RIL’s stake would be over 26% in the cargo airline; details still awaited on the capital being infused
The Mukesh Ambani-led Reliance Industries today forayed into the aviation space as a “strategic investor” with over 26% stake in cargo airline Deccan 360, reports RIL.
While the companies did not disclose the quantum of investment, RIL said that a wholly-owned subsidiary would provide “growth capital” for the new cargo airline.
Later speaking to reporters, Capt Gopinath said that RIL’s stake would be over 26%, but below 50%. He, however, declined to comment when asked about the amount of capital being infused by Reliance Industries (RIL).
"We want to make it clear that it is not a sale. We would rather say that they (RIL) have invested in the company,” Capt Gopinath said, adding that RIL would have two nominees on Deccan 360’s five-member board of directors.
“We were in talks with some private equity players and some other potential strategic investors, but we chose Reliance, not because theirs was the highest bid, but because of (the) strategic advantage of this deal,” he said, but did not elaborate further.
Capt Gopinath said that the company has 300 employees, while it has a network of 60 franchises with an additional workforce of 1,500.
As many as 3,000 applications were received when the company invited franchisees to join it, he added.
“We believe that our collaboration with Deccan 360 will see a transformation in the logistics domain in India,” RIL's chairman and MD Mukesh Ambani said in a statement.
RIL’s investment would help Deccan 360 increase its air and surface network coverage across the country, the company said.
Deccan 360 is already present in 50 cities and would expand to 100 cities in the next 12-18 month, Capt Gopinath said.
He further said that RIL and Deccan 360 would start discussions from Monday to finalise the areas of potential cooperation.
Deccan 360 is developing a 50-acre hub at Nagpur in Maharashtra and currently has eight freight aircraft covering 15 airports and a fleet of over 300 trucks and 850 vehicles nationwide.
Capt Gopinath is credited with pioneering the low-cost passenger airline service in India and had previously founded Air Deccan, the country’s first budget air carrier, that he later sold to industrialist Vijay Mallya-led Kingfisher Airlines.
The self-regulatory body for advertising has introduced amendments in the codes for auto and foods & beverages advertising
The Advertising Standards Council of India (ASCI), the apex self-regulatory body that observes advertising content, has introduced additions to the codes for advertising of automotive vehicles and foods and beverages (F&B). The addition is directed at depicting safe, secure and healthy practices in advertisements.
“The additions to the ASCI advertising code is in line with the swift changes happening in the Indian advertising and marketing world. The recent set of guidelines for automotive vehicles and F&B seeks to make advertising content safer and healthier for the general public,” said Alan Colaco, secretary general of ASCI.
He also added that the number of complaints concerning automotive and F&B ads had risen, which resulted in ASCI tightening norms.
Earlier, there were no rules for automobile advertisements. But due to the recent changes in the automotive industry in India and its depiction to the potential viewer, ASCI has added fresh rules.
The recently-introduced guidelines for automotive vehicles’ advertising prohibit the portrayal of violation of traffic rules in any manner, showing reckless speed or manoeuvrability that could harm the driver, passengers or general public. The code is directed at promoting safe practices such as wearing of helmets, fastening of seatbelts and not using mobile phones while driving.
The code also discourages ads that show stunts or actions without a readable cautionary message on the potential dangers of the stunt.
“ASCI realises that cutthroat competition among products and the need for uniqueness can sometimes lead to senseless exaggeration and depiction of unsafe practices,” Mr Colaco added.
The code addendum on F&B advertising disallows advertisements from depicting personal changes in intelligence, physical ability or exceptional recognition unless scientifically substantiated.
It also adds that nutritional and health-benefit claims in F&B advertisements must have a substantiated scientific backing, including those ads for food products nutritionally designed as a meal replacement.
The recent addition in the F&B code also specifies that messages in ads to children must accurately portray the products in a manner that is in keeping with the child’s ability to understand the message. The code stresses on the importance of parental care and guidance in making the right choice for children.
The F&B code also prohibits advertisements and promotions from portraying over-consumption in any way. It also prohibits visual F&B presentation to be any different from its actual material characteristics.
Releasing annoying ads is a very stupid ploy and is sure to damage the brand’s perception in the market place
This question recently bothered me. Because of two commercials currently on air during the IPL coverage. One cell phone ad features actor Akshay Kumar, where he laughs like a mule, and the sound is so grating, it shoots up the blood pressure by 40 points. Guaranteed to turn you off. Then there’s the Karbonn mobile phone commercial, starring cricketers Gautam Gambhir and Virender Sehwag, and it is flashed while an over is being bowled, often blanking out live match coverage, leaving fans seething with rage. Good old David Ogilvy once remarked, “You can’t bore your consumers into buying your product, you can only interest them into doing so.” Of course, he didn’t mention anything about annoying your way into the consumer’s heart and mind, in his days no such practice was followed.
Clearly, marketers and their ad agents aren’t such fools as to be wanting to annoy viewers deliberately. Surely there must be something to gain from this nefarious strategy. And going by the little research conducted in the West so far in this matter, there is some method behind this madness after all.
Here’s the general consensus: What essentially happens is that irritation through ads does lead to a degree of brand memorability, the consumer’s anger aiding in that process. It’s more than likely this tactic cannot work in the long term, but what it does in the immediate term is to create brand awareness pretty swiftly. And especially so for smaller brands that lack the ad budgets and the resources to carpet-bomb the media. So the clutter-break strategy is the reason for unleashing annoying creative on hapless viewers.
But research also indicates another thing: emotionally assaulting a consumer can never work in the long term. It can only induce a negative response. And I totally agree with this view. This strategy is like your neighbour chucking a stone into your house to attract attention. He does get that for sure, you notice and remember him vividly, but will you maintain good relations with him, would you invite him over for a drink? Very unlikely, even if he looks like Brad Pitt. So to my mind, releasing annoying ads is a very stupid ploy and is sure to damage the brand’s perception in the market place.
I’ll give you two examples. I conducted a small research of my own with my Facebook buddies, all in the younger age bracket. And every single one stated that they would never, ever purchase a Karbonn Mobile, so furious are they with the brand. Another thing: Notice that I do not even recall which cell phone is being hawked by the Akshay Kumar-Mule laughter ad. So even the quick awareness theory is questionable. Because the moment that ad comes on, I instantly switch to watching Krishi Darshan on good ol’ DD.