Oct. 19 - Nov. 1, 1998
Special Features

Electronic Presentation Equipment

Plastic Money

Electronic Presentation Equipment
Lasting impressions

An array of sophisticated and technologically advanced tools and devices are changing the face of business communications in Corporate India

Not too long ago, an executive making an audio-visual presentation used to shiver with trepidation. Using unreliable and almost primitive equipment, the Murphy's Law was uppermost on the mind and there was an impending sense of doom. What if the slide projector did not work? What if the pictures were blurred? Would the remote control prove to be the nemesis? And if something goes wrong, what will be the consequences? A missed chance of a promotion? A lost deal? Or, just plain embarrassment?

Fortunately, one need not have any such fears now. In the last few years, a quiet revolution has swept across boardrooms, seminar halls and conference rooms in the country. Business meetings have acquired a new smoothness and glitz, thanks to a bewildering array of sophisticated and state-of-the-art presentation tools. Against the earlier basic slide projectors, we now have cutting-edge multimedia projectors, LCD projection panels, electronic whiteboards and glitch-free overhead projectors. If business is all about communication and effective showcasing of ideas and arguments, these tools have become crucial in chalking out strategies, plotting roadmaps and providing a competitive edge in the marketplace. The entry of a vast number of multinationals coupled with changing business paradigms have brought forth a dramatic shift in the way people conduct business. It is against this backdrop that the electronic presentation equipment business has come of age.

Though the exact market size is difficult to estimate, given the large number of players in the unorganised segment and the many hole-in-the-wall corner shops offering all sorts of low-cost products, the electronic presentation equipment business in India is pegged at over Rs 100 cr. Though many segments are still in an evolutionary phase, at least one section of the business appears to be galloping ahead. This is the LCD data projector market, which is estimated to be growing at a rate of 35%.

Right now there are at least 20 different brands in the market competing for a slice of the pie. A few are established players like Philips and Birla 3M, who possess their own manufacturing strengths and technologies. But a vast majority of the international brands now available in the Indian market are routed through various distributors who import the equipment and sell it in the country. Says Naveen Mandhana, chief executive, India OA Systems, a company belonging to the Videocon Group which markets the Toshiba brand of LCD data projectors in India, 'The market for advanced LCD-based projectors is still an emerging one. Right now, everyone is exploring the market.'

Electronic projectors have been traditionally used for training purposes and presentations, but it is the business presentation segment that is witnessing rapid growth. Taken as a whole, the projector market (comprising all the various segments) still relies on the training segment for 70% of its demand, but the business presentation segment using multimedia tools is catching up rapidly. Basic overhead projectors and transparencies are slowly becoming pass; now, it is portable, ultra-light and compact multimedia compatible projectors that are in demand. Using powerful software packages such as PowerPoint and Harvard Graphics and on-line direct video projectors hooked to a PC or a Note Book computer, business presentations today can not only make heads turn but also make jaws drop.

The new generation of projectors have many technologically advanced features and support a wide variety of interfaces, besides offering ease- of-viewing. New optical technology has not only improved projector brightness immensely but also ensures greater uniformity in the light conditions. Unlike in the past, one does not need to dim the lights in the room now before the making a presentation. This enables a presenter to maintain eye contact with his audience, resulting in greater impact. As Mandhana says, 'Whether it is a sales pitch or a strategy discussion, an effective presentation is all about creating an ambience where you can capture the eyes, ears and minds of the audience. The new generation of presentation equipment is designed to ensure this.'

The current demand for LCD data projectors in India is estimated at around 2500 pieces per annum. But competition among players is intense. Says Ankan Biswas, general manager (marketing) in Philips India's business electronics division, 'With the opening up of the market to international players, competition has become severe. Of the 20 or so brands in the market, only a few are doing well.' Established players like Philips and Birla 3M have an edge owing to their strong brand image as well as well-oiled distribution and service networks. Says Biswas, 'Most dealers keep on changing the brands they represent; this reduces their commitment as well as the assurance of good after-sales service.' Philips, he says, maintains an exclusive dealer network which enables the company to maintain a good supply chain and provide efficient after-sales support.

Right now, Philips and 3M roughly have a 20% marketshare each in LCD-based data projection systems, with the rest distributed among various other players. Global brands like Proxima, Barco, Toshiba and Sharp are now available in the Indian market and those in the distribution business include corporates such as Godrej and Videocon, besides a host of small independent players.

But large players in the organised sector have to contend with grey market operators who offer cheaper products. 'Where there is a high customs duty, the grey market will always be a threat,'says Biswas. Imported LCD projectors attract a duty of almost 100%, making them costly when they hit the market. An LCD panel along with an overhead projector could carry a price tag of over Rs 5 lac. While a small independent distributor may import a kit with lesser duty as a one-off case by declaring it as a PC

peripheral or by under-invoicing, big established companies play by the book, and their systems invariably end up at the higher end of the price ladder. However, B N Doongaji, vice president of Godrej & Boyce's Prima Division, which markets a range of sophisticated presentation equipment, feels that the grey market does not pose any major threat to big established players. Says he, `Due to their high costs and falling import duties, presentation equipment business will not suffer much from grey market operators.'

But there are other challenges. With PC technology changing fast, the LCD projection systems (which are PC-oriented) have to be upgraded continuously on the technology ladder. 'Product life cycles have become very short. Manufacturers have to move ahead continuously on the technology and price fronts,' says Biswas. Adds Mandhana, 'With international prices on a downward curve, prices in India, too, will drop in the future. However, the challenge for equipment manufacturers will be to keep pace with the fast- changing technologies in computers.'

Godrej & Boyce - Prima Division

The name 'Godrej-Prima' is synonymous to typewriters in India. But typewriters themselves are a vanishing industry and are being replaced by printers - impact and non-impact. The Prima Division of Godrej, in order to leverage its strong distribution network of 20 branches and 600 dealers, has moved into presentation equipment.

B N Doongaji, vice president of the division, expects the typewriter market to survive for some time. Says he, 'If we can make up for the decline in domestic sales by exports to new markets, we may not need to cut production.' Closure of some of the international players in the type writer industry has provided a breathing space to some companies. Godrej expects to make up for its loss in volumes in the domestic market by exporting its products to African and Latin American countries.

But the future of the division is in presentation equipment. It is now marketing products from the stables of quite a few international companies like Panasonic, Plus Corp, Polycom, Davis, Kodak, etc. The products include overhead projectors, direct projectors, multimedia projectors, panaboards, audio visual equipment, slide projectors, etc. Keeping in mind the need to offer the latest technology to its customers, Godrej enters into agreements for distributing such products in the country on a non-exclusive basis, so that both the parties have enough leeway for supplying their products to the consumer. The technological edge that the products marketed by Godrej possess are borne out by the Davis Powerbeam V projector

which uses digital light-processing (DLP) TM technology, a patented award- winning Texas Instruments technology which allows for film-like video quality and crisp saturated computer images.

The Godrej-Prima name is synonymous with effective after-sales service which ensures repeat sales. With this background, the division enters into service contracts for maintenance of all the equipment sold by them, which besides getting an increased share of business from the same customer, also becomes a major source of its sustainable revenue.

Top

Plastic Money
Card check

Though usage of cards is increasing in India, very few users are aware of their features that can help or trap them

It is beyond doubt that credit cards are the most popular form of plastic in use in India (among charge cards, ATM cards, debit cards and smart cards), and will continue as the best alternative to carrying cash. With disposable incomes increasing and travelling and tourism becoming important for the middle-class, more is the need for credit cards. Growth rates in the credit card industry are projected between 35-40%, with non- metros seeing a proliferation.

Says Vijay Mehta, chief consultant, Credit Card and Management Consultancy (CCMC), an advisory service on credit cards and allied plastic money businesses, set up in 1994, 'The rapid acceptance of personal computers at homes and workplaces, and the acceptance of electronic banking services packaged around the familiar credit card, will lead to a more widespread use of cards.' Adds a senior official with Bank of India's credit cards department,'The potential is very high and there is a role for everyone.' Says Chandra Agnihotri, country manager - South Asia, Visa International,'We expect a growth rate between 40-55% in the next three years.'

Competition is bound to get hot with the entry of the largest public sector bank, State Bank of India (SBI), in collaboration with GE Capital-India. SBI has an exclusive arrangement with the world's largest payment system, Visa International (Visa) for payment cards in India. The bank has set a target of 2 million cardholders within 3 years of its start of operations.

The major USP of the SBI card will be its price. Industry sources expect the entry fee to be around Rs 250 for the product, while the annual fee is pegged around Rs 500. Besides, with over 8900 branches and a very substantial corporate and retail customer base, it should not be difficult for SBI to capture a large market share, dethroning the multinationals from the top slot in the next couple of years.

The more significant aspect of a credit card is perhaps its in-built capacity to satisfy the fundamental needs of the customer. Says E Gopalkrishnan, executive vice president, BoBCard, 'It is the acceptability and maximum credit limit that count the most for the cardholder, besides fringe benefits.' The presence of a strong and efficient servicing mechanism, whereby a person gets his/her card within the said time limit, also counts. Further, supply of statement of accounts on time, correct billing of expenditure, sufficient time to settle the dues, and, last but not the least, issuer's response to address any query from the cardholder also matter. Comments an official of a domestic bank,'Some of the new features like photo card, insurance and picture cards have very limited appeal to the prospective cardholder. It is the quality of service that counts.'

However, a study conducted by CCMC revealed that 65% of credit cardholders in India are unaware of the high interest rates charged on outstanding card balances and they end up paying more than what they believe they should be paying. The study surveyed 10,000 customers holding credit and charge cards in 15 cities across India. According to Mehta, 'It's surprising that a majority of the 3 mln cardholders are ignorant of the fundamentals of credit card products such as interest rates charged on outstanding balance.'

With different types of plastic money available in the market today- there are debit cards, charge cards and smart cards - it becomes important for the customer to choose correctly according to his basic requirements/needs. However, not many cardholders are aware of the different features that these cards provide. The study reveals that 78% of them are unaware of the difference between credit and charge cards. While credit cards are designed for customers who would like to rotate credit, charge cards are for those who wish to settle their bills in full. Interestingly, cardholders were unaware of the financial loss they could suffer in case the card is lost, with most card companies holding the cardholder responsible for all expenses incurred on the card till the loss is reported. For instance, in case of Bank of India's IndiaCard, if it is lost or stolen, the cardholder's liability on fraudulent use of the card is Rs 1,000 from the time the loss is reported.

Another revelation of the study is that 84% of the cardholders believe that they are entitled to an interest-free period of 30 days or more in all situations, whereas, in reality, the interest-free period is applicable only in those few cases where the monthly bills are settled in full. Even as rewards/points programmes are considered to be of major value, 80% of the cardholders do not have this benefit on their cards. Further, 70% are not aware of a charge on out-station cheques. Adds Mehta,'It is the responsibility of card issuers to educate customers about what is really behind the piece of plastic.'

With new players entering the market, throwing in more features and benefits, it becomes important to educate customers about the financial aspects also. Says Mehta,'While card companies do a good job of explaining new benefits and services, they could do much more to educate customers about the growing interest rates and transaction fees.Our study will provide individuals with the right information to increase card literacy and help create a well-informed card base in the country.'

==========================================================================
                          Reading the fine print
            Important tips for selection and usage of your card
--------------------------------------------------------------------------
*    Opt for a card based on your needs/ requirements and finances
*    Look  out for hidden charges such as growing interest rates and  other 
     service charges
*    Check   out  the  eligibility  criteria,  interest  rates  levied   on 
     outstanding and cash advances
*    Keep a note of the annual, joining, add -ons, penalty and  transaction 
     fees
*    Check out the interest-free period and range of credit limits offered
*    Find out the nature of rewards/points programmes
*    Check  out  the  number of merchant establishments the  card  will  be
     accepted at
*    Decide and pay off your credit card balance in less than 6 months
*    Know your available credit limit
*    Check  out  your  travel plans : Are they confined  to  metros  and/or 
     smaller cities/towns in India?
===========================================================================
===========================================================================
                                Card facts
                   Credit cards are catching up in India
---------------------------------------------------------------------------
*    Card industry turnover : 1996: Rs 4,300 cr; 1997: Rs 7,000 cr.
*    Credit cards in India : 1996: 2.2 mln; 1997 : 3 mln
*    No. of merchant establishments in India currently : 1,05,000
*    Card industry's growth rate : 35-40% pa
*    No. of cardholders by the end of 2001:15 mln 
*    No. of electronic terminals, EDC terminals (electronic data  capturing
     terminals) in the country: 7000
===========================================================================


===========================================================================
                           Know your credit card
                        Findings of the CCMC study
---------------------------------------------------------------------------
*    The three features considered most important for a card are:
     - Convenience & acceptability
     - Quality of service 
     - Cash advance / Credit limit
*    70%  of  the  cardholders are unaware of the  facility  of  waiver  of 
     outstanding balance upon death of the cardholder
*    70% are unaware of the action to pursue in case of loss/theft of card
*    35% are unaware of the annual fee charged for the card
*    Only 16% considered ATM connectivity to be important
*    Average card spendings : 
     -  Cardholders  with  a monthly income less than  Rs  10,000  have  an 
     average spending of Rs 2,600
     -  Cardholders with a monthly income in the range of Rs  10,000-15,000 
     have an average spending of Rs 4,300
     -  Cardholders  with a monthly income ofmore than Rs  15,000  have  an 
     average  spending of Rs 4,800
    No. of merchant establishments in India currently: 1,05,000 
===========================================================================

Top