Monday, January 16, 2012

Tol Mol ke Bol

Disclaimer : Its damn boring man. Read at own risk !

For the last couple of days, I have been going through my Marketing books. I have been checking out the chapters on how to price a product and ruing at my gross inattentiveness during the classes in which these theories were taught. This sudden interest in this topic owes to this very interesting newspiece where a Chennai couple have sought out a sperm donor from an IIT. The news immediately sparked some dormant entrepreneurial instincts in me. If an IITian can command a sum of twenty thousand rupees for his sperms, how much should the same product be priced for a person with an REC+IIM background ?
So I opened Kotler, the Bible of Marketing to go through the basics again. With a production rate of 1000 per second (Source : The endocrinologist sister) at almost zero input cost, this is a product that challenges the very foundations of all pricing principles. We cannot follow any of the cost-oriented pricing strategies and thus concepts like break-even analysis, markup pricing etc are of little help to me.
However like every other product, it must be priced and priced rationally for it to succeed in the market. I analyse a few theoretical concepts to throw some light on this subject.

Value-Based or Cost-based pricing - This is the first choice that a seller has to make and the choice is fairly obvious given the nature of the product. With insignificant costs of production, the pricing strategy needs to be Value-based. But therein lies the catch. Value-based pricing method needs the seller to set a target price that would match the customer's perceived value of the product which becomes a tricky proposition. A good idea would be to follow a value-added pricing plan. Thus instead of a price war with competitors, one should attach value-added features and services to differentiate the offers. Maybe something like a contribution from a batchmate can go a long way in establishing market credentials of the product. I am currently in touch with a few who are interested to contribute.

Pricing as per Market : To understand this we take a little help from the concepts of economics. Now there are primarily four types of markets.
a) Pure competition - Many buyers and sellers trading in a uniform commodity and individual sellers cannot cause changes to market price.
b) Monopolistic competition - Many buyers and sellers trading over a range of prices owing to differentiated offers for different customer segments.
c) Oligopolistic competition -Few sellers who are highly sensitive to each other's pricing. Entry barriers exist for new sellers.
d) Pure monopoly - Single seller.
Of the above, though we may fantasize of an Ideal world where a pure monopoly exists with us being the single provider, in reality I think the market for our product would fall in between monopolistic and oligopolistic competition leaning slightly towards oligopolistic at this stage but with the government opening up a plethora of IITs and IIMs , the market is expected to move more towards monopolistic competition and thus as sellers, we must quickly start devising plans to differentiate our offerings.

The Price-Demand relationship - An increase in price is usually followed with a decrease in demand but to what extent is the question. That must be analysed with proper market research data and I suggest opening up a Facebook community for say IIM Sperm donors to keep record of sales. Also every donor should immediately update his Twitter account on a successful transaction to maintain a real time check on market prices. However such updates should strictly happen only when the transaction has had some commercial value attached to it.

New Product Pricing Strategy :
Kotler says that pricing strategies should change as the product passes through its life cycle. Now the life cycle of a sperm while inside the production warehouse is hardly of any interest to anybody and thus we will directly jump to the stage when he has successfully managed to come out to see the world outside the factory gates. The stimulus to see the outside world may vary greatly depending on the mood and circumstances of the factory owner. The life cycle of this product depends largely on that. If the gates were opened under the pressure of some adult content related stimuli or some fanciful thoughts interspersed by special appearances of beautiful unobtainable women, then the product is doomed from the very beginning. Inhospitable external environment, most often tissue papers, lead to immediate destruction of any commercial value of the product.
If however, the exit circumstances are enabled by the physical presence of another person of the opposite gender, then it may have a completely different cycle to follow, which this time would invariably depend on the mood of this other person. Most often than not disaster would strike again in the form of a thin plastic sheath that prevents any further transportation of the product. The product gets an unceremonious fruit-flavoured farewell.
(Note : If the product finds itself getting a vigorous rinse and then looking down a basin hole, then the circumstance leading to its predicament regretfully cannot be covered in this blog owing to its 12A rating)
Coming to the case, when the product manages to transfer itself successfully to a hospitable foreign destination. The word hospitable here is only used relatively as the acidic recipient environment allows the survival of only a couple of hundred of sperm from an enormous pool of about 300-500 million that arrive with each incoming batch. These few hundred who survive are left to shoulder the responsibility of the product. Depending on ten thousand other factors, details of which are beyond the realms of our understanding, one robust swimmer, out of those many millions that started the journey with him, may successfully swim across the complex matrix from the vagina to the cervix to the uterus and reach at the gates of the fallopian tubes where it would do what it does best. Wait ! The wait may or may nor bear fruit and the life cycle of the product again becomes dependent on factors beyond its control. The heroic journey may be cut short simply because of the timing of his visit. The sign on the gates 'No Ovulation - Come back later' brings his world crashing down and he too dies a tragic and unsung death like so many of his compatriots. The task would be left for another brave soldier from another batch who, after braving all these above mentioned obstacles, may finally meet a coy little egg at the gates and complete its Karmic cycle by fertilising it !!!
Urination on a strip thereafter may lead to congratulatory messages being exchanged or a broken nose for the factory owner. Thus discretion is supremely advised in any transaction related to the product.

Apologies for digressing from the primary intention of this blog but the above information was necessary to understand whether the price of the product should vary as per its life cycle. As per my conclusions, the pricing should remain constant due to the complex nature of the product's life cycle.

Some other very pertinent points which I think are worth considering when setting the price of the product:
  • Market-skimming pricing - where we charge a high price initially should be justified here as the competitive advantage is soon to be affected with the arrival of new competitors. Though some of the earlier batches who passed out in the 60's and 70's may not be much of a competition now but they cannot be completely discounted either. Also I am pretty sure that very soon, fake products would flood the market that would bring deflationary impacts on my product price.
  • Time pricing -where a firm may vary its price by the season, the month , the day or even the hour also is relevant here. Research shows that the demand for the product fluctuates largely based on the global economic climate. Recessionary trends that may lead to lesser than expected salaries during the placement season significantly brings down the perceived value of the product. Thus the pricing too should be need to be adjusted accordingly.
  • Competitor's Strategies and Prices - Kotler says , "Consumers will base their judgement's of a products value on the prices that the competitors charge for similar products ". Thus I guess an all IIT-IIM meet should be organised where the directors of all these institutes should agree upon some basic principles of pricing that would be applicable to all alumni and current students. This would ensure a level playing field for all. The products should be graded as soon as the placement season is over. The following table can be used as a guiding principle :

    Recruiting Company
    Product Grade
    I-Banks, Management Consulting firms
    PE firms
    FMCG firms
    Indian IT firms
    Suspicious Quality of product

I am a little groggy after all this study. No one single theory seems to be giving me a definitive direction to my pricing strategy. Thus after considering all relevant and irrelevant literature , I have come to the conclusion that Psychological Pricing which prices a product based more on the psychology of the consumers rather than economy would be the most ideal way of pricing this product. A higher priced product comes with the natural perception of having a higher quality. So in order to shine out in the competition pool, I have decided to put up my product for auction.
The shortlisted sites are,, .

So all couples who are looking out for this great product, please don't miss this opportunity to buy this guaranteed product. Register yourself today and start bidding. Let you, my dear consumers, decide what the price of my product should be ! Looking forward to doing great business with you all.

Jai Hind !

Thursday, January 12, 2012

Happy Birthday Bloggie !!

My blog is six years old today. Named after the iconic Coffee House at College Street in Calcutta, I guess laziness was something that came in its DNA. Yet, 55 posts that averages to 9 posts a year is not that bad, considering that the author was recently diagnosed with chronic PAS or Posterior Adhesion Syndrome, a rare disorder that immobilizes all locomotory and sensory activities for considerable periods of time as soon as the posterior gets a resting place. Often this is diagnosed incorrectly as being a Bengali. (The symptoms may be similar but this disorder is far more severe.)

On this joyous occasion, I must also observe a minute's silence for those many thoughts that did crackle out of the brain with the enthusiasm of a Oliver Ridley hatchling, only to take the expression of a severely PMS affected woman and fizz out with a whimper without ever seeing the light of the blog. And there were very many of them. Let those fertile aborted thoughts rest in peace. Amen !

Meanwhile a quick month long trip to Scotland happened between the last post and this. The trip wasn't meant to be this quick but one can never truly qualify as being from the IT industry if he hasn't been part of a project that was scrapped when in full steam. So now here I am beaming with pride at the completeness of my mandatory IT credentials, as one fine Monday morning soon after completing a status call , we were all invited for a meeting that announced the immediate closure of the project. Just like that ! Not much work is done in the Western world when the birthday of Jesus is around the corner and when you have developments such as these, the people affected are left as directionless as a cow in a busy Indian thoroughfare. You can chew cud, you can stand in the middle of the road amidst honking cars wondering about how the universe was created or you can just smack the dog nearby with your tail for all anyone cares ! Such was my case too as no one had an idea of what to do with me. So I loitered around for some time before the think tanks realised that the financial impact of my liability was not helping the recessionary economy at all and decided to send me back. But not before I celebrated the 25th Dec birthday. And boy is the birthday celebrated with pomp and show !! Not a single shop was open, not a single house had any fancy lights hanging outside, not a single public transport vehicle on the streets !! Much similar to a curfew after a riot in our country ! Its a private celebration they say.. Wierd , we say considering this is the only thing close to a festival that these guys have !

Anyway a friend from yonder years had come over to share our mutual melancholy and with two more of her friends , we embarked on a climb up Arthur's Seat, a 825 feet hill in Edinburgh that provides some exotic views of the beautiful city. But planning and execution are two wicked step sisters who rarely see eye to eye. Nature that day was in the mood to play frisbee and typical to her playful nature, chose us humans as flying disks. So strong were the winds that it was next to impossible to stand aground and if you belong to the gender with not very heavy hanging organs then God save you on such days.
But we did manage to scale almost to the top where we met a not-very-cloth-friendly Canadian girl. In other circumstances, I may well have spent a moment admiring her visible contours but in those extreme chilly and windy conditions, where my features were slowly but surely turning Mongoloid as the photo to the left confirms, I just left the thought float away with the wind. Some people just don't like wearing clothes and that's that. We were led in this campaign by a very spunky lady of our group, who braving these extreme conditions was more than willing to lead us to the top. It seemed King Arthur's spirit had possessed this otherwise sweet lady and boy was she determined to go and check out the seat !! Her tresses, which kept swinging around like a lost compass needle in frantic search of the north, complimented her possessed state and dare we not have followed her ! Nature however intervened our glorious march and just a little distance from the summit, we decided that birthdays were better celebrated where Gods were not taking their Fluid Mechanics practical exams

The following day was Boxing day, a day traditionally meant to torture the male species. Comes camouflaged as Sales in Fashion stores ! With the friend from yonder years also in a mood to celebrate her womanhood, I had to tag along of course. Thankfully other than the one occasion when she managed to get lost in the crowd with the cellphone obviously left at home and her having no clue where that home was, it was not that torturous a day out. What I couldn't help noticing was an Indian gentlemen who cut a very sorry figure of himself in his desperate attempts to keep track of that wandering kid, the other one pooping in the trolley, those thirteen packets overflowing with female and kid clothing and the red water bottle. As consolation for all his effort , his wife had bought him a bright yellow T-Shirt that said "My wife cutest !" As the happy family made their way back home, with the wife cheerfully chattering away on the phone informing her mother in Ernakulum of the day's steals, the gentleman walked with an expression of having lost a lot more than a mere few hundred pounds on that cold Monday afternoon . "Honey I love you na", she said. He smiled. On his cell phone he opened the Facebook page of his only remaining bachelor friend who had just uploaded pictures of a Christmas in Goa with a few scantily clad Ukrainian ladies. He clicked the Like option and sighed.

I flew back to India in another couple of days and finally saw the T3 terminal which sure is a treat to watch. An Indian origin smart looking female bearing no signs of being married and carrying an American passport lamented about the fact that I being an Indian too had to queue in the common line for immigration clearance. When good looking females pass an opinion , I always agree and this one had an American passport !! Are you kidding me ...I nearly fell on my trolley trying to convey how much I agreed with her. Our paths were destined to diverge in a couple of minutes but her sad expectant eyes did convey to me how lonely she was ! Alas I had a connecting flight and she a kid !

A fortnight later, I am still put in India while my current bosses continue to figure out something that my previous ones have burnt much oil thinking over, but to not much avail ! How can they make any use of me ! Let them take their own sweet time. Its 2012. The world is coming to an end anyway so why bother much !

I had started this blog inspired by mydayzwithmyself, a blog maintained by a fellow IIMCian, which he in those days updated regularly with large doses of his typical humour. As I see his blog too hasn't seen much activity of late. Blame it all, we may on Blackberrys and Androids but then I'm sure every blogger wants to continue writing.
So here is raising a toast on my blog's sixth birthday.
I want to write more. I hope to write more. Maybe I will write more.
Cheers !

Photo Credit : The spunky lady - Divya Iyer