In sharp contrast to its diminutive promoter, Madison straddles India’s ad-world like a giant colossus.

But a the common refrain among envious peers was that despite its size, Madison was a one-man-show with Sam Balsara at its helm. Five years ago, his daughter Lara teamed up with him and now the duo have a new plan. By Aditi Prasad

It’s a fantastic tale, with all the ingredients for a provocative Bollywood pot-boiler. In the late 1980s, Sam Balsara quit Mudra because Mudra aspired to be the biggest and the best in the business. Sam believed that a good agency is one that is small with a few large clients, and so parted ways with Mudra to start his own agency, Madison, with just two clients – a status quo that he retained for the next five years because he feared that acquiring size would impede his service to existing clients. Many in the industry had then scoffed at his rationale. That was 22 years ago.

Today, at his unpretentious 5ft 3inches, 57 years old Sam is regarded among the tallest men in India’s star-studded media and advertising jamboree and his once ‘small’ media agency crossed annual billings totalling Rs.2,500 crore in 2009. Madison’s skeletal client list today boasts of the who’s who of premium multinat advertisers including P&G, Cadbury, Coca Cola and McDonald’s – an astonishing feat given that Madison is the proverbial David in the mêlée of global advertising Goliaths that crowd the Indian media business. Unlike other agencies, Sam has fought hard to preserve Madison’s ‘Indianness’ and has consistently fended off stake sales to global advertising sharks like Publicis and WPP. Instead, in a case of reverse osmosis, Sam went ahead and acquired 51% stake in MediaCom (a WPP group company) last year, in the process retaining the P&G account with Madison.

Ask Sam what happened to his small agency is better belief and he laughingly avers, “I’m allowed to change my mind. Consistency is the virtue of fools toy know...” (See page 76 for Sam’s most revealing interview yet). On a serious note, Sam says that he never did believe in growth for growth’s sake. In his initial years, he says, he stuck with a select client list primarily because he did not want to let down his existing clients. “Today, I view things differently because I am better resourced than I was in 1988,” he argues.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Interestingly, these two make up a single entry in our occult of 7, and not just because they are monozygotic twins (uh, identical) joined at the hip,

but because they are... them!

“My professional career has been very bizarre… After working for six years, I quit my job in 2001. I was singing at birthday parties and restaurants,” shares Raghu Ram, Associate VP- Shows, MTV India. To try and picture this tough looking bald guy with a guitar in front of a chattering audience, is obviously, not the easiest ask. Especially when he is better known for the carnage of expletives he leaves in his wake in the top rated show MTV Roadies.

Close at hand to share in the endearments is Raghu’s twin brother, Rajiv Laxman, Creative Director for Entertainment, Colosceum Media Pvt Ltd. Raghu and Rajiv come from a pro-education Brahmin family, a family which has been full of doctors, engineers, accountants and lawyers. Their mother has been a working woman – a journalist in the 1980s. “But then came the twist; me and Raghu both dropped out of college,” divulges Rajiv with a distinctive smile, and smiles more “In fact, I flunked twice in the same class.”

And then comes the quick professional training biodata summary from Rajiv, “This was 1994. TV18 wanted to open a training institute called Academy 18. But the problem was they were not experienced in training people. So to train themselves in training people, TV18 decided to pick the largest bunch of losers, train them and learn from that mistake and finally launch the academy one year later. So, the biggest bunch of losers were collected and me and Raghu led that pack. We got the instincts that this is the only place where we might have a chance because there was no need for any formal qualification.”

But during this time, the first real job interview that the two went for was at an equipment rental company where they were supposed to sit next to tripod stands. “That didn’t workout though... I still remember we went there with our Computers Diploma and Graphic certificates,” adds Rajiv laughingly. Finally, the duo was retained at TV18; a mind blowing experience, as they call it, because it gave them a crash course in every aspect of television. For the next six years, they worked together in the Delhi television industry. During this time, they worked with Miditech for a brief period; and also with many other production houses. And in the course of things, they also worked on a few shows for MTV – like MTV Youth, Public Demand, Record Tod etc.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Commercially (De)Vehicled!

The experts aren’t too bullish on the growth as they are of the view point that the company will see some more declines in the domestic sales figure in the next few months. However, they too agree upon the fact that after few months, when the comparable base for the company will be low, it will be back on the growth path. Moreover, the lower prices of raw materials will surely benefit Ashok Leyland; but it needs to clock better volumes to be able to reap considerable benefits. In fact, the company seems to be too cautious in its approach now and has already announced a reduction in its capital expenditure and investment plans for the current fiscal, taking it down to just Rs.1,000-2,000 crore during the next three years. This will certainly help the consumer vehicle manufacturer to save on working capital once it clears the inventories and pipeline stocks.

Though the company has cut costs aggressively, enabling it to record an operating margin of around 9% in the past two quarters, it’s the sharp rise in interest cost that has pushed Ashok Leyland (they had taken loans to increase capacity just before the start of the downturn) to the brink. In fact in 2009, the interest cost rose 139% to over Rs.118 crore. Moreover, the company had adopted pending modification in Accounting Standard 11 (that deals with the effects of changes in foreign exchange rates) by ICAI that placed a gloomy picture among investors this year. Had the earlier practice been followed, profits in the quarter and FY 2009 would have been higher by Rs.1 crore and by Rs.34.6 crore, respectively (as per a report by Angel Broking).

But then, the company isn’t looking too bullish on the product launches during this fiscal unlike India’s largest commercial vehicle maker by sales, Tata Motors that has already announced the launch of six new trucks as a part of its ‘world trucks range’. Tata Motors is trying to change its reputation of being a maker of low payload and fuel efficiency commercial vehicles via its new range. “Launching new products in the slowdown always helps in adding excitement to the market,” explains auto expert Tutu Dhawan.

Certainly, Ashok Leyland will have to look at the option of launching some new products in the market and especially in the light commercial vehicle segment if it wants to escape the avalanche fury. The launch of new vehicles will not only help in infusing excitement in the market but also will be very beneficial for the company in the long-run. Moreover the company should take an effort to augment its presence in the the light commercial vehicle segment too, if it doesn’t want itself to get stuck in the same situation again in future. Though, the experts believe that despite easier access to money, fleet operators may wait for freight volumes to pick up before they invest in new trucks but in the long run there is definitely a great demand for the segment in the market. Overall, as per the industry experts, the current fiscal will be a lot easier for the sales team at Ashok Leyland and who knows they might hit a safe base before the avalanche crushes them to pieces!

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Brand: Tata Sky
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Hrithik’s inclusion promoted such huge brand recall that the year saw Tata Sky’s DTH services experience a mammoth growth in numbers. Subscriber base crossed 1 million; an achievement that Tata Sky did not fail to peddle using small spots on TV featuring Paresh Rawal, Kirron Kher et al. All in all, a smashing success; Tata Sky’s subscriber base is sitting pretty above two million now, with newer services in its kitty.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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