had taken a jewel loan at the bank, came back to repay the loan and take the jewels. While the repayment was processed and jewel furbished back to the claim processing clerk who returns the jewellery, in those few minutes between the time when it was going to be handed over to the customer, the jewel got stolen.. The bank claimed that somebody who was at the branch that time had taken it.. these were old days and even these days IOB only have surveillance cameras in its branches in cities, not lesser towns/villages.

The guy bluntly said he wanted his jewels back and not its cost. This issue got on for a while as a disagreement when the bank chose to informally settle the dispute with panchayat like meeting with the branch manager, some of the clerks, the customer, and some outsiders who were influential. It was forced upon the customer that there is no way they could get back the jewels, and so he will have to take the cost value of the jewels. Also it was forced upon the manager that he bear the cost from his personal money because neither the bank can blame anybody to take up the responsibility or pay part of the amount, nor they could open-up on the lost article because it would discredit the bank's way of handling it.

More so, I think IOB managers decide things based on the cost of it and put the cost to the bank.. they write it off... except strange cases where the manager takes ownership of the error.

And so it happens that the manager paid up the 60 thousands from his pocket, and subsequently requested an immediate transfer from the branch because of the episode.

This bank called UTI in India was in a financial crisis, and they smartly sold off when market was at its prime couple of years back. They became AXIS bank and all UTI branches and operations became AXIS.. They advertized, with twins in ADs, saying both UTI and AXIS are one and the same, not to worry, just the name is different. I am sure they will be cursing all their intelligence for that concept (of the ADs) now. Because the once happened financial crisis, is back with the bank and they are probably worser than the state what UTI was in to earlier.

I have a savings account with the bank, with some namesake money in it.. Obviously that is not the interesting part...and I am not going to ask you for donations to lift my account balance. Because the bank is doing just that. They are asking all their savings bank customers to put money into the bank to help their bankruptcy.

I got a call today from AXIS bank, a business development officer, who said, the bank's status with funds is not good.. I asked "do you mean.. the *bank's* status is not good? ".. and he said "yes, we don't have enough funds to run operations, and we thought it is a good time to call our known customers and ask them to transfer all their money in other banks into ours.. for the time being, to get us back in shape"

I couldn't feel anything for a while, let alone sympathizing, and after a while I got irritated and asked the officer is this how AXIS bank does business development.. and he got into the same thing.. couldn't feel anything for a while..

So much so, I kept the phone and was thinking what was happening..

Is this something that is there with all banks.. ?
Is this why recently when all banks increased their lending rates by 0.5%, ICICI bank increased its lending rates by 0.75% ?
The only thing that is coinciding financially is the stock market crash.. Did all banks put in a lot of money in to the stock market when the markets were hugely bullish a few months back ? and now that the market has crashed royally they are all crying over the pain of the money ?

Whatever, but we all think all the time, that banks know it best when it comes to managing money. No, they also are run by people like us is the fact.

Get back to some hard work with hard earned money.
If you want to invest in stock market, invest yourself and learn the nitty gritty.. not through mutual funds..

If you want to invest in anything.. invest yourself and learn the area, don't don't trust anybody with all that money.

At the end of day, I keep trying to think on any positive sides in this whole thing to keep my head away from worrying about that namesake money in AXIS bank.. oh yes.. there is a positive side.. I can tell everybody... "A bank...a bank.. asked me help by requesting me money.. imagine how big and rich I should be .. ha.. that's something".

Spider on their website..

this is a website of an active sports accessories company. They have done it so nice and different, you will think real good animation films on websites are not real far from happening.

venom.spyder.com