Government - Don't mess with the JEE

The move to tinker with the JEE* is an example of BAD intentions to spoil something that has worked well for the country. Needless to say there is always scope for improvement of a selection criteria that focuses on merit and is devoid of political meddling and corruption.


It seem to be a politically motivated "vote-bank" or "money-grabbing" idea to curry favour with some constituents or other. Don't these people have better things to do, to improve the plight of the millions of poor in India? Instead of improving people's lives, the prevailing tactic is to lower existing standards to enable "inclusive growth".


The proposal at hand is to change the format of the JEE exam with a preliminary aptitude test, with a 40% weight to the entrance test with Board exam results. The following Scenarios depict some of the possible outcomes:


Scenario 1: It is a non-issue.

The advocates of this moronic idea don't realize the varied levels of the different Boards. Normalizing them is a major challenge. Many students score a greater than 100% result. One possibility is that there will be grade inflation in the harder Boards so that their graduates can compete effectively. And if most of the applicants have greater than 100%, this effectively makes the 40% weight assigned to the Board results a non-issue. Everybody gets the 40%, khullum khula.


Scenario 2: The process crumbles on its own weight.

The JEE is a highly automated test environment capable of handling the massive number of entrants taking the test. Unless the factoring in of this 40% weight into the JEE results is automated, i.e matching the entrants with their Board marks, and the number entered accurately, the process will be fraught with errors. This idiotic idea of ascribing 40% weight to the Board exam adds so much weight to the process that it becomes impossible to implement efficiently and accurately.


Scenario 3: Institute a common Board exam:
That is what the two step JEE was and that was kabashed.


Scenario 4: Bye Bye UPA

The UPA fails to be the next governing body and this issue gets shunted to oblivion.


Scenario 5: Hurting Minority sentiments

The IIT graduates are a minority community and tinkering with this "Sacred Cow" hurts the sentiment of this community. Once this community starts expressing their "hurt", the UPA government which excels in appeasing minorities will be forced to withdraw this effort.


Scenario 5: Non-cooperation

The patriotic faculty could just put its foot down and say this is just not feasible citing Scenario 2. This would force the MHRD to institute a software project to automate factoring in the weighting of the Board results and hopefully it will be assigned to the duds Murthy referred to in his whine and the project will never be completed to fruition.


* JEE - The Joint Entrance Exam that students appear for admission to the IITs

Nano Mistakes and Missteps

Summary:

The Nano was much heralded and expected to take the Indian car industry by storm. However it didn’t quite pan out that way. To begin with the decision to manufacture it in West Bengal was a major catastrophe. Why anyone would locate an industry in a communist infested region begs reason. With a timely invitation from Modi’s government coupled with sheer grit and determination, the unfortunate site selection error though overcome, was just the beginning of many missteps the Nano had to contend with. The technical glitch that caused a few cars to catch fire was overcome as well. However, the biggest error in marketing the Nano was the choice of the Distribution Channel which has resulted in lack luster sales.

Related Info:

Tata bought the bleeding Jaguar-Land Rover company for $2.3 Billion. The expectation was the $2,500 Nano would revolutionize the car industry by launching the “poor man’s car”, and the $65,000 luxury brand would be a millstone around Tata’s neck.

The outcome was quite the opposite. For 2010-11 out of the consolidated net profit of Rs. 9,274 crores, just Rs. 1,812 crores came from the Indian operations of the company. The rest came from JLR and other associated companies.

Sales of UK based JLR rose 26%, while Tata Motors car volume in India grew at 23%. The Jag that costs 25-30 times more than the Nano even at base price sold nearly 53,000 cars against the Nano 70,000.

The Importance of Positioning:

Launching the Nano as a “cheap” car pretty much ruined its Brand Value. The assumption was that if it is cheap enough, then it would attract buyers who were priced out of the existing auto market. This flies in the face of the fundamental marketing principle of targeting early adopters first, then going after a broader market segment. Despite this error, there was an initial ground swell of interest where many people signed up and a lottery was held to select the initial set of buyers. In that sense the hype that accompanied the launch prior to availability did work for a short period of time. And then it fizzled out.

It is not clear what a successful positioning could have been. Clearly it is meant for the married motorcycle owner who now has a child or two. But this buyer is conservative not only with regards to price, but is also risk averse and would rather wait till “others” buy and provide feedback. The fire glitch certainly did not help.

Other positioning questions are:

-         Is it an Urban car or a Rural car?

-         Intended for teenagers?

-         A second car?

-         Self driven or driver driven?

None of the above supports the premise that providing a cheap car will result in buyers. In fact the most appropriate positioning would have been to promote it as an Auto Rickshaw replacement or a cheaper taxi, but in order to do so it would have to run on LPG and also deal with bureaucratic and administrative hurdles.

Pricing error:

It was never a Rs. 1 lakh car, with taxes and transportation added. This immediately set the perception that the 1 Lakh price is just a teaser price and that what one lands up buying will cost more.

The expectations mismatch:

The Nano was trumpeted as an engineering marvel, which it is. However, bringing it to market presents one set of challenges and marketing it successfully is another. As in any new product, the expectations are typically set high and in reality the performance falls short. Too much importance was given to the technical aspects instead of highlighting the fact that it is a “no frills’ car that transports four people safely and economically. The goal should have been to highlight its utilitarian value.

In essence, it should have been promoted as a utilitarian vehicle at and affordable price

The Channel Mistake:

The Nano was sold through the existing Tata Motors car dealerships. What happens when a person interested in a Nano shows up is that the sales person will up-sell the person and convince them that they are better off buying the car next model up. With financing the monthly outlay will not be that much more. The incentive to the dealer and the sales person is better margins and commission respectively. The net result is that the buyer either buys the next model up from Tata or goes some place else with the “upgrade” intent in mind.

A few years down the road, Bajaj will launch their competitive offering. If they do it right they will sell it through their existing motor cycle dealerships. In this case a person interested in buying a motorcycle, like a family man is a potential customer who could be motivated to buy the car instead.

This underscores the importance of the Distribution Channel, which is a major hurdle for Tata. What they have been doing recently is taking the Nano on the road and getting people to test drive it. It appears the objective is to make the sale on the road and rope the customer into the dealership to seal the deal.

Lessons Learned:

This kind of car is targeted to a new market and does not cannibalize the existing market. This is more of a commuter car and appeals to a person who will drive the car themselves.

Growing a market involves patience and the first set of buyers targeted should be early adopters. This was a new product targeted to a new market. The expectation of high volumes at low margins works if one is introducing a better, cheaper replacement to an existing established market.

The target customer is one who has out grown the motorcycle or a buyer who values the utility, safety and economics of such a car. The bulk of the sales eventually will come from the first time car buyers.

It is better to underestimate demand and start with under capacity initially so that demand out strips supply. Having a back log, gives the impression that this is a much desired commodity and worth the wait since the savings are significant.

One can hark back to the VW Bug, which was a bare bones car with the transmission and engine being the two major assemblies that formed the motion system. It was positioned as “the people’s” car and named appropriately. It found popularity amongst the youth. Ultimately, if one wants to repeat this phenomenon in today’s context, the VW Bug serves as an example to build upon.