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Monday, March 29, 2010

Aktel becomes Robi, how rebranding gets robbed by Robiuls

No wonder naming a new born is one of the most beatiful activities undertaken by proud parents. In some cases, this graceful responsbility is handed over to grand-parents or next to kins who care about the family and ofcourse the new born. Techno savvy new parents also take help from Google to find out most uncommon and 'never-used-before' Arabic or Bangla names for their offsprings. You must have come across a lot of new mom's in your Facebook friend list who have asked for recommendations for baby names, instantly responded by enthusiast friends with an array of names to choose from. Surely if Bangladeshi mom's on Facebook can practice crowdsourcing then I wonder what held back Aktel, the Bangladeshi telecom operator, from not involving its friends, enemies, frenemies, users and non-users alike to save its face from renaming itself to 'Robi'.

I am not sure if Facebook has the technology to search for the most prominent keywords in status updates of people at a given point of time, but if they had it like Twitter search, it would have been revealed that a great deal of Bangladeshi users of mobile services are all abuzz about the recent renaming exercise executed by the 3rd largest telecom operator in Bangladesh. Some of the witty reactions are as following as found from status updates and the Corporate Blog's Facebook page.

Tausif Choudhury
i m disgusted wid the name :s thanks god i m not a subscriber of ROBI

Syed Almas Kabir
If it is Robi, what phone shall we use on Shome, Mangal, Budh, Brihashpati, Shukra & Shani?? ...And if they spell the name as ROBI instead of RAVI (correct transliteration), doesn't it seem like they're trying to 'rob' the consumers?!

Shahed Mustafa Mujahid
Can we now call the people working there as ROBIul? (this is my favorite!)

Soumya Bardhan - Rahul
its a sad name! and their outdoor publicity looks so cheap!

Mushroof Ahmed
Forget the name..this is one of the worst executed relaunches ever..the atl, btl colors, execution everything..

Arif Chowdhury
Next year it will be renamed as 'shom'

Abu Jafar Sadiq
Can the company recover this blow on itself? A stupid move.

Njmul Haider Mukul
branding name jara select korcjey tader uchit,job cherey deoa. Oh jogonnno

It seems it would help Robi to immediately undertake a post-mortem of their brand value after this akika which seems to be generating mixed, if not negative, reactions. I called up a Robiul friend of mine, who works in Robi actually, to ask him about his reactions. He made sure that his name doesn't show anywhere on this blog and expressed his utter disappointment and embarassment to have been rebranded like this. We ran through a few assumptions, albeit jokingly.

1. Although its common knowledge is that Asiatic was involved in this grand Aktel akika, its possible that the Goverment's representative from the Ministry of Renaming was involved in the task force. This is the person who is charged with renaming major establishments around Bangladesh with a political motive. Its possible that he tried his F2 (keyboard shortcut for renaming) skills in the business sector too.

2. It is possible that the new DoCoMo and Axiata management became so obsessed with local heritage that they decided to go for brand names straight from Bangla Academy dictionaries, rather than considering some local acceptance and norms in terms of linguistic preferences. No wonder Michael Kuehner has some excessive doses of Rabindranath to keep justifying the name with that of the poet's name and its proximity with the mass people of Bangladesh. Surely Rabindranath is close to our hearts, but his name as the brand name of a telecom operator? Spend some more time around Bangladesh Mikey, you will realise what you are smoking.

3. It might be that a talented baby elephant works in the agency hired by Robi, who can paint as well from time to time. So the baby elephant got paid to come up with his best efforts for this renaming of Aktel.

We also discussed how this wave of negativity could have been mitigated to some extent if Aktel would have decided to experiment in certain cases. Assuming that we refrain from criticising the very name, but focusing on the process to arrive there. Lets look at some scenarios.

1. Internal Staff Survey:

According to Robiuls, staff was never consulted or involved in any way in this process. I wonder if an internal competition or consultation could have taken place or not,to ask for suggestions. Certainly Asiatic made sure that this was not required, otherwise why they are there for?

2. Involving Aktel customers:

Say Aktel sends an SMS to its existing users asking them to send naming suggestions to a certain shortcode for free. The lucky user whose suggestion would be accepted would win some trip or something. Or even users whose suggestions would reach the top 10 shortlisted names, would receive some sort of act of 'free love' from the mobile operator. Did that happen?

3. Involving ordinary consumers:

Then there is the traditional way of print and electronic media where Aktel could have tried to create some sort of a collaborative wave of competitions, suggestions by mobile users of all operators, ordinary consumers in this major rebranding effort in its history. What did it do instead? It relied on the elephant who paints and picks up names for brands from Bangla Academy dictionaries. Although it claims that 'Robi will remain beside the people of Bangladesh as they want. Robi will incorporate Bangla in all facet of its work. In Bangladesh, telecommunication sector witnessed massive development during the last decade, mainly due to the penetration of mobile telephony. However, there remain enormous opportunities for further growth as the economic indices grow correspondingly. As the main thrust of development will be rural-based, identification of the name with a Bengali word is expected to add significant value.' What this statement misses is the fact that picking up any Bengali name, as suggested by the elephant, will not reach the rural target audience until they know what that means, if they use it or not, even if its a Bangla word. No wonder their website is still all in English with the new brand name as the only Bangla script around. So much so for rural users of mobile in Bangladesh.

4. What about social media?

Another proof of Aktel's opting for archaic means of consumer involvement is the total disregard for social media. Certainly no other big Bangladeshi brands are considering social media in a large scale, nevertheless, Aktel could have taken this opportunity to set some sort of benchmark in crowdsourcing suggestions and getting users engaged in the rebranding exercise, which if rightly planned, could have taken some viral effect. Its interesting to note that all the comments, positive or negative, about Aktel or Robi is flying around nowhere else more but in social media and through the network effect, bad news is spreading faster for Aktel through the social network. See Aktel unofficial Facebook page for more brouhaha regarding Robi.

There is no denying of the fact that eye-brows might have been raised when Apple decided to call itself 'Apple' and started producing operating systems and computers. But it is to be noted that that is how they started, there has never been any rebranding involved (other than the logo) and consumers identify themselves with the company's products (iPods, Macbooks etc.) and personality more than they do with the brand name itself. Infact the product superiority and innovation has made 'Apple' sound like a renegade and trend-setter in its industry. Same with the case of Grameenphone's Djuice. Although it doesn't make much sense why a telecom product sounds like a fruit juice, they could affort that exercise on a child product brand targeting a certain market segment. Can we claim the same for Aktel or Robi? The lagging third player in the competitive mobile industry in Bangladesh is in the third position never because of its name. So its very unlikely that by putting up a different make up on a Sunday and renaming itself as Robi would be of much help.

I guess the mass consumers and citizens of Bangladesh are wary of renaming exercises. Unless there is no actual value added, or utility created in terms of consumption and the customer service that follows, all this would be futile. By the way, hats off to Asiatic and the baby elephant to pull it off Aktel's pocket real hard. Thank god its Monday today.

Friday, March 19, 2010

Mobile based donations for Bangladeshi NGOs

When the North Kashmir earthquake stuck Pakistan in October 2005, the owners of the off-licence shop on top of which I used to live in North London were quick to setup a donation bucket at the check out counter in aid of their fellow countrymen and women who fell victim to the devastating natural calamity. The red buckets were wrapped with photos of distressed children and women sitting on debris and wreckage under an open sky with screaming calls to action in English and Urdu asking Londoners to donate for the tragedy. Certainly a generous move, the least people abroad could do when their roots back home are shaken and stirred by powers over which humans have no control. Keeping aside my political and historical bias, I also thought to participate in this humanitarian initiative by donating some hard earned sterlings, much to the gratitude and appreciation of my bhaijaans. Their weeklong charity event finally ended with enough cash collected from sympathised Londoners, to cook heavenly aromatic Biriyani, chicken curries and other gastronomic delights fuelled with sufficient supply of Jack Daniels, Smirnoffs and free flowing Stella Artois. Not to mention the night long merry-making with Bollywood music that ensued as they celebrated the inflow of cash, thanks to the earthquake miles away. A night of rejoicement for some, and reflections, repentance for myself, staying up all night and wondering why the hell did I waste my money by donating it to those untrustworthy exploiters.

Natural calamities are part of life in Bangladesh. We the habitants have become so resilient and used to floods, cyclones, droughts that we would lend deaf ears to threats of climate change or a massive earthquake until they actually flatten us. Our capacity and patience to deal with natural hardships also contribute to the inertia we display regarding political stalemates or even traffic jams...we are happy to express disgust and waste time, hoping that somebody else will do something about it. But when it comes to the discussion on poverty alleviation, crisis response and the eventual fundraising and donation - it has been proved time and again that there are a lot many amongst us, both within and outside Bangladesh, to help with their small contributions which become immensely powerful when summed up. Are we thinking anything in line of mobile based donations in this case? I am sure you must have come across calls for mobile donations by sending SMS to a certain shortcode in campaigns run by leading national dailies like Prothom Alo or by mobile operators themselves, like Banglalink or Aktel (stands besides Soma). I wonder how the development agencies are thinking to adopt this method.

It is argued to be a misconception that ordinary people in Bangladesh cannot afford to donate, as its a very poor country. Although the majority of the population may be under poverty line, the rich are either getting richer, the middle-class graduating to richer class or may be the actual poor are getting poorer. Whatever be the case, it does not require a crystal ball to establish that a certain class in the society has increased buying power and consumption desire which is taking them to Kathmandu and Singapore for gambling, Kolkata, Delhi for shopping, Malaysia, Thailand for holidays, leaving Cox's Bazar behind as the buying prowess can afford it. So the argument is for the fact that there are enough people inside Bangladesh who would be willing to donate for noble causes if certain criteria are met.

Authenticity of the organisation

Certainly we will not want to donate through our mobiles to a dubious or less known organisation who just might disappear next week, pretty much like the charity stunt executed by my previous neighbours in North London, as mentioned in the early section of this post. So its important to establish the authority and authenticity of the NGO to convince mobile users to donate through SMS. Its even more important as we as the NGO-mushrooming country have given room for enough frauds (count 1000+) to consider poverty reduction as a profitable business venture only and nothing else. So caution is the best policy as a donor, and if you are an NGO, make sure that your brand is established first and foremost before jumping into the mobile donation bandwagon.

The cause itself
Next comes the issue of the cause, how severe it is, how quickly donation is required, how long the mobile donation is open i.e. right now, for a week, open ended, monthly etc. need to be determined. For example, following a cyclone or a flood, or earthquakes (Haiti), donations are required as quickly as possible. Red Cross SMS appeal for Haiti raised $8M in 2 days as people were interested to get involved as quickly and as easily as possible. So the time taken to donate is extremely important, the shorter the time, the better it is. Other than natural calamities, entities such as Islamic Foundation can also consider how interested people can pay their zakaat or fitra during Eids (a religious cause in this case) through SMS based donations, assuming that the organisation meets the 1st criteria discussed earlier. However, its very unlikely that people will be interested enough to be involved in fundraising campaigns that go on endlessly. It can generate suspicion of corruption unless the NGO provides transparency on the movements of the SMS donation from ordinary donors.

Donation experience

When an ordinary donor is convinced about the authenticity and sympathised with the cause, its time to design the donation experience. You must be aware of the recent fundraising exercise by Jaago Foundation 'where a group of young boys and girls, clad in bright yellow tees, were seen thronging the roads in different parts of Dhaka city, selling flowers at red signals and talking to people in the vehicles. Not only was it a shock for commuters sitting in the traffic jam watching these young people in yellow Jaago Foundation tee shirts selling flowers, it was quite a pleasant surprise for them to watch these smiling youngsters trying to make a difference in their own little way.' So in this case the donation took place from the comfort of your car stuck in the never-moving traffic jams in Dhaka. The experience could also take place during concerts. Say Ayub Bachchu or James, urging a loyal strong 10000+ music revellers present during a concert against drug addiction, to donate 1 taka for 'Mukti' (the drug rehab center) so that youngters who are prone to drug abuse are warned and cared for. Events arranged by NGOs inviting various stakeholders during conferences, workshops are also good opportunities to lock in and ask for SMS donation from within the premises and during the events. Finally the amount to donate is extremely important too. Either a donor can be asked to settle for a monthly 1 taka donation, direct debited from the mobile credit or the donation amount can be open ended. Say to 2525 could deduct 10 taka from my account for the rehabilitation of the victims of Cyclone Nargis.

Follow up

Our NGOs are keen to keep the foreign donors happy with the hope of receiving fresh funds. All the monitoring and evaluation, impact assessment tools are designed to prove to the foreign donors how their money made a difference in the poor people's lives in Bangladesh. But if you are seeking to look for new donors in the domestic market through SMS based donations, you need to figure out your transparency framework for fund raised this way. Unless ordinary donors like students, housewives, service holders are not sure about the impact of their tiny (but important) donations, its likely that they will shy away from future calls to donate for any event whatsoever.

If Grameen Phone is one of the pioneers in facilitating mobile based financial services where we can pay electric bills, buy train tickets through SMS, then we are not far away from facilitating mobile based donations for social causes. This conversation would continue in next posts focusing on mobile based remittances, mobile banking for the poor, but in the meantime have a look at what others have done around, notably M-Pesa in Kenya, Obopay in India etc.

Thursday, March 18, 2010

How to Invest Like Peter Lynch - Kabir Ahmed's blog on stock investing

In a previous blog, we have discussed thoroughly the inevitable risk, so far, in the stock market that comes from a lack of knowledge. For that reason risk is contextual, that is depending on a degree of knowledge and also understanding many factors like quantitative, qualitative that are based on under-lying values of a company and psychological movements of shares. The risk needs to be measured and minimized through a learning process, implementing trading evaluation process and varieties of trading strategies. Many of us have already learned the risk minimization process and its importance, now we can begin to explore and experience. (read more)

We have also discussed how to build confidence in the process of screening a list of shares in a stock market investment. This process must be ingrained at a subconscious level to control our minds and create a habit of utilizing a defensive (conservative) approach in a stock selection. Despite many other investment methodologies available, a few people have become highly regarded and popular to global investors because their investment strategies are well-recognized on Wall Street as well as studied in academic circles. Just think about these consummate stock pickers who have run billions of dollars of funds in the last 30 or 40 years with their sophisticated stock screening process. There must be some traits which they are born with and also which they have learned so effectively that they can now trounce the market in order to gain lucrative profits on selected shares. Obviously, there are many questions to be asked. How do they perceive a company, how do they approach studying a company, and what type of investment methodology do they apply for analyzing shares? Does this make you curious at all? It makes me curious for sure. Obviously, their continuous successes are not based on pumping-dumping nor rumor, but rather a solid long-term objective, written on paper, that was followed as a blue-print. What could be more important than studying their investment styles? Old folks believe that there is no need to waste your energy to invent wheels when wheels already exist. These people created remarkable fortune with their great understanding of companies’ future prospect and experiences that can be a course of direction to other investors, in a way, to utilize their investment styles, and adopt their proven attributes and principles that will guide investors to stay on a right course to win on profit-taking.

One of the greatest successful fund managers was named Peter Lynch, who became revered and famous as a money manager worldwide, managed Fidelity’s Magellan fund which is one of world’s largest mutual funds. The remarkable achievement of his career is managing Magellan fund with a cumulative return of 2,703 percent and an average annual return of 29.2%. That small and obscure Magellan fund grew from $20 million in assets when he started managing the funds in 1977 to $14 billion at the time he retired in 1990. Many of his investment strategies and policies have been studied in academic circles around the world. Simplification to a company’s business is one of his mottos, especially understanding and explaining the investment methodology into simple logic—common sense. That was greatly compelling to ordinary people like John or Karim who are neither rich nor well-educated in financial terminology, who don’t have access to sophisticated financial resources, that are only for professional people. Despite all of the financial jargon, you can still do well in the market. He strongly believes that there are some events, news, and business prospect happening that are regularly available to anyone who may attain an investment edge by paying attention to what’s going on around us at the market place or in our society in terms of technological advancement.

For the sake of simplicity, ask yourself what you already know about a company by its products or services, whether they appeal to our society and show a sign of growing in the market place. When you carefully look at these selective products or services-ask yourself how much appealing is taking place to consumers and shaping our society to the advancement. See if these products are essential and integral to our everyday life styles or are they extension of luxuries—imagine you don’t have to depend on clothes, soft drinks, drugs, and also necessary food. All the products we use every day for the rest of our lives that can be sorted to cyclical and non-cyclical products and services. Cyclical represents those products or services that depend on the country’s economy and government’s changes, because they are such products that consumers and businesses only spend on more in an upward turn in the economy. When the market senses bad times coming in the economy, consumers will move toward non-cyclical or defensive stocks due to cyclical changes. Automobiles, vacation/airlines, tire, chemical companies and defense companies are classical example of cyclical stocks. When the economy is good, the middle class is expanding and people are working, so car sales do well. However, if there are layoffs and uncertainties or high interest rates, people may decide to hold off going on vacation or buying a car until next year. In such a cyclical period, some businesses are either falling off or moving up, this can be an early sign for investors to determine the timing to exit, by selling or enter, by buying, certain stocks. Businesses expand during good times or out of necessity. They buy new equipment and build new facilities, so equipment sales and constructions are also early sign for investors. The classic example of non-cyclical stocks is utilities. Everyone from consumers to businesses needs gas, electricity, and also some household non-durable goods such as toothpaste, medicine, necessary foods and others are classical example of non-cyclical stocks. Such common sense, with a little bit of paying attention, can separate the products and services into either cyclical or non-cyclical in order for investors to discover the prospect of certain stocks and decide whether or not they want to enter the market based on the proper timing, because timing is everything when it comes cyclical ones.

Based on the growth rate of earnings per share over the years, many other fund managers as well as Peter Lynch usually use certain methodology to classify stocks into one of these three main categories: fast growers, stalwarts, and slow growers, and also classify stocks to cyclical, turnarounds and asset plays based on other attributes. It is a comparison of PE with growth rate of earning per share per quarter, simple earnings per share, and annual sales to identify if a company is a fast grower, stalwart or slow grower.

Fast growers are companies whose annual EPS’s growth rate was either at 20% or higher in past three years; the growth rate can go much higher. However, a quick growth does not always sound good either because the company may experience trouble with its capacity and managing under a right course. So, it is important to look for at least 3 years of earning records. Some new companies are in the market place with their smaller size of business operation, but aggressive growth, due to new innovative ideas and pioneering in the industry, can achieve a growth rate of 20% or higher in earnings per share. Such a small company with a great deal of success in a small local city can multiply to different cities and different places by duplicating the same business model. Such an expansion of business model can also multiply its rate of earnings growth. Peter Lynch’s idea is to look for PEs that are either less or equal to the growth rate of earning per share then the stock is seen as a fair price. If PE stats are at half or less than the growth rate (say the growth rate is 40% while the PE is 19) that is much better bargain price. It is simply a comparison of how fast earnings growing and how fast PE changing. PEs must be lagging at least; the less it is comparing to growth of EPS, the more gets it attractive to investors. PE ratio to annual sales is when a company manages to have $1 billion ( such a company can be new, any index group but huge revenues growth) dollars of sales per year and the PE ratio is less than 40, then a stock is seen as a fair price. A stock is no longer a bargain price when the PE goes any higher than 40 even the company’s sales are higher than $1 billion (average sales in those fast growing companies listed in DSE).

Stalwarts are companies whose annual earnings per share growth rate exist between 10% and 19% and the PE stats must be half or less than the growth rate plus the yield (say, the growth rate is 45%, a yield is 5% and PE is 20) when the stock is seen as a bargain price. The sales of the company must maintain $2 billion dollars or higher in order to screen a company in a Stalwarts category. Earnings are growing moderately, however, companies in this group are matured and in a highly competitive industry and listed in blue chip categories like DSE-20 or CSE-30. Investors’ expectation from Stalwarts are dividends payments along with a little bit of stock price appreciation.

Slow grower companies are mostly large and aging, and can’t accelerate businesses easily with new business strategies, whose annual EPS growth rate is slightly higher than GNP which would be less than 10% of growth rate. Such companies are extremely stable but earnings growth or capital appreciation or dividends growth are not very noticeable because these Companies already have passed the peak point and are moving away from maturity. Especially utility companies when they have been in the business for decades and providing electricity to limited number of cities.

Turnarounds are companies facing troubles; however they have managed to pull themselves out of serious slumps through bail out money or its own strength. A perfectly healthy company which shows a long history of dividends payments, but currently the stock has created a new 52-week bottom price that can’t be disregarded if you are fishing for the bottom price.

Asset Plays is when the company’s assets exceed its market capital, such companies are commodity based or supermarkets that have been overlooked by Wall Street. Investors can justify the stock based on bargain price opportunity if a company represents a potential of hoard cash, therefore, the company’s price-book ratio might be much more favorable than what has been on the balance-sheet.

What do you get out after reading this article? It means a company can switch several times during its lifetime. Any new starting company starts with fast growing, if no barriers are placed then more companies enter to compete in a free market that pushes companies to stalwarts and then later companies go to further competition that pushes companies to slow growers. When competitors join in or new technology appears, they can become cyclical and then turnaround. If the price sinks far enough, however, they can be an asset play.

--Kabir Ahmed