Saturday, January 30, 2010

Why is Building a Brand Important?


The main aim of any small business or a corporate company is to build a brand. Building a brand is of prime importance than making money in the business. Of course, everybody in the business is here to take profit from the business. But before taking a profit one should build the brand for their products. Without building a brand, taking out the profits will surely sustain for short term.

If you want to be in the business for long term, first build the brand and get the confidence and loyalty of the customers. Coco Cola and Pepsi, when they entered the Indian Market, for the first five years they spent lot of money in building the brand image. They never broke even for the first five years. Think of a Company which invested lot of money in one company and they never get paid for the investments for the first five years.

It may look ridiculous initially, but they have built a brand image in every household in India. From urban population to rural population in India, everybody knows these two brands. Initially, they started with their core business of beverages. But after having built the brand name, they have started introducing other food products also.

They have slowly entered the snacks market in India. First they penetrated the urban market and they slowly penetrated rural market also. Now the traditional snacks in india is being replaced by these snacks. Such was their brand image, which could even change the way of life in one country.

What Coke and Pepsi did in India is brand building. They did for the first five years and now they are reaping the benefit of brand building. You too, if you are interested in starting business, build the brand first, and then make profit out of it.

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Sunday, January 24, 2010

Gender Bias in Workspace

6949Gender bias is a problem faced mainly by the fairer sex in all countries. It is felt less in developed countries like north American Countries and European Countries. But this disparity is much felt in Asian and African countries. In Asian countries, mostly in Muslim countries it is being witnessed much more. This is because of religious and Political reasons. But as the years go by, this disparity is started shrinking in all asian countries.

It is particularly improved in India for the last one decade. The statistics released by the Government of India says it has steadily been improving for the past ten years. The two parameters for the development of Women, Gender development index and Gender Empowerment Measurement have been increasing for the past five years.

This increase in the index shows the improvement of Women in the fields of Politics, Health, literacy, decision making and standard of living. After the boom in IT and Telecom Industry in India, the women participation in this Industry has started increasing. This gives them an opportunity to get salaries as equal as their male counterpart.

Women have occupied some of the top most posts in some of the leading companies in India. The previous records of harassment and sexual violence against women have started declining. Though, it was not completely eradicated, but for sure it is in declining path.

Some of the top posts like president of India, Chairperson of the Lower House, Leader of the ruling Alliance are all occupied by women in India. Though China is little bit advanced in Economic Growth and Military Growth, women disparity has not declined as much as in India. In this area, India is much developed than China.

We hope this disparity would soon be completely disappearing in all Asian Countries.

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Sunday, January 17, 2010

Why is Market cyclical in nature?

Many would know that all the free markets, like Stock Market, Commodities Market, Bond Market and etc, behave cyclically. ‘Cyclical’ here means the upside and downside movement of the Market rhythmically between a particular period. We have seen Gold markets move up during the time Stock Markets come down. This is one type of cycle in the Market when one comes down, one goes up. When Stock Markets move up, the interest rates would go up.

Why are these cycles occurring in the Markets? Let me explain the internal dynamics of these cycles. We all know that any Market exists because of the demand and supply for that asset. Let us start from a bear Market bottom of an asset. Let us assume here that the asset being Stocks. During the bottoms the demand for that particular asset would be less and the supply for the asset would be high. Since supply is more than demand, the stock price would continue its downtrend.

At one particular stage, the supply will be completely observed by the Market. Here, the stocks transfer from the people of weak hands to strong hands. Once again here is a small explanation for weak and strong hands. Those who are well informed about the company with strong financial strength can be termed as strong hand, because he wouldn’t sell the stock even if it comes down further. On the other hand, a weak hand is an Investor, who is not financially strong and not well informed about a company would sell his holdings if the prices decline further.

At this stage, stocks transfer from weak hands to strong hands. The floating stocks of a company would be held by strong hands. So slowly supply stops and demand picks up at a lower price. Now the price difference also plays a crucial role. Since the prices are low now, automatically demand picks up in that stock. At one stage, supply will be overwhelmed by the demand and the prices of the stocks start picking up. This process always takes a time to complete. That is why a cycle is created in the market. This may be of Intraday, or weekly or yearly or decades cycles.

The same process takes place during the bull market peak vice versa to create a cycle. Proper understanding of cycles is very essential for successful investing.

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Saturday, January 9, 2010

Buy the Sell off, Sell the Rally


The Stock Mantra of prime importance is, you buy during big sell offs and you sell your securities during rallies. How many really do follow this simple logic in Stock Markets or Commodities Market is a question, even though it is the only way to make money in Stock Markets. Every body knows this logic, but nobody doesn’t follow it.

The Simple reason for that is, the logic is associated with emotions of investing person. During big sell offs, the Investor would go by his heart not by his mind. If you go by mind, then it will show you that this is the right time to invest. If you go by the heart, then the panic created by the big sell off would certainly eat you to make you sell the securities actually at a time when you should be buying it.

So investment decisions in any free Markets should be rational, not irrational. Rational Investors are very few in numbers and they are the winning Investors in the Market. Becoming a rational Investor is not as easy as it looks. You have to keep you emotions under the check during the big market moves and you have to think independently.

If you join the crowd, then you would be sucked into the crowd and you would be part of the crowd and your investing or trading decision would be taken irrationally or emotionally. Always await the crowd during time of taking Investment decisions.

One simple example is, those who have invested in the Stock Markets would have invested their money mostly in IT sectors in any part of the world from 1999 to 2003. Because, the popularity is such that any investor would have invested only in this sector. But this sector never saw a big bull market since then.

Had an investor acted in his own way and though investing in IT sector would not fetch good returns, simply based on the fact, that this Sector is already over Invested, certainly he would have avoided that sector.

So, be rational when it comes to investing.

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