Vol. 02, No. 02 July – December, 2014 ISSN 2347-9256icbm.ac.in/wp-content/uploads/2017/02/UDAAN-Vol-2-No-2-July... · The International Journal of Management Research Vol. 02, No

The International Journal of Management Research

July – December, 2014 ISSN 2347-9256Vol. 02, No. 02

ICBM-School of Business ExcellenceH Y D E R A B A D

A C C R E D I T E DA C C R E D I T E D

Editorial

Research ArticlesInnovations in Indian Information Technology IndustryDr. Shiv S Tripathi

Emotions – An Indian Mythological PerspectiveMs. Madhuree Mahato & Dr. Pranab Kumar

Crowdfunding for New Ventures: A Qualitative Interview StudyMs. Mitali Baruah & Ms. Krina Patel

Customer Perceptions on Credit Card: A Survey in Select Private and Public Sector Banks in Visakhapatnam Dr. K. Rakesh

Case Studies

India Post’s e-Post: Can It Bridge India’s Digital Divide?Mr. Pratyush Banerjee & Ms. Ritu Gupta

Chik Shampoo: Reaching to the Bottom of PyramidDr. Saurabh & Mr. Abid Sultan

Book Review

‘The Accidental Scholar’ by Jagdish N. Sheth with John YowDr. Vinay Chaganti

Editorial Board

Prof. Mohd. Akbar Ali KhanVice-Chancellor, Telangana University, Nizamabad, India

Mr. Douglas ViehlandExecutive Director, ACBSP, USA

Prof. Vidyadhar Reddy AileniFormer Dean, Faculty of Management, Osmania University, India

Prof. B. Krishna Reddy Dean, Faculty of Management, Osmania University, Hyderabad, India

Prof. V. Shekhar Principal - UCC & BM, Osmania University, Hyderabad, India

Dr. A. R. AryasriDirector & Professor, School Of Management Studies, JNT University, Hyderabad, India

Dr. R. NandagopalDirector , PSG Institute of Management, Coimbatore, India

Prof. S. ZararDirector / Principal, ICBM – School of Business Excellence, Hyderabad, India

Prof. Jitender GovindaniDirector – Academics, ICBM – School of Business Excellence, Hyderabad, IndiaEditor – in – Chief, UDAAN: The International Journal of Management Research

Prof. Kunal GauravAssociate Professor (Marketing), ICBM – School of Business Excellence, Hyderabad, IndiaEditor, UDAAN: The International Journal of Management Research

Prof. Khan FirdausAssociate Professor (Finance), ICBM – School of Business Excellence, Hyderabad, IndiaAssistant Editor, UDAAN: The International Journal of Management Research

© All Rights ReservedPrinted and Published by Dr. Ritu Zarar, Chairperson, ICBM – School of Business Excellence, Hyderabad, India.

Opinions expressed in UDAAN: The International Journal of Management Research are of the writers’. UDAAN: The International Journal of Management Research and ICBM – School of Business Excellence, Hyderabad, India do not assume any responsibility. All rights reserved, including the right to reproduce the contents of this publication in whole or part without prior written permission. (Subject to Hyderabad jurisdiction Only)

1UDAAN: The International Journal of Management Research

Editorial

Greetings to all readers!

The present issue of ‘UDAAN: The International Journal of Management Research’ is not only

topical and timely, but also comprehensive in its purview. Articles were selected keeping in focus

the value-addition to key management problems and challenges. Management as a body of

knowledge shapes as well as gets shaped by Management, the skill. It is a symbiotic relationship

with each being the cause and effect of the other. This essentially keeps the field vibrant and

young.

The article “Innovations in Indian Information Technology Industry” provides a 3600 analysis of

the process of innovation being implemented in IT companies, probing into key aspects such as

training, incentivization, funding, ownership of the idea, level at which innovation takes place

and many other such issues. Dr. Shiv S Tripathi uses qualitative technique to capture the varied

nuances of innovation.

Ms. Madhuree Mahato & Dr. Pranab Kumar take an unconventional stand-point in the article

“Emotions – An Indian Mythological Perspective.” From the lens of Indian mythology as captured

in the Ramayan, Mahabharat and Bhagvad Gita, the authors analyze the concept of emotions and

offer coping mechanisms for negative emotions that may hinder productivity.

Information Technology has changed the world forever. Distances have been bridged, time zones

have been encompassed and access to resources has been democratized. One such innovative

practice in today’s world is Crowdfunding. Ms. Mitali Baruah & Ms. Krina Patel have researched this

rising phenomenon in the article “Crowdfunding for New Ventures: A Qualitative Interview Study”

using the qualitative interview technique. The article not only captures the difference between

this modern method and traditional funding but goes on to delve deeper into essential aspects

such as importance of pitch, rewards, challenges and future of crowdfunding efforts.

Dr. K Rakesh takes the conventional theme of “Credit Card: A Survey in Select Private and Public

Sector Banks in Visakhapatnam” and approaches it from a competitive landscape, comparing

between private and public sector banks. The article concludes that credit cards are a necessity

of the financially intelligent and with experience the customer adapts the purchase options to

benefit from its flexibility.


Aligning products and services to match customer expectations is a must for any business

irrespective of being in the private or public sector. Indian Post too has stepped in to ride the

digital wave and meet its customer’s preferences. The case “India Post’s epost: Can it bridge

India’s digital divide?” questions the impact and efficacy of this strategy. The authors Mr. Pratyush

Bannerjee and Ms. Ritu Gupta look at challenges such as low internet awareness and penetration,

availability of electricity, energy loss and other such issues that widen the chasm between urban

and rural customers of India Post.

Dr. Saurabh & Mr. Abid Sultan have analyzed the penetration ability of a hitherto unknown brand

from CavinKare that went on to capture the Indian market by positioning itself for the low income

rural folk. The case “Chik Shampoo – Reaching to Bottom of Pyramid” presents a strategic view of

the branding initiatives and promotional tactics of Chik that gave the company a ready untapped

market, basically neglected by other players.

Dr. Vinay Chaganti has presented a book review of “The Accidental Scholar” by Dr. Jagdish N.

Seth. The reviewer highlights the strengths of the book and pays a glowing tribute to the life of

Dr. Jagdish N. Seth – the young research scholar, the confident academician, the wise guru and

above all else the trail-blazing Indian.

‘UDAAN: The International Journal of Management Research’ is a small contribution to the

objective of knowledge creation in the field of Business Management. The editorial team enjoyed

the process of selecting and editing articles and we hope that you – the readers take as much

joy in gaining a vantage point of view that aids your decision making ability. Thank you to all the

authors who have contributed to this edition.

Happy Reading!

Prof. Jitender GovindaniDirector – Academics, ICBM – School of Business Excellence, Hyderabad, India

Editor – in – Chief, UDAAN: The International Journal of Management Research

3Vol . 02, No. 02, July - December 2014

INNOVATIONS IN INDIAN INFORMATION TECHNOLOGY INDUSTRY

Dr. Shiv S TripathiAssistant Professor, Strategic Management Area, Management Development Institute, Gurgaon, India.

AbstractInnovation is the need of the day and in the field of Information Technology, it is much more

important due to the dynamic nature and fast rate of obsolescence of technology. Present case

is based on in-depth interviews of 28 middle and senior level managers in large IT companies

in India including companies of Indian origin and multinationals operating in India. The

respondents had an average of more than 7 years of experience in the IT industry and were

working in an organization having an annual turnover of over Rs. 1000 crores. It throws some

light on the process of innovation followed by these companies and the bottlenecks faced by

them in their path of product or service innovations.

Keywords: Innovation, Information Technology, Product Innovation, Service Innovation.

“We haven’t done much innovation. For 20 years the IT industry has been working on the

principle that it can provide cheap engineers who can work at cheaper rates”.

-Phaneesh Murthy in an interview to Economic Times1

IntroductionIndian Information technology industry has gone a long way from being an outsourcing service

provider to a software service provider to solution integrators. Companies in the sector have

realized two things – the importance of software products in business and diversification of their

portfolio of clients. A number of software product firms have grown over the last decade from

a little over 100 in 2000 to nearly 2400 in 2013. According to the industry body NASSCOM, the

revenue from the software product segment currently stands at USD 2.2 billion and is expected

to reach USD 10 billion by 20202. This recent shift towards products and services exports may be

owing to several reasons like stagnating growth rate of IT industry on account of over reliance on

outsourcing business, serious lack of innovation eco-system that promotes innovations in new

1 http://articles.economictimes.indiatimes.com/2012-06-26/news/32425004_1_software-companies-phaneesh-murthy-information-technology

2 http://www.pwc.in/press-releases/indian-software-industry-poised-for-strong-revenue-growth.jhtml


products and services instead of just outsourcing business and so on. In 2014, a diversified set

of Indian companies made it to the Forbes list of 100 most innovative companies of the world

comprising of an FMCG, an IT major, an automobile company, a pharmaceutical company and an

engineering major. All these companies had a market capitalization of >US $10 billion, spent at

least 2.5% revenue on R&D and had at least 7 years of public data3. Indian companies like L&T, Sun

Pharma, TCS and Bajaj Auto are part of the list besides the Indian subsidiary of Unilever. Against

the list of two IT companies viz. TCS and Infosys who were part of the 2012 list, in 2014 only TCS

is part of the list4. Tata Consultancy Services (TCS) added 7 US$100 million customers in 2013-14,

taking its total to 24 such customers5. The reason of TCS being innovative and acquiring new

clients can be ascribed to the fact that Indian IT companies need to break the long standing over-

reliance on the U.S. based clients and diversify their business, in which TCS made a significant

progress. It is assumed that soon TCS may generate more than half its revenues outside the U.S.6

The Premises of StudyThe case focuses on product and/or service innovations in the targeted IT companies. The purpose

was to develop a better understanding of the underlying common processes irrespective of product

or service innovations, which would have been different otherwise. To find out the present state of

product and service innovations in Indian IT companies or multinational IT companies operating

in India, 28 middle management employees of 17 IT companies were interviewed on the basis of

an indicative questionnaire for 30 minutes to 1 hour 30 minutes. To find out the present status

of innovation in the Indian IT industry data was collected through an in-depth interview from 28

respondents having an average experience of 7.5 years with 2 years as minimum and 13 years

as maximum. The sample size of 28 was sufficient to study about an industry (Creswell, 2007).

Case study methodology (Yin, 1981) was followed to present the findings. The experience profile

of respondents is shown in table 1. All the respondents were working in top Indian companies

or multinational companies operating in India. All these companies had a work force of 1000+

employees and had a turnover of over Rs. 1000 crores. All 17 companies in the sample were listed

in one of the stock exchanges amongst Bombay Stock Exchange (BSE), National Stock Exchange

(NSE) of India, New York Stock Exchange (NYSE), London Stock Exchange (LSE) or Nasdaq. There

were 12 respondents from the Indian IT companies and remaining 16 were from multinationals IT

companies operating in India.

3 http://www.forbes.com/innovative-companies/list/ (retrieved on December 10, 2014)4 http://www.forbes.com/innovative-companies/list/ (retrieved on October 15, 2012) 5 http://www.forbes.com/companies/tata-consultancy-services/ 6 http://www.forbes.com/companies/tata-consultancy-services/


Years of Experience No. of in-depth interviews2-4 045-10 20>10 04 Table 1: No. of respondents and their experience

The respondents were also from different functional areas as given below in table 2.

Functional Area No. of respondentsTechnical 24

Sales 02HR 02

Table 2: Functional areas of the respondents

The responses were collected through an in-depth personal interview of the respondents leading

to finding out the answers of questions, focusing on the inputs, processes and outputs of product

and service innovations in these IT companies. The purpose was to generate insights from the

process of product and service innovations followed by these organizations.

Product / Service Innovations: What and how do they do?Responses were collected through a structured discussion guide containing indicative questions.

Since in-depth responses were sought from the respondents during interviews the questions

were not limited to the discussion guide only. Yet the discussion guide was there to maintain a

logical sequence of questions whose answers were being explored.

Theme 1: Number of innovatorsWhen asked about the number of innovation mentors in their organization, the respondents were

of the view that around 20% people in their organizations can be termed as innovation mentors

i.e. people who actually do innovations for the company. On the other hand 6 persons were of

the view that everyone in the organization is encouraged to do innovations as it is evident from

the response given below:

“Innovation is an objective of yearly appraisals. So everyone is mandated to work on it……….”

-Senior Engineer, Performance materials & Technology in a multinational company


At the same time some problems were also visible like:

“The number of people driving innovation (product and service) maybe 1%, don’t know what’s

happening in the company on the innovation front”

-Business Analyst, Europe & UK in a multinational company

Present StatusEmployees in the lower levels of hierarchy are not empowered enough to lead innovation projects.

Only the top management drives all innovation projects and most of the times the innovations

are also the brain children of themselves.

RecommendationEmployees at the middle and lower level in the organisation structure should be motivated to do

innovations and the best reward for an innovation could be making the innovator as the project

lead as he will put in his best efforts for the success of that innovation more than anybody else in

the organisation.

Theme 2: Incentives for InnovationMost of the respondents said that there is a system of monetary and non-monetary incentives in

their companies to promote innovations in products and services like one respondent said:

“Incentives that we have in our company are of two types: financial and the intangible rewards.

Financial part includes the direct as well as the indirect financial benefits. The intangible part

includes flexible schedules, part time works, and sabbatical, study leave, training opportunity,

feedback and recreational leaves. There are many others which I am not aware of.”

-Deputy Chief Innovation Officer in a multinational company

Some other people from the market leading companies gave a reason of short-term complacency

in the large firms when they told that incentives are provided only if the innovation brings out

some patent. This is why a few of the large organizations were not growing as they could do due

to putting a curb on creativity of people. At times people abstained from giving new product

and service ideas as the rewards were far less as compared to the kind of effort to be put into the

process by the employee.


Present StatusBoth monetary and non-monetary incentives exist in the IT companies. Most of the Indian

companies relied on monetary incentives whereas the MNCs operating in India relied more on

non-monetary incentives like recognition and awards.

RecommendationAs far as innovations are concerned, employees become more motivated if their effort is recognized

or awarded. A policy can be made for recognizing potential innovators at various organisational

levels as well as at the levels of business units.

Theme 3: Idea to marketInterestingly, when asked for the time between idea generation and venture launch for a new

product or service all except 3 respondents said that it is below six months. It is evident from a

response given below:

“When any employee comes up with an idea, it is evaluated and goes for multiple rounds of

screening. On an average it takes about 4-6 months for any idea/tool or value-adds to be

implemented / launched.”

-Technical Analyst, Service & Insurance in an Indian Company

Three respondents said that it took more than one year for their company to implement any in

innovation in the field of products and services.

Present StatusMost of the organizations in the sample are efficient in taking the idea to market. However, some

of them take more time.

RecommendationIn today’s fast changing world, the slower organisations who take close to an year to bring the

idea to market need to revisit their structure so that the idea to market cycle become faster.


Theme 4: No. of new ideasWhen asked for the number of new product and service ideas followed by the company in the

last one year, respondents said that it was on average 3 to 5 new business ideas being followed by

the company. Despite this, more than 10 respondents commented “I don’t have the big picture”.

Present StatusFrom the responses it can be inferred that IT companies operating in India work in functional

silos and the person in one silo does not know what is happening in the other or outside. This

tendency curbs all the creativity that could have been extracted from a relatively large pool of

skilled employees and converted into real-life products and services.

Recommendation Internal communication amongst top management and the employees need to be improved

in order to change the practice of rational acceptance of ideas to shared feelings. Frequency of

cross-functional interaction amongst employees belonging to different projects/units must be

improved.

Theme 5: Funding InnovationsFunding was never a problem for IT companies working in India. It was also owing to the fact

that all the organizations surveyed in this study had a turnover of more than Rs. 1000 crores and

they were plush with funds as their business was growing year after year. It is evident from the

following response:

“……for medium level complex requirement funding is handled by DPE and finance department

and time for this is around 20 to 30 days. Exceptional cases are handled separately”.

- Team Lead in a market leading multinational company

FindingsIn most of the cases if the new product/service idea was promising, financing it was not a problem,

although there is no process mechanism for funding.

RecommendationClear cut stage-wise funding mechanism may be developed in organizations to avoid any kind of

biases towards the known people or experts only hosting the idea and the novices never getting

a chance at all.


Theme 6: Training in innovationTo find out the support system for innovation, when enquired about the people who have

launched or helped launching a new product/service for the company the average figure was

less than 5% which was still better than the figure of employees who have started a business for

the company after leaving it. The number of such people was very less as most of them joined

another IT company. It is evident from the following response:

“It is less than 1%. Most IT employees leave one IT company and join another IT company”

-Manager-HR at a leading Indian IT company

Training was an important need that was identified, as there were more than 50% people who

agreed that there was a strategic focus on innovation in the company, but just 20-30% said that

they have been imparted trainings for creating/developing new products/services. E.g.

“…Almost all are trained but without any effect.”

-Network Administrator in a multinational company

Present StatusNo specific training is provided to employees for innovation. At most it is limited to the top

management.

RecommendationIn order to develop a culture of innovation, employees at all levels should be trained about

innovation. To start with, it can be introduced during their induction programs itself.

Theme 7: Idea generation and implementationIn an answer to the question that whether the idea of new products/services is generated in-house

or with outside collaboration too, respondents agreed that most of the times they generated

ideas inside the company only and only on some specific issues external collaboration was

required. Companies deployed various idea generation programmes/platforms like ‘Innovation

Jams’; Software Engineering & Testing (SET) Labs, ‘Idea Junction’, Co-innovation Labs/Networks

(COIN) etc., yet often the process to convert these ideas into action was missing.


Present StatusEmployees believe that although mechanisms for idea generation exist, often there is no structure

for converting these ideas into commercial successes.

RecommendationCompanies must also think about developing a structure for implementation of ideas to convert

them into commercial successes. It can also be done by promoting open innovations.

Theme 8: Proactively launching new products or servicesWhen asked about whether they consider launching a new product when an old product reaches

maturity or they revive the old product, all the respondents were in favor of launching new

products. At the same time it was important to keep the relevant existing technologies alive as

they were giving a regular stream of profits to them. As suggested by one respondent:

“Launching a new product makes more sense when it reaches its maturity. In the IT sector, more so

than in the other sector, it’s a dynamic environment. If you don’t keep upgrading and developing

newer technologies, you’ll stagnate and competitors will topple you over. So, continuous

innovation is a mandatory prerequisite”.

-HR Manager in a leading Indian Company

Most of the respondents believed that their company proactively did product and service

innovations to stay ahead in the market and fulfilled the demand of its customers.

Present StatusThe share of proactive product/service development was increasing as it was considered better

by the respondents to launch and offer new products and services to their customers before they

even demanded it. It was because if they demand a particular product or service in urgency the

company might face a stiff competition with another player who was ready to supply the required

product or service on an immediate basis.

RecommendationIT companies may assess and understand the changing needs of the customers before their clients

recognize them. This way they can not only proactively share the knowledge with their clients as

well as they will be in a position to offer proactive solutions in the shape of new products and

services.


Theme 9: Outputs of InnovationWhen asked about the revenue generated by the new product and services, an average figure of

20-30% came out. In other words 70-80% of the total revenue of any company was generated by

the old core technologies and 20-30% was the revenue generated by the new products/services.

It was visible in the response like:

“It is around 30-40% considering old/Core product as maintenance job and Development as New

Product Development”

- Senior Solution Integrator at a large multinational company

When asked about what do they think will be the scenario of new products and Services’ share in

the total business after 5 years, most of them said it will be around 30-40 percent. The model might

be skewed towards the side of the new products /services whereas the present new businesses

will become the core businesses in future.

Present Status Due to high rate of obsolescence of technology and dynamically changing needs of the clients

the new products and services are going to occupy a larger share in the offering portfolio of the

company.

Recommendation Companies must try to maintain a balance between the core offerings and new offerings to its

clients and avoid any type of over-reliance on any of them for sustainability of the business.

References

l Creswell, J. W. (2007). Qualitative enquiry and research design: Choosing among five

approaches, Sage, California.

l Yin, R. K. (1981). The Case Study as a serious research strategy. Knowledge: Creation,

Diffusion, Utilization, 3 (Sept.), pp 97-114.


EMOTIONS – AN INDIAN MYTHOLOGICAL PERSPECTIVE

Ms. Madhuree MahatoAsst. Prof (HR), Usha Martin Education & Solutions Ltd., India.

Dr. Pranab KumarAssociate Prof., Dept. Of Management, Birla Institute of Technology (Deemed University),

Lalpur Extension Centre, Ranchi, India.

AbstractHuman resources have long been considered as a source of intense emotions that can create

a competitive advantage or disadvantage. Having good competent and talented employees

who can readily contribute with their positive emotions is an asset for today’s organizations.

The criticality of emotions and their effective management is increasingly being emphasized

in the modern stress oriented organizations. This paper aims to chart out the conceptual

viewpoints of emotions and also explore their Indian mythological base that is rooted in the

Ramayana, Mahabharata and the Bhagvad Gita. This study will prove to be a strong revelation

to all the employees and the HR managers who are on a frantic search for better ways to flush

away the negative attitudes and emotions from their workplaces.

Keywords: Emotions, Ramayana, Mahabharata, Bhagvad Gita.

IntroductionTraditional Organizations operated largely under predictable business environments and were

driven towards premeditated consensus. According to (Malhotra Y., 2000) the latest in-thing is

a dynamic and discontinuous change which has unseated the former organizational routines

and underlying assumptions. Even the ‘best services’ of yesterday have transformed to become

the ‘worst practices’ while core competencies turned into core rigidities. The role of employees

and their attitudes have been the focal point of many studies as they help craft the smooth

transformations for organizations into one that is modern suitable and performing.

Organizational climate is considered to play a major role in the creation of the right set of employee

attitudes, though there were issues and disagreements in concretizing the concept. It is the study

of individual perceptions that are created regarding the various aspects of the environments in

the organizations (Owens, 1998). It is also characterized as just an experience that creates long-

lasting effects on the employees’ behavior and attitudes with ripple effects on the employees’


productivity levels. While other researchers argue that it is more than an experience, (Schneider,

2008) has defined climate as an experientially based description of the work environment with

specificity on the employees’ perceptions regarding the formal and informal policies, practices and

procedures towards their organizations. (Adenike, 2011) has explicated Organizational climate as

a measure of individual perceptions or feelings about an organization. It can provide a holistic set

of provisions ranging from management or leadership styles, employee participation in strategic

decision making, creation of worthy jobs, tackling the daily predicaments like burnout, stress,

monotony etc. to the basic aspects like proper working conditions and career growth. These

provisions when served in the right amounts can lead to the creation of positive and channeled

energy within the organizations. This also brings in the trust element and togetherness that most

modern organizations seem to discount. The overall implications for creating positive perceptions

can be studied for an upsurge in employee productivity, organizational growth and effectiveness

and as a general boost in the quality of work life and satisfaction amongst employees.

Organizations, often believed to be institutions with rules and regulations guarding it, feel that

emotions have the capacity to de-stabilize their long standing decree. In fact (Vigoda and Meisler,

2010) opinions that the science, art and profession of organizations is based on systematic

and rational thinking. But these systematic and rational thinking processes are not devoid

of psychological attributes. This is so because (Ashkanasy, 2003) believes that emotions are

ephemeral and idiosyncratic. Their dynamic nature can make them become unpredictable and

more importantly manipulable also. In support of these statements (Kahn, 1990) posit that when

people occupy roles at work, they are not only the occupants of the houses that roles provide, but

in the process they also absorb the related emotional chaos. Psychologists are of the view that

people bring in their mental and affective processes to work. Sociologists also suggest along the

same lines that social exchanges are an inevitable part of organizations. Due to this the emotions

so expressed during the interpersonal interactions gain centrality. The emotional importance at

the workplace was further reiterated by (Kiel and Watson, 2009) with the statement that “you

get hired for what you know” (cognitive skills) and “get fired for not getting along with others”

(emotional skills).

Though the recognition of the existence of emotions in organizations & the importance of such

emotional experiences in our physical and psychosocial well-being have long since existed,

organizational behavioral frameworks started giving acceptance and consideration to this only

recently (Brief and Weiss, 2002). This in itself is an indication of the lack of tangible evidences in

this research field and helps to bring in novelty and freshness to this subject of research.


Emotions have gained widespread popularity with the growth in services sector contributions

across countries all over the world. Globalization has also greater than ever before created team

based structures and raised the levels of interdependence amongst the various departments and

employees alike. Traditionally organizations have emphasized more of technical capabilities to

ensure the survivability of its employees. Even historically, emotions in organizations have been

undervalued in favor of rationality with dualistic assumptions made regarding the two (Dougherty

& Drumheller, 2006). However these dualistic assumptions have become archaic as organizations

are re-branding their corporate images as favorable to customers and in the process have realized

that employees’ attitudes facilitate the same.

Employees’ attitudes are largely influenced by the core of emotions they experience both within

and outside their workplace. Emotions are created through the perceptions generated out of

cognitive appraisal of the situation at hand. Cognitive appraisal, according to (Dewitt et. al.,

2008) is “a process through which a person evaluates whether a particular encounter with the

environment is relevant to his or her well-being”. Emotional well-being in its experience and

expression has been a chief construct of interest for researchers owing to its implications.

Emotions – Research Domains & DefinitionsEmotions are the most basic facets of individuals since the expressions of feelings are vital as well

as indispensable. Expression of emotions can be considered as the most fundamental need which

is quite similar to the need for food, water or sleep. This essentiality has led to a constant and

continued association between emotions and individuals both at the organizational as well as the

societal contexts. The emotional associations which are experienced by most of us is because of

the environment in which we live in, the nature of work we do, etc. but the only difference is that,

the intensity of emotions experienced varies. Although the study of emotions in work settings is

not uncommon, organizational behavior researchers are increasingly recognizing the importance

of emotions in everyday work life (Arvey, Renz, & Watson, 1998; Fisher & Ashkanasy, 2000) and

hastening the process of study of such emotions. According to Hess (2001), emotions in everyday

language, can simply refer to feeling states such as happiness, excitement, love, fear, or hate.

Emotion (exmovere in Latin) can also be defined as “applying ‘movement,’ either metaphorically or

literally, to the core feelings” (Newman et. al., 2009).

The early definition as given by (Simon, 1967) was that emotions interrupt normal cognition

when unattended goals require servicing. The initial researches in the area of emotions evaluated

their creation as occurring through the interactions of the social system. They are the foundations


for the indiscriminate rational or irrational choices made by the people operating within those

social systems. The social function was looked upon as commanding the cognitive function of

individuals. Working on the social or circumstantial and emotional linkages, the appraisal theories

came into being. (Gratch et. al, 2009) argue that the ideology of appraisal theories is that the

organism’s evaluation of its circumstances forms the cognitive antecedents of the resulting

emotional experience and response. The real or perceived evaluation of the circumstances and

events are carried out with the beliefs and desires of the organism as a base. Emotions were

therefore considered as the design of the cognitive systems that judiciously employed cognitive,

physical and social resources to survive in a dynamic, semi-predictable and social world.

On the other hand, (Ekman 1992) viewed emotions as just discrete sensory functions that operate

on their own. Contrary to this argument was the dimensional theories proposed by (Russell, 2003)

who felt that emotions cannot operate on their own. Though they are born out of an individual’s

cognition, they are assigned a valence to the arousal experienced, in most cases retrospectively.

This brings in a series of positive and negative emotions that are elicited depending on the

valence assigned. All the theories on emotions worked upon till date has presented some or the

other limitations. The discrete concept of emotions did not hold as the appraisal theories proved

that there is an external linkage to the emotions. The dimensional theories come with their own

limitations as do not justify the valence assigned. Any arousal or stimulus, whether related or

unrelated, cannot merely be given a valence. It requires a detailed assessment of the arousal.

In an attempt to provide answers to the existing limitations in the emotional literature, modern

researchers like (Gratch & Marsella, 2004) are working on emotion as a moment-by-moment

adjustment to the changing demands of a responsive environment. Computational appraisal

models are being used to analyze and exemplify the sequential patterning of each emotional

episode as they unfold with time. Beyond the traditional approaches, modern researchers like

(Hamann & Canli, 2004) have attempted to inspect individual differences and their emotions

from the neural bases perspective. Emotions are fundamentally outcomes of emotional stimulus

which have the tendency to evoke a wide range of emotional responses across individuals. While

individuals are differentiated by personality, dispositional affect, biological sex, and genotype,

these differences in turn can dictate their neurobiological bases of emotion processing. These

emotional responses take various shapes into positive and negative emotions and also help spot

the differences between genders. Studies in this line declared women to demonstrate better

emotional brain activation, greater integration of emotional experience and memory but men

outshined women for emotional stimuli responses.


To add in more concretization to the emotion definitions, Ashforth and Humphrey (1995) define

emotions as an “integral and inseparable part of everyday organizational life. From moments of

frustration or joy, grief or fear, to an enduring sense of dissatisfaction or commitment, the experience

of work is saturated with feeling”. Drawing cues from cognitive appraisal, organizational events

and emotional experiences are evaluated for their pleasantness. Pleasantness in turn is segregated

into positive and negative emotions. Positive emotions are viewed as providing support for goal

achievement and individual motivation. (Scherer 1997 & 2007) opinions that positive emotions

experienced at workplaces can help to create more goal conduciveness, internal locus of control,

higher coping ability, self-consistency and responsibility. On the other hand, negative emotions

lead to a string of uncertainties, feelings of unfairness, goal and value incompatibility with the

organization, perceiving presence of obstacles, fear and turnover intentions. (Cure, 2009) explored

the concept of fear which is “the most powerful and fundamental of emotional states” and its

primary evolutionary purpose is to protect one from harm through the seeking of security, and

avoidance of threat as a reaction of defense and protection. Fear is enhanced or mitigated by the

structural elements of confidence, trust, support and experience and is an emotional result of

threat or danger. Fear unlike joy occurs under unforeseen conditions with individuals perceiving

that the levels of control they can exercise are at their lowest. Even for a similar negative emotion

like anger, the perceived level of control and the trust factor goes missing. Joy or happiness,

unlike negative emotions, are more rewarding. The establishment and execution of culture,

transformational leadership, positive psychological strategies and the strong will combined with

the need to alleviate fear and other negative emotions in the workplace allows the preventing

of fear and fear-based consequences. This can lead to accelerated positive behaviors and

more importantly finer dispositional characteristics like organizational citizenship behaviors.

(Jarvenoja, 2010) defines emotions as short, intense reactions to something, usually directed

toward an object or achievement. The valence of these emotional experiences can actually vary

and result in a variety of positive and negative responses. Positive responses, linked to high levels

of motivation, are joy, excitement, happiness and hope. On the other hand, negative responses are

due to boredom, fear, anxiety, or anger. The emotional experiences are upshot of organizational

policies and are generally studied as personality dispositional consequences. However modern

organizations and their inherent functioning style can corroborate the escalation of emotions

from a social perspective too. Though personality dispositions can moderate the intensity and

related outbursts of emotional experiences, the social society of organizations is also playing a

foremost role. With changes in organizational strategies there are changes as well as challenges

in the learning contexts too. This leads to a maze of complex interactions and places increased

pressure for conjuring active motivation and positive emotion.


This emphasizes the need for greater cooperation and pro-social interactions among employees

in the organization (Suan Chin et. al. 2011). Even (Huy, 2009) emphasized on the requirements

of establishing emotional authenticity in organizations that bring in consideration for both

oneself and others’ long-term well-being. Considerate emotional authenticity has long term

positive benefits in which individuals choose to display emotions in a sensitive and respectful

manner and also wherever required perform compensatory actions like counseling or support

in order to mitigate possible toxicity and restore the authentic self. This is considered more

legitimate and encouraging when compared to the emotional suppression perspective because

it helps to deal with unhealthy stress, depression, emotional dissonance and other psychological

problems. It also promotes an open sharing of failures in a climate where there is no fear of

punishment, embarrassment, or shame. When success is acknowledged and failure is mocked

at workplaces, employees become risk-averse and succumb to peer pressure. This leads to

dysfunctional groupthink and heightened uncertainty about appropriate responses and the need

to maintain good feelings with other group members. Along the same lines (Fong & Tiedens,

2002) have advocated the existence of emotional ambivalence in organizations which refers to

the simultaneous experience of positive and negative emotions regarding an event. It primarily

denotes confused emotional states that are apparent outcomes of a weak organizational culture

and organizational climate. To prevail over such adversities, later researchers have recommended

emotional offsetting and emotional channeling. These are akin to adaptive and sustainable emotion

management that deliberately smothers the negative emotions to experience positive emotions.

This self-regulation automatically brings in a satisfactory state and an internal psychological

balance. Therefore in order to raise the quality and sustain continuous organizational learning,

emotional authenticity and procedural justice can play crucial roles to ensure the same.

Components of Emotional ExperienceFurther studies in this field have also plowed the presence and influence of emotions on the

general functioning and conflict management of work teams. (Desivilya & Yagil, 2004) have

investigated the role of emotional experiences, individual dispositions like self-efficacy and a

situational-group factor like ethical climate to emotions experienced toward group members,

thereby indirectly affecting conflict management patterns amongst team members. With modern

views about conflict, viewing it as essential, natural and encouraging, it comes with an assortment

of emotions and experiences. Emotional experiences in organizations are commonly categorized

as behavioral, physiological and cognitive (Brodtker & Jameson, 2001). The behavioral element

deals with expression, physiological deals with bodily experiences and the cognitive element

involves the perceptual aspects.


The cognitive element of emotional experiences has been the desired choice of most researchers

as it had the potential to determine the consequences of the other elements too. As declared

by the emotional and climate authenticity researches, cognitive emotional research relates to

positive emotional experiences with open communication, sharing, positive attitudes, higher

self-efficacy, decreased disputes and constructive conflict management under ethicality.

Emotions have always been the social fabric of organizations. This fabric has been, more often

inherently rooted and is said to maneuver the social structure of teams, employee empowerment

facets and overall commitment levels. With growing research on teams and employee

empowerment emotions have come to the forefront to create a more explicit “emotion culture”.

Emotion culture is a general belief about the nature and causes of emotion, when an emotion

is experienced, and how the emotion should be expressed. Thus, emotion culture provides

guidelines by which individuals interpret their worlds (Thoits 1989). The “emotion culture” in itself

is an emotional review and creates meaning for the individual by which a variety of emotions are

expressed as an aftermath. (Sloan, 2005) has also considered emotions as being explicated by

the status hierarchy and social positions existing in the workplaces. Social status in workplaces

operates at two levels. First it is the social status within the workplace hierarchy which is commonly

taken as a basis for relative comparison amongst employees. The second is the occupational status

that determines the status in the society. Furthermore, although workplaces are not the core

for emotional settings, emotions do subsist and employees work their best towards experience,

regulation, suppression, manipulation and display of their own emotions. This calls for an account

of the multiplicity of emotions and the emotional management processes that occur during

everyday social interactions at work.

Emotions – A Mythological PerspectiveEmotions have long since existed and found a place in mythology as well. Indian mythology

has been centuries old and have explicitly highlighted the emotional shades of earlier times.

Ramayana, one of the earlier mythological impressions regards truth, courage and love as the

primary principles to lead a successful and ethical life. The Ramayana teaches us the truths about

human nature, norms for living and about man’s relationship with God. It has much therapeutic

wisdom and can be successfully employed in emotions identification and psychotherapy (Jacob

& Krishna, 2003).


Taking cues from this greatest epic Ramayana, it was found that the ruler or the modern day leader

plays a major role in managing the emotions of his people. Ramayana depicts that the people of

Kosala were contented, blissful and righteous in their own way as they were confident that their

land was cosseted by a strong, powerful army and a reliable king. Ayodhya, the capital of Kosala

itself meant that “it cannot be subdued by war”. The feelings of security were the reasons behind

their happiness which is akin to the modern day job security or a deep faith in the organizational

policies and practices. The epic also highlights the significance of having wisdom held by the

great sages at the helm which ensured the smooth running of the kingdom.

(Rajagopalachari, 2011), in his version of the Ramayana, also brilliantly explores the emotional

attributes of various characters and highlights the inherent predispositions possessed by each

of them. The epic marvelously presents a holistic range of emotions varying from positive to

negative. The positive shades were representative of feelings of happiness, joy, enthusiasm,

fearlessness, valor and dignity under austerity. The emotional tones were visible when King

Dasaratha was depicted as a doting father who was deeply concerned and overprotective about

his sons especially his eldest son Rama. Rama was considered an honest, ethical and duty bound

son who held immense respect for women. Feelings of happiness were felt by the readers of

Ramayana when Rama was born, his growth into a brave and virtuous warrior. There were also

vibrant illustrations of an entire city bathing in happiness over the decision to coronate Rama,

his triumph over the Asura community as a sixteen year old, obtaining of divine weapons and

marriage with Sita. Sita was loyal, faithful and a symbol of feminism and tenacity even under

austere conditions. But her emotional sways were visible when she portrayed fear and contempt

during her abduction by Ravana. She also portrayed concern, affection for Rama when he went

hunting for the golden deer for her. It was equally supported with distrust and suspicions, the

reasons for her to send Lakshmana to protect her husband. Sita had the audacity to forsake

lust, power and other worldly desires to remain chaste. Equally remarkable negative emotional

tinges were rendered for comprehension and scrutiny. Sage Vishwamitra, a warrior turned saint

was an archetype representation of braveness, wisdom and martial and spiritual prowess. He

was thoroughly impulsive and was easily over-powered by emotions like anger, defeat, disgrace,

sympathy, firm resolve and love. The epic gives vivid descriptions of his emotional overtones, the

misuse of the divine weapons out of sheer rage and the manner in which he provides shelter to

Trisanku, one of the famous kings of the Solar Dynasty, by creating an altogether parallel universe

for him. He also expresses his boundless joy when he gets conferred as the Brahma Rishi, a long

pending desire to counter Sage Vasishtha, thus exemplifying the insubstantiality of his emotional


intelligence levels. The see-saw of emotional waves continue throughout the epic with intense

sketches of characters like the stereotypical Parasuram, who swore that the Kshatriya clan needs to

be destroyed in order to avenge his father Sage Jamadagni’s death. His emotions were splendidly

countered by the soft and steady emotions articulated by Dasaratha. Rama too countered the

offensive display of arrogance with courteousness. Even during the plan for his coronation, Rama,

believed to be a perfect analyzer of human nature, gave up his throne with utmost calmness and

tranquility thus subduing the wicked intents of both Kaikeyi and Manthara.

On the other hand, Lakshmana, a doting brother, was representative of anger, impulsive outbreaks,

had the courage to force upon his ideas in any situation but unwaveringly served his brother

with immense enthusiasm and equally appreciable skill. The most imperative and the vital of the

characters is Ravana, the ten-headed demon king. Overwhelmed by lust, self-pride and war-like

qualities, he was best known as an achiever who saw through things which he desired the most.

Another interesting characterization was of Hanuman, a true slave-like, trustworthy soldier to

Rama. He is often conceived as one who lacked the capacity to assess his own capabilities. In more

ways, he was an over-achiever and an ideal servant filled with valor that helped re-unite Rama

and Sita. In more ways, Ramayana is more palatable as its emotional weaves bring in insightful

observations and immense wisdom that has deep-seated significance for those globalized times

that are filled with emotional duplicity and treason.

On the same lines as Ramayana, Mahabharata and Bhagavad Gita are also fundamental primers

that underscore the rich spiritual and self-realization processes. They facilitate the overriding

of the emotional issues and other conflicts thereby channelizing life in pertinent directions.

Mahabharata was best known for its Kurukshetra war between Pandavas and the Kauravas which

was reckoned as a battle of the good over the evil. It gave an insight into the activities, actions

and life of the Kuru Clan. The temperament and dispositions described as possessed by various

characters were close to reality. The Pandavas were five brothers and embodied all the moral

virtues. The Kauravas were hundred brothers, headed by Duryodhana. They were symbolic of

jealousy, vice and malevolence. Their greed for more share of the kingdom culminated in the

Kurukshetra war. This beautiful epic also delineates and unfastens the manner in which emotions

run high even for the seemingly cogent and indifferent Devas who contrive to their best to make

the Pandavas win the war as well as their kingdom back. On the other hand, (Swami Sivananda,

2000) echoes the emotional imprints through the Srimad Bhagavad Gita, the mother of all epics.

It is essentially a dialogue between Lord Krishna and Arjuna, narrated in the Bhishma Parva of the

Mahabharata that act as a guiding light and contains words of wisdom and practical teachings


that answer the vexing problems of the present-day individual. Its eighteen discourses formulate

the three path theory in which action, emotion and intellect need to work in harmony to achieve

anything in life. Primarily within any individual, both negative and positive forces tend to act.

If the negative forces cannot be tamed, collaboration with others fails to occur. Even the war

between nations or amongst family or friends mainly occurs due to the inherent selfish motives

and desires possessed by them that lead to a fight for possession and power. Collaboration and

the path of Ahimsa (non-violence) can resolve such situations. Also when two noble principles

conflict with each other, the higher principle should be given priority. Therefore Gita in totality

prescribes the right blend of action, emotion and intellect through which situations need to be

handled righteously, action be given undivided attention and energy without any apprehensions

about the result. This unmistakably would help in leading a meaningful life with self-realization

at its core.

ConclusionThe emotions that are generated and experienced either at the intrapersonal level, team level or

at the organizational level are rooted in the religion and the conventional social set-up. If every

individual can take cues from the mythology, it would become much easier to handle the day-to-

day problems for them.

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CROWDFUNDING FOR NEW VENTURES: A QUALITATIVE INTERVIEW STUDY

Ms. Mitali BaruahAssistant Professor, V M Patel Institute of Management, Ganpat University, Ganpat Vidyanagar, India.

Ms. Krina PatelAssistant Professor, V M Patel Institute of Management, Ganpat University, Ganpat Vidyanagar, India.

AbstractThis study addresses a new way to pool financial resources through an open call on the

internet – crowdfunding. Since the innovation of general web-based crowdfunding began

in 2008, crowdfunding platforms have expanded from the small-scale to truly massive

enterprises that have seen incredible growth. This has paralleled the crowdfunding platforms

shift from a niche idea to a mainstream funding solution. Currently, as this new industry

continues to grow and develop, it is important to evaluate its status and recent developments

to try to find clues about the future. Crowd funding is still a nascent concept in a country like

India where every year many entrepreneurs come up with their ideas in various fields ranging

from social cause to entertainment. Hence, objective of this study is to explore the novel

phenomenon of crowd funding and develop deeper understanding of this topic as it has not

received adequate coverage in literature. Here an attempt was made to explain the process

of Crowdfunding and explore crowdfunding as an alternative method of fund rising vis-a-vis

traditional methods. Hence project creators and platform providers were interviewed. Semi

structured interview questionnaires were used for this purpose. This study will be helpful to

aspiring entrepreneurs, researchers, teachers and students.

Keywords: Crowdfunding, Entrepreneurs, Social Media, Investment

IntroductionMichael Sullivan introduced the term “crowdfunding” in 2006. In general, crowdfunding is a

heady mix of charity, micro-finance and crowdsourcing, which makes it a new member of existing

financing landscape with its own unique style facilitated by number of internet site/portals and

social media. The process of crowdfunding can be defined as an open call, essentially through

the internet, for the provision of financial resources either in form of donation or in exchange for

some form of reward (Mollick, 2013).


Crowdfunding process can vary greatly in both goal and magnitude from small artistic project to

an entrepreneur seeking a hefty amount of seed capital as an alternative to traditional venture

capital investment (Schwienbacher & Larralde, 2010). Albeit, In India Crowdfunding has been

used more by creative industries comprising independent filmmakers, independent writers,

journalists, publishers, musicians, creator of performing and visual arts, games, theatres etc.

however, Bahubali Shete from India raised $1, 35,485 for developing a smart device named

“gecko” through the International crowdfunding platform indiegogo (John, 2013).

Crowdfunding is a process where project creator collect relatively small contributions from

a large number of individuals using internet/social media. A lot of people including family,

friends, acquaintances and complete strangers , who feel connected to project creator’s dream

emotionally , intellectually as well as artistically contribute some amount of money in exchange

of some non-monitory rewards like copy of a book signed by the author, product or game itself

once it is developed, original DVD signed by the musician or chance to perform with the band,

on screen credit for film or sometimes just name of the contributor can be used as a name of

protagonist in a film.

Research Methodology

ParticipantsIn qualitative research, the sample is selected based on the problem statement of study and

sample size is smaller than quantitative research (Russell, 2003). To achieve better understanding

of issues underlying crowdfunding process in India ,participants are divided into two categories

i) project creator ii) platform owner. Project creator is a person/team proposing an idea through

reward based crowdfunding website to receive funding. In most of the cases project was created

by a team and one member of a team was interviewed. Total 11 project creators, each representing

different teams have been interviewed, out of which one project creator has used international

platform indigogo.com, which is again a reward based crowdfunding platform. To get better

understanding of crowdfunding concept the project creators are interviewed irrespective of

success or failure of their projects. Researchers tried to interview 17 project creators, after many

e-mail reminders and calls they could manage 11 interviews. Hence, the qualitative research

method was applied using 11 semi-structured interviews that offer anecdotal narrative of

participant’s personal experiences with crowdfunding.


Platform owners are those who offer a crowdfunding website as a platform to the project creators

for displaying their idea and generating fund. From a team of platform owners any one co-founder

of a team was interviewed for the purpose of this study.

When this study was initiated in July 2013, three prominent crowdfunding platforms were in

existence in India namely wishberry.com, igniteintent.com, and catapoolt.com. from secondary

data it has been found that two more platforms were planning to start their operations in India

and they were start51.com and pikAventure; As crowdfunding was a very recent phenomenon

in India, founders of start51.com as well as that of ‘pikAventure’ were also interviewed, so over

all 5 platform owners were identified for interview out of which 4 have started their full swing

operations in India while pikAventure was still operating as a blog. However, when crowdfunding

is taken as a concept contribution of founder of pikAventure could not be undermined.

Interview GuidelinesFor the purpose of this study semi-structured interview questionnaire was used. The interview

questionnaire had been sent via an e-mail, some of the project creators have suggested that they

would be more comfortable with telephonic interview so for them recorded telephonic interview

was conducted. During telephonic interview, as and when required interviewer probed to get

better interpretation of interviewee’s answer, In case of e-mail interview, a mail has been sent for

clarification issues.

Data AnalysisFor the purpose of data analysis interviews were analyzed by keeping in view various emerging

themes related to crowdfunding. Recorded telephonic interviews were transcribed for the

purpose of data analysis. During the analysis nodes were created using nvivo software, which

represented narration as category of various concepts related to crowdfunding. As, This type of

research is conducted to provide interpretation of participants experiences through anecdotal

narratives as well as the learning related to any particular subject or concept, the results of

this study are presented as a descriptive theme. To make the theme more explainable from

participant’s perspective quotations from interview are added (Russell, 2003).


ResultsDomain 1: Crowdfunding V/s Traditional Funding MethodProject creators opt for crowdfunding instead of traditional funding methods for many reasons

apart from raising capital as Gerber et al found project creators choose crowdfunding to increase

awareness of project, engage funders, to have creative control, gaining approval and confidence

in the project as well as to learn more about business and fund raising (Wash, 2013). Further,

Crowdfunding is a better alternative for those new ventures who find it difficult to raise capital

from sources like bank loans, angel capital, VC, government subsidies or other similar sources

because they may be too innovative to be understood, too crazy to be valued financially or just

too risky to be funded by one individual or a single organization (Joachim, 2011).

Many projects do not get funding by traditional methods if the project is seen as a taboo in society

or if the funders feel that the idea is not going to be accepted by the people. Further, Contemporary

start-ups and risks inherent in them influence banks’ resistance to provide financing; Funds may

be given only to a level where the debt is secured with hard assets (Zider, 1998). Thus, banking

environment is still loyal to a system where collateral is a base for loan financing. Similar problem

was faced by Aditi Gupta, Co-founder of Menstupedia, a comic book about menstruation, which

will guide young girls about their changing bodies and especially about menstruation using

stories adopted from real life situations for which traditional funding method is particularly not

an option. Her view given to the authors in a personal interview are as below:

“Menstruation has always been a taboo in our society. Therefore, when we came up with the idea

about a comic book for spreading awareness about menstruation and were looking for investors

they were constantly turning us down saying that you cannot make profit by selling a comic

book. Most of them thought this is not a topic even that needs to be addressed.”

When it comes to creative approaches like independent filmmaking it is very difficult to raise

fund from producers and keep creative freedom intact. The same view was expressed by national

award winner independent filmmaker Onir as below.

“why I opted for crowdfunding is, there are films (which) are not perceived as a project, If you see

the way traditional financer finance; they are not driven by content but by stars and what they

need is business proposition…for me I am not here to make business proposition I am here to

make a film, I think for a film it is important to leave a mark, and one more thing is to join people

who believe in your project through crowdfunding.”


Many chose Crowdfunding because they feel this is the best way to reach out to the people they

want to target, like Sridhar Ragayan, Festival Director, Kashish – India’s biggest LGBT film fest.

“Crowdfunding is a great way to involve your target population or stakeholders. It is also a surefire

way of getting a lot of online mileage if your crowdfunding campaign goes viral. We have been

successfully crowdfunding for KASHISH Mumbai International Queer Film festival over the past

two years. It has proved to be a very good way of involving the LGBT community and building a

community spirit.”

However, there are many who term fund raised through crowdfunding as a ‘Stupid Money’ as it

does not get advantage of professional managerial advice required in situation of high strategic

uncertainty when chances of success are skewed (Larralde, 2010). However, the Crowdfunding

platform providers strongly oppose the term ‘stupid money’, like Satish Kataria, Managing director

of crowdfunding platform Catapooolt.

“Those who comment crowdfunding as ‘Stupid Money’ can’t be more naïve. Indeed, as proven

by its global success, crowdfunding is the best way not only to get funds and resources for your

dream project – it is the best form of customer gratification for the project/product that you are

developing. Indeed, as per some international studies, USD 1 raised through crowdfunding is

equivalent to USD 10 – considering the audience engagement it entails and hence the marketing,

user trust and awareness you end up creating in the process.”

For many project creators, absence of traditional financing method means more creative

freedom to them and crowdfunding can also complement the other forms of finance as it is not

just about money but it provides concept testing, marketing/communication , crowd sourcing

in making or for distribution purpose and also pre selling of products. Thus, crowdfunding can

become a substitute seed financing source for entrepreneurial ventures, As on the last day of

its crowdfunding, A project called “Gecko” – A smart device from connovate technology had

raised order worth $1, 35,485 on the crowdfunding platform indiegogo and now several big VC

and industry names are keen to fund them, but the founders are more interested in strategic

partnership rather than money (John, 2013).

Domain 2: Importance of Pitch/ Online CampaignThe project pitch is a page where information regarding project creators and objectives of project

has been provided. As in case of Traditional sources of finance there is a mechanism through which


investor can judge the quality of new ventures. While in case of crowdfunding amateur funders

apply different approaches to judge the quality of project. Here, project creators provide quality

signal through online video pitch or brief description of project as well as individuals involved in

it. Realizing this, all Crowdfunding platforms are extending help to the project creators to make

an appropriate pitch as stated by Anshulika Dubey of crowdfunding platform wishberry.com.

“Campaigners are not able to pitch (or sell) their ideas efficiently. In India, we are not taught PR

at school or college unless we are mass communication majors and unfortunately, crowdfunding

requires the skill to sell. To combat this, Wishberry has created a proprietary database of student

filmmakers who we train to create quality videos that would then help the campaigner pitch his

project to the crowd very well.”

Approaches to pitch varies on a basis of various project categories, as project creators can

pursue the potential investors through the information that compel them to believe in idea and

contribute. Hence, a pitch can make or break the project. As experienced by Jubanashwa Mishra,

one-week job project experienced the same.

“Reach is good and visibility is good but according to fund and all we didn’t get what we were

expecting financially, if you ask me in India it is very skeptical about crowdfunding, it is like ‘friends

funding’ , may be if we would have good campaign, we would have got a better response.”

However, Apart from pitch Marketing and PR are also important issues that need to be considered

in the process of crowdfunding. The crowdfunding project, which demonstrates third-party

endorsement, starts gaining increasing amount of funds (Mollick, 2013), there is a bandwagon

effect, which creates buzz about the project, which is helpful in attracting more funds further

(Agrawal, Catalini & Goldfarb, 2010). As Apple co-founder Steve Wozniak backed the product

‘Gecko’ from Connovate Technology through his tweet “I contributed to this – useful as well as

prankful” and then provided a link to Gecko’s page. Wozniak put $100 and funders started spurting

in. the target amount was $ 50,000 and the project ended up with $1, 35, 485. When Bahubali

Shete, CEO and MD of Connovate Technology has been asked that whether recommendation

of Steve Wozniak was just a coincidence or you put any special efforts for that so your work get

noticed by him. Following was the answer given by Bahubali Shete, CEO and MD of Connovate

Technology.


“It is bit of both. I am not really sure which one worked for us, we rely heavily on social media

marketing and targeted online magazines press releases”

Domain 3: Contributors Several studies proved that social capital can increase the chances of success in crowdfunding

projects (Moisseyev, 2013). Entrepreneurship related research proved that family and friends

are important sources to acquire seed capital for startups. Similarly, In case of crowdfunding

the family and friends can act as a mediator to resolve information asymmetry exists between

project creators and potential contributors by providing necessary information to other potential

investors given the knowledge Family and Friends have about creators (Agrawal, Catalini, &

Goldfarb, 2011). As per the reinforcement theory, greater initial contributions will elicit positive

effect on later potential supporters (Burtch, Ghose, & Wattal, 2011). Thus, the amount raised during

an initial stage is a promulgation of creator’s social networks and not only the quality of their

projects (Agrawal, Catalini, & Goldfarb, 2013). As web 2.0 has given people a unique opportunity

to connect with each other, crowdfunding has no respect for geographical boundaries and project

gets funding from world over due to availability of online transactions. This is how Bahubali Shete,

CEO & MD, Connovate Technology Private Limited has raised $1, 35,485 from more than 3000

contributors for his smart gesture control device ‘GECKO’.

“In our case initial backers were our contacts. Later it is mostly others from all over the world. We

have received funding from 50+ countries.”

Domain 4: Rewards Potential contributor’s contribution depends on the value they receive from contribution. As

Sommeregger has categorized five values namely financial value, functional value, social value,

epistemic value and emotional value based on his crowdfunding platform studies (Sommeregger,

2013). So, reward gives sense of belongingness/association to funder. According to Vasuda

Sharma of Project -Attuned spirit, one has to be empathic with the contributors to understand

what would appeal to them.

“My target were people who were fans and followers of my music, well-wishers etc. Keeping that

in mind I kept rewards that they would be interested in particular. Also my target audience being

youth, I wanted to also be able to reach out to people who had not heard me before and if they

were to go through rewards should find something interesting and worth the contribution”


Domain 5: Importance of Social Media Crowdfunding connects project creators to ordinary individuals who are not the professionals

from financial market, for them social media act as a tool to connect with the project creator. For

project creator, social media is not only a publicity tool but also a tool to check how many people

supported the project and based on that level of acceptance regarding their ideas can be gauged.

Project creators’ social media accounts can be linked to their project page on crowdfunding

platform through which funders are allowed to make comment and connect directly with project

creator (Moisseyev, 2013), and project creator can post updates regarding the project, which

helps in maintaining the investor’s trust in project creator’s ability. As noted by Bahubali Shete,

CEO & MD, Connovate Technology Private Limited, Project – ‘GECKO’

“Social media is definitely playing a major role in marketing our campaign. For example, one

tweet from Steve Woz made all the difference to our campaign. Social media is best way to create

awareness and make people visit our campaign page”.

Domain 6: Challenges of Crowdfunding In process of crowdfunding contributors not provide finance only but they also become an active

promoter of the product or one can say a project can have equal number of PR persons, who

have contributed to it. However, this is not possible without real time feedback and transparency

from project creator’s side and eventually it turned out to be a full time job to keep in touch with

contributors, posting project related updates, sending thank you note as well as acknowledging

contributors by responding to their comments or queries and the one who fails to do so may

actually hurt the project and hinder its chances to succeed (Gorshkov, 2011). The contributors can

be philanthropist, investor, customer or may be all of them and if project cannot be completed

in time limit and rewards are delayed then eager contributors may feel ignored and betrayed

(Wortham, 2012) due to it project creator’s reputation is always at stake as project is backed by

many contributors and thanks to social media it gets viral very fast. Jubanashwa Mishra, one-

week job claimed that it becomes bit difficult for one individual to handle it if s/he is travelling or

performing other job along with the crowdfunded project.

“The problem is like the person who is heading the campaign , he would responsible about

campaign’s success or failure, if you are travelling and you are the face of the crowdfunding

campaign then you should outsource the whole campaign to some dedicated digital agency

kind of thing, so they can work out, if you see, there are many who are successful like menstrupedia

in Gujarat, but I can admit my failure in crowdfunding campaign, because the first reason is I was

travelling and hardly I got time on weekend only ”


Many feel that crowdfunding is a good option for one time funding or creative projects, though

creative freedom is offered chances are high that idea may get stolen or imitated before project

creator actually implement it ,again, when it comes to entrepreneurial ventures we don’t have

many successful incidents of crowdfunding in India. However, Entrepreneur has to make a

strategic choice from available financing options to raise capital considering various costs like

transaction cost, search cost, monetary cost, time cost, negotiation cost etc. This can be termed as

the dilemma of choosing fast money through crowdfunding/Equity crowdfunding versus smart

money through Angel Capitalist or Venture Capitalist (Stevenson & Letwin, 2013). This paradox is

addressed in case of project ‘GECKO’ by Bahubali Shete, CEO & MD, Connovate Technology Private

Limited.

“Crowd funding offers very different opportunity and challenges. If you succeed in crowd funding,

you are getting the customer validation done right there. If you fail in crowd funding, it just meant,

you do not have a product that is solving any pain points. Secondly, crowd funding solves some

key issues associated with new product introductions for a small startup like ours – customer

acquisition, distribution channel etc. Thirdly, crowd funding offers a great platform for visibility

and access to world market. Traditional methods are good if you are a big brand and established

market and distribution channel. Last but not the least, crowd funding offers great way to give

best to both us and customers. What I mean is we are benefitted by the funding, which is not debt

or equity based. And customers are benefitted by the low cost as there are no middle men apart

from Indiegogo.”

Domain 7: Future of crowdfunding in IndiaIn future crowdfunding can take many forms like equity crowdfunding, debt model, profit /

revenue sharing model for entrepreneurs or startups, which required legalization through some

regulations and its pros and cons should be considered for platform owners, entrepreneurs/start

ups as well as investors. Equity crowdfunding is prevalent in many countries like UK, Netherlands,

Belguim,France, Germany , Australia and the US. The US government passed the JOBS (Jump-star

our Business Startups) Act in 2012 (Collins & Pierrakis, 2012). This act legalizes debt and equity

based crowdfunding. Under this act one can raise up to $1 million from investors and up to

$2 million if they provided audited financial statements. Under JOBS act Investors with annual

income of less than $100,000 may invest up to the greater of $2000 or 5% of their annual income,

for income above $100,000 per year, and investment is permitted up to 10% of total salary but

should not exceed $100,000 (Mitra, 2012). If similar steps will be taken in India then the question

is whether equity crowdfunding will provide growth opportunity or rules and regulations of


it may make crowdfunding lose its charm? The question answered by Ateel Bajaj, founder of

crowdfunding platform Start51.

“When crowdfunding arrived in USA in the online format, no one expected it to become such a

big hurricane, but by December 2011 about $350 million had exchanged hands on “Kick Starter”

itself and thus the Government had to step in, to legalize crowdfunding which resulted in Jobs

Act being signed in April2012. As per my views, Jobs Act came in place so that crowdfunding

and SEC do not cross paths. India is still to see the real birth of crowdfunding for common man.

Once similar hurricane hits the creative liberation of India, we should define our own laws for it as

amounts and figures in JOBS Act may conflict with SEBI rules and legislation”

Still some people are treading this ground quite cautiously as some experts dubbed it as a ‘boiler

room act’ because it may open the door to many small investors to be targeted by fraudsters

so the phenomenon crowdfunding should be given some time to take its own course. Similar

sentiments regarding equity crowdfunding in India echoed by Rinkesh & Jubin, founders of

crowdfunding platform igniteintent

“Equity crowdfunding is where proper laws will need to come in place and SEBI will have to play

a role in India. Without that it is difficult to track things in India. Not yet. First crowdfunding as

an industry should show growth in nonsocial space in a significant way. Only then learning will

happen and certain laws can be passed. As for US it’s a mature market now and thus very much

required to protect crowd’s money and platforms interest.”

Recently SEBI has put forward consultation paper on crowdfunding regulation for discussion

purpose, which delineates roles and responsibility of platform owners and project creators as

well as issues pertaining to contributors/investors.

DiscussionsLooking at present scenario crowdfunding is a good option for seed financing however it cannot

replace traditional sources of entrepreneurial finance in later stages, but it can complement them.

Further it is always a question that how many times a project creator opts for crowdfunding

and how many times s/he will be successful in achieving the target amount. However, in initial

phase with small amount of money, it can support the emergence of a project, which could have

not been possible otherwise. Further, Crowdfunding reduces the financial risk and blurs the

boundaries between marketing and finance by involving consumers as contributors. In order to


be successful, the campaign design, use of social media and other PR activities should be done

in a proper and convincing way that act as an impetus for contributors. However, the Goal of a

campaign should not be solely to seek funding only but it should help in marketing product/

project, involving target market and receiving feedback from customers.

As Most of project creators got initial funding from friends and family members and after that

they got contribution from stranger suggests that social network has a huge influence on process

of crowdfunding.

This study has some implications for future research. Like, the research can be done on contributor’s

behavior and motive, impact of social media connections on fund raising, effectiveness of various

pitches (text, image, and video) on fund raising in various categories of projects. Longitudinal

analysis can be done to see during which phase of the project ,fund raising activity boost up and

when it gets weaken, impact of other marketing activities like PR and public relation can also be

assessed.

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CUSTOMER PERCEPTIONS ON CREDIT CARD: A SURVEY IN SELECT PRIVATE AND PUBLIC SECTOR BANKS IN VISAKHAPATNAM

Dr. K. RakeshAssistant Professor, School of Management Studies, MVGR College of Engineering, Vizianagaram, India.

AbstractAs a part of financial inclusion the banks turn around with many new policies and schemes

to attract customers in rural areas like no frills account, zero balance etc., when comes to

urban the inclusion laid steps to competition. To survive and have better completion banks

come up with some additional services to the urban customers like less processing fees, less

documentation for loans, different types of cards like credit, debit, cash cards etc. among

them credit card have their own identity in all ways. Credit card today is an important funding

tool of commercial banks. However, this facility has several limitations like high cost of credit,

high penal charges for missing schedules etc. success of an organization is directly dependent

on high-level customers’ satisfaction. The findings are based on feedback collected from

cardholders by various methods. This paper issues of credit card and aims at making the

credit card as a payment instrument, more cost effective and cot friendly.

Keywords: Credit cards, banking, financial inclusion, competition, customer satisfaction

IntroductionA credit card is a payment card issued to users as a system of payment. It allows the cardholder

to pay for goods and services based on the holder’s promise to pay for them. The issuer of the

card creates a revolving account and grants a line of credit to the consumer (or the user) from

which the user can borrow money for payment to a merchant or as a cash advance. When a credit

card is used properly and responsibly, it may have many advantages for the cardholder. Some

advantages to using a credit card may include, credit cards are very useful for emergencies, also

cards offer great bonuses, such as cash rebates and frequent flyer miles, (you automatically get

these bonuses for just using the card!) and perhaps most importantly… if credit cards are used

responsibly they can help you establish a positive credit history. As the coin have two sides the

other side of the card is, if a credit card is used irresponsibly, it may have many disadvantages

and cause the cardholder financial distress. Perhaps the most devastating result of using a credit

card irresponsibly is the effect it may have on your credit history. If you do not use credit cards

properly, you can develop a negative credit history and, in turn, lower your credit score. Some

literature have been collected which will help the study.


Review of LiteratureSteve Worthington (1992) discussed changes in credit card terms and feels societal attitudes

may further reduce borrowing. He also suggested debit cards would become increasingly

important as a means of payment in UK. Plastic cards in general will be used more as paper

transactions decline. In Europe, there may be convergence of plastic card issuers observed. Hye

Jung Park, Leslie Davis Burns study (2005) indicated that fashion interest significantly influenced

compulsive buying directly & indirectly by influencing credit card use. Further, James F. Devlin,

Steve Worthington & P Gerrard (2007) examined why most multiple credit cardholders have a

‘man card’ used more than spending pattern associated with main subsidiary cards. The field of

consumer behavior covers a lot of ground. According to Solomon (1996), consumer behavior is

a study of the processes involved when individuals or groups select, purchase, use, or dispose

of products, services, ideas, or experiences to satisfy needs and desires. The official definition of

consumer behavior given by Belch (1998) is “the process and activities people engage in when

searching for, selecting, purchasing, using, evaluating, and disposing of products and services so

as to satisfy their needs and desires”. Behavior occurs either for the individual, or in the context

of a group, or an organization. Consumer behavior involves the use and disposal of products as

well as the study of how they are purchased. Product use is often of great interest to the marketer,

because this may influence how a product is best positioned or how we can encourage increased

consumption.

The field of consumer behavior covers a lot of ground. According to Solomon (1996), consumer

behavior is a study of the processes involved when individuals or groups select, purchase, use,

or dispose of products, services, ideas, or experiences to satisfy needs and desires. The official

definition of consumer behavior given by Belch (1998) is “the process and activities people

engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products

and services so as to satisfy their needs and desires”. Behavior occurs either for the individual, or

in the context of a group, or an organization. Consumer behavior involves the use and disposal of

products as well as the study of how they are purchased. Product use is often of great interest to the

marketer, because this may influence how a product is best positioned or how we can encourage

increased consumption. Banking is service-oriented industry providing a wide range of services

to the people in their day-to-day operations. Today the problem of the people is complex and

varies from individual to individual. Man created the credit system, but with the improvement

in transport and trade, people become mobile and the creditability of the entire customer

could not be established by all the sellers. The innovative humans once again come up with yet

another brilliant idea of plastic money. The plastics money or credit card offers the convenience of


providing on the spot purchase and eliminates the carrying of huge amount of cash. Credit card

is a plastic card issued by a bank or an organization or clubs to the consumers. The introduction of

credit card by banks all over the world is considered as a major step, the card has become a way of

life in advanced countries. That is also fast catching up in developing countries like India. During

1914, a number of oil companies issued the first credit card to their customer for the purchase

of gasoline, oil and accessories at the company’s stations. Therefore, local departmental stores,

railways companies also started issuing credit card. The Franklin national bank of New York was

introduced in 1951. It is the first banks in the US to adopt a credit card plan around 1958.In the

early stages its growth was very slow in terms of member and values. However, in the recent past

the scenario has changed dramatically.

In the mid 60”s slowly but steadily, these credit instruments struck it roots. Diners club was the

pioneer in launching the credit in India during 1961. The first nationalized bank to enter credit

card business was central bank of India, which launched its card in august 1980.Andhra bank

followed suit in next year. They are the innovations in the credit card business in India. Gradually

other banks adopted this scheme. The number of nationalized and private banks issuing credit

card has increased significantly. Credit cards are now not only an integral part of the consumer life

in metros, but even residents of smaller cities and towns have taken to them.

This can be attributed to the aggressive strategy of nationalized and private banks promoting

cards in smaller towns and cities. The credit card business has become increasingly popular in

India.

Objectives of the studyl To study the perception of the cardholders.

l To analyze the influences of credit card on buying.

l To find out the troubles faced by the cardholders.

l To study satisfactory levels of cardholders regarding bank services.

Problems of credit card holders

High interest rate: The main problem of the credit card holder that they regularly come across

was interest rate. The interest rate charged by the banks both public & private are hectic and

customers face a huge problem in using of cash rather than purchase of goods. It is easy to spend

money but extremely difficult to consume with credit cards. Just wipe and it done.


Annual usage charges: The annual usage charge or card handling charges unknowingly increase

the debt of the customers in enormous way.

Benefits to the cardholdersConvenience: Credit cards provide customers an easy and sophisticated way for the customers in

shopping and travel. This is even better way handling cash than a cheque or any other instrument.

They need to provide additional care if they handle cash in case of travelling etc.

Security: Lost cash can be used by finder. If the card is lost, the cardholder should report it to the

bank that issued the card as soon as possible, and it will preclude anyone from unauthorized use

of card .however, different banks may have different liability policies.

Emergency protection: A credit card will get the credit card holder through almost any financial

emergency it is like the security blanket that will cover him in most of situation.

Research MethodologyThis study is used both primary data and secondary data the primary data were collected by

using a structured questionnaire method. A questionnaire was framed to find out the perception

level of customers regarding services rendered by banks on credit cards. Secondary data were

collected from books, journals, magazines, and daily reports of various agencies and relevant.

The sample size was taken as 200 from Visakhapatnam, based on selective sampling. The sample

includes all class of customers like business people, online traders, self-employed, professionals,

etc. The customers also belong to various income levels and education levels. Out of 200

respondents, 167 customers have given complete information on questionnaire, for the article

sake, we have taken only 150 respondents data. Since the article was based on study of perception

levels of customers, the study related questions were tested using Chi – Square test.


Table 1: Chi - Square test on Customer’s perception on High interest rate

Particulars Observed Expected O - E (O - E)2 (O - E)2/EStrongly Agreed 63 48.6 14.4 207.36 4.27Agreed 46 38.4 7.6 57.76 1.50Undecided 17 26.4 -9.4 88.36 3.35Disagreed 13 16.2 -3.2 10.24 0.63Strongly Disagreed 11 20.4 -9.4 88.36 4.33

14.08

Hypothesis testH0: Customers experience that banks charge high interest rate on credit cards.

H1: Customers experience that banks do not charge high interest rate on credit cards.

The table value of c2 for 16 degrees of freedom taken at 5% significance level is 26.29., and the

calculated value is 14.08, since the calculated value is less than book value we accept the null

hypothesis saying that customers experience that banks charge high interest rate on credit cards.

Table 2: Chi - Square test on Customer’s perception on High charges on late payments

Particulars Observed Expected O - E (O - E)2 (O - E)2/EStrongly Agreed 69 48.6 20.4 416.16 8.56Agreed 43 38.4 4.6 21.16 0.55Undecided 26 26.4 -0.4 0.16 0.01Disagreed 7 16.2 -9.2 84.64 5.22

Strongly Disagreed 5 20.4 -15.4 237.16 11.63

25.97

Hypothesis testH0 : Customers experience that banks charge high on late payment of balance on credit cards.

H1: Customers experience that banks do not charge high rates on late payment of balance on

credit cards.



calculated value is 25.97, since the calculated value is less than book value we accept the null

hypothesis saying that customers experience that banks charge high on late payment of balance

on credit cards.

Table 3: Chi - Square test on customer’s perception on usage of card on unnecessary purchase

Particulars Observed Expected O - E (O - E)2 (O - E)2/EStrongly Agreed 19 48.6 -29.6 876.16 18.03Agreed 28 38.4 -10.4 108.16 2.82Undecided 29 26.4 2.6 6.76 0.26Disagreed 27 16.2 10.8 116.64 7.20Strongly Disagreed 47 20.4 26.6 707.56 34.68

62.99

Hypothesis testH0 : Customers experience that credit cards does not lead to unnecessary purchase of goods.

H1: Customers experience that credit cards lead to unnecessary purchase of goods.


calculated value is 62.99, since the calculated value is greater than book value, we do not accept

the null hypothesis. Customers feel that usage of credit card will lead to unnecessary purchase of

goods, which in turn leads to high debt to customer.

Table 4: Chi - Square test on Customer’s perception on Influence of Personal Factors

Particulars Observed Expected O - E (O - E)2 (O - E)2/EStrongly Agreed 54 48.6 5.4 29.16 0.60Agreed 39 38.4 0.6 0.36 0.01Undecided 29 26.4 2.6 6.76 0.26Disagreed 17 16.2 0.8 0.64 0.04

Strongly Disagreed 11 20.4 -9.4 88.36 4.33

5.24


Hypothesis testH0 : Customers experience that personal factors will influence the usage of credit card.

H1: Customers experience that personal factors will not influence the usage of credit card


calculated value is 5.24, since the calculated value is less than book value, we accept the null

hypothesis saying that customers experience that experience that personal factors will influence

the usage of credit card.

Table 5: Chi - Square test on Customer’s perception on Effect of Income & Expenditure

Particulars Observed Expected O - E (O - E)2 (O - E)2/E

Strongly Agreed 38 48.6 -10.6 112.36 2.31Agreed 36 38.4 -2.4 5.76 0.15Undecided 31 26.4 4.6 21.16 0.80Disagreed 17 16.2 0.8 0.64 0.04

Strongly Disagreed 28 20.4 7.6 57.76 2.83

6.13

Hypothesis testH0 : Customers experience that effect of income & expenditure will influence the usage of credit card.

H1: Customers experience that effect of income & expenditure will not influence the usage of credit card


calculated value is 5.24, since the calculated value is less than book value, we accept the null

hypothesis saying that customers experience that effect of income & expenditure will influence

the usage of credit card.

ConclusionCredit card which was considered to be only for spend thrifts has become one of the necessities

for financially intelligent. It was very much to be used only by higher income group where the

rotation of funds will help them from avoiding high interest rates. However, in today’s scenario

with development in banking and trading activities, fixed income group or salaried class were

also in progress using the same. It was clear from the study that the card leads to unnecessary


purchase of goods and expenditure. This may be so in the preliminary stage but when once a

customer get used to the credit cards the customer will know how to use the same in a flexible

manner.

Referencesl Kaynak, E. & T. Harcar. (2001). Consumers‘ Attitudes and Intentions towards Credit Card

Usage in an Advanced Developing Country. Journal of Financial Services Marketing, l6 (1),

24-39.

l L. M. Bhole. (2004). Financial Institutions and Markets. Tata McGraw Hill: New Delhi.

l Park, Hye-Fung., & Leslie Davis. (2005). Fashion Orientation: Credit Card Use and Compulsive

Buying. Journal of Consumer Marketing, 22 (3), 135-141.

l Snellman, Jussi S. (2001). Substitution of Non-Cash Payment Instruments for Cash in Europe.

Journal of Financial Services Research, 9 (2), 131-145.

l Sudhindra Bhat. (2007). Financial Management Principles and Practice. Excel Books: New

Delhi.

l Vasant Desai. (2010). Banking and institutional Management. Himalaya Publishing House.

l Worthington, Steve (1994). Retailer Aspirations in Plastic Card and Payment Systems-An

International Comparison. Journal or Retailing and Consumer Services, 1 (1), 30-39.

l Worthington, Steve (2006). Entering the Market for Financial Services in Transitional

Economies-A Case Study of Credit Cards in China. International Journal of Bank Marketing,

23 (5), 381-396.

l Worthington, Steve. (1992). Plastic Cards and Consumer Credit. International Journal of

Retail and Distribution Management, 20 (7).

l Worthington, Steve. (1995). The Cashless Society. International Journal of Retail and

Distribution Management, 23 (7), 31-40.


l Worthington, Steve. (1996). Smart Cards and Retailers—Who Stands to Benefit? International

Journal of Retail and Distribution Management, 24 (9), 27-34.

l Worthington, Steve. (1998). The Card Centric Distribution of Financial Services: A Comparison

of Japan and U.K. International Journal of Bank Marketing, 16 (5), 211-220.

l http://consumerjungle.org/jungle-talk/good-bad-ugly-credit-cards

l http://personal.natwest.com/personal/credit-cards.html

l http://innovareacademics.in/journals/index.php/ijbm/article/view/14


India post’s e post: can it bridge India’s digital divide?

Pratyush Banerjee Doctoral Research Scholar, IBS Hyderabad, IFHE University, India

Ms. Ritu GuptaDoctoral Research Scholar, IBS Hyderabad, IFHE University, India.

IntroductionIn March, 2011, the Department of Post (DoP) of India launched its online avatar- the ‘E Post’

in a giant leap towards revolutionizing traditional postal operations. Since its inception, this

innovative internet based postal service has been hailed by experts such as Union Minister

for Telecommunications and Information Technology, Mr. Kapil Sibal, as one possible solution

towards resolving the gigantic digital divide between urban and rural India regarding the degree

of information and communication technology (ICT) adoption. The ‘E Post’ service is expected to

enable the millions of Indians residing in geographically remote areas to avail the benefits of fast

electronic transmission of postal services. However, the road towards achieving that goal will

not be easy. This case discusses the potential infrastructural challenges unique to India which

can create barriers towards this novel effort to bridge the digital divide between rural and urban

India. Through such discussions, this case wishes to highlight important policy implications for the

Government of India as well as for rural entrepreneurs involved in similar ICT promotion activities

across the huge landmass covering rural India. Before discussing the technical, infrastructural and

cultural challenges lying ahead of the E Post initiative, let us first go through a brief overview of

the more than a century old history of the Indian Postal Service organization.

India Post: Organization BackgroundThe Indian Postal Services (henceforth India Post) is the vintage mail delivery service organization

of India. Over 150 years old, at present, India Post caters to over 150 million people in the

rural and urban areas of the vast Indian subcontinent. The Department of Post (DoP), as it is

currently addressed, presently comes under India’s Ministry of Communications and Information

Technology, currently headed by Mr Kapil Sibal. As of 2010, the Indian Postal system boasted

of over 5, 66,000 employees with more than 1, 55,618 offices across India, easily making it the

world’s largest postal network.


The postal service of India has its origins way back in 2000 B.C when the great emperors of India’s

golden past started using innovative ways to exchange messages across country. Some such

innovative practices were using foot runners called ‘Dak’ runners or ‘Harkara’ who ran or walked

all the way to the destination of the message where it was to be delivered, and the use of pigeons

as war messengers was also popular. Around 12th century A.D., then Sultan of Delhi, Qutb-ud-din

Aybak started ‘Horse Dawk’ where the message was taken across the country on a horse back by

the messenger. Later, the great Mughal emperor Akbar introduced ‘Camel Dawk’. With the advent

of the British Indian regime, a host of mail delivery services such as the Catamaran Mailman, Mail

carriage, Bullock cart mail, Bullock cart train, Rail mail, Sea Mail, Postman cycle and finally Air mail

was started in 1911. This is how the evolution of postal services in India occurred.1

Indian postal service was earlier called “Company Dawk” as it got established under East India

Company and took shape under them. Bombay saw its first post office in 1688, but the whole

system was reorganized under Warren Hastings, Governor General, Bengal in 1774. In those

days metal tickets were used as a token of payment for the post. In 1835 a committee sat for the

centralization of Postal Services. An act called Post Office Act was passed in 1837, this provided

uniform rates and routes and other specification for the postmarks. In 1850, a commission was

setup which reported in 1851 that led to amendment of Post office Act and it was restated in

1854. At that time Indian post office carried entire mail of British. Postmaster General of North

West Presidency was the first Director General, Mr. H P A B Riddle in May 1854.2

A century and half ago in 1854 in the Province of Sindh (then in British India), India’s postal system

created history by issuing India’s first postage stamps. By October 1854 all the post offices in India

were centralized. At the same time Railway mail service was initiated and India at that time had

701 post offices across country making it one of the largest networks. Air Mail was also started in

India in 1911 where a biplane flew from Allahbad to Naini with 6500 mails. This was a landmark in

the world’s history as it was the first official Air Mail in the world. The reach of this postal service is

what makes it unique- from the arid deserts of Rajasthan and Kutch to the icy heights of Ladakh;

with the highest post office in Sikkim at a height of 15,500 feet. This is what made the Indian

government enlarge its vision for the postal system as it reached the entire population of the

country.

1 Sandeep Varma, “Pigeons to post history of Indian Postal Service”, http://sandeepvarma.com/,

6th March,2011, extracted on 17th June,2011.2 “Indian Postal Service”, http://en.wikipedia.org/wiki/Indian_Postal_Service, Extracted on 17th

June, 2011.


Postal service in India has more than one job to perform- they connect the rural India in the

way that is not possible otherwise even with today’s digital age. In addition, India Post provides

banking facilities to the rural Indians in the absence of proper banks. Other facilities provided

include ‘general or registered mail, parcel post, speed post, express post, E Post and special

courier service known as EMS-speed post. There are several saving schemes like National Savings

Certificate, Kisan Vikas Patra, Recurring Deposits and Term Deposits’.3 For a long time after India’s

independence from the colonial rule, India Post operated like a typical state owned government

undertaking, and not until the 1990s, there was any effort to introduce some innovative ideas to

the service. This was mostly triggered by Jyotiraditya Scindhia, a young MP from Guna, who came

to charges during the fag end of the UPA regime. Under him, India Post first started promoting its

brand awareness and about its peripheral service activities actively to its customers. Over the past

fifteen years, India Post has been steadily establishing itself as a leading medium of information

and communication despite stiff competition from the internet mobile telecom services.

E Post: The New Age Post OfficeThere has been a rapid transition in the mode of communication since the internet revolution.

Today emails are more prevalent, and are fast replacing traditional postal media. But the

penetration of internet technology has still not reached the remote corners of rural India. ‘E Post’

(www.epostoffice.gov.in), an initiative by DoP, was introduced in 2011 to bridge this digital gap

and allow everyone to enjoy the benefits of ICT. On a related note, this initiative gave India Post a

platform to compete with the increasingly popular email services The services provided by E Post

include printed or handwritten messages of customers being scanned and sent through emails

via internet. Upon reaching the destination the postmen prints these messages and envelops

them to make a final delivery at the postal address. Such E Post centers have been set up in old

Indian Post Offices across India in major districts and towns. The centers are well equipped with

the required material like computer, internet connection, printers, etc. This initiative was launched

in late 2010 in five states on experimental basis.

In March 2011 a tie up was established with National Informatics Centre (NIC) which provided the

expertise to develop customized software to run ‘E Post’, which enabled an all India launch of the

service. Though there are separate ‘E Post’ centers, the service can be availed from any post office

irrespective of the location whether it is metropolis or a remote village. If the message has been

booked at any post office which does not have ‘E Post’ center then the message is sent to ‘E Post’

3 “Post Services in India”, http://www.iloveindia.com/finance/post-office/index.html, extracted on 17th June,2011.


center for scanning and dispatch. Similarly, if the message is received by ‘E Post’ center and if they

don’t cover the destination area, then they give it to concerned post office for delivery.

The ‘E Post’ service has been designed in a manner where the customers can directly access this

service from their home or offices if they have computer and internet access. They need to make a

payment from a prepaid card which can be purchased from selected post offices or other ‘E Post’

outlets. It is simple to use- the customer has to register him/her self at the ‘E Post’ portal (indiapost.

nic.in) and follow the instructions. Sachin Pilot, Minister of State for Communications and IT, 2010,

announced that the content of the portal would be available in regional languages very soon

(currently it is available only in English). The change in the language of the content availability

will ensure the availability and accessibility to more people who can avail the benefits from this

initiative. In fact the next version of the portal would be launched in Bangla and Kannada language.

The other services which will be added to the repertoire of E Postal service are electronic money

order, instant money order, sale of philatelic stamps, postal information, tracking of express and

international shipments, PIN code search, and registration of feedback and complaints online.

For the philately enthusiasts, this service can help in acquisition of rare stamps. Through ‘E Post’,

money orders may also be sent through a secured online payment gateway. The service will be

similar in use with its counterpart web based services by banks. Text messages, E Messages to

email ID’s across the world can be sent from customer’s computer or office or from post office.

‘E Post’ messages are printed on A4 (8.27” x 11.69”) size paper; if the message exceeds the limit

then the customer is charged for the number of pages. Indian Post Office Act, 1898 treats E Post

messages at par with the unregistered letters.

The ‘E Post’ service has been priced at nominal rates of Rs 10 per page per addressee. If prepaid

card is used then it costs only Rs 6 per page of A4 size. This business model will in one hand help

save paper and indirectly checking destruction of trees and forest products and on the other hand

will help reach out to people living in remote areas which are not accessible regularly through

conventional transportation networks. ‘E Post’ will also help businessmen and professionals to

make people aware about their product and services at low cost to select customers; thus serving

as an advertising medium. Professionals can send their publicity material from their home or

office, without having to incur printing cost and post and hand delivery- E Post will take care of

all such detail.


Infrastructural Challenges To Be Faced By E Post Initiative

Low internet penetrationThough abounding in potential and promise, the road to a successful adoption of ‘E Post’ will

not be easy. One of the key challenges ahead of successful implementation of this service lies

in the issue of low internet diffusion in rural India. As of June 2010, India had approximately

81,000,000 broadband subscribers making it fourth in the list of countries with maximum number

of broadband users after China, USA and Japan. However, in terms of internet penetration, India’s

broadband penetration figures are not very promising. India has an internet penetration factor

of 6.9 % compared to China’s 31.6 %, USA’s 77.6 % and Japan’s 78.2 % Penetration. This figure has

since marginally improved to 8.5 % in 2011.

On a sorry note, as of December 2010, India has the lowest internet penetration factor (6.9

%), among the world’s top 20 countries in terms of internet users, with only Indonesia (12.3 %

penetration factor) coming close in comparison. Although India’s internet usage has seen a huge

increase over the past 12 years- from an insignificant 0.1 % in 1998 to 6.9 % till the latest data in late

2010, as per the ITU report, it still has a huge void to fill. While China, with an internet subscriber

base of 420, 000, 000 users, represented 21.4 % of the world broadband user population, India

accounted for only 4.1 % as of 2010.

Also, in terms of internet penetration, a mammoth 92 % of the population still does not have

access to internet. If we look at rural India, the picture is even more dismal. According to the latest

wave of the National Readership Survey conducted in 2006, India had about 568 million people

residing in the rural areas spread across approximately 6,00,000 villages. Out of this huge number,

only a meager 7.45 million reported to have access to internet in a recent survey conducted by

the Internet and Mobile Association of India (IAMAI).

Lack of internet awarenessAccording to the IAMAI report, only 5.5 million (2.13 %) among these reported that they used

internet actively and regularly. In other words, hardly one percent of India’s rural population was

comprised of regular internet users. In 2010, there has been a modest increase in the number,

with the latest IAMAI survey revealing that by December 2010, there were roughly 15 million

claimed internet users and about 12 million active internet users in rural India. This upward

growth in internet usage has been spurred by a host of e-governance initiatives ushered by the

Government of India such as the Common Service Centers (CSCs) and State Wide Area Network


(SWAN). The private sector is also playing an important part in spreading internet awareness

through programs such as Indian Tobacco Company (ITC)’s ‘e Choupal’ venture and Microsoft’s

‘Project Shiksha’.

One commendable initiative in this respect has been the deployment of Common Service Centers

(CSCs). Started in 2006, CSCs are common public access points for computer usage stationed

usually at a convenient location for village users. As of 2010, CSCs and other public use computers

covered 65 % of places where the villagers could have internet access, with home and college PC

access making up for a meager 10 % of internet access points. The SWAN scheme, which provides

the backbone of the CSCs’ connectivity through its network of optical fibers, is also an essential

component of the rural IT awareness programs. The ITC e Choupals provide further access points

for the villagers to engage in internet surfing. Its 6500 internet kiosks cater to villagers of 40,000

villages across the country. Irrespective of such commendable efforts, internet adoption in

rural India is still lagging behind the country’s urban penetration. Speaking of awareness about

computers, in the ICUBE survey conducted in 2010 by IAMAI-IMRB on 94 million Indians residing

in rural areas of 7 states of India, it was found that the most important reason for non-usage of

internet was lack of awareness of internet (31 %). The survey also revealed that only 47 million (8.3

%) of the rural population in India is PC literate.

The ICube survey has suggested promotion of internet awareness through rural shopping and

fair events such as ‘Haat’ (weekly markets) and ‘Mela’ (fair), along with use of televisions to spread

internet awareness in rural India. Bulk of the online activities of rural internet users has been found

to be concentrated on finding out information on higher education, examinations and results

(48%). The percentage of activities related with online transactions was not very encouraging,

in 2010- online banking (6%), information on farming techniques (5%), booking of tickets (3%),

weather forecast (2%) and job search (2%), indicating low awareness and lack of trust among rural

Indians to make use of such benefits of internet in near future unless they are educated on the

untapped potential of internet which they were not availing on regular basis. In face of such hard

facts, the ‘E Post’ initiative is faced with a lot of technical and infrastructural challenges to make E

Post reach its optimum potential.

Low electricity penetration in Rural IndiaOne of the major technical problems that will determine how effective E Post is going to become

in near future is the issue of electricity. Another major concern will be the speed of internet

networks. In most rural areas of India, still dial-up connections are in operation, with frequent


disruption in transmission a recurring problem. In terms of rate of electrification (percentage

of population having access to electricity), India does not have a very promising figure, with

the 2009 International Energy Association’s (IEA) report indicating that among countries of

developing Asia, India’s electrification rate of 66.3 % is at best modest, with even smaller nations

such as Malaysia, Thailand and Vietnam way ahead of India at over 95% electrification. Therefore,

we are talking about 403 million people in India without access to electricity. Compared to 2008,

the electrification rate showed a slight increase in the electrification rate from 64.5 % to 66.3

%. However, compared to urban electrification (93.1%), electrification rate for rural India was an

abysmally poor 52.5 %.

It is not that initiatives have not been taken. The ‘Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY)’

is a plan launched to electrify rural areas in March 2005. Under this plan over one lakh unelectrified

villages were covered and free electricity connections were provided to an estimated 2.34 crore

rural BPL households. These projects are financed by the government where they have been

providing 90 per cent of the project cost as subsidy and have sanctioned Rs 33,000 crore out of

which Rs 17,900 crore has already been released. The RGGVY is involved in the following activities:

“forming rural electricity distribution backbone; creation of village electrification infrastructure:

decentralized distributed generation and supply; and rural household electrification of below

poverty line households”. RGGVY has been designed to give more emphasis to - “the states with

a large number of un-electrified villages and households—Assam, Bihar, Jharkhand, Orissa,

Rajasthan, Uttar Pradesh and West Bengal”. It also covers places with population of above 100.

There are special category states as well which will get special focus like Himachal Pradesh,

Jammu and Kashmir and Uttarakhand in the north east. From the data we know that on January

1, 2010, 67,607 villages had been electrified, 97,599 villages had been intensively electrified and

83.88 lakh free electricity connections had been given to BPL households. By March 2012 the

ministry expects to electrify more than one lakh villages and provide electricity to 175 lakh BPL

households. It would only be a miracle to expect E Post to succeed and reach rural customers as

nearly 40% of the country is yet to get access to electricity, let alone internet connectivity.

Low Energy Production & High Energy LossCompounding India’s electricity worries is the fact that India is also one nation where there is a

serious issue of transmission and distribution losses. As of 2010, only two out of its 28 states, Tamil

Nadu and Jharkhand, have less than 20 % electricity loss due to faulty transmission systems (OECD/

IEA Report, 2010). Especially in the North-East, the figure is above 50 %. As per data released by

the 2011 India Energy Handbook, India is lagging behind the total energy requirement and the


present volume of supply. As per experts, this scenario is going to remain same even in the next

5-6 years. Hence, whether E Post will be able to sustain in the long run will remain a matter of

speculation.

ConclusionKeeping in mind these above barriers that lay ahead of India Post’s E Post service, it will be safe

to comment that bridging the urban rural digital divide is going to be a stiff challenge. What

we can expect is that E Post will survive in certain pockets of the postal network, where the

issues discussed above are not that acute, and hope for a slow and gradual expansion of this

revolutionary service in the distant future. We should not forget the potential of this service for

the urban customers of E Post as well. After all, the new generation customers of India Post are

the ones who are internet savvy and will be glad to use the online avatar of the postal service.

At least that can help India Post to lure back its customers from their emailing tendencies to the

traditional practice of letter writing, albeit using a keyboard and a mouse.

Referencesl Cube Survey (2011), I-Cube 2009-10 Internet in India, IAMAI, available at: http://www.

digitaltribe.in/digi-data/icube_2009-2010.pdf, (accessed on 19.12.11).

l India Energy Handbook (2011), PSI Media Inc, available at: http://www.psimedia.info/

handbook_contents.html, (accessed on: 04.11.11).

l Internet Usage and Population Statistics (2010), Internet World Stats, available at: http://

www.internetworldstats.com/stats.htm, (accessed on: 13.10.11).

l Top 20 countries with highest number of internet users (2010), Internet World Stats, available

at: http://www.internetworldstats.com/stats.htm, (accessed on: 13.10.11).

l Key World Energy Statistics (2010), International Energy Agency (IEA), available at: http://

www.iea.org/weo/database_electricity/electricity_access_database.htm, (accessed on:

27.10.11).

l National Perspective Plan (2009). National perspective plan for renovation, modernization

and life extension of thermal power stations (up to 2016-17). Available at: http://www.cea.

nic.in/reports/renov_modern/national_plan.pdf, accessed on 19.12.11.

l Niez, A. (2010). Comparative Study on Rural Electrification Policies in Emerging Economies-

Keys to successful policies, Information Paper, OECD/ IEA, available at: http://www.oecd-

ilibrary.org/docserver/download/fulltext/5kmh3nj5rzs4.pdf?, (accessed on: 12.09.11).


Exhibit 1- E Post Website Homepage(www.indiapost.nic.in)

Exhibit 2- Internet Penetration Statistics of India (1998-2010)(Source: www.internetworldstats.com, as updated on June 30, 2010)

Year Number of Users Population %Penetration1998 1,400,000 1,094,870,677 0.1 %1999 2,800,000 1,094,870,677 0.3 %2000 5,500,000 1,094,870,677 0.5 %2001 7,000,000 1,094,870,677 0.7 %2002 16,500,000 1,094,870,677 1.6 %2003 22,500,000 1,094,870,677 2.1 %2004 39,200,000 1,094,870,677 3.6 %2005 50,600,000 1,112,225,812 4.5 %2006 40,000,000 1,112,225,812 3.6 %2007 42,000,000 1,129,667,528 3.7 %2009 81,000,000 1,156,897,766 7.0 %2010 100,000,000 1,173,108,018 8.5 %


Exhibit 3- Top 20 countries with Highest Number of Internet Users(Source: www.internetworldstats.com, as updated on June 30, 2010)

S l . No

Country or Region

Population,2010 Est

UsersLatest Data

% Population

(Penetra-tion)

Growth2000-2010

% of WorldUsers

1 China 1,330,141,295 420,000,000 31.6 % 1,766.7 % 21.4 %2 United States 310,232,863 239,893,600 77.3 % 151.6 % 12.2 %3 Japan 126,804,433 99,143,700 78,2 % 110.6 % 5.0 %4 India 1,173,108,018 81,000,000 6.9 % 1,520.0 % 4.1 %5 Brazil 201,103,330 75,943,600 37.8 % 1,418.9 % 3.9 %6 Germany 82,282,988 65,123,800 79.1 % 171.3 % 3.3 %7 Russia 139,390,205 59,700,000 42.8 % 1,825.8 % 3.0 %

8 United Kingdom 62,348,447 51,442,100 82.5 % 234.0 % 2.6 %

9 France 64,768,389 44,625,300 68.9 % 425.0 % 2.3 %10 Nigeria 152,217,341 43,982,200 28.9 % 21,891.1 % 2.2 %11 Korea South 48,636,068 39,440,000 81.1 % 107.1 % 2.0 %12 Turkey 77,804,122 35,000,000 45.0 % 1,650.0 % 1.8 %13 Iran 76,923,300 33,200,000 43.2 % 13,180.0 % 1.7 %14 Mexico 112,468,855 30,600,000 27.2 % 1,028.2 % 1.6 %15 Italy 58,090,681 30,026,400 51.7 % 127.5 % 1.5 %16 Indonesia 242,968,342 30,000,000 12.3 % 1,400.0 % 1.5 %17 Philippines 99,900,177 29,700,000 29.7 % 1,385.0 % 1.5 %18 Spain 46,505,963 29,093,984 62.6 % 440.0 % 1.5 %19 Argentina 41,343,201 26,614,813 64.4 % 964.6 % 1.4 %20 Canada 33,759,742 26,224,900 77.7 % 106.5 % 1.3 %


Exhibit 4- Countries with more than 50 % Electricity Access in Developing Asia (08 &09) (Source: IEA Database, http://www.iea.org/weo/database_electricity/electricity_access_

database.htm)

S.No. Name of the Country (South & East Asia)

Electrifi cation Rate (%) Population without Electricity (Million)

Total Urban Rural 2008 20091. Singapore 100 100 100 0 0

2. Brunei 99.7 100 98.6 0.1 0.0

3. Malaysia 99.4 100 98 0.2 0.2

4. China 99.4 100 99 8.2 8.1

5. Thailand 99.3 100 99 0.4 0.5

6. Chinese Taipei 99 100 98 0.2 0.2

7. Vietnam 89 99.6 85 9.5 2.1

8. Philippines 86 97 65 12.5 9.5

9. Sri Lanka 76.6 85.8 75 4.7 4.7

10. Mongolia 67 90 36 0.9 0.9

11. Indonesia 64.5 94 32 81.1 81.6

12. India 64.5 93.1 52.5 404.5 403.7

13. Pakistan 57.5 78 46 70.4 68

14. Lao PDR 55 84 42 2.7 2.8

Exhibit 5: Statewise electricity energy loss in India(Source: OECD/ IEA Reprort, 2010)


Exhibit 6: National Perspective Plan (2009)(Source: CEA Report, www.cea.nic.in)


Chik Shampoo: Reaching to the Bottom of Pyramid

Dr. SaurabhAssistant Professor, School of Business, Shri Mata Vaishno Devi University, Katra, India.

Abid SultanResearch Scholar, School of Business, Shri Mata Vaishno Devi University, Katra, India.

“If you cannot do great things, do small things in a great way.”Napoleon

BackgroundIn recent years Bottom of Pyramid and rural marketing has attracted huge attention of the

companies from almost all sectors and specifically from the fast moving consumer goods (FMCG)

sector. Market dynamic of the FMCG sector is quite dynamic and vibrant, which makes the

survival of the companies tough in this sector. Rural India consists of 5, 70,000 villages and 63

crores consumers. Rural population has grown by 12% in the last decade. In India about 70 per

cent of its population lives in rural India and rural markets accounts for 40% of Indian economy.

Despite of its huge size, growth rate and vast opportunities, companies often struggle to capture

the market because of its traditional outlook, scattered & heterogeneous nature with varying &

limited purchasing power capacity. Some of the difficulties faced by the companies while entering

rural market are:

Communication barrier: About 40% of the population is illiterate while 50% of the population

lives in media dark areas. There are 16 languages and 432 dialects (Dixit, 2011). Rural India is very

much diverse in languages and dialects. This is creating huge problems for the companies to

communicate with rural India.

Infrastructure: Poor infrastructure particularly in terms of road, railway and electricity is making

companies task further complex because of the increasing logistic costs.

Income: The most common source of income is agriculture - about 60 per cent of rural income is

generated from agriculture. Agricultural income is highly dependent of the yield of crops which

fluctuates from season to season and amount of rainfall. This means that income of the rural India

also fluctuates and thus proper forecasting of the income is quite complex task.


Social Infrastructure: Social infrastructure like education rate, development & growth, health,

nourishment, sanitation etc. in the rural India is very much unimpressive and due to which the

social development and life standard development is very much hindered in the rural areas.

Traditionalistic: Rural India is highly accustomed towards its culture, values and traditional

habits. This traditionalism is considered to be the heritage of the rural India and it governs the

habits and consumption patterns of the rural India.

Companies from the all sectors are trying implementing their best strategies to capture this huge

untapped market, particularly FMCG companies. In India about 75 per cent of the sales in fast

moving consumer goods (FMCG) and consumer durables sectors is due to Indian rural markets.

Some of the FMCG companies operating in India are Unilever Limited (earlier HUL), Dabur Ltd.,

Proctor & Gamble (P&G), etc. These companies are offering products ranging from tooth paste to

soaps to hair care products like hair oil, shampoo, conditioners, hair creams etc. Among all the

hair care products shampoo industry has the highest penetration of about 80 per cent.

The penetration of the shampoo among the Indian population is 14 per cent (Mohanty, 2012). The

size of shampoo market is Rs 2700 Crores of which the urban area accounts for 80% of shampoo

sold and rural areas account for 20% of shampoo sold in country. The market is expected to

increase due to increased marketing by players, lower duties and availability of shampoos in

affordable sachets. Sachet makes up to 70% and anti-dandruff shampoo up to 20%of the total

shampoo sale (Rahman et.al. 2012). This is primarily a middle class product because more than

50% of the population uses toilet soaps to wash hair. The industry has huge potential for growth

as there is huge market pending particularly rural market. However, this industry is facing certain

challenges such as:

l The frequency and usage of the shampoo is low,

l Mostly used at special occasions such as festivals or marriages,

l Around 50 per cent of the population use bathing soaps for washing hairs,

l Attitude towards package size and design varies from region to region e.g. northern region

prefer shampoo bottles where as southern region prefer sachet shampoo.

Per capita shampoo consumption in India is low around 38 ml while as in countries like Indonesia

its 160ml and in Thailand its 330 ml. As mentioned earlier shampoo penetration in India is low i.e.

around 14 per cent with 40 per cent penetration is in urban areas and 10 per cent penetration is in


rural areas. All the factors as mentioned above are creating hurdles for the companies to penetrate

shampoo market in rural India. However, firms like Chik Shampoo have crossed all these hurdles

to reach the bottom of pyramid with its innovative product, promotion and distributions strategy.

The shampoo industry has gradually evolved over the years. HUL has dominated the shampoo

industry from the beginning with brands like Sunsilk (launched in 1964), Clinic plus (launched in

1971), clinic all clear (launched in 1987). Chik Shampoo (launched in 1983) & P&G (entered India

1995) has molded the Indian shampoo industry. Over the years these companies has brought

the various types of products and now at present the shampoo industry can be categorized

into Normal Shampoo’s (Clinic plus, Sunsilk, Chik etc.), Herbal Shampoo’s (Dabur, Nyle etc.), Anti

dandruff Shampoo’s (Head & Shoulder ,Clinic all clear etc.) & Premium shampoo’s ( Loreal, Revlon

etc.). These different ranges of products along with their variants and different packaging sizes

have created various revolutions and booms in Indian shampoo industry. One such revolution

was “Sachet Revolution” started by Cavinkare Pvt. Ltd. through its brand “Chik shampoo”.

The 1980’s was an era were multinational companies used to dominate the shampoo market with

its shampoo bottles. Such products were mainly sold at the big stores. With limited economic

opportunities the purchasing power of the rural people was very much limited. Shampoo was

considered to be a luxury item as people could not afford to buy big bottles. Also the access

of the rural population to the big stores was very much limited as visiting to the town or city

was an expensive affair as well as time consuming process. Within these constraints the buying

of a shampoo by the rural population was a complex process. So people mostly used soaps

as a substitute for washing the hairs. Although, need of cleanness used to get fulfilled but the

satisfaction of the people with the usage was very much low, rather extremely low. As soap usage

was not without flaws - tangling of hairs & dull shine were the two main dissatisfaction factors.

Well aware of these constraints and flaws Mr. C.K.Ranganathan thought out of box and thus came

Chik India into existence with the capital investment of Rs. 15000.

Cavinkare Pvt. Ltd. (CKPL)CavinKare Pvt. Ltd. is a diversified FMCG company with brand in personal care, food dairy and

beverages. It was established in 1983 under the name of firm Chik India with capital of Rs 15,000

in a rented accommodation for house-cum-office, at Rs 250 a month, and a factory for a rent of

Rs 300 a month and shampoo-packing machine for Rs 3,000. In 1990 the firm was made private

limited company under the name Beauty Cosmetics Pvt. Ltd. in 1998 to revamp its corporate

image Beauty Cosmetics Pvt. Ltd. was renamed as CavinKare Pvt. Ltd. Presently the company


owns more than 20 brands like Chik shampoo, Nyle shampoo, Spinz , Mera shampoo , Ruchi

pickles etc. with 6 state- of-art manufacturing facilities and presence in 13 countries like Srilanka,

Nepal, Bangladesh, Malaysia, Singapore, USA etc. The company is presently having 388.36 crore

as invested capital. The net worth of the company is 141.44 cr. The net sale of the company is

916.80 cr with 18.49 per cent rate of growth on net sales. The gross turnover of the company is

77375.15 lakhs and has 40,698 tons of installed capacity of production. The company products

are sold across the country twenty five lakh outlets through an all India network of 5351 stockists

and around 3000 employees. As a true success story of CavinKare Group has crossed a turnover

of 11000 million INR in 2011-2012.

Launch Of Chik ShampooThe launch of Chik shampoo an acronym for its founder Chinni Krishnan was launched in 1983 as a

well planned venture by son Mr. C.K.Ranganathan (the company is presently known as CavinKare)

towards tapping of Indian rural market. Mr. C K Rangnathan after breaking away from his brothers

launched a me-to product against ‘Velvet’ a commonly available product sachet priced at Rs.1.

The Velvet was high on distribution in southern India with a unique fragrance of lime. Mr. C K

Rangnathan toyed with the various brand names say ‘Lemen’, ‘Beena’, and ‘Tonic’ against some

of the regular brands ‘Lemon’, ‘Heena’ and ‘Doctor’ respectively. The initial ventures were rejected

candidly by the distributors and the retailers. Under the zeal of proving and knowing the huge

market availability in rural areas but with limited purchasing power Mr. Ranganathan thought

out of the box by launching shampoos in “sachets” with price tag of 50 paisa in rural areas. The

decision was a revolutionary as all multinational companies used to sell products in big bottles at

the big stores and not in sachets except Velvet which was in the urban markets and the sachets

were priced at Rs.1/-. The small kirana stores and rural markets were totally ignored by the

multinational companies. Within this background, the Chik India was founded with capital of Rs

15,000 in a rented accommodation for house-cum-office for Rs 250 a month, factory for a rent of

Rs 300 a month and shampoo-packing machine for Rs 3,000.The survival and growth of the Chik

shampoo was not easy because of the presence of multinational companies and the traditional

habit of rural population using soaps for washing of the hair. However, the proper understanding

of the consumption behavior and market helped the Chik shampoo to carve out its niche in the

market. Mr. C.K.Ranganathan analyzed constraints and issues of the rural consumption in a very

descriptive way and came out with various strategic ways that helped the company to change the

traditional habits of washing hairs as well as helped company to create brand awareness about

its product.


Being well aware of the drawbacks of soap usage Mr. C.K.Ranganathan started a campaign

of live demonstration of shampoo usage and its benefits like smell and silky & shiny hair. The

Chik Shampoo also sponsored shows of Rajniknath’s films and relied on advertisement, live

demonstration and free sachets distribution among the audience after these shows. All these

efforts worked well and helped Chik shampoo to create brand awareness as well as market share.

Although, the initial journey of the Chik shampoo was not good. The company was not able to

generate any profit in the first year. However, with perseverance, dedication and proper market

research & analysis Chik shampoo started making profits from the second year as well as their

sales started picking up. The well planned marketing strategies further helped companies to

increase their sales and attract the rural consumers for using the Chik shampoo. The company

started scheme of buy 5 get 1 free for the deeper penetration into the rural market as well as

for increasing the monthly sales. Due to such marketing interventions the sales went up from

Rs 35,000 to Rs 12 lakh (Rs 1.2 million) per month. With further research and development Chik

shampoo was introduced with jasmine and rose fragrances, this also helped in increasing sales by

Rs 30 lakh (Rs 3 million) per month. The brand promotion with the endorsement of leading south

Indian actor Amala increased the sales up to Rs 1 crores. The rural penetration increased once the

village dwellers were given a live demonstration along with three free samples to each. The low

size and minimum price introduced the shampoo as an accessible product for the rustic areas.

It instigated as well as ensured the repeat purchase of the product. The mobile beauty parlors

that demonstrated and promoted the sales along with retailing the product with promotional

offers created a niche for personal hygiene for hair care in rural areas. The innovative market

positioning with small sachet packing and strategic pricing at Rs. 1 and 50 paisa as well as with

agile distribution and adaptation to the changing consumer needs made Chik a trend setter and

lead it to a number two brand in the country.

Competitive Position Chik shampoo is the one of the oldest shampoo of Indian shampoo industry that revolutionized

the industry, with its sachet marketing. Before the economic importance of bottom of pyramid

(BOP) was popularized by the late Prof. C K Prahalad, Chik shampoo had already established

itself as an example for BOP. Today Chik shampoo is a recognized and one of the top five largest

shampoo brands in India. It has the rural penetration in over two million homes in India every year

having rural market share more than 21 per cent.


Table 1: Market Share of Leading Shampoo Brands in India

S.No. Company (Brands) Market share in %1 Unilever Limited (Sunsilk, Dove, Clinic plus) 47

2 P & G (Head & Shoulders and Pantene) 23

3 CavinKare (Chik, Nyle) 11

4 Dabur (Vatika) 5

According to the ORG-Marg: figures quoted by the company, Chik, which is the No 2 shampoo

brand in the country, is closer than ever to market leader Clinic Plus. The gap between the two

started closing in since April 2001, when Chik Shampoo had a (volume) share of only 15.18 per

cent against Clinic Plus’ 29.19 per cent. By April 2002, Chik’s share stood at 21.1 per cent and Clinic

Plus at 22.9 per cent. Also, the market shares in the two southern markets of Andhra Pradesh

and Tamil Nadu (for sachets, which have an MRP of below Rs 1.50) for the period January-March

2002, indicate a very healthy growth for CavinKare Chik has grown (in volume terms in the sachet

market) by 17.87 per cent in TN while HLL’s brands have a share of 5.42 per cent. In the AP market,

Chik has a share of 22.9 per cent (volume terms) as against HLL’s brands that have 16.7 per cent.

Even the all-India figures reveal the same story. Chik has a share of 16.29 per cent, while HLL’s

brands have 11.84 per cent share in volume terms.

Of course, the story is reversed when the figures are compared in value terms. According to market

sources, HLL’s Clinic Plus Protein Shampoo had a 27 per cent market share (in value terms) in

April 2002 against Chik’s 8.89 per cent. The difference between the value and volume shares can

be attributed to the price differential between the two brands. As market share figures indicate,

the bulk of the growth in the shampoo market has come from the low-priced segment, where

CavinKare is most active. This segment has grown from 5 per cent in 2000 to 13 per cent this year,

while Chik has jumped from 11 per cent to 20 per cent in the same period.

The strong rural strategy and the one to one contact with heavy smell-and- feel strategy (where

the demonstration was done on a boy and the assembled audience were asked to smell the

fragrance and touch the smoothness of hair), made rural people well connected with the brand

Chik. A small start up venture held for strong hold in rural areas. In statistics by the company it

holds number one position in rural market share in Uttar Pradesh, Bihar, Andhra Pradesh and

Tamil Nadu and number two in Madhya Pradesh and Odisha. The states have huge market in

terms of rural population. Ref table 2.


Table 2: Rural penetration of Chik in Major States of India 2012

S.No. States No.of villages

Market Share of

Chik

Rank status

withrespect to other

Shampoo Brands1 Uttar Pradesh 107440 67% 12 Madhya Pradesh 55392 22% 23 Bihar 45113 32% 14 Andhra Pradesh 28123 39% 15 Tamil Nadu 16870 46% 16 Odisha 55352 19% 2

CavinKare has been able to position the Chik as a distinct brand in the shampoo market. With

aggressive marketing and promotion strategy it has created a niche for itself as a shampoo that

provides fragrance, strengths, cool and black hair. The vectors of brand positioning are directly

proportional to the Indian rural consumer’s preference. They relate easily to the sensation of

fragrance, and prefer dark hair. The Chik shampoo was launched in black color and in black

packaging. As per an Economic Times 14 May 2002,:

Some of the earliest sachet shampoos such as Chik were black in color. Conventional marketing

wisdom would have you believe that a black shampoo just won’t work. Rural India proved

otherwise. The story goes that customers believed that the black color shampoo actually removed

dirt, because the hair retained some black color and hid the grays and the whites.

Table 3 Competitive Positioning of Major Shampoo Brands in India

S.No. Brands (Company) Competitive Positioning

1 Sunsilk (Unilever Limited) Silky, shiny, voluminous strong and black

colored hairs

2 Dove (Unilever Limited) Damage control, daily hair care

3 Clinic plus (Unilever Limited) Strong and long hair, Anti-dandruff shampoo

4 Head and shoulder (Procter Gamble) Anti-dandruff shampoo

5 Pantene (Procter Gamble) Smooth, silky, voluminous, full, lively, long,

black hair

6 Chik (CavinKare) Fragrance, strength, cool and black hair

7 Nyle (CavinKare) Herbal shampoo, strength, softness in hair

8 Vatika (Dabur) Herbal shampoo, naturalness in hair


The CavinKare is in nearest competition of Unilever Limited’s Sunsilk as well as P&G’s Pantene

which has launched Pantene black.

Rural Penetration Of Chik ShampooThe Chik shampoo entered the market in India when shampoo was considered to be a luxury

product and was out of reach of the common people particularly rural India. CavinKare Pvt. Ltd.

formerly Chik India adopted a different approach towards the capturing the rural population/

BOP. Some of these approaches adopted by the CavinKare are as under:

1. Slashing the price: CavinKare launched the Chik shampoo after well research and analysis

and decided to launch it in the form of sachet at price of 50 paisa & 1 rupee. This move was

taken due to the low purchasing power of the rural India and this strategy worked well as it

made the product available to the rural people within their purchasing limit.

2. Sachet revolution was introduced by CavinKare. The smaller packaging sizes helped

CavinKare to reach to the masses and helped them to capture the market at a very fast

speed.

3. The use of the fragrance in the shampoo helped them further to attract the rural people.

4. Quality was never compromised by the CavinKare. They held quality management close

their corporate agenda and bring continuously innovation in the Chik shampoo with new

fragrances.

Promotion Of Chik ShampooCavinKare Pvt. Ltd. adopted the traditional values of the rural people and used promotion schemes

to overcome the language barriers of the rural India. Through dedicated approach of reaching to

the masses the company used professional means of communications. The Chik Shampoo made

its presence felt and won the AAA award from Advertisement association of Chennai, Tamil Nadu,

in year 2003 along with winning the faith of rural masses. CavinKare adopted a well-planned

promotion strategy for Chik shampoo which included:

1. Campaign of live demonstration of shampoo usage and its benefits like fragrance, silky &

shiny hair.

2. The Chik Shampoo’s sponsored shows of Rajniknath’s films and inserted advertisement, live

demonstration and free sachets distribution among the audience after these shows.

3. Buy five get one shampoo free scheme was initiated to attract the rural population.

4. CavinKare launched a chain of salons where they demonstrated the usage of the Chik


shampoo and highlighted its benefits. Also the young girls in rural areas were give free

beauty treatment through mobile beauty vans.

5. Used radio advertising in the form of jingles and cinema dialogues to lure rural consumers.

6. Endorsement of female actors to win over and have faith of rural masses in the brand.

7. The mode of advertisement for Chik shampoo was more on the local media, print and

televisions before moving to national level. The outdoor media promotions in rural weekly

markets, rural fairs say ‘Haats’ or ‘Melas’ was done to have larger coverage of the population.

8. The photo picture of a girl with dark and long hair gave an assurance of long, black and

manageable hair to the rural consumers communicating across the language barrier.

9. For trade promotions the company gave volume discount to the retailers along with

special gifts on festive occasions. The company also launched a scheme where a retailer

was offered one free sachet for every fifteen empty sachet he would return to the company

as collected from the consumers. This motivated the retailers to push and sell the product

to the consumers.

Distribution Strategy Being a small venture the company had to face a challenge of surviving the distribution network

and credit period of 45 days as provided by the big MNC’s to the distributors. CavinKare identified

the people who gave the bicycles on hire and offered them to become the distributors for Chik

Shampoo. This ensured the mobility Chik shampoo through the owners of bicycles. For the bicycle

owners it was a new and respectable business preposition. The company took a demand draft of

Rs.2000/- from the bicycle owners and trained these persons through the certification of Beauty

Cosmetic (earlier name of CavinKare Pvt. Ltd.) to make them suitable for the demonstration of

shampoo and selling to the rural markets for taking and filling orders. In this way company did

not only managed the working capital leverage but also overcame the infrastructure problem for

penetration in the rural areas. Later company established a well-structured sales force network

but humble cycle is still a medium to reach to the rural areas. The sales force network worked in

following manner:

1. A well defined rural distribution organization was created which had trained and specialized

rural stockist. This rural stockists has the responsibility to sell and promote the product in

the near surrounding areas and further appoint sub stockists with the help of sales force.

2. Sachet sales force that used to sell sachets products to small retailers including paan-wala’s,

cigarette shops as well as post offices.

3. Separate hawker based sales force is also created to capture neighborhood markets.


4. With the unique mix of trained sales professionals and local sales vendors the company is

reaching to the major rural point of sales professionally as well and with high flexibility of

unconventional mechanism.

ConclusionToday due to this feature the shampoo market is driven mainly by rupee one small packs, with

over 90% of the rural market dominated by sachets. In cities, sachets account for about 40% of

total sales. Small packs have helped in increasing penetration in rural areas where pricing plays

a major role. CavinKare Pvt. Ltd. over the period of three decades has graduated from regional

player of south India to a national player. With a full understanding of the rural market CavinKare

understood the preference of rural India which demands value for money. The low cost has

been the core business preposition for earlier firm Chik India now CavinKare Pvt. Ltd. Innovative

means of using local rural practices well amalgamated with professional business management

are some of the basic tools of CavinKare. Through educating and ensuring the rural masses that

they can afford shampoos and by making it available to the rural masses the Chik Shampoo has

revolutionized the shampoo market in India in reaching to the bottom of pyramid.

Referencesl Badugu D & Chauhan S.S, 2011,”Understanding the Indian Rural Market Potential”,

International Journal of Multidisciplinary Research, Vol.1 Issue 6, pp. 68-82.

l Chik Goes Rural With 50p Shampoo Sachet, 27/September/1999, available at: http://www.

financialexpress.com/old/fe/daily/19990927/fst27033.html, Accessed on 23/ March/2013.

l Chik Shampoo in New Avatar, 14/Sep./2011, available at http://www.business-standard.

com/article/press-releases/chik-shampoo-in-new-avatar111091400108_1.html, accessed

on 23rd /March/2013.

l Consumption, available at http://www.ibef.org/download/consumption.pdf ,Accessed on

26/ March/2013.

l Dixit K., 2011, ‘Competitive And Innovative Marketing Strategies For Tapping Vast Rural

Potential In India’, International Journal of Multidisciplinary Research, Volume 1, Issue 7,pp

39-46.

l HUL’s marketing mantra: 4M, 29/July/2010,available at http://www.business-standard.com/

article/management/hul-s-marketing-mantra-4m-110072900069_1.html, Accessed on 25/

March/2013


l India’s Rural Market-The Fortune at the Bottom of the Pyramid available at http://www.

abesit.in/pdfs/Success_Through_Excellence.pdf, Accessed on 26/ March/2013

l KIT: The Indian shampoo and hair conditioner market, 23/August/2010 available at http://

www.business-standard.com/article/companies/chennai-based--may-shift-base-to-

mumbai-111070700062_1.html , Accessed on 25/ March/2013

l MNCs try to catch the rural pulse, Economic Times, May 14, 2002 http://articles.

economictimes.indiatimes.com/2002-05-14/news/27366810_1_rural-markets-consumer-

products-rural-consumer, Accessed on 25th March 2013

l Mohanty Sangeeta ,2012, “Indian Shampoo Brand Positioning: Multi-Dimensional Scaling

Approach”, International Journal Of Computing And Corporate Research , Volume 2 Issue 5,

available at http://www.ijccr.com/September2012/3.pdf ,Accessed on 22/ March/2013

l Price War In Shampoo Market Over ,1/October/2004, available at http://www.business-

standard.com/article/companies/price-war-in-shampoo-market-over-104100101016_1.

html, Accessed on 22/March/2013

l Rahman K. M., Kazi Roshan, Sourav S. ,2012, “Analysis Of Hair Care Products With Reference

To Shampoo Market In India”, Journal Of Research In Commerce & Management Volume1

(11), pp. 177-184

l Sachet King Moves To Shed Regional Tag, 2/May2011, available at http://www.

business-standard.com/article/management/sachet-king-moves-to-shed-regional-

tag-11050200022_1.html, Accessed on 20 /March,2013

l Shampoo War Enters Its Second Round, 28/July/2004,available at http://www.business-

standard.com/article/companies/shampoo-war-enters-its-second-round-04072801037_1.

html, Accessed on 22/March,/2013

l Shampoos The Next Big Boost For FMCG firms, 29/May/2007, available at http://www.

business-standard.com/article/companies/shampoos-the-next-big-boost-for-fmcg-

firms-107052901087_1.html, Accessed on 25/ March/2013

l. To Take On HUL, ITC In Bottled Shampoo Biz, 17/September/ 2008, available at http://www.

business-standard.com/article/management/-to-take-on-hul-itc-in-bottled-shampoo-

biz-108091701006_1.html, Accessed on 22 /March/2013. www.cavinkare.com


Book Review The Accidental ScholarJagdish N. Sheth with John YowSage Publications | Response Business Books

ISBN: 978-93-515-0039-1

Reviewer: Dr. Vinay Chaganti, Associate Professor, ICBM-School of Business Excellence, Hyderabad, India.

An Indian going abroad and succeeding might be a common sight today, but to be among the

first few, almost five decades back, to do it must have been an accomplishment. The success had

come, not in just any field, but in academics, an area in which India is still struggling to have some

of its best institutions on par with the ivy-league. To take a respected place among the world’s

best academic institutions, therefore, for an Indian was not only considered out of reach, but

next to impossible. Nevertheless, one man had this accomplishment destined. The book being

reviewed is an autobiography of that man, Prof. Jagdish Sheth who currently is occupying the

Charles H. Kellstadt Chair of Marketing at Emory University, USA.

Praise for the book prior to its release had come from high-profile individuals such as Ram Charan,

Azim Premji, Jeffrey Pfeffer, and Alvin Roth. All praise pointed to how inspiring the book is to

aspiring academicians. This praise offers a compelling reason for young academics to pick up the

book and find how one man became a richly published scholar, widely respected teacher, and

extremely sought as a consultant; put all into one, he became a thought leader.

The book is organized into fourteen chapters. The foreword was contributed by the most-read

marketing author, Philip Kotler. The respect that Kotler has for Jag Sheth is evident in his indication

of how much notes Kotler made whenever Jag Sheth spoke at any of their meetings. Jag Sheth,

too, reciprocated this respect in his preface for the book by appreciating Kotler’s capacity for

organizing his materials, and including the ‘Howard-Sheth Theory of Buyer Behavior’ in his

popular marketing textbook. Jag Sheth makes a humble submission that the idea of writing his

autobiography was a suggestion by David Aaker, who seemingly had set the trend of academics

writing their life stories. If one thought that this book might be Jag Sheth’s praise for USA as a land

of opportunities, they may be surprised that he acknowledges that in his preface, but dedicates

his book to present his journey of life, including cultural differences between USA and India only

in sufficient detail to explain how it made a difference to his life. In his words, the goal of the book


was ‘to motivate others to become educators’. Sticking to his objective, Jag Sheth offered a life

lesson at the end of every chapter.

This review, further, selectively presents few incidents from the introductory and growth phases

of Jag Sheth’s career that appear to have been pivotal to his success. The entire story is not

rosy though. Some incidents where Sheth had troubles shall be shared to justify the balanced

perspective Sheth presented in his book.

In an MBA class, the professor talks his research and mentions that 42 percent of American

homemakers routinely headed out to the store without a shopping list, stating the implication

that they were buying impulsively. A student asks the professor whether his research means that

all illiterate people are impulsive buyers. The student in the incident must be courageous to pose

such a question, especially if the student is the only one in the class to be from an alien culture.

In the incident, the student was Sheth and the professor was John Howard, and it took place at

University of Pittsburgh where Sheth did his MBA. Destiny then shaped this professor-student

relationship to move forward—partly by Sheth’s obligations, partly by Howard’s belief in Sheth’s

capacity to bring a cultural perspective, and some amount of luck—to produce the most popular

theory of buyer behavior. Sheth, as a student, specialized in individual and group behavior with

emphasis on motivation. However, marketing became his applied field. Sheth suggests from the

incident that it is important to be resilient and flexible.

Venkatesan was a doctoral scholar at University of Minnesota. Meeting Venkatesan, Sheth recalls

was again by an accident, but their partnership too proved productive. Venkatesan was involved in

experimental studies, whereas Sheth believed more in logic than evidence. The fusion of these two

diagonally different approaches has yielded beautifully. Together, they published several studies

in top academic journals such as the Journal of Marketing Research. Sheth suggests the young

academics that networking with scholars with different interests could lead to opportunities, and

perhaps allow each to develop their unique brand of studies.

Sometimes circumstances slant against intentions. For Sheth, University of Illinois was the place

where it happened. He became the Dean of the Department of Business Administration, not by his

intentions but because of implausible other alternatives, therefore, qualifying this incident too as

an accident in his life. Sheth described the challenges in reorganizing departments, degrees they

offer, specializations, in a rational way so that everyone respected the department. Soon, Sheth

picked up a name for finding recruits from a pool of doctoral scholars at different universities who


would later go on to become stalwarts in their field of research. He emphasized the importance

of corporate collaborations in furthering research and creating value through such pragmatic

academic work.

His description of the time he spent at the library of MIT, his defence of doctoral dissertation, how

he handled his mid-career crisis are a must-read. His reflection on his life of a researcher as being

entrepreneurial and constantly changing, both in methods and in ideas, might mirror the lives

of most young academics seeing themselves as being in a state of discomforting flux. He had

a thought provoking philosophy behind his decision-making, and many of his decisions were

indeed bold but had clear purpose. Handling criticism as a scholar is the string that a committed

reader of this book should hold on to, and learn from Jag Sheth.

Jag Sheth is a veteran in writing papers and books. However, his book on his own life is not a

consequence of his profession, but a contribution to it and all his young colleagues in academics.

GUIDELINES FOR AUTHORS

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