Tavleen Singh in her very interesting book Durbar recounts one of her earliest reporting experiences in Delhi. The year was 1977 and the state of internal emergency declared by the then Prime Minister Indira Gandhi was still in effect. The opposition leaders had come together to address a rally at the Ram Lila maidan in Delhi.
The leaders started to arrive in their white Ambassador cars by around six pm in the evening. The ground was full. And the boring speeches started one after the other. As Singh writes in Durbar “I thought people might start to leave unless somebody said something more inspirational. It was past 9 p.m. and the night had got colder although the rain had stopped.”
But nobody had left. They were all waiting for a certain man called Atal Bihari Vajpayee to speak. By the time Vajpayee rose to speak it was well past 9.30 pm. The crowds clapped chanting ‘Indira Gandhi murdabad, Atal Bihari zindabad‘. As Singh puts it “He acknowledged the slogans with hands joined in a namaste and a faint smile. Then, raising both arms to silence the crowd and closing his eyes in the manner of a practiced actor, he said, ‘Baad muddat ke mile hain deewane.’(It has been an age since we whom they call mad have had the courage to meet) He paused. The crowd went wild. When the applause died he closed his eyes again and allowed himself another long pause before saying, ‘Kehne sunne ko bahut hain afsane.’ (There are tales to tell and tales to hear). The cheering was more prolonged, the last line of a verse that he told me later he had composed on the spur of the moment. ‘Khuli hawa mein zara saans to le lein, kab tak rahegi aazadi kaun jaane.’ (But first let us breathe deeply of the free air for we know not how long our freedom will last). The crowd was now hysterical.”
Such was the connect Vajpayee had with the masses. Having heard him give speeches to a large audience of over a lakh, I can safely say his pauses which became a butt of jokes later when people saw him make speeches on television, would mesmerise the entire audience when he spoke to them live.
In the Lok Sabha election that followed the leading opposition parties came together to form the Janata party. Vajpayee’s party Jan Sangh was also a part of it. The Janata experience was soon over and by the 1984 Lok Sabha elections Jan Sangh in its new avatar as the Bhartiya Janata Party (BJP) was down to two seats.
From there on Lal Krishna Advani built the party on the ideology of hardcore Hindutva, taking the number of seats that the party had in the Lok Sabha to 88 in 1989 and 120 in the 1991. This fast rise of the party was built on slogans and ideas like “saugandh Ram ki khaate hain mandir wohin (i.e. Ayodhya) banayenge” and “ye to kewal jhanki hai Kashi Mathura baaki hai”. Vajpayee took a backseat for a while. It is one thing to instantly connect with the masses when you address them and entirely another thing trying to build a political party from scratch. And this is where Advani flourished.
In the 1980s and the early 1990s the BJP espoused causes like making temples in Ayodhya, Kashi and Mathura. It talked about banning cow slaughter, having a uniform civil code, and doing away with the Article 370, that gives special status to the state of Jammu and Kashmir. All this was music to the ears of voters across Northern and Western India and the party catapulted from being a political front of the Rashtriya Swayamsevak Sangh (RSS) to having some identity of its own.
In the 1996 Lok Sabha elections the BJP won 187 seats in the Lok Sabha and was invited to form the government. At that point of time it was Vajpayee and not Advani who had played larger role in reinvigorating the party, who became the Prime Minister of the country.
While Vajpayee may have been a taller leader there was practical considerations at play as well. The BJP on its own did not have the strength to form the government. It needed other parties to support it either by joining the government or supporting it from the outside. And the chances of that happening were better with a moderate Vajpayee at the helm of things than a hardcore Advani who by then was looked upon as a man who had played an important part in bringing down the Babri Masjid. At least, that was the perception among a host of political parties.
So Advani had to make way for Vajpayee as the Prime Minister. BJP’s first tryst with power lasted less than three weeks and even with Vajpayee leading, it could not attract the support required to prove its majority in the Lok Sabha. But things changed in the years to come and Vajpayee was the Prime Minister from March 1998 to May 2004.
His moderate image and larger than life persona helped him rule the country with a rag-tag coalition of more than 20 political parties.
Narendra Modi is now trying to convert his image from that of a hardcore Advani of the 1990s to that of a more moderate Vajpayee who ruled the country. At least, that is the conclusion that one can draw from the speech he made at the Shriram College of Commerce in Delhi, yesterday.
In the speech he said several things that tried to project an image of a moderate ‘Modi’. Lets sample a few lines.
– The youth of the nation has its finger on the mouse of computers and is changing the world. India’s journey has gone from snake charmers to mouse charmers
– The ambassador of a nation asked me what major challenges India faces and I said the biggest one is that how we use opportunity. When asked what the opportunity was, I said the youth. Europe buddha ho chuka hai, China budha ho chuka hai.
– This nation is being ruined by vote bank politics. This nation requires development politics. If we switch to politics of development, we will soon be in a position to bring about lasting change and progress
– We need P2G2. Pro-People Good governance
– Why shouldn’t we make the ‘Made in India’ tag a statement of quality for our manufactured products?
If the above statements are viewed in isolation Modi does not come across as a hardliner that he is typically made out to be. He comes across as a man who has some vision for India.
Politically this makes sense for both BJP as well Modi. If Modi is able to soften his hardcore image in the days to come he might start to appeal to people beyond his home state of Gujarat and votaries of hardcore Hindutva. He might also start to appeal to political parties who currently won’t touch him with a bargepole given his hardcore pro Hindutva image.
This is very important in this era of coalition politics where no single political party can form a government on its own and sticking to any ideology becomes a burden beyond a point. If this strategy of projecting a softer Modi does work, it would mean that the BJP would be going back to its soft Hindutva strategy that it followed during the reign of Vajpayee. As we all know this strategy worked wonders for the BJP till it was abandoned in favour of the India Shining strategy.
A softer Modi will continue to appeal to the traditional supporters of the BJP and at the same time appeal to those who currently have doubts about him. That seems to be the idea behind the new Modi that India saw for the first time in Delhi, yesterday.
Whether that happens remains to be seen. As marketing guru Seth Godin writes in All Marketers are Liars “Great stories happen fast. They engage the consumer the moment the story clicks into place. First impressions are more powerful than we give them credit for.”
Given this getting rid of first impressions in the minds of the voter is very difficult unless you are the Congress party, and do not stand for anything. So it remains to be seen whether people of India will buy the new story that Modi is trying to project at the national level. But then we all have to start somewhere.
The article originally appeared on www.firstpost.com on February 7, 2013
(Vivek Kaul is a writer and can be reached at [email protected])
Games companies play: Why you pay more while he pays less for the same product
Indian Railways can even spring up positive surprises, now and then.
Recently while travelling from Delhi to Mumbai I was pleasantly surprised to have been upgraded from third AC to second AC. And this of course meant traveling more comfortably.
On entering the coupe in the second AC bogie I found an elderly lady already sitting there who somehow figured out that I had been upgraded.
“How can they upgrade you? You haven’t paid as much as I have!” she said.
And she was right about it. I was travelling second AC while having paid for a third AC fare.
Nevertheless, this sort of “price-discrimination” has now become a quintessential part of our lives. Airlines are an obvious example. You could have paid many times more than the guy sitting next to you because you booked the ticket two hours before takeoff and he had it all planned out three months back. Yours might be a business trip wherein you need to be a particular place on a particular day at a particular point of time. The person sitting next to you might be simply travelling for pleasure and could have thus planned it all in advance.
When books are first launched they are typically launched in the hardback form. A few months later a cheaper paperback is launched. The hardback is targeted at an avid book reader who just can’t wait to have his hands on the book, and so is ready to pay more. When the bestselling Shantaram first came out in India it retailed for around Rs 1200 in hardback form. Prices finally fell to around Rs 400 for the paperback, which was 66% lower.
But these as I said a little earlier are the obvious examples. Companies have also started using the discriminatory pricing strategy when it comes to electronic products. This has started to happen primarily because being spotted with the latest cell phone (be it an Apple iPhone 5 or a Samsung Galaxy G3) or a tablet (the Apple iPad) gives so much meaning to the lives of people these days. Till a decade back a man’s worth was decided by what he wore. Now it’s decided by the brand of cell-phone that he carries.
What was once a luxury became a comfort and is now almost a necessity for a large number of individuals. When such products are first launched they are targeted at the “geeks” or early adopters who find a lot of meaning in their lives by being the first ones to use the latest i-Pad/i-Phone and hence are willing to pay more for it.
Companies tend to exploit this human need by charging more for freshly launched electronic products. Of course, once companies have skimmed higher prices off these early adopters, they cut prices so that you, I and everybody else, can start buying the product.
In the apparel industry, fresh stocks go for higher rates towards the beginning of a season, whereas as the season ends the same set of clothes is sold at a discount.
The logic behind price discrimination is to divide consumers into various categories and get them to pay what they are willing to pay. As Seth Godin points out in All Marketers are Liars “Ralph Lauren generates a huge portion of its sales from seconds… There are so many of these stores that many of the items aren’t seconds at all.”
So those who are price sensitive buy the “so-called” seconds, those who are not buy the “so-called” originals. Companies try and cash in on this price sensitivity of consumers through price discrimination. Anyone living in Mumbai can go to Parel and buy all kinds of things from the so called seconds shops that swarm the area and get a good discount doing so.
As Jagmohan Raju a professor at Wharton Business School says in an article published by [email protected] “Companies…charge people different prices depending on the buyer’s desire or ability to pay…They reap wide profit margins from those willing to pay a premium price. In addition, they benefit from high volume, even at a lower per unit price, by building a wider customer base for the product later.”
But this logic doesn’t always work. Consumers may not mind discounts for senior citizens or lower prices for early morning cinema shows, but they can be touchy about discriminatory pricing.
In the late 1990s Coca Cola developed a vending machine which charged the consumer a higher price on warm days. As Eduardo Porter writes in The Price of Everything “When Coke chief executive Doug Ivester revealed the project in an interview…a storm of protest erupted.” Coca Cola had to ultimately drop the idea.
In September 2000, it was revealed that www.Amazon.com was charging different prices for the same DVDs to different customers. The company denied segregating customers on the basis of their ability to pay, something they could easily figure out from their shopping histories.
The early adopters of Appne iPhone were an unhappy lot when in 2007, the company decided to cut prices of the 8GB model from $599 to $399 within two months of launching it. The company had to placate this lot of customers by offering them a $100 store credit.
However, there are no easy ways of ensuring that your customers do not feel cheated. One way is to differentiate the offering in some way. “Companies have to sell products that are at least slightly different from each other,” writes Tim Harford in The Undercover Economist. ”So they offer products in different quantities (a large cappuccino instead of a small one, or an offer of three for the price of two) or with different features (with whipped cream or white chocolate),” he adds. The products are marginally different, but it gives the company a reliable excuse to charge “significantly” higher prices. The next time you go to a coffee shop try this little experiment by just try saying no to everything extra that the barista tries to offer you and see by what proportion your bill comes down.
Book publishers tend to launch a book in a hardback form. The cost of production of a hardback is slightly higher, but the price difference between a hardback and a paperback is significantly different (as we saw in the case of Shantaram earlier). The hardback is just a way of telling the early buyer that the book firm is offering him something more.
Frequent flyer programmes work in a similar way where the frequent flyer may get a cheaper rate because he is a frequent flyer and thus other flyers do not feel cheated.
Companies practice price discrimination in the hope of raising their average price per unit of sale. This of course works if the core business model of the industry is strong. But even price discrimination cannot rescue a flawed business model.
A great example is the newspaper/magazine industry worldwide. It started putting news and analysis free online while expecting those buying the newspaper/magazine in their physical form to pay a price for it. Of course consumers will take what is free and shun what they have to pay for, especially if it’s the same product. No wonder, worldwide the industry is in trouble. While it was easy to put news/analysis free online and get the so called “eyeballs”, nobody bothered to figure out how would they go about earning money doing the same?
The other example of an industry which has been disaster despite all the price discrimination is the airline industry. As Porter points out “For all their efforts at price management, competition has pushed airfares down by about half since 1978, to about 4.16 cents per passenger mile, before taxes…In terms of operating profits, the industry as a whole spent half the decade from 2000 to 2009 in the red.”
At times companies end up in trouble because of price discrimination practiced by someone else. A spate of websites which sell books at a discount of as high as 40% have been launched in India over the last few years and this has led to bookstores getting into serious trouble. People now use bookstores to browse and check out what are the latest titles to have come out and then go home and order the books online at a discount.
Price discrimination is a new game in town and impacts consumers and companies in both good and bad ways. Hence it’s important, at least, for consumers to be aware when and where are they being price discriminated. Or else, they are likely to react like the old lady who travelled with me from Delhi to Mumbai.
The article originally appeared on www.firstpost.com on November 22,2012.
(Vivek Kaul is a writer. He can be reached at [email protected])