10 OCT, 2011, 06.43PM IST, PTI India Inc's fresher hiring up 21 pc in Jul-Sept quarter: Report

(This is an adopted report from Economic Times)

NEW DELHI: India Inc has witnessed 21 per cent growth in fresher recruitment in the July-September quarter, say experts.

"We have seen overwhelming response from clients over campus hiring. Industries like energy, infrastructure, consulting, media, IT and retail has grown up by over 20 per cent in Q2, FY 11-12.

"Whatever the slowdown in the US and European countries is, Indian market are showing more growth," Ripples Consultancy Services CEO Rishi Raman said.

Echoing view, Prachi Kumari Director of Sat-n-Merc Manpower Consultant said, "We had seen increment in campus recruitment activity and companies are focusing more on campus hiring because of cost effective module".

According to a survey by MyHiringClub.com which was conducted among 879 employers and 1,274, institutes across the country said that the second quarter of current fiscal year has seen 21 per cent upward hiring activity in campus vis-a-vis first quarter of 2010-11.

"The campus recruitment market had seen growth in terms of number of hiring and salary as well," MyHiringClub.com CEO Rajesh Kumar said.

Arjun Mohan, Placement Committee Member at IIM Kozhikode said, "Hiring season at IIMs started amid fears of global slowdown but we are now getting good response from companies on summer internship and final placements".

Experts believe that energy and enthusiasm of campus graduates as well as the right training make them the best possible combination of adaptability, flexibility and cost effectiveness.

"Now globally companies are paying more attention to hire from campus, because they find skilled professionals at very low cost. Besides, these graduates can easily adapt the company's culture," Kumari said.

Among the sector, the IT and ITes, infrastructure and FMCG sectors have done maximum freshers recruitment. In terms of pay package, IT space stole the show.

City-wise analysis shows that Bangalore has witnessed highest campus recruitment with 24 per cent, followed by Delhi NCR (21 per cent), Chennai (18 per cent), Mumbai (15 per cent), Hyderabad (13 per cent) and Kolkata (10 per cent).

Although, campus hiring in Tier II and Tier III cities is still very low.

"There is a major concern is hiring from Tier II and Tier III Cities. These cities need more attention in terms of campus recruitment," Kumar said.

Chips wars- Lays Vs Everyone else

PepsiCo, through its Lays brand, created a market for potato chips in India in the nineties. The brand which is now a household name is extremely popular among the young Indians. But lately, lays is facing a lot of heat in the market it created.

It all started with ITC banging the market with Bingo followed by copy cat solutions by Parle, Haldiram and Balaji. These players used the supply chain and retail network Lays painstakingly build over years. They bought potato from the same contract farmers and sold in the same shops side-by-side Lays products. Last 2 years have seen the competition intensify with local players such as Prakash snacks (Yellow Diamond) entering market and Parle relaunching its product (under Parle's brand) with a 20% free offer. With so many players, the competition on price points intensified and customer loyalty enjoyed by the segment eroded. In the 3 year war period, market share of Lays eroded from 66% to 58%, with the major share erosion in the states of Maharashtra and Gujarat where Balaji snacks, Prakash snacks and Parle Agro had a strong product portfolio and distribution network.

2011 began with the AC Nielsen report above which pointed at PepsiCo's losing grip on the chips market. But the legendary marketing of Pepsi is not the one which will accept defeat that soon. The strategy adopted by PepsiCo India to counter the insurgence of its competitors was nothing less than legendary and in all probability will go in as a Harvard case study.

The company realized that in India there exists a market for both cheap chips and premium varieties. So PepsiCo started exactly the way Kotler suggested, by segmenting the chips market. They positioned their flagship product Lays in the premium segment and made numerous changes to the product. The quantity was increased to 32 g from 28 g and price increased to Rs. 15 from Rs. 10. The package was also redesigned by making it thinner and taller than the standard packaging adopted by the industry. This allowed Pepsi to differentiate their product from the Parle, Diamond and Balaji. To add on to the perception of the customer, they erected the retail stores with special shelves exclusively for Lays chips and paid the retail stores to give exclusive racks for lays. The new retail planogram just had one motive - "Never keep Lays side by side with cheap competitors". No wonder the second largest marketing expenditure incurred by Pepsico after mass media advertisement is retail promotions.

For the cost conscious segment, Pepsi launched a new product - Lehar potato chips. Lehar copied it competitors in packaging and pricing and was positioned side by side with Balaji, Diamond and Haldirams. While the premium product Lays was always backed heavily by advertisements and promotions, Lehar received absolutely zero marketing allowing PepsiCo to compete heavily on price. With this master stroke of copying the copy cats, PepsiCo is turning the tables around and eating into the market share its competitors chipped away from it.

Lehar, the JV partner Pepsi used to enter India is a brand Pepsi uses for most of its products for the 'aam aadmi' such as its soda and now its chips. Pepsi also entered the namkeen segment with Lehar creating a strong competitor for Haldirams and Balaji. One cannot really understand if Pepsi is interested in capturing this segment which is concentrated in a few central Indian states or its strategy is just to prevent Balaji and Haldirams from growing strong(Both Balaji snacks and Haldirams made their money selling namkeen).

When I saw both Lehar and Lays in a shop in Mumbai, the first thing that came to my mind was the possibility of cannibalization. But if you look more closely, PepsiCo has launched Lehar potato chips only in the markets where it's facing competition from cheap copycats. In all other markets, they have launched lehar namkeen alone. Recent market studies shows that this strategy is immensely successful with both Lays and Lehar showing increase in market share and sales. Will this strategy be successful in long term before competition catches up is something we will have to wait and see.

Fuel Woes

GOI jacked up the prices of diesel and cooking gas today. The reason was the usual one, oil marketing companies are losing money due to the subsidies. This is interesting as the price of crude has been dipping. Oh! but we can't complain, diesel, cooking gas and kerosene is heavily subsidized int his country. In fact, we are the only nation in the world where kerosene is cheaper than drinking water. Let us understand this subsidy more -

Crude oil price (25/6/'11)

WTI crude - $92

Brent crude - $105

India calculates the price as a weighted average of WTI and brent in the ratio 5:4

Price of imported crude - $97.77

Price paid to ONGC for a barrel - $55

We get the crude at a discount ranging from 10% to 80%. I am adjusting the discount with the transportation expenses incurred during import. As India imports 75% - 80% of its oil

Average price paid per barrel - $89.26

Quantity of oil in a barrel - 158.9 liters

So the price we pay for one liter of crude oil is $ 0.56 or Rs. 25.27

According to refining companies, the operational costs of refining a liter of crude is 52 paisa. So the total cost of refined oil should be approximately Rs. 26.

As of today, petrol costs Rs. 71 and diesel Rs. 43 (Bangalore rates). In other words, there is a 200% and 100% additions of price due to government taxes and high costs incurred by petroleum companies.

Taxes on oil in India include -

1. Import/Customs duty on crude oil

2. Excise duty

3. VAT imposed by states

But this is not all, oil marketing companies are another big group of money guzzlers. These organisations which run on one of the most inefficient and bureaucratic organisational structure are a big reason for the hikes. We keep hearing about the oil companies losing $5, $10 or $2 per liter of petrol sold in India and the petroleum minister goes out of the way helping them out by issuing oil bonds or hiking the prices. What I don't understand is that why is it that these companies are never asked to cut costs internally. Why does not the corporate cost cutting mechanisms and concept of leaner organisations apply to them? These companies run some of the most inefficient supply chains in the world, give exorbitant commissions to their dealers who don't need to do any marketing to sell and carry outrageously overstaffed and inefficient organisational structures.

Every time when a hike happens, there is a lot of hue and cry about bringing down the taxes on oil. But this never happens because oil is the biggest revenue source for GOI and GOI needs all that money to feed its staff who sits at 5 levels of bureaucratic maze and passes files at a rate of 2 per day. The entire system which requires 5 people is run by 500 people now and we are forced to pay more for our daily needs. The significant cost and time overruns is not the only bad aspect of this structure; the system also results in high levels of risk aversion and indecision. Because one has to justify one's position, everyone wants to be part of the decisions and significant amount of ego clashes ensure that good ideas are nipped off at inception itself.

If you think about it, government is jacking up the cost first and then giving a discount on the increased cost and calling it subsidy. What an irony?

Comparison with katta koothara

After the posting of ads, some of my batch mates came to know about the existence of this blog and more importantly my "About Me". The effect was the ad you can see here (Courtesy - Tony Sebastian, Shashi)

IIMK has got talent :)

Ads by AD RATS

Ad - 4 (Wills)

Ad - 3 (Impotency)


Ad 1 (Couple) Ad 2 (Oral Cancer)

The ads were created by AD RATS (Ansa, Devarajan, Razy, Arjun, Tony, Shashi) for our MM 2 project. To take the associated survey, please visit -

Survey at tony's blog