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PRATIBIMB The Reflection of Management
FINANCE | GENERAL MANAGEMENT | HUMAN RESOURCE | MARKETING | HEALTHCARE | OPERATIONS | SYSTEMS
BC Model –A Revolution in Banking Services
By Souvik Dhar, Priyanka Hazarika, NIT Silchar
Gamification, Social Media and IPL
By Ankit Agarwal, Symbiosis Pune
Licensing of New Banks and Financial Inclusion
By Elma Davies, SIMSR
Cause Marketing and Brand Activations
By Richard Manickam, SIES
Decentralized and Distributed Generation: Policy Recommendations for Implementation
By Rahul Sharma, National Power Training institute
Panacea for the Rural Mass
By Shruti Jaiswal, XIMB
The Sparks and Spikes of Neuromarketing
By Divyanshu Kumar Singh,IIM Lucknow
Volume II, Issue XX June 2013 A Monthly e-Magazine
A Students’ Initiative
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Pratibimb | June 2013 | 2
T. A. Pai Management Institute (TAPMI) is a premier management institute situated in Manipal
and is well known for its academic rigor & faculty-student interaction. The Institute has been
recently ranked amongst top 1 per cent of B-schools in India & 4th in the South Zone by The
Week Magazine.
Founded by the visionary, Late Shri. T. A. Pai, TAPMI’s mission is to provide much needed
impetus to the task of building professional management capability in the country. In the
process, it has also played a role in strengthening the existing educational and health
infrastructure of Manipal.
“To excel in post-graduate management education, research and practice”.
Means:
1. By nurturing and developing global wealth creators and leaders.
2. By continually benchmarking ourselves against best in class institutions.
3. By fostering continuous learning and reflection, achievement orientation, creative
interdependence and respect for diversity.
Value Bounds:
1. Holistic concern for ethics, environment and society.
T. A. Pai Management Institute
Manipal, Karnataka
About TAPMI
Our Mission
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Pratibimb | June 2013 | 3
TAPMI’s e-Magazine - is the conglomeration of the various
specializations in MBA (Marketing, Finance, HR, Systems and
Operations). It is primarily intended to provide insights into the
plethora of knowledge that relate to the various departments of
Management and to give an opportunity to the students of TAPMI
and the best brains across country to exhibit their creative cells. The
magazine also strives to bring expert inputs from industries, thereby
bringing the academia and industry together.
Pratibimb the e-Magazine of TAPMI had its first issue in December
2010. The issue comprised of an interview of well known writer Ms.
Rashmi Bansal along with a series of articles by students and industry
experts like MadhuSudan Rao (AVP-Delivery, Mahindra Satyam) & Ed Cohen who is a global leader
and chief learning officer who led Booz Allen Hamilton & Satyam Computer Services to the first
rank globally for learning & development . It also included a hugely successful and engrossing game
for finance geeks called “Beat the Market” to bring out the application based knowledge of
students by providing them the platform where they were expected to predict the stock prices of
two selected stocks on a future date. The magazine is primarily intended for the development of all
around management knowledge by providing unbiased critical insights into the modern
developments.
TAPMI believes that learning is a continuous process and is not limited to the four walls of the
classroom. This viewpoint is further enhanced through Pratibimb wherein students manage and
contribute to create a refreshing learning environment outside the classrooms which eventually
leads to a holistic development process. The magazine provides a competitive platform and
opportunity to the students where they can compete with the best brains in the B-Schools of the
country. The magazine also provides a platform for prominent industry stalwarts to communicate
their views and learning about and from the recent developments from their respective fields of
business which in turn helps to create a collaborative learning base for its readers.
Pratibimb is committed in continuing this initiative by bringing in continuous improvement in the
magazine by including quality articles related to various management issues and eventually creating
a more engaging relationship with its readers by providing them a platform to showcase their
talent.
We invite all the best brains across country to be part of this initiative and help us take this to the
next level.
PRATIBIMB TAPMI’S MONTHLY e-MAGAZINE VOLUME 2, ISSUE XX JUNE, 2013
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TAPMI has taken a major stride towards research and research oriented learning. ‘Pratibimb’ is one such initiative by TAPMI that provides a platform for the students and faculty members to publish and showcase their research activities to the outside world. It brings me great pleasure to see this venture taking purposeful shape in the participation of both students and the faculty members.
The magazine reflects the contemporary thoughts and actions in the management. The quality of the articles
and papers proves that we have taken the step in the right direction and from now on there is no looking back.
I wish the team and the magazine the very best.
R C Natarajan
Director
TAPMI
Director’s
Message
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Editor’s corner
Arun Stephen
Abhineet Rastogi
Bhavnita Nareshkumar
Devi Kailas
Kannan Venkat
Shubha Prabhu
Aditya Bhat
Lloyd George
Prof. Chowdari Prasad Dean (PR) & Chairman-Admissions
Prof. Aparna Bhat
Editor in Chief
Marketing & Advertising
Creative & Cover Design
Communications
Operations
Publishing
Faculty Advisors
Dear Readers,
We thank all the participants and readers for their contributions and feedbacks. In this issue of Pratibimb Souvik Dhar and Priyanka Hazarika of NIT Silchar discuss about the BC Model and its impacts in banking services sector. In "Gamification, Social Media and IPL", Ankit Agrawal of Symbiosis, talks about various marketing techniques used by various corporates in the last edition of IPL. "Licensing of new banks and financial inclusion" by Elma Davies of SIMSR talks about how will increase in number of banks in India help the financial inclusion.
Richard Manickam, SIES explains the way by which corporates fulfill their social responsibility through advertisements in article “Cause Marketing and Brand activations”. In the period of increasing energy crisis how can India implement a system of decentralized and distributed power generation? Rahul Sharma of NPTI talks about this in his article. The hot topic of today’s marketing Neuromarketing is explained beautifully by Divyanshu Kumar of IIM Lucknow in his article “The sparks and Spikes of Neuromarketing”. I am sure that this issue of Pratibimb will be a treat to all our readers.
As always, stay safe, celebrate life and keep reading Pratibimb.
Stay updated, like our page to hear more from us at
http://www.facebook.com/pratibimb.reflecting.management
We would like to thank all faculty members who have provided their valuable feedback to help maintain the standards we have strived to achieve. Also, send in your valuable suggestions or feedback to [email protected]
Enjoy Reading!
Arun Stephen
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Contents BC Model– a Revolution in banking Services 7 by Souvik Dhar, Priyanka Hazarika, NIT Silchar
Gamification, Social Media and IPL 10 by Ankit Agarwal, Symbiosis Pune
Licensing of New Banks and Financial Inclusion 13 by Elma Davies, SIMSR
Cause Marketing and Brand Activations 16 by Richard Manickam, SIES Navi Mumbai
Decentralized and Distributed Generation: Policy Recommendations for Implementation 17 by Rahul Sharma, National Power Training Institute, Faridabad
Panacea for the Rural Mass 21 by Shruti Jaiswal , XIMB
Spark and Spike of Neuromarketing 24 by Divyanshu Kumar Singh, IIM Lucknow
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BC Model—A Revolution in Banking Services
Souvik Dhar, Priyanka Hazarika, NIT Silchar
The reach of banking and other financial services were very limited to the mass
population of India as in spite of so many years after independence of our country half of
our population is unbanked. Although many programs like Co-operative Movement,
Setting up of State Bank of India, Nationalisation of banks, RRBs, Self Help Groups were
initiated on behalf of Government of India and other government bodies like RBI,
NABARD etc. to include the financially excluded population but these programs were not
that of huge success in ground level due to many constraints to cover all sections of
population.
Thus with the primary objective of ensuring greater financial inclusion and increasing the
outreach of the banking sector in India the BC model has been implemented. In the year
2006 RBI initiated the Business Correspondent (BC) Model in which Non-Governmental
Organisations/ Self Help Groups (NGOs/ SHGs), Micro Finance Institutions (MFIs) etc.
were used as intermediaries between the banks and the financially excluded population
of India for providing various financial and banking services. These intermediaries are
known as Business Correspondent or Business Facilitator’s. And RBI has defined the
parameters and criteria for all those entities who can become BC.
The different entities who are working as BC’s of various banks are in proper legal
agreement with the banks. And they cannot offer any new product or services until they
have taken the prior permission of banks. And for each transactions or opening of any
new accounts or for any other services they provide to the customers on behalf of the
bank they are working with they receive an amount of commission for that. And the
banks will be fully responsible for all the activities of the BC and their retail outlet i.e.,
Customer Service Point or CSP. Thus BC is primarily the representative of banks who
provides banking services through use of ICT based solutions in his own or nearby
villages. And the banks give remuneration and or transaction based commission to them
against the service they provide.
RBI also took several corrective measures to promote BC model by allowing banks and
their respective BC’s to open No Frill Accounts to promote the drive of financial inclusion.
The reason to promote No Frill Account was because those accounts could be opened
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with either zero or for a minimal balance requirement
which was not present earlier. And thus it was easy for the
banks to open new account especially in the rural sectors
among the BPL i.e. Below Poverty Line people. Even the KYC
norms were simplified to enhance the outreach of banking
in rural sectors.
BC offer its clients a mix portfolio of different financial prod-
ucts and services like micro-loans, micro-savings, micro-
insurance and micro-remittances services etc. The different
scope of activities that BC can offer to its customers are
strictly guided by RBI’s notification and they include (i) dis-
bursal of small value credit, (ii) recovery of principal / col-
lection of interest (iii) collection of small value deposits (iv)
sale of micro insurance/ mutual fund products/ pension
products/ other third party products and (v) receipt and
delivery of small value remittances/ other payment instru-
ments. BC model is increasingly being recognised as the
most suitable approach for achieving financial inclusion in
the long run as it allows banks to service customers and
extend their geographic reach at a much lower cost.
To further strengthen the pace of financial inclusion pro-
gram in India in the year 2011 the Government of India in
association with Indian Banking Association started the
SWABHIMAN SCHEME. And under this scheme the banks
were advised to draw up a road map to provide banking
services in every village having a population more than
2000 by March 2012 either through brick and mortar
branches or through Business Correspondents. Thus 73000
villages were identified and allotted to various banks with
the help State Level Bankers’ Committee’s i.e. (SLBCs).
Initially several banks started pilot project to test the viabil-
ity of BC model and gradually the pace and rate of expan-
sions of Business Correspondents and their retail outlets
Customer Service Provider increased to a greater extent
with the usage of Information and Communication Technol-
ogy i.e. ICT based solutions. Thus, the customer provided
with a Multi-application Smart Card mobile phone enabled
banking facilities, biometric ATMs, Internet Kiosks helped a
lot to gather the momentum of the financial inclusion pro-
gram in India. The Financial Inclusion Technology Fund is
used for investing in Information Communication Technolo-
gy (ICT) based solution for promoting financial inclusion.
Thus new technologies are invented especially for inno-
vating new models and approach to mitigate the demand
and supply of banking services in India.
Government’s decision to use BC Model in transferring
monetary benefits of government programmes like NREGA,
Social Security Pensions etc. is also helping the model to
gain momentum. The recent tie up of direct transfer of sub-
sidies with the help of ADHAAR card i.e. a Unique Identifica-
tion Number with the help of BCs network also shows that
how effective and efficient BC Model has been in reality
that even Government is using it for promoting its own pro-
grams.
Thus BC Model has been a perfectly game changing model
for reaching the financially excluded population of India.
And the pace of growth of BC’s and their retail outlet i.e.
CSP is really a positive sign for the growth story of financial
coverage in India. The banks also actively participated for
caring out new different strategies and plans for making the
BC Model more effective in the ground level. And the latest
data released by RBI can highlight the real success story of
BC Model and why it can be used as a pathway to promote
financial inclusion in India.
Figure 2: Various services offered by BC
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Figure 3: BC using ICT based solutions
References
Figure 4: Growth Chart of BC Model released by RBI
Mas, Ignacio (2010), New opportunities to tackle the challenge of financial inclusion
Yeshu Bansal &N. Srinivasan, (2009) ,Business Correspondents and Facilitators: The Story So Far
BinduAnanth, Gregory Chen and Stephen Rasmussen ( 2012) , The Pursuit of Complete Financial Inclusion: The KGFS
Model in India
Ignacio Mas, Akhand J Tiwari, Alphina Jos, Denny George, Krishna UM Thacker, NitinGarg, RaunakKapoor, Shivshankar V.,
Swati Mehta, VartikaShukla (2012) , Are Banks and Microfinance Institutions Natural Partners in Financial Inclusion?
Prahalad, C.K. (2004) The Fortune at the Bottom of the Pyramid: Eradicating Poverty
Through Profits. Wharton School of Publishing. New Jersey.
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Gamification refers to the transfor-
mation of passive low engagement
activity to a dynamic high user en-
gagement and involvement activity.
Among all the sources of entertain-
ment gaming has the maximum im-
pact on its users across age and
groups because it has the maximum
user engagement and can enable
multiple level of engagement (from basic digress to starter to a professional embellish-
ment for a serious pro.
The objective is to improve the overall quality of the outcome of the consumption and
increase consumer welfare. Gamification involves applying game design thinking to non
-game applications to make them more fun and engaging. It has been called one of the
most important trends in technology by several industry experts. Gamification can po-
tentially be applied to any industry and almost anything to create fun and engaging
experiences, converting users into players. Few simple examples are things like earning
points and setting goals with Nike+ to motivate oneself to exercise more.
Gamification to arouse the Marketer in you
For marketers, “gamification” is about integrating game mechanics into marketing ac-
tivities to make them more fun to drive engagement and participation by cultivating
desired behaviours through incentives and rewards. The power of games, if they are
based on the right incentives, can create breakthrough engagement with any audience.
Marketers are becoming increasingly aware, game play is now evolving into a gamifica-
tion movement–a significant trend that is altering the way businesses interact with cus-
tomers. Adding a few visual game elements to a brand’s site in order to “gamify” a mar-
keting strategy and increase engagement just isn’t enough. To be done right, gamifica-
tion must take a behaviour-focused approach. So Gamification (like all well done mar-
keting) is 75% Psychology, 25% Technology.
The basic thing is that when you offer rewards for user actions, consumers are more
likely to engage with a brand — that is, visit the site more often, register, linger and
invite friends. Games can “activate communities, build trust and loyalty in a company
and its products, communicate progress and level of expertise, and demonstrate status
and rank.”
Gamification, Social Media and IPL
Ankit Agarwal, Symbiosis Pune
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How brands like Pepsi & Vodafone are using Gamification
& Social Media to engage audience?
Pepsi has tied up with Twitter to allow viewers to
play cricket on the social media platform.
Google + is doing special hangout sessions that will
generate post match conversations.
You tube has made the experience of watching IPL
more social with the ability to chat live and has inte-
grated Google.
Vodafone, too, is running its new Zoo Zoo’s cam-
paign online.
PEPSI IPL Tweet 20 Campaign
Pepsi has launched a Tweet20 tournament on Twitter – a
twitter API-based Application, which allows people to play
cricket on twitter. Here the Pepsi India handle tweets a par-
ticular type of ball (for example, short pitched bouncer on
the middle stump) and users have to reply with what they
think is the most appropriate shot for the ball. Tweeting the
correct shots fetches runs and the wrong shots cost wickets.
Unlocking special shots gets users bonus runs.
Figure1 : Pepsi tweet20 contest
PEPSI IPL the Great Indian Catch Contest
Figure2 : Pepsi Great Indian catch Contest
To play the game, one has to visit the Pepsi website and
login with their Facebook accounts. The game is played on
the entire map of India. Batsmen hit the ball to different
parts of the country while fielders have to field the ball.
When participating in the contest, the user has to login via
Facebook and give access to the application to action Face-
book check-ins at different cities on the map of India as de-
fined in the application. Then, one has to select 3 friends
and start fielding. One is a catcher, another is thrower, third
one is the runner who stops the boundaries and saves runs
and the last one is a driver who takes distant catches.
You must first check the batsman’s statistics,
on field weather conditions, incoming balls before starting
to field. This will help you to judge the favoured bowling
type by understanding it. The app also shows the ball type
and batsman’s favourite shots. Then choose from the given
fielding formations or reposition on any other city to cus-
tomize it.
If the batsman’s shot lands on your highlighted fielding cir-
cle, you take a catch or get a run out! If the shot lands on
any other fielding circle, you save runs! You can also up-
grade your fielders by sending gifts to your friends. There
are 300+ cities to field at. Balls are spaced out at different
time intervals and but you can play any 20 balls of the day.
Highest scored will be displayed on the leader board and
the winners get a chance to get VIP box tickets for IPL
matches.
Figure3 : Selected Cities
Vodafone Super Fans Campaign
Vodafone Super Fans give ‘money-can’t buy’ experience.
The new zoo zoo army will target first time users of mobile
internet and sensitise them on what all they can do on the
internet. Vodafone is also running the Super Fan campaign
on social media in the which the company will give 76 Voda-
fone Super Fans a money can’t buy experience where they
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match ball autographed by the winning captain on live tele-
vision.
Fan Cam/Photo by Vodafone
After the Vodafone Superfan initiative launched in April
2013, the company takes the IPL theme forward with its
new application based on augmented reality “The Vodafone
Fan Cam/Photo” as a part of their on going IPL 6campaign.
Interactivity, personalization and putting a human face on
the digital experience is at the core of the Vodafone Fan
Cam/Photo campaign. The app takes a step forward from
the Superfan initiative.
Figure4: Fan Cam/Photo-1
Hosted on a dedicated app the new in-stadia digital activa-
tion gives a panoramic view of the stadium for selected
matches where the user can search for themselves and tag
them and then share it on their Twitter and Facebook pro-
files.
Figure5: Fan Cam/Photo-2
A fan can place his/her image using the ‘Wish You Were
Here?’ tab and the app will add their face among the crowd.
The ‘Send A Free Postcard’ feature allows the fan can place
his/her image in the frame and share it with friends and
family. The third tab is a ‘Find & Win’ where one has to
search for the Zoozoo among the audience. The Hint is the
music that plays in the background “The louder the music
the closer are you to finding the Zoozoo”. The fans also have
the option to Share, Tag, and Invite Friends and also view
tagged friends on the left hand corner of the screen
Conclusion
These are some of the fantastic ideas coupled with brilliant
execution that has successfully managed to bring the game
of cricket in the digital world. Not only they are highly en-
gaging, but also have taken gamification to a whole new
level altogether.
References
Mariam Noronha (May 20, 2013). Social Media Campaign
Review: Fan Cam/Photo by Vodafone. Retrieved
fromhttp://www.socialsamosa.com/2013/05/the-vodafone
-fan-camphoto/
Nirali Hingwala (May 10,2013). Social Media Campaign
Review: Pepsi IPL The Great Indian Catch Contest. Re-
trieved from http://www.socialsamosa.com/2013/05/
social-media-campaign-review-pepsi-ipl-the-great-indian-
catch-contest/
economictimes.indiatimes.com/slideshows/advertising-
marketing/ipl-striking-gold-on-social-media/
slideshow/19456452.cms
www.iimsbitesys.in/index.php?
option=com_content&view=article&id=52:gamification-a-
its-scope-in-india&cat
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RBI has decided to grant licenses to few private sector banks for which they
have invited entries till July 1, 2013. The circular, ‘Guidelines for licensing of new Banks
in the Private sector’ issued the Central Bank on February 22, 2013 states that the plan
is to provide licenses as per the guidelines set up by RBI. Few of the guidelines include
a minimum 10 year experience, a minimum paid-up capital of Rs. 500 crore and a maxi-
mum level of foreign investment (including FDI/FII and NRI) up to 49 percent.
RBI believes that the licensing of new banks will promote financial inclusion
and infuse competition into the banking sector. RBI Governor, D Subbarao at a function
on financial inclusion, organized by the World Bank and Organization of Economic Co-
Operation and Development (OECD) asserted that an important criterion for obtaining
a banking license is the amount of financial inclusion attained or planning to attain by
the players.
The RBIs move to provide an entry to more private players into banking has been ap-
plauded by many. Yet, the Parliamentary Standing Committee on Finance have ques-
tioned the ‘subjective nature’ of the RBI set guidelines and thus opposed the move.
Even if the guidelines setup for providing licenses to banks is transparent, one question
that arises is who will gain from these new banks? Will the entry of new private players
in banking encourage financial inclusion? Or is the licensing of more private sector
banks an effective solution to reach 6, 50,000 villages and provide them financial ser-
vices?
Financial Inclusion
Financial Inclusion is defined as ‘the process of ensuring access to appropriate
financial products and services needed by vulnerable groups such as the weaker sec-
tions and low-income groups, at an affordable cost in a fair and transparent manner by
mainstream institutional players’. Quoting C. K. Prahalad and Allen Hammond, “While
individual incomes may be low, the aggregate buying power of poor communities is
actually quite large”. Thus the market available is sufficiently huge for the banks to tap
in. Yet, many players have not stepped into the rural platform due to a number of rea-
sons.
Roadblocks to financial inclusion
While implementing financial inclusion, a viability gap arises for the banks due
to the high cost of operation coupled with low probability of growth and expansion and
the issue of recovery of assets in the rural areas. The biggest issue faced by banks in
financial inclusion is the issue of dormant accounts. Rural population may have a sav-
ings account, yet financial activity, which are detrimental for the smooth operation of
bank are absent. Such operations have always turned out to reduce the returns of
Licensing of New Banks and Financial
Inclusion
Elma Davies, SIMSR
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banks and thus discouraged them from moving towards
large scale financial inclusion. The other nuances for finan-
cial inclusion include the issues of resolving technological
problems, accessing inaccessible regions, security concerns
and lack of infrastructural facilities.
Will more number of banks help?
Initiatives taken by banks in India towards financial
inclusion have not been very successful due to the lack of
financial literacy among the rural population. Quoting Mr. SL
Bansal, the CMD of Oriental Bank of Commerce, ‘Banking
can finance economic activity, provided it exits there. Banks
cannot create an economic activity’. Thus the efforts of
banks towards financial inclusion are futile unless there is
sufficient financial literacy in these villages. Thus even when
the existing banks could not achieve their financial inclusion
benchmarks, entry of new players cannot assure significant
returns unless they innovate themselves with better models.
Moreover, India has 96 scheduled commercial- 27
public sector banks, 31 private banks and 38 foreign banks
which have been able to serve 53,000 branches around the
country. The entry of 7 or 8 more of new banks may bring in
8000 more branches. Yet the reach is not sufficient to cover
the 6, 50,000 villages in the country. Thus arguing that the
licensing of more private sector banks is the ultimate solu-
tion to financial inclusion cannot be accepted.
How to achieve financial inclusion?
Financial inclusion cannot be achieved unless
the people feel the need for financial institutions. Thus eco-
nomic activity and an environment for economic transac-
tions should first be in place. To achieve this, financial edu-
cation is essential. Financial literacy will empower the rural
population to take control of their lives which will bring in a
need for them to save money or avail credit facilities and
thus bring in the need for financial institutions.
RBI has brought in many initiatives like no-frills
savings accounts, simplification of KYC norms, introduction
of Information and Communications Technology (ICT), Elec-
tronic bank transfers and use of rural intermediaries to
make financial services accessible to the rural people. But,
for wider financial inclusion, microfinance must focus on the
clients. Many a times, large banks may not have the exper-
tise to tap into the rural needs. Local players like small
NBFCs, microfinance institutions, Non Governmental Organi-
zations (NGOs/SHGs) or other civil society organizations may
be better equipped for the same.
SHGs and Non-Governmental organizations
Experiences of developing countries like Bangla-
desh show that a combination of formal and informal finan-
cial intermediaries is necessary to provide sustainable ser-
vices to the rural population. Thus there is a need for sup-
plementary credit delivery system to encourage micro-
finance NGOs to act as facilitators and intermediaries.
Providing financial services to poor through SHGs is propa-
gated as a viable method of credit delivery. In such pro-
grammed, the NGOs have become a formal interface be-
tween the banking system and different SHGs. Thus to de-
velop such a credit delivery mechanism, the SHG-Bank Link-
age Program was introduced in 1992.
RBI has permitted Banks in India to outsource
Banking services and formulated Business Correspondent
(BC) model towards faster penetration of banking services to
less penetrated areas. Thus different banks have collaborat-
ed with different NGOs as their Business Correspondent
(BCs) to enter into this field. Samvriddhi, a NGO aimed at
providing low cost delivery network, has partnered with
State Bank of India (SBI), Central Bank of India, Union Bank
of India and Axis Bank and Punjab National Bank (PNB) has
partnered with a NGO, Labournet.
Microfinance Institutions
Microfinance refers to small scale financial ser-
vices extended to the rural, semi-urban and urban popula-
tion. MFIs are the main players in the microfinance space in
India. They have grass-root level reach and understanding of
the economic needs of the poor. The microfinance sector
and MFIs in India is estimated to have outstanding total
loans of Rs. 160 to Rs. 175 billion, and Rs. 110 to Rs. 120
billion, respectively as on March 31, 2009. CRISIL estimates
that as of March 31, 2009, MFI’s outstanding loans to have
increased to Rs. 114 billion from Rs. 60 billion a year ago.
The growth in disbursement by MFIs was more than that of
the SHG-bank linkage program during 2007-08; MFIs’ dis-
bursements have increased aggressively, at a compound
annual growth rate (CAGR) of 90 percent, over the past four
years. CRISIL estimates the overall disbursements during
2008-09 to be around Rs. 287 billion, of which disburse-
ments of Rs. 185 billion was made by MFIs. This is reflective
of the increased acceptance of MFIs as commercially viable
and their ability to attract capital and resources in the past
two years.
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Pratibimb | June 2013 | 15
Presently, only NBFCs come under the regulatory and super-
visory framework of RBI. The lack of regulatory frameworks
and uniformity in accounting practices for non-NBFC micro-
finance institutions is a reason for their ineffectiveness and
lack of effective financial inclusion. There was a proposal by
GOI to bring in legislation in 2006 to regulate the entire mi-
crofinance sector in India; the regulation however is yet to
materialize. Thus if RBI and Government turn their focus
towards strengthening such microfinance institutions, effec-
tive financial inclusion can be achieved.
SUGGESTIONS
A proper regulatory mechanism should be instituted to
overview the activities of MFIs, SHGs and NGOs.
Different reputed organizations providing financial services
should be treated as a part of financial sector on par with
other financial institutions like Regional Rural Banks, Com-
mercial Banks, Cooperative Banks, etc and given sufficient
aid.
They should enjoy statutory authority and sufficient powers.
Conclusion
RBI has mandated that, to obtain a banking license,
financial institutions will have to open 25 percent of their
branches in rural area. Opening a branch in rural area does
not ensure financial inclusion as majority of the accounts
opened in such villages are dormant. Thus to achieve finan-
cial inclusion, government should direct its efforts towards
providing financial literacy and empowering and regulating
different segments such as NBFCs and MFIs of the country.
References
A speech delivered by K. C. Chakrabarty, Deputy Governor,
RBI , on ‘FINANCIAL INCLUSION: A ROAD INDIA NEEDS TO
TRAVEL’.
RBI circular dated February 22, 2013 named ‘GUIDELINES
FOR LICENSING OF NEW BANKS IN THE PRIVATE SECTOR’
A speech delivered by Harun. R. Khan on , ‘ISSUES AND
CHALLENGES IN FINANCIAL INCLUSION: POLICIES, PART-
NERSHIPS, PROCESSES & PRODUCTS’.
CRISIL report on ‘INDIA TOP 50 MICROFINANCE INSTITU-
TIONS’
A working paper on ‘FINANCIAL INTERMEDIATION OF MI-
CROFINANCE NGOs-AN ALTERNATIVE ROLE IN THE CREDIT
DELIVERY SYSTEM TOWARDS FINANCIAL INCLUSION -A
STUDY IN THE INDIAN CONTEXT’ by World Finance Confer-
ence.
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Pratibimb | June 2013 | 16
Does your work actually make a difference to anyone? Does your job profile include
bringing a smile back to a face that has been long lost in this #world? Does your cam-
paign possess a Cause that has the power to bring about a Change apart from Brand
Recall and Sales Figures? Do your brand activations actually connect at the ground level
with your Consumer’s emotions?
These are exactly the same questions that arise in the mind of a Cause Marketer. About
contributing and adding towards building positive human relations.
The term ‘Cause Marketing’ was first coined by American Express in 1983 for the Statue
of Liberty Restoration Project. The 3 month campaign raised close to $ 2 million and the
American Express card use rose 27%.
India has seen significant Brand Activations in recent past through Cause related cam-
paigns. Aircel’s ‘Save our Tiger’ where you could donate funds for WWF Campaigns or
Tata Tea’s ‘Jaago Re’ in which it was estimated that 6.5 Lakh Indians used the platform
to register as voters thereby creating a widespread social awakening.
On similar lines is the on-
going campaign of ‘I LEAD
INDIA’ a Times of India
initiative in association
with Maruti Suzuki is an
activist program. It seeks
to mobilize the youth in
the 18-24 age group and
make them agents of change at the grass-root level. The cause here is to make a differ-
ence in the society by being the change in the society and stop pointing fingers.
Cause Marketing and Brand Activations
Richard Manickam, SIES Navi Mumbai
Figure-1 : Lead India campaign
Figure2 : What people think about cause marketing
Page 17
Pratibimb | June 2013 | 17
The consumer psychology about Cause marketing is well
brought out by insights that the Edelman Research Report
has captured. 82% respondents believe that supporting a
good cause makes them feel better about themselves and
nearly 50% said that ‘Social Cause’ ranks higher than ‘Brand
Loyalty’, ‘Design’ and ‘Innovation’ as a Purchase Motivator.
Coca Cola a brand that resonates with happiness is actively
engaged in Cause Marketing. The brand came up with its
campaign-Happiness without Borders. It invited the people
of India and Pakistan- used to living in conflict-to share a
simple moment of connection and joy through its Hi-Tech
Vending Machines. The vending machines aptly called as the
‘Small world Machines’ brought together human emotions
by displaying real time action and initiating joyful interaction
Brand Activations form an important part of this Cause Mar-
keting in bringing the consumers emotions directly in touch
with the Goodwill of the brand.
European passenger car manufacturer Volkswagen in associ-
ation with the Ministry of Tourism launched the ‘Think Blue’
Campaign. The objective of the campaign was to persistently
put a conscious effort towards a cleaner and a more sustain-
able environment not only for ourselves but our future gen-
erations as well. The campaign included launching Think
Blue pages on Facebook giving helpful sustainability tips and
an Iphone game where in players have to cover the most
ground using as little fuel as possible.
Another significant Campaign for which multiple brands
came together for a brilliant cause is the RED campaign-
Fighting Aids in Africa. By the time we wake up tomorrow,
another 5500 men, women and children would have died in
Africa due to Aids. They die because they cannot afford
treatment costs of 60 cents a day. The Cause and the Goal is
to have an Aids free Generation by 2015.
Partners supporting the
Red Campaign are Apple,
SAP, Beats by Dr. Dre and
Starbucks to name a few.
A Simple Brand Activa-
tion program done by
Starbucks where it used
the technology to estab-
lish the relationship be-
tween the Cause, con-
sumers and the brand
has won laurels.
For 10 days, Starbucks
contributed $1 on every
Check-In at Starbucks
stores in the US & Cana-
da - up to $250,000 - and
they hit their goal 2 days
early!! $250,000 raised in
8 days! That is the power
a Cause, a Brand and its
Loyalty can create to
prove that humanity continues to thrive in our hearts. It is
that part of Marketing which has its heart in the Consumers
but the heartbeats remain with the recipients of the Cause.
We as Cause driven Marketers are as simple a connection as
the blood that flows into these hearts.
References
AFAQS. (2009). Jaago Re - the most 'awakening' message:
MCCS. Mumbai: AFAQS.
AFAQS. (2011). View other Company Briefs Volkswagen
launches 'Think Blue' campaign in India. Mumbai: AFAQS.
IEG. (2008). Forecast: Recession Slams Brakes On Sponsor-
ship Spending. USA: IEG Sponsorship Report.
Trivedi, B. D. (2010). Tiger, tiger burning bright. Afaqs.
AFAQS. (2009). Jaago Re - the most 'awakening' message:
MCCS. Mumbai: AFAQS.
IEG. (2008). Forecast: Recession Slams Brakes On Sponsor-
ship Spending. USA: IEG Sponsorship Report.
Figure4: Red campaign
Figure5: Starbucks coffee
Figure2: Think blue campaign
Page 18
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Power is essential for the socio-economic development of a country and is being recog-
nized as a basic infrastructural requirement. Although the installed capacity has in-
creased to 210 GW but India faced an energy deficit of 10.1 %( Source: CEA) in 2011-
12. Adding to that around 60 percent of population is still deprived of reliable and qual-
ity power supply. Power cuts, erratic voltage and low or high supply frequency have
added to the ‘power woes’ of the consumer.
At present more than 65 percent (Source: Ministry of Power) of the generation comes
from Non Renewable sources of ener-
gy like Coal, Natural Gas etc. but
there is a need to explore various
alternate sources of energy which will
ultimately help India to utilize its
available potential resources to the
fullest. With a unique geography and
demography of India, innovative
forms of producing energy needs to
be explored in order to reduce its
dependence on oil, coal, natural gas
etc. and other nonrenewable sources of energy.
In order to achieve the daunting task of achieving “Power for All” ,Ministry of Power
launched Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) as one of its flagship
program in March 2005 with the objective of electrifying over one lakh un-electrified
villages and to provide free electricity connections to 2.34 Crore rural BPL households.
The Bharat Nirman target for RGGVY was to electrify 1 lakh villages and to provide free
electricity connections to 175 lakh BPL households by March 2012 which was achieved
by 31st December, 2011; DDG was introduced in the XIth Plan to address the issue with
the recommendations of Gokak Committee.
Technologies which can be used for Distributed Generation are:
The Internal Combustion Engine.
Biomass
Turbines
Micro-turbines
Wind Turbines
Concentrating Solar Power (CSP)
Photovoltaic
Fuel Cells
Decentralized and Distributed Generation :
Policy Recommendations for
Implementation
Rahul Sharma, National Power Training Institute
Page 19
Pratibimb | June 2013 | 19
Photovoltaic
Fuel Cells
Small-Hydel
Penetration of DDG: As on 30-11-2012, around 6% of the
villages are still to be electrified and these villages will be
electrified with a mix of GE and DDG.
Table 1 : Benefits and barriers of implementing DDG
To successfully implement DDG, overall strategy that can be
thought of is
Model/Proposed Framework for Implementation of DDG:
Rural Electrification Policy: The current REP Clearly discuss-
es the means of achieving 100% rural electrification but it
falls short of recommending a single nodal Agency for all
rural electrification efforts as shown in Fig 1. The Agency
will have to act as an overseer for channelizing of funds
through various agencies like MNRE, REC etc. and encourag-
ing private participation in the sector.
Under Sec 14 of Electricity Act 2003, no license is required
for electricity generation & distribution in notified rural are-
as (26 states have notified). RE Policy states that for villag-
es/habitations, where grid connectivity would not be feasi-
ble or not cost effective, off-grid solutions based on stand-
alone systems may be taken up for supply of electricity so
that every household gets access to electricity.
Management of DDG systems: Local authority/panchayat/
societies need to maintain the system as they are the real
consumers and a sense of belongingness may incorporate in
them.
Selection of Technology: Relevant technology need to be
adopted by the authorities with adequate feasibility analysis
( in terms of raw materials, feedstock level, transportation
facilities, usage pattern of consumers etc.) of particular re-
gion.
Figure 2-Model Framework for Implementation Source: Publica-tion of IDFC on DDG: www.idfc.com
Capital Subsidy from Government: GenerallyRural coopera-
tive societies manage the high expenditure of the DDG but
owning to huge capital expenditure involved in the prelimi-
nary stage, government should provide adequate subsidy to
the developers or the EPC companies whosoever is involved
in the project. The incentives/subsidy should be based on
the various factors like geographic location of area, planned
capacity addition and output performance.
Enabling guidelines for Tariff revision: Under the purview
of CERC, Tariff setting and revision should be taken care by
the concerned nodal agency which has been assigned the
successful implementation of DDG in a particular area and
moreover there should be crystal clear transparency in this
process.
CDM Benefits: All RE projects are eligible for CDM benefits,
DDG projects can be made financially more viable and com-
petitive after encompassing the monetary benefits associat-
ed with them.
Considerations to be taken w.r.t various institutional Mod-
els recommended by Gokak Committee: Models like
Benefits of DDG Barriers to implementa-tion of DDG
Utilization of waste fuel to Energy
Lack of Adequate Infor-mation for market devel-opment.
Investment Deferral in Transmission Sector
Poor Access to Credit
Power Quality and Ancil-lary Service
Lack of awareness of RET(Rural Energy Technolo-gies) in rural India
Remote Areas Electrifica-tion
Limited Site specific issues may erupt
Power Quality Financial Viability-A major factor
Page 20
Pratibimb | June 2013 | 20
Sunderbans Model, TERI Model, Bangladesh Model may be
adopted after suitable changes in order to increase people
participation at large.
Other recommendations:
Extend RGGVY to fund evacuation infrastructure
Develop transparent and simple interconnection
rules and procedures.
Streamlining Project Approval
In the long run, Distributed generation will help consumers
in two basic ways; 1) to get quality and continuous power
supply and 2) competitive and relatively lower power tariffs
as compared to usual sources of generation.
With the advent and successful implementation of DDG,
India can be transformed from a Power deficit nation to
Power Surplus nation in the near future and the availability
of affordable power may not be a distant dream for many
across the nation.
References:
Biomass Energy for Rural India Society, available at http://bioenergyindia.kar.nic.in Central Electricity Authority www.cea.nic.in)
Village Electrification report of CEA
Gokak Committee Report on Distributed Generation
“Electricity Act 2003”, Ministry of Power, Govern-
ment of India, New Delhi, India, Jun. 2003..
California Energy Commission “Distributed generation
and cogeneration policy road map for California”
2010 (www.energy.ca.gov/2007publications/.../CEC-
500-2007-021.PDF)
ChandrashekarIyer,”Decentralized Distributed Gener-
ation for India” – 2011
Decentralized Distributed Generation on REC
Page 21
Pratibimb | June 2013 | 21
The Government of India has recently taken up various steps so as to benefit the popu-
lation at the bottom of the pyramid. The sudden activism is not just because of the
carrot of winning the forthcoming elections (which obviously is one of the major cata-
lyst) but also because of the stick that has lashed them in terms of failure of achieving
the past targets by substantial amount.
National Bank for Rural and Agricultural Development (NABARDs) initiative of ensuring
that every person in the rural India should have access to banks by seeking help of mi-
cro-finance companies, has served only half of the platter. Funds were sanctioned to
various organizations and the accounts were created by hook or crook by those organi-
zations in the banks but most of the accounts remained dormant with just one or two
transactions in a year. To fix this issue NABARD has launched Self Help Group Promo-
tion Initiative (SHPI) and Self Help Group Bank Linkage Programme (SBLP). The newly
initiated programme has been the major reason why most of the micro finance compa-
ny are now approaching NABARD for funds for creation of SHGs. NABARD pays INR
7,000 per Self Help Group (SHG) under SHPI programme for creation and training of
the SHGz by the organizations. The organizations sign a contract for three years where
they receive the funds from NABARD for the creation and training of the SHGs and the
SHG’s are assessed through an internal grading system defined by NABARD passing
which the SHGs are linked with banks. By the completion of one year NABARD has laid
guidelines to educate the SHGs about feasible Income Generation Activities (IGA) so as
to ensure that the linkage of the SHGs with the banks is sustainable and smooth repay-
ment of loans by the SHGs.
The focus of NABARD is to create women based SHGs as it has been observed that the
women based SHGs are much more successful and sustainable than the men oriented
SHGs and the SHGs owned by women also have a much less rate of non-payment of
debts.
Panacea for the Rural Mass
Shruti Jaiswal, XIMB
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Pratibimb | June 2013 | 22
NABARD estimates that there
are 2.2 million SHGs in India,
representing 33 million mem-
bers, which have taken loans
from banks under its linkage
program to date. However, the
programme should not be ap-
proached by the various organi-
zations solely for the creation of
the SHGs. NABARDs initiative of
providing financial services to
the rural India, in the past, had
succumbed mid-way with only
creation of bank accounts with
no or very less transactions.
Therefore, NABARD should lay
stringent rules on the creation
of Income Generation Activities
(IGA) by the organizations operating with NABARD under
SBLP and SHPI programme.
Another initiative by NABARD to promote RuPay cards is a
laudable step which will directly link the farmers of the
country to the financial services. Companies like Oxigen,
Suvidha, PayTM and PayMate have been already providing
non-banking portals for financial transaction and the initia-
tive of NABARD for creation of the RuPayKisan Cards will
directly link the farmers to the financial services on not only
a national but international platform of financial services.
RuPay cards are an initiative of National Payments Corpora-
tion of India (NPCI) so as to compete with the international
players like Master Card and Visa Cards. RuPay cards are
made to reduce the transaction cost paid by the banks to
the international companies. The NPCI claims that by the
fiscal year 2017-18 the investment on the development of
RuPay cards will be break even and such time space to
reach break-even is only because RuPay does not charges its
banks as heavy as the other players in the segment does.
RuPay has been promoted as the only Indian company in
the segment and also as a non-profitable venture. The table
on the left depicts the number of banks that have started
issuing RuPayKisan Cards.
NABARD is also funding 11 such banks for speedier imple-
mentation of core banking systems.
1. There are 3,330 lakh Card holders in the country of
which 3,140 lakh use Debit Cards and 188.5 lakh use
Credit Cards
2. Rs 1,074 billion is the amount Payments made
through cards at point of sale
3. Total number of payments via cards to accounts - 6%
STATES Potential Rural
households to be
Rural households
covered* (SHG:
Total Percentage
Coverage
Chattisgarh 25.92 lakh 16.88 lakh 65.12
Jharkhand 27.86 lakh 11.65 lakh 41.81
Bihar 73.51 lakh 39.66 lakh 53.95
Uttar Pradesh 138.19 lakh 61.25 lakh 44.32
Madhya Pra-
desh
62.09 lakh 21.27 lakh 34.25
Rajasthan 37.11 lakh 32.72 lakh 88.77
Odisha 51.11 lakh 70.20 lakh 137.35
West Bengal 61.75 lakh 89.11 lakh 144.30
Maharashtra 104.39 lakh 107.52 lakh 102.99
Uttrakhad 5.92 lakh 6.26 lakh 105.74
RRB’s Issuing Kisan Debit card
Pragathi Gramin Bank of Canara Bank.
Shreyas Gramin Bank
South Malabar Gramin Bank
Rushikulya Gramya Bank of Andhra bank
Chaitanya Godavari Gramin
NPCI to issue the RuPay Kisan Cards
Vijaya Bank
United Bank of India
Union Bank of India
UCO Bank
Syndicate Bank
State Bank of India
Punjab and Sind Bank
Punjab National Bank
Oriental Bank of Commerce
Indian Overseas Bank
Indian Bank
Dena Bank
Central Bank of India,
Canara Bank
Bank of Maharashtra
Bank of India
Bank of Baroda
Andhra Bank
Allahabad Bank
Page 23
Pratibimb | June 2013 | 23
4. Only 12 lakh RuPay-enabled cards have been distributed
The matter of concern however, is the positive impact of
these policies on the rural mass, which accounts to 68.84%
of India’s population. There are various facts clearly depicts
the meager impact of these policies in spite of the huge
investments by the government. As per a few reports 99 per
cent of lift irrigation schemes are not functioning and have
incurred a loss of Rs. 15,000 crore. In 2010, there were 195
tenders and only 50 of them were approved at 5 per cent
lower than the actual cost. It was also found that in the past
four financial years, 14,537 tenders were awarded at a high-
er cost. Some of which violated government conditions as
well. It has to be noted that one third of the country’s popu-
lation lives under the below the poverty.
Therefore, it is a clear indication that these policies are not
the panacea for the impeding problems in our nation. The
poor socio-economic condition of the rural mass is the cata-
lyst behind the even worse health conditions of the rural
mass. More than 50% of all villagers have no access to
healthcare providers. This can be clearly explained by the
pattern of per capita spending by the government, which
accounts to only $39. It accounts to only 4.1 per cent of our
GDP. Another noteworthy aspect is the nationwide; farm-
ers’ suicide rate (FSR) which 16.3 per 1,00,000 farmers in
2011. The records as per NCRB state that since 1995, a total
of 2,70,940 have committed suicide. The average rate of
farmer’s suicide has been 14,462 from 1995 to 2001. From
2001 to 2011 the average annual rate is 1,67,431. This im-
plies that every day 46 farmers die and every half an hour
there is nearly one farmer that commits suicide.
These facts clearly reveal that the policies framed by the
government are only good on paper. India does not need
policies; it needs an effective monitoring and evaluation
system.
References
Source: Status of microfinance 2012 by NABARD
RBI/NCPI
Indiafacts.in and India Development gateway
www.thehindu.com/opinion/columns/sainath/
farmers-suicide-rates-soar-above-the-rest/
article4725101.ece
Page 24
Pratibimb | June 2013 | 24
Introduction
Figure 1: Confusion in buying
How do we decide to buy a certain item? What activity influences us in making a buy-
ing decision? Answer to all these questions lies in the subconscious and non-conscious
drivers of the brain activity which forces us to buy certain things. Among all plethoras
of options running in the mind, there is one neuronal activity which runs superior to
all and hence pressurizes our mind to buy the item related to that activity. Brain maps
such signals and body acts accordingly. So, it’s all neurons and sensory activities re-
ceiving spikes of feedback from outside world and reverting back with the most suited
image created in the mind. All this subconscious, non-conscious, cognitive, affective
response to market stimuli lies under the domain of buzzword Neuromarketing which
refers to understanding of the brain subconscious activity with respect to outside mar-
ket stimuli. Many large scale companies such as HUL, P&G, Pepsi, Frito-Lay are con-
stantly trying to read the consumers mind via neuro marketing techniques during ad-
vertising or launch of a product.
Brain behind Neuromarketing
Neuromarketing has its origin in the late 1990s in the labs of Harvard University where
group of psychologists were trying to understand the major thinking part of brain ac-
tivity including emotions, pains in the subconscious level of brain activity that goes
below the level of controlled awareness. In the process, they define the basic unit of
brain activity as “meme”. Meme refers to unit of historical information store in the
brain. Large number of meme units of similar kinds refers to remembrance of a partic-
ular thing for a long time. The word “Neuromarketing” was coined later by Ale Smidts
in 2002.
Spark and Spike of Neuromarketing
Divyanshu Kumar Singh, IIM Lucknow
Page 25
Pratibimb | June 2013 | 25
Figure 2: Neuro functioning of brain during buying
Neuromarketing- Altering the marketing minds
Brand and product management through consumer behav-
iour is more of an influencing art rather than a marketing
tactics. Neuromarketing finds its importance in revealing
the taste of the consumers as per their gender composition,
emotional connect, brand importance. Nowadays packag-
ing, messaging, advertisements, marketing themes such as
ambush, subliminal, guerrilla are all influenced by the brain
waves action of Neuromarketing. Neuromarketing is primar-
ily used nowadays to better understand consumers’ wants
and needs and point consumers in the right direction to-
wards right fit by tapping the ‘pleasure center’ of the con-
sumers and then using marketing science tactics for any
product launch.
The new intelligent consumer dialogue
In such an advance social media network and constantly
changing buying behaviour, neuromarketing signals a direct
new brain to brain shared emotion. Every firm, organization
and community whosoever is dealing with consumer or
employer is trying to satisfy the needs and wants in order to
retain the consumer and maintain long term relationship for
better sales of their products. Neuronal sensory system
drives consumer thoughts and behaviour towards anything
and thus appeals to consumer wants, needs and desires.
Neuromarketing techniques serve as a medium to gain the
core of brain activity towards lucrative items, presented and
posted in a marketing world.
7 wonders of Neuromarketing
Decision buying and consumer behaviour is highly reflected
by the below mentioned seven tactics of neuromarketing:
Be visual: the study by neuro marketers suggests
that any item should reflect visibility in front of tar-
get audience and appeals to the desire of the con-
sumer. Visibility matters much more than the con-
tent description.
Create contrast: Since the plethora of products are
available in the market for attracting customers, sale
and maintaining customer base, any firm should
have some USP associated with the product launch.
That USP should posses contrast, should stand out
among other products and should truly reveal the
essence of launch.
“Firsts and Lasts” push: A good marketing strategy
on any product is something which could capture the
mind of customer in its first launch and left an ever-
lasting impression. In such a busy and competitive
lifestyle, neuro marketers suggest an ideology of
“first impression is the last impression.”
Emotional connect: To influence brain activity, any
product should have an emotional connect with the
consumer mind to persuade him towards buying
proposition. Brain to brain association of product
Page 26
Pratibimb | June 2013 | 26
with consumers is essentially important for success
of product.
Keep it simple: Any complicated and complex termi-
nology requires lot of thinking and interpretation.
People are too busy to give a minute of thoughts on
product. They immediately carry an image of product
which has simple but lucrative demonstration in the
outlets.
Concreteness: Simplicity and concreteness is the
guru mantra influencing buying decision and creating
positive image in the consumers mind.
Make it personal: Product should be directly associ-
ated with the needs of consumer. No matter how
much personifying a demonstration will be, it would
carry no meaning and importance until and unless it
is related to the needs, wants and desires of consum-
er.
Recent trends in Neuromarketing
Packaging and Marketing Messages
Neuroscience finds its importance in attracting customers
through lucid and lucrative packaging sense and messages
conveyed to customers for a particular product. Creating
marketing messages to tune accordingly to the mind of cus-
tomer perception towards product is achieved through
Neuromarketing techniques of electroencephalography
(EEG) and functional magnetic resonance imaging (fMRI)
which describes the change in neuronal activity of brain
after going through the details of product or the way prod-
uct is launched in the consumer market.
Figure 3: Packaging to influence customers
Societal Relevance
Neuromarketing through various brain mapping functions is
helpful in several kind of consultancy and provide appropri-
ate solutions. Neuromarketing provide an object oriented
research methodology to track the problem and then look-
ing for solution on the basis of evidence collected. Such
decisions in use of Neuromarketing techniques would be
beneficial in public policy decisions related to health and
society well being.
Figure 4: Health related messages
Tourism Sector
Motivational world of travel agency and package tourists
rapidly uses psychology and neuromarketing methods to
attract customers during tourism period, holiday, vacations
and during festive seasons. The package tourism and travel
agency track the tourist mind in each season and comes up
with various lucrative schemes for homes or stay deals dur-
ing vacation, food, meals and full day tourist package by
offering several incentives to earn revenue.
Figure 5: Neuro activity stimulus while going for drive
Brand equity and management
Neuromarketing techniques have been deployed in pilot
testing where group of consumers from local regions are
assembled and they are required to specify the characteris-
tics of range of products without letting them knowing the
product name. Similar to Pepsi-Coke blind taste test, neuro-
marketing methods were used to gain insights on the taste
of soft drinks in different regions and thereby improving
upon to enhance the brand value.
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Pratibimb | June 2013 | 27
Figure 6: Brand Perception
Green Ecosystem
There are been lots of talks in preserving ecosystem and
making the environment pollution free. Emphasis has been
given to adopt techniques to change the psychology of con-
sumers towards use of materials which harm our ecosystem
such as poly bags, plastic materials, use of petrol diesel run
vehicles, infra wave emission mobile technology and others
non bio-degradable materials. Neuromarketing helps in
capturing the psyche of consumers and tempting them to
use the eco friendly materials by developing options which
suits the consumer needs and provides pollution free sur-
roundings.
Figure 7: Green Mobile Technology
Medical Treatment and Prevention
Neuromarketing finds its importance in spreading messag-
es related to disease free nation and several campaigns are
promoted in rural and semi urban areas to increase vaccina-
tion and medical facility in the areas through proper region
related population understanding.
Figure 8: Making consumer conscious about cigarettes
Conclusion
Neuromarketing certainly impels the human mind towards
marketing stimulus in terms of buying, taking decisions,
brand perception and will surely be driving the future con-
sumer behaviour and attitudes It is a new marketing game
which moulds the consumer behaviour, perception and
provide new insights about anything which could have
spiked in his mind due to neuro activity. Such brain re-
sponse towards certain mood, personality would surely be
helpful for future marketers in better marketing research
and neuromarketing would be fruitful for companies to
create an impact in the mind of consumers.
References
Douglas L. Fugate, (2007) “Neuromarketing: a layman’s
look at neuroscience and its potential application to mar-
keting practice”, Journal of Consumer Marketing, Vol. 24
Iss: 7, pp.385-394.
Margraf. Ingo and Scheffer. David, (2010) “The needs of
package tourists and travel agents- Neuromarketing in the
tourism sector”, Trends and Issues in global tourism, Jour-
nal of consumer marketing, Vol. 2, Iss: 13, pp. 79-91.
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Pratibimb | June 2013 | 28
Introduction
`Does the stock market overreact?' De Bondt and Thaler in 1985 gave start to a new wave of thinking
known as behavioural finance. Weak form inefficiency of the stock market was discovered by them after
analysing how people are systematically overreacting to unexpected and dramatic news events which were
surprising and profound. The Efficient Market Hypothesis as proposed by Fama (1970) asserts that the
stock prices reflect the relevant information. The asset prices follow a random walk path i.e. they are
merely random numbers. The study conducted by Caginalp G. and H. Laurent (1998) by the predictive
power of price patterns finds patterns and confirms that they are statistically significant even in out-of-
sample testing and report.
The pattern of the stock index might help in predicting some of the effects of the various events. The
calendar anomalies tends to exist which goes against the efficient market hypothesis. The researchers have
used Gregorian calendar to investigate the calendar anomalies. There are various countries and societies
which follow their own calendar on the basis of their religion. For example, the Hebrew calendar is
followed by the Jewish society, which is strictly based on luni-solar, the Christian society follows the
Gregorian, which is based on solar, and similarly Hindu and Chinese follow their own.
The Hindu calendar is called “Panchanga” and it is based on both movements of the sun and the moon.
The festival of “Diwali” is typically occurs at the end of October and beginning of November.
The special ritual called “Mahurat Trading” can be observed on major stock exchanges like NSE, BSE,
NCDEX to name a few lasts for about an hour. It is performed as a symbolic ritual since many years. It
marks a link with the rich past and brokers look at it on a positive note. It marks an auspicious beginning to
the Hindu New Year. The investors place token orders and buy stocks for their children, which are
sometimes never sold and intraday profits are booked, however small they may be. Thus, it is widely
believed that trading on this day will bring wealth and prosperity throughout the year.
It is interesting to observe the behaviour of trading activities during the period preceding and succeeding
Mahurat Trading. The purpose of this study is to know the effect of the festival prior and post diwali on the
the returns.
Econometric methodology
I have measured stock return as the continuously compounded daily percentage change in the share price
index (S&P CNX NIFTY) as shown below:
Rt = (lnPt – lnPt-1) x 100 …………………… (1)
Where, Rt = return at time t
Pt, Pt-1 = closing value of the stock price index at time t, t-1.
I have used S&P CNX Nifty as it has got the most liquid stocks in its portfolio. Further, the National
Stock Exchange is largest in terms of Market capitalisation and Volume. I have used the data of the
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