Desicritics Author: enidhi

Toll Gates Inside Cities - Are They Fair?

enidhi — Mon, 4 Aug 2008 14:52:58 EDT

Many of you have might have noticed the toll gates on highways which collect a fee from each vehicle that passes through. Probably you’re irked because despite paying road tax you’ve to pay extra to these robbers, or maybe you’ve got used to it thinking, since the road is nice and we can cruise it is OK to pay.

The idea of collecting toll fee on highways was justified on the grounds that vehicles will be able to reach their destination faster, with better fuel economy and lesser maintenance expenditure. Many of us were annoyed earlier about paying this toll fee, now everyone has got accustomed to it.

So far the toll gates have only been on highways, on the roads connecting big cities. (You get four toll gates between Chennai and Bangalore) What I don’t like is that the Tamil Nadu government is bringing these toll gates right inside the city, for a small stretch of 20 kilometers. Two main toll gates are being erected near Perungudi and Siruseru in Chennai on the IT corridor, the Old Mahabalipuram Road (OMR) and another five satellite toll gates on the connecting roads to ensure that no one escapes unpaid.

Soon commuters will have to cough up extra money if they wish to cross these points, but for no or little extra benefits as such. That includes an expected Rs 6 for autos, Rs 17 for cars, Rs 44 for buses and so on -- one way -- totaling nearly Rs 1000 per month under normal usage for a car user. On top of that comes administrative charges of Rs 1000 per year for On Bosrd Units (OBU), which will be irrespective of usage, equaling Rs 13,000 per year, per car.

The project is being commissioned on a BOT (Build, Operate, Transfer) basis by IT Expressway Limited, a subsidiary of TNRDC. The IT corridor project as such looked quite promising and roads today are far better than what they were two years ago. No questioning that, but I have a few concerns about the idea of paying at toll gates even for city driving.

If I am wrong somewhere/misinformed correct me, else let me know your views.

Taking A Toll On Drivers

Toll gates on highways would affect only those traveling to other cities and that usually will be a once-in-a-while expense. But toll gates within a city mean paying extra every day, an additional burden amounting to several thousands of rupees each year. Can’t the TN government fund a Rs 300 crore project? Is collecting toll fees the only option? A small cess on petrol and diesel will earn this amount in a few months. Also, I feel it not quite viable to have toll roads in the heart of the city and even if built and commissioned, motorists won’t derive many benefits out of it.

It has been learned that the government is making a list of local residents around this toll road (Kottivakkam, Perungudi, Sholingnallur and so on) and will be giving them free passes, so that they won’t have to pay every day. Though that is a small relief to local residents, what about those who hail from elsewhere but stay in these localities?

On highways usually vehicles will travel inter-city, and would use the entire stretch of toll road. That may not be the case in cities. People are forced to pay, just to cross the toll gate, not necessarily to use the road. If my destination is just 100 meters on the other side of the toll gate, why should I pay the full fee? I should have an option of paying a proportional fee. Do they have that provision?

Someone having his office and residence both within the toll road will use the road all his life but will never pay a penny, because he is not required to pass through the toll gate. Already we need to pay at the ECR toll gate just to go to Mayajaal / MGM or other places that are just a few kilometers on the other side.

Where's the Fuel Economy?

On highways, the number of vehicles will be less and if the road is good cars can cruise at higher speeds to save time and achieve fuel economy. In city limits, even if the roads are improved, there will not be any time or fuel advantage due to the following reasons:

• Unlike the elevated expressway in Bangalore, which facilitates non-stop movement from Madiwala to Electronic city, Chennai’s IT corridor project is on ground level and with offices located across the road, vehicles will be changing lanes either to take an exit or to make a U- turn, forcing other vehicles behind to slow down.

• I've learned that buses will drive on right-most lane. If that is so, they will have to cut two lanes to move to left-most lane and stop at bus stops

• No ban on bullock carts, manual carts and carts powered by 50 cc TVS engine. Because the road falls within a city banning these vehicles is not viable as that will affect the livelihood of many people. These vehicles will haunt the drivers all the way. It seems one lane will be reserved for these non-motorized vehicles, but lane just means a white line. I don’t think those driving these vehicles have slightest idea what a lane is and moreover we all know how lane disciplined Indians are.

• When carriage roads like this are commissioned, one will have to go several kilometers before finding a U-turn. Many of us hate this and prefer to drive across the edge of the wrong side of the road instead. So of the 3 lanes, 1 lane will be used up by those driving in the wrong direction, one other by slow-moving vehicles and the last one by buses. Cars can struggle in between.

• On inter-city highways 2- and 3-wheelers will be almost negligible in number, as few people travel intercity on a bike. Within city limits the 2- and 3-wheeler count will be significant and with their zig zag driving, they are capable of causing nightmares to other road users.

• The IT corridor was supposed to be 3 lanes all the way-but at places it converges into 2 lanes, due to non availability of space. If the third lane goes missing at multiple places it will create bottlenecks and slow down the traffic further.

• Since the toll road falls in a dense civilian population, the number of people walking across the road will be very very high. Will I be permitted to knock them down? Few Foot Over bridges are being built, but many find it more convenient to jump over the barricade and cross the road -- nevermind the risk involved. The probability of cattle and stray dogs coming in the way of speeding vehicles is equally high.

• Work is incomplete at some places and service roads do not exist at all. When construction work is in progress it will add to the inconvenience and in the absence of service roads, those supposed to be using them will use the main carriage road.

Given the above conditions, I am pretty sure it is near impossible to have any time or fuel advantages by using this IT Expressway. During peak hours, given the number of vehicles involved and above factors, I doubt if anyone will ever be able to cruise on this road. Just pay and crawl.

Traffic Congestion And Other Problems

Imagine the number of vehicles that would accumulate near toll gates during peak hours. Even if each vehicle needs to spend 20-30 seconds max (to slow down, stop, pay/swipe, and move on) that will result in the accumulation of 100s of vehicles near toll gates. What is the convenience?

I understand that the idea of On Board Units is being pushed through. Those vehicles that have them installed will be automatically debited and they can zip through. Will these OBUs be free? What number of drivers will opt for this is something yet to be seen. Anticipating the rush as much as 10 gates are being built, still it might be tough during peak hours.

Government is trying to pose as if they are willing to go soft on private vehicles (by issuing smart cards, etc.) and will primarily target commercial vehicles. Commercial vehicle owners won’t do any charity - they will pass on the entire fee (maybe even more) to the commuters who hire those vehicles, eventually burdening the common man.

Rs 17 one way for cars is just too much. Probably one of the highest per km. Between Chennai and Hosur a car driver pays Rs 140 for about 320 kms = 45 paisa per km (That's more expensive than a general class train ticket). Even at that rate it shouldn’t be more than 8 Rs for the 20-km road. Further, I don’t think those manning the toll gates care to keep change. If the car driver doesn’t carry exact change he will be forced to pay Rs 20 on the excuse of "change illai."

The original idea was to complete the project, with service roads and landscaping, and then start collecting money. The current statement is “we’ll build service roads and other things as money starts flowing in." Why should I pay in advance? What if they don’t complete the work on time with promised quality? Will the money be refunded? Governments change and priorities may change - leading to compromise on the project's execution, but this daylight robbery of money collection will continue. When the money is collected from vehicle owners by promising certain services, vehicle owners should be in a position to question ITEL in consumer forums and demand compensation if what is promised is not delivered.

Why is the cost of OBUs and administrative charges passed on to road users? It's government that wants to collect money - let them bear the cost. None of the existing smart card mechanisms (like Petro card of BPCL, iMint card, etc.) charge any maintenance charge to its consumers, except a onetime fee. Administrative charges of Rs 1,000 per OBU will be charged annually irrespective of usage. Even if the owner goes abroad or for other reasons doesn’t use the toll gate for say six months, he will be forced to pay admin charges. Unfair.

Problems Will Spread

This may look like a problem to those living in Chennai only, to those regularly using this particular stretch of road. But this can happen anywhere. Soon other states and cities will catch up with this idea of bringing more and more roads under a “pay and use” scheme and in a few years we might be required to shell out money just to hit the main road in front of our homes.

Opposition does the ritual of holding protests every time there is a hike in fuel prices (after a day they will settle down, though) Why is the opposition is keeping quite in this matter?

I very much understand the need to have good roads. The money needed to build these roads comes from nowhere else but citizens. In other words, governments have to collect the money from its people, one way or the other, and a toll gate is one of them. Still, erecting a toll gate in the middle of the city and troubling everyone — there has to be a better alternative to ensure development.

What Goes Wrong With MLM Companies?

enidhi — Fri, 16 May 2008 12:12:45 EDT

With the Chennai Police opening investigations on QuestNet/Goldquest MLM company, operations of such companies which promise an easy wealth creation for everyone involved, are again under scanner. Hundreds of network marketing companies are operating in India, each calling itself unique, genuine and best. Each of them may have their pros and cons and while we may not have specific legal backing to term their operations illegal, caution is advised before getting associated with these companies. Why do most of these companies face trouble over a period of time?

During early stages, all goes well and it will be difficult to sense the trouble ahead. Because most of the companies will have some products to cover their money schemes, because there are no laws which declare this kind of operations illegal, because MLM promoters manage to get some high profile persons on board to show their credibility all goes well during early years. As the idea is new it spreads like wildfire and thousands of people would sign up every day. Obviously few early joinees make huge money in this process and seeing them buying luxury homes and cars only propels the greed of new joinees who start promoting the scheme with all new energy and aggression. But then, market reaches a kind of saturation and it won’t be possible to enroll new people, at the rate it was possible in the early years.

This is when the trouble begins. The concept of MLM survives on the belief that the chain continues to grow sine die in a never ending fashion and existing people do not leave. But unfortunately this won’t happen. As the saturation is neared, desperate members start resorting to unethical practices with a sheer greed of making quick money. Some examples of unethical practices are as below:

1. Empty Assurances. Telling prospects “You just invest the money, I will bring more people and enroll them under you-you don’t have to do anything” Someone who invested because of assuring words like above of their friends would feel cheated if their friend fails to recruit people under him, resulting in loss of his investment

2. Balance Transfers. “Use your credit card 1 to make payment now-after 50 days use balance transfer facility and transfer the balance to second credit card - you’ll get 3 months time this way by which you can get your money back” But in most cases the member won’t be earning his investment back within first few months. Besides losing money he’ll also end up paying hefty credit card interest and this results in direct rage against the company and his upline who suggested such an approach.

3. Members investing their own money on behalf of others. Sometime, for specific reasons, members pay on behalf of their down line (Because both legs need to be balanced or because a person thinks his friend is very much capable of signing up people or other reasons) and sign-up people for free. This kind of approaches may not give expected results adding to frustration.

4. Hiding facts: Many people hide several disturbing facts while giving presentation, because their sole objective is to sign you on the spot. Some facts which are never disclosed: Both side needs to be balanced, maximum payable amount, annual charges, cancellation/refund policies, ongoing legal cases and other negative news, minimum amount of money you’re expected to bring in (by referring people under you) to get back your money, what rights you have/do not have as a member etc. Some of these facts people will discover, sooner or later and that will give a sense of betrayal.

5. Forcing people. Ideally you should tell both positive and negative aspects of the business and let the person take his own time to decide. But more often than not, prospects are given only the positive side and are often forced to sign up on the spot. Hypnotic environment conducted by the up-line and faith in their friends may make people sign up on the spot but they may repent later for that.

6. Ignoring Unethical Practices. Ideally, a company is expected to terminate membership of those who use unethical business to promote the business. But we seldom hear such news. As long as money flows in, company doesn’t really bother about the approach used. (they will have a well crafted fine print to protect themselves in case something goes wrong). Only when things go out of control (like when someone files police complaint), they look for some scapegoats.

7. Drop in company’s efficiency. Most of the companies operate promptly during initial years, by sending out checks and products in time. As members get their check and product on time they build a trust and advocate on behalf of the company to their friends. But after few years, when member base grows beyond control, some companies fail to maintain the same efficiency- Products do not reach in time and checks take forever to come. If this happens, credibility starts falling and bad words spread real fast.

8. Inducing cultism and over commitment: Gradually, up line try to exercise an influence on their down line even in areas not related to business. Some examples: Encouraging down-line to quit his main job and take MLM full time, setting targets and pressurizing them to meet the same, discouraging members from using competitor products (even when they are cheaper and better than MLM one),forcing down-line to attend meetings and seminars, humiliating those who do not show enough commitment or question things and so on

9. Ignoring early warning signs. Because of the unquestionable faith (shall I say Cultism) members develop towards their company, upline and its business model, early signs of warning, even if detected by few in time, are often suppressed and ignored. Beliefs that “That can’t happen to me” or “he failed because he didn’t work hard” or “there must have been some misunderstanding-everything is fine” or “this is a small issue-we’ll get over it” etc keep members hooked to their dream. Only when things go totally out of control they wake up to the reality. Lot of trouble can be saved if members maintain an open mind to question and verify any negative news that they come across, without any prejudice.

Note: All companies may not face all the above issues, must most of them do at some time or the other. These are general observations - some companies may take exception w.r.t. certain points.

QuestNet Reopens as Lotus Marketing in Sri Lanka?

enidhi — Sun, 6 Apr 2008 00:38:33 EDT

QuestNet (aka Gold Quest) is yet another network marketing company which sells overpriced products to members and encourages these members to bring more members to buy its products and gives commission to member when new member signs up under him and buys the product. A binary pyramid kind of compensation plan where in one gets his money back only if he makes around a dozen of his friends/relatives sign up under him, a system wherein only few percentage of people at the very top of the pyramid reap huge benefits while almost everyone else (around 98%) lose their money to their up liners while pursuing a nonexistent dream of financial freedom and instant richness.

Simply put, this is akin to MLM scams and QuestNet is banned in several countries- the USA, Sri Lanka, Afghanistan, Iran and many more because this kind of scheme loots people of their hard earned money and drains millions of dollars of money out of the country. They are operational in India, Singapore and several other countries, for the sole reason that there are no stringent laws under which their operation can be declared illegal.

We can go on discussing pros and cons of network marketing and keep arguing if QuestNet is legal or illegal. The Internet is full of anti-QuestNet reviews explaining how almost everyone loses money in QuestNet and you can find lots of such posts with a simple search. Let me not reinvent the wheel and focus on a special issue here.

QuestNet was banned in Sri Lanka recently after it allegedly drained millions of dollars of foreign exchange out of the country, severely affecting nation’s economy. If QuestNet felt they were banned for no reason, they should have convinced Sri Lankan Government that they were innocent and genuine and try to get the ban lifted. But, it is evident that they have silently opened another company in Sri Lanka, under the name Lotus Marketing and have started the business as usual, hunting for new prospects and abandoning millions of their earlier IRs (of QuestNet).

Details of the Lotus Marketing launch can be found here. Their website is supposed to be http://lotus-mktg.com/ which is booked under a discrete domain (so is quest.net, meaning identity of domain owner not disclosed) and is under construction as of now. The conclusion that this company is directly related to earlier QuestNet is drawn from the fact that Lotus Marketing is selling the same products which QN was selling. (BioDisc, Pendants etc, the only missing thing is gold coin, which might have been excluded because Gold Coin will draw immediate relation with Questnet which sold huge number of gold coins and is known more for gold coins than any other product). Elakiri, a Sri Lankan community forum has a detailed discussion going on in one of their threads here on this topic.

QuestNet sells the Amezcua BioDisc, an useless piece of glass priced at INR 22000 which its promoters claim will cure so many diseases including cancer. (More on this product in a separate post soon). The presentation says QuestNet has exclusive marketing rights to sell it. So if Lotus Marketing is selling this disc, it has to have backing of QuestNet.

I have already written in my earlier post that network marketing/MLM companies keep their physical assets and presence to minimum so that it will be very easy for them to pack up overnight and re appear later in a totally new disguise.

QuestNet Kingpin Vijay Eswaran did nothing to protect the interests of millions of IRs in the countries where QuestNet was banned. Those IRs were neither compensated, nor an attempt was made to prove to governments that their business is legitimate and that the ban deserves to be lifted. What QuestNet has done clearly indicates its intentions are not good and this development (Questnet abandoning its IRs post ban and re-appearing in a new name all afresh) should be an alarm for the company’s IRs in India and other countries. If QuestNet is banned in India tomorrow, all these members (Independent Representatives) will be left unaware without any compensation for the money they pumped in but haven’t yet recovered. After few months the same promoters of QuestNet, who made billions sucking hard earned money of new members, will re appear to launch a new company and start their fooling business afresh.

The blind faith and belief of the IRs may not allow them to believe in all these, but this is the ground reality and its in their own interest that they stay prepared.

Book Review: Merchants of Deception - The Amway Inside Story

enidhi — Sat, 29 Mar 2008 11:15:43 EDT

Merchants of Deception is a book by Eric Scheibeler, former Amway Emerald Distributor, who once believed strongly that Amway would fetch him a financial freedom and success, reached near top of the chain, only to discover how fraudulent the system is and how everyone involved are guaranteed to lose money.

His book exposes some key inside info regarding the operation of Amway (and other such multi-level marketing companies) and is a must read to everyone involved in this business or considering entering into it.

Most of you have heard of Amway and other network marketing/MLM companies. Chances are, some of you might be a part of it or faced pressure to join it. These “Business Opportunities” are projected as wealth creation tools or vehicles to achieve financial freedom. But the truth often is otherwise.

Those who join these kind of business almost always suffer a loss - financial or otherwise. It may be difficult to blindly agree that these NM/MLM companies do more harm than good and you HAVE to read, Merchants of Deception, to know how exactly these companies fool people with an illusion of financial freedom.

The book is 232 pages long and free for download in pdf format from the author's website (2.91MB), MerchantsofDeception.com Click here to read Merchants of Deception for free.

The book is written in first person, in a sequential order, starting from Eric’s life before joining Amway, his initial days as Amway distributor, how he trusted the company, developed loyalty to his up liners and slogged hard to promote the business and eventually climbed up the ladder to different levels in the chain.

Then he gradually discovers he is not making the amount of money he is supposed to me making at his level (Emerald) and slowly comes out of his pre-programmed mindset and starts exploring things. The truths he uncovered and the trouble he faced from his upliners because of that make this book a must read for anyone who believes network marketing can make them rich.

As some of you may not find enough time to read all 232 pages of the book, I am listing below some key extracts from the book, with permission from the author, the facts you might have never known and are guaranteed to find it difficult to digest.

First, an open request to all Amway IBOs and members of other similar businesses who are reading this: I am aware that your current mindset doesn’t allow you to accept and digest the facts given below. Your upliners are guaranteed to brand these facts as rubbish and baseless allegations and distractions which will deviate you from your goal. MY sincere request to you don’t trust me or your upliners - Think independently and make an attempt to verify the facts on your own.

1. Amway top leaders make a fortune, NOT from Amway distributorship but by selling training material (Seminars, video, audio and books, etc.)

While few top Amway IBOs (At Diamond level and above) appear to be super rich, everyone thinks they made money because of core Amway activities (buying and using products), but Eric has discovered that their IT returns prove that wrong. Just 5% of their income came from Amway and over 95% came from “tools business”, a collective name for motivational stuff they sell to down liners .

These include, conducting seminars and charging people for it, selling audio and video contents with motivational stuff that will guide down liners towards success, books, etc. Low-level IBOs who buy this stuff think that the diamonds are sharing their success about to how to become millionaires like them, while diamonds pocket millions for the simple reason that others are buying their motivational stuffs.

Hardly 1-2% of members in a total network reach Diamond and above levels and mint money this way and the rest of the distributors (IBOs) will never be able to achieve that (because they can’t create and sell such motivational stuff)

If you doubt the above, ask for the income tax returns of these millionaires.

2. There’s no way to track your earning.

Amway IBOs don’t have an option to track their earning on Amway's Web site. If they get a check for an amount which is far below what they were supposed to get, there’s no way they can trace down the cause. At Emerald level, Eric was supposed to be making $100,000 an year, but he was making a little less than $30,000.

One of his down liners, a Ruby Direct, was supposed to be earning $50,000 but had made only around $4,000. An IBO is not supposed to discuss his woes with his downliners or cross lines and upliners won’t give any explanation why there is such a huge difference. Not earning enough is attributed to "not working hard enough" or "lack of commitment to the business" or "a personal failure" and an IBO will be assured that all his woes will vanish once he reaches the next level - for which he needs to work harder.

Everyone will be under an illusion that everyone else is making lots of money and only he is not making enough. They may try to hide this fact by attempting to show off wealth and saying they’re making huge money. If they say they are not earning enough their downliners will get discouraged and de-motivated, new prospects hesitate to join and business falls further, so faking success is the only way for everyone in this business.

3. Amway founders were very much aware of all the wrong things in the organization (Cultism, Tools, Business, Under-paid distributors, Near 100% of people lose money)

Eric shows, with evidence, that the frauds he detected were not isolated incidents but spread across the organization. More importantly he proves that Amway founders were aware of this from the very early stages and nothing was done to protect innocent distributors who lost tens of thousands of dollars or punish kingpin distributors who were making fortunes by exploiting the unsuspecting downliners. The book also details several unethical things done by Amway management to silence things they didn’t want the outer world to know.

4. The four cardinal principles of Amway (and such companies)

Amway distributors were brainwashed systematically about four cardinal rules, that they should never, ever violate. They will have 100% success rate as long as they blindly adhere to the system following instructions of their seniors and outside the system there is a 0% success rate.

a. Never De-edify:

Never question your upliners. You are expected to blindly believe in whatever has been told/instructed to you by your up liners. You’re not welcome to give suggestions / make deviations / use your discretion. Eric’s loyalty was questioned when he decided to correct a few grammatical errors in a newsletter given to him for circulation by his upliner.

Further, a distributor is expected to praise his upliner whenever there's an opportunity and serve him (by fueling his tank, paying the bill and being loyal) whenever he receives advice/help from his upliner. You’re expected to blindly duplicate.

b. Never pass on negatives:

Anything that’s against Amway is branded as negative stuff. IBOs are brainwashed to believe that those who chose not to join Amway are losers, who have no dreams, no hope, no ambitions and would never achieve anything in life.

Anyone who cautions you about any possible negative impacts of Amway are jealous of your progress and trying to pull you down. You’re supposed to use only Amway products at home, nevermind how expensive it is. You’re expected not to have a plan B as that would mean you don’t trust the system fully.

If you’re not willing to put in enough efforts to promote the business you don’t love your family. You’re always expected to give positive feedback and talk good things and show off (though you didn’t like the product or running a financial loss).

c. Never Cross Line:

You need to interact with your upline and downline only and are not supposed to interact with other members of the company. This is typically to ensure retention of secrecy.

d. Never implement new ideas:

You must do what you’re told to do. Nothing more, nothing less. You’re supposed to be the owner of your business, but you have no freedom to bring in a change or run it the way you want it.

5. Nearly 100% people fail

This can sound unrealistic. With so many millionaires as living examples, how can anyone say the system is not good? After recruiting over 2,000 people under him, Eric realized that he could identify only 10 people who made net earnings of $1 or above in a year (after deducting the expenses incurred in promoting the business).

The system is such that it ensures its members keep pumping money in by buying overpriced products, attending seminars, buying motivational materials, etc. The earnings they make usually will be far less than expenses incurred for all these. People are kept going until they break, under a nonexistent hope of financial freedom which would come as soon as they reach the "next level."

Failure, when it finally happens, is attributed to an individual rather than the system, so others continue in the belief, "That can’t happen to me."

6. Dream building is a key technique employed

A prospect is made to build a huge dream (mansions, private jets, etc.) and is made to believe that their current job can never take them there but a business like Amway has the potential to take them there within years.

Greed is quite a common weakness in humans and MLM companies very effectively target that and most people don’t find any fault as such in the system and silently fall prey. The brainwashing that happens gradually after they join will keep them loyal to the system. If anyone tries to save them from the impending disaster they are heading to, such people are treated almost like enemies who are snatching their dreams away.

The book explains all these in detail. It also reveals the cultism, the emotional and financial trauma he and his family faced, the tactics adopted by his upliners to keep him silent, how he was blackmailed and threatened and more.

His struggle to recover to normalcy is remarkable. He could have walked away with huge amounts of money, had he chosen to remain silent. But he chose to spread awareness and has actively helped law enforcement agencies across the globe to investigate scams of this nature. He receives over 3,000 testimonials a day from MLM victims across the globe and his Web site is full of supporting documents, proof, the latest news related to the business.

Cultivating the Savings Habit in Children

enidhi — Thu, 7 Feb 2008 00:42:30 EST

This post is in response to a topic raised by Ashwini, a member at our MoneyTalk India Finance Forum (MTIFF) who sought help how to cultivate a habit of saving in her brother who spends all his pocket money in no time and keeps asking for more money.

I thought about it a bit and here are some tips I could think of, which if used effectively can make youngsters understand the importance of savings.

Reward
Promise to contribute to the savings made by a child – If he/she saves 100 Rs by end of the month add Rs 100 from your side. This reward should encourage him to save more. (Downside: The child should not borrow from elsewhere and show as saving - opening a minor bank account in his name will be a very good idea.]

Online financial games:
There are some free games online using which one can do virtual trading. Teach him some basics of trading and introduce him to this game-it will be as good as trading in real market except that profit and loss will be virtual. Such games will make him understand the value of money and how markets operate. If he likes the game chances are he will develop a sense of respect towards money and its value?

Mandate book keeping
Insist that the child should give daily or weekly account of all expenditures. This will increase accountability and we’ll be able to identify what expenditures were avoidable, for what there were better alternatives etc and over a period of time it should be possible to improve the spending habit of the child.

Running competition among siblings
If there are two or more children at home run a competition as to see who will save more. This should encourage them to cut unnecessary expenditure and try to save more.

Provide them with interesting alternatives:
Suppose the child is insisting that he needs that overpriced remote control car which is unlikely to last beyond few weeks. Try to trade that money for more meaningful alternatives - say I will take you to that amusement park this weekend instead of this toy, or why don’t you try this children's laptop instead etc. This will show the child that there are more meaningful and valuable things which can be secured for the same price.

Attribute your success to savings-
Suppose you get a Diwali bonus and you are taking family for dinner. Instead of saying “I am taking you out because I got a bonus” say “I could take you out for this dinner because I have been saving Rs. 250 every month for this.” This way a child will realize that small amount when accumulated over a period of time can be exchanged for bigger rewards.

Practice instead of preaching:
Children learn a lot by observing. Control your spending habit and make your child understand that you’re saving regularly for a better tomorrow. Do not indulge in excessive shopping or activities that involve flaunting your wealth. Be a role model by yourself and that should help a lot.

Never give a credit card to children
When there’s a need (say when he is staying at a hostel and may need to have some money of his own for emergency needs) stick with debit card. You can always transfer money to his account if there’s a genuine need to spend more.

Club Mahindra's Timeshare Membership - Q&A

enidhi — Thu, 13 Dec 2007 03:56:04 EST

Recently I got a chance to interact with Mr. Arun Nair, Senior Manager, Marketing, Club Mahindra. I used this opportunity to discuss certain reservations I had about timeshare membership [which are detailed in this post].

In this post, I'm publishing Club Mahindra's official response to various concerns I'd raised about their lifetime membership. The purpose of publishing this post is to give both side of the perspectives to readers who can use the same to arrive at a conclusion if they want to spend on timeshare membership or not, after executing necessary verifications and validations as felt appropriate.

Q1. I understand that you've read my post on Club Mahindra's timeshare membership. You're very angry with me for that? Do you think the post is making baseless allegations?
Arun: The Mahindra group overall, and we as a part of it, have a customer centric approach. So, I do not think viewpoints engender anger in us. What we do believe is that we would like to apprise you of facts so that your view is then an informed view. I am sure your motivation is not to sensationalize through baseless allegations but to highlight your views to fellow netizens. We have a high degree of respect for social media and its participants and hence are taking efforts to familiarize them with our service offering.

Q2: The major concern most of the members face is that they're not able to get reservations despite planning well in advance. Why so?
Arun: We would disagree with the fact that most members face this issue. We have a metric we track internally of Unique member holidayed which essentially is to ensure that our efforts are geared towards getting more and more and more members to holiday. This metric for last year stood at 75 %. However, in an effort to help our members plan their holidays we open bookings 6 months prior to the date of the holiday. Now, there are certain periods which have disproportionate demand in comparison to the rest of the year, like New Years Eve in Goa. I am sure you will appreciate that we cannot build capacity in a location for a small period when that demand is not sustained through the rest of the year. Hence there are cases when some members would call in later in the day and find that period in question is fully booked up. We however have a practice of tracking a waitlist and whenever there is a booking cancellation we are able to confirm the booking for a waitlisted member.

Q3: But there're complaints that a member fails to get accommodation but those willing to take one time holiday readily get accommodation. Whom do you treat with higher preference?
Arun: Unequivocally our members are first priority. We have been often asked by people members and otherwise as to why such an event happens. First let me explain that our members are entitled to Studio, One Bedroom and 2 Bedroom apartments, depending on the membership they have bought. However, we are a mixed use resort i.e. in some resorts we have hotel units also. These are smaller than studio apartments. These are the apartments generally offered to non-members. However, on occasion we have also offered our members the use of this type in case they are interested. Apart from these rooms we have in the off season taken in non-members to ensure we do not have low occupancies. The rationale for a mixed use is that the resort operations & maintenance costs are covered by this revenue and the ASF in conjunction. In the event we did not follow this model we would be constrained to charge higher ASF. In the US where some resorts do not follow this model the ASF is 6-8% of the upfront price whereas in our case it is only about 4 %. In addition this mixed use also ensures we will always be benchmarked to the best in hospitality service levels.

Q4: Is it true that your sales staff hide lots of cost component while explaining the membership scheme to prospects? Many members regret their decision because of this, as what they end up paying will be far more that what they thought they will pay. Most of the sales staff also put pressure on prospects to enroll on the spot with whatever amount they can pay.
Arun: Our entire sales process is carried out in an interactive fashion relying on understanding the consumer needs and suggesting an appropriate membership suited to their needs. Our sales executives carry laptops and make a technology enabled presentation. In terms of the cost components we are the only vacation ownership company in India and amongst a few globally that function on a printed Price list. This price list discloses all components of the price to be paid by the consumer. In addition, at the time of sign up there is a membership application form which carries the contract, to be signed by the member, which has all the cost elements and rules of the membership and a copy of the same is left with the member. In addition we also have a practice of a welcome call done by our member relations team wherein we walk the member through the membership, how to use, rules, our obligations and his obligations. In light of all this practice if an occasional bad apple is present it should not be generalized to the organization.

Q5: Many feel investing several lakhs in timeshare is not a wise option, since the money gets locked in, options get limited and there's no liquidity. Don't you think investing that money wisely elsewhere and using the returns to take one time holiday a better option?
Arun: A Club Mahindra membership is never sold as a pure investment play. It is commitment one places for a certain lifestyle for the family and it should be viewed as such. However, we understand the fact that no decision is purely rational or emotional, and even while making such a commitment for the family there is a monetary payback angle that needs to be considered. So internally, we keep tracking industry trends and ensure that we have a healthy rational argument as well. I am also sending a rudimentary working of the same and you will realize that a Club Mahindra membership in comparison to holidaying through one time holidaying achieves break even in 7-10 years leaving the balance tenure as a complete upside to the consumer

Q6: But prices may not always shoot up at the rate it is predicted. Air travel today is far cheaper than what it was 5 years ago. Economy hotels and home stay business is booming and prices may stabilize or even come down when volumes pick up. What do you think?
Arun: You are absolutely right that certain sectors which had artificially propped up prices when they got de-regulated saw a huge variation in pricing. However, our offering is at the premium end of the market and for the discerning affluent consumer who is looking to commit to a certain lifestyle for the family. We are not competing in the budget category. I am sure your experiences at the Coorg resort will more than bear up to the fact that the Club Mahindra experience is a 5 star experience delivered with a superior value proposition. We believe with our value proposition as we have shown to you will hold good irrespective. In the long term price appreciation of the competitive offers will happen and our value proposition will keep improving.

Q7: Membership offers price protection against accommodation only, that too to a certain extent (as ASF increases every year, passing a part of inflation to member). Members need to pay everything else-Food, laundry, other activities etc at par with others. Food for four people costs as much as room rent. Can something be done to make the holiday really inflation free?
Arun: Let me first answer your query on food. Our funding program which is a member privilege provides for Rs. 450 per person, breakfast+lunch+dinner on an elaborate buffet. This buffet is comparable to any 5 star offering. I am sure you will appreciate that that the price being charged is less than what many 5 Stars charge for ONE buffet meal let alone three. In addition, we also provide rooms with kitchenettes; however we have found that members prefer to dine with us availing the fundining Programme. The kitchenettes come in handy if you are travelling with elders or infants, for whom we also provide additional care kits on request. I am sure you will appreciate that as an organization we have strived to have an edge in the competitive context in terms of our value delivery.
In terms of the membership fee you pay at today’s pricing and enjoy holidaying for 25 years, the only factor that is increased is the ASF which also we have indexed to the Consumer price index as published by the RBI. There are no arbitrary changes done. This ASF is also towards only the upkeep and maintenance of our resorts. Our resorts at Munnar and Goa are 10 years old but are in impeccable state of maintenance. We intend to ensure that for all our resorts going forward as well. I am sure there are umpteen examples of Timeshare resorts which have steadily declined in upkeep, that will not happen to a club mahindra member.

Q8: Why is there so much negative perception about Club Mahindra? In most of the community sites and forums, the general opinion is not that good, as per my observation.
Arun: We believe each feedback that is there online or otherwise is an opportunity for us to recover ground and improve ourselves. However, I think you would agree that it is more likely for you to comment when you are dissatisfied than when you are happy. I am not for a moment discounting the grievances voiced. But we would like you to consider the following facts:
• We have a cell which monitors the web for feedback whenever we identify negative feedback we try and get in touch with the concerned member and resolve underlying issues – NOT from the perspective of getting him to drop his comments but resolving their issues
• We have a multi channel mechanism for tracking feedback, apart from the point mentioned we also have the usual consumer redressal cell which operated on voice and mail enabled contact centers with dedicated teams. We also have contact programs where we go into cities or localities where we have our members and invite to come and met with us to resolve any issues and most importantly plan their holidays. We also have a in resort real-time feedback mechanism running on touch screen kiosks wherein a member can voice feedback and instead of the usual post event turn around that most companies do we have a person contact the member real time and address their issue so in the same holiday their concern is taken care of.

I believe the above are rare practices in the hospitality industry overall and practically unique when it comes to timeshare. There is no other brand in the holiday space that employs so many means to stay in touch with their consumer. I would also like to mention a few other aspects that we have observed:
• We have 38% of all our sales coming in from referrals – indication of a positive sentiment?
• We have based on member feedback won the RCI Gold Crown awards at 5 of our resorts this award is given every year based on member feedback by RCI to less than 10 % of its 4000 resorts world wide– indication of good service delivery?
• We commission regular consumer satisfaction surveys through CSMM an arm of IMRB, and our resort satisfaction scores are 71% for Excellent and Very good ratings.

We are alive to the fact that services as against products are people dependent will have occasions of below par delivery the above points elucidate some of the steps that we take for tracking and recovery and some satisfaction indicators in addition to the ones you mention.

Q9: The moment I make my initial payment I fall in the trap. Why can’t you give an option wherein members can surrender their membership at any point and take proportionate refund? (The 15 days cancellation period is too short for anyone to experience your service and decide if they want to continue. Though one can transfer the membership, onus is on the member to get a buyer. If members can surrender the membership to CM and take refund, more and more people will come and try your services, as they have an option to quit anytime. Also this ensures no one gets a chance to complain. If they are not happy let them surrender and exit. The fear that members may leave ensures higher service standards.
Arun: The commitment to superlative standards is ingrained as a service culture in our organization. In addition I would to point out two facts:
1. The Rescission period was a proactive step from our side not compelled by any regulation; in addition as a part of AIRDA we have tried to establish this as an industry standard. This period is 10 days from the date of realization of the down payment, in which time a re-consideration by the member entitles him to full refund.
2. Proportionate refund, is already available to the member across the term of the membership. This is governed by certain terms and is applicable for a certain part of the fees paid by him.

Robbed by SMS

enidhi — Sun, 14 Oct 2007 00:25:41 EDT

How often do you send commercial SMSs? I mean messages sent to four digit numbers as shown for the purpose of TV shows, contests, SMS polls etc?

SMS can do wonders, right? At least it is projected so. By sending SMS you can win prizes worth several lakhs to crores, you can decide who will win the Indian Idol title. You can win a date with a superstar; you can get a whole bunch of products and services at your doorstep. You can get your loved ones' name on the screen of a television music channel, you can get a whole lot of information related to astrology, weather, cricket, stock, you name it.

True. But at what cost?

These SMS are not free. They come at a premium price, much higher than the cost of an SMS sent to another mobile number. On average each SMS costs Rs 2 to Rs 7 or more. I’m sure most of the people are aware of this. But people don’t mind; rather they don’t care. Five rupees is no big amount for many mobile users and this is the fundamental concept exploited by those who run SMS-based activities. Tiny drops make a mighty ocean. Even if one lakh people out of several crores of mobile users send a message each, one can make couple of lakh rupees in no time.

Luring people to waste their currency by tempting them to send SMS is another way to stay in business for mobile operators. The money is shared by the network operator, SMS event organizer, and the givernment (as tax). When I lose 5 Rs currency per SMS the actual value is always a bit higher. (For 300Rs talk time if I pay 350 Rs while recharging, the actual cost of Rs 5 talk time is 5.83 paisa). But generally no one cares.

SMS based activities are really convenient and hence have picked up momentum very fast. It all appears so simple and cheap, but the volume of money involved behind the screen is very huge. I’m not saying don’t send such SMSs. After all it’s your mobile, your money, your fun.

Another factor to be noted is, there's nothing you can do after sending out the SMS. There's no guarantee that you'll be informed who won the contest, no guarantee that your vote is counted, nothing you can do if your message doesn't appear on screen.

Let me know what you think of this…

Comparing Notebooks: Dell vs. HP vs. Sony vs. Others

enidhi — Fri, 5 Oct 2007 15:13:17 EDT

In this post I’m listing pros and cons of major laptop vendors which should help a prospective buyer of notebooks to compare various brands in the market. Contents in this post are based on my observation made during June 2007. Specification and pricing may change without prior notice. Please check with respective companies for latest information.

Dell
Legendary Direct sales model, favorite vendor for corporate houses due to aggressive pricing, Cheapest option for any given configuration and excellent customization. (detailed analysis of Dell:http://enidhispeaks.blogspot.com/2007/05/dells-dilemma-part-two.html )

Pros:
Relatively cheaper than competition for a given configuration
Prices may drop further once Dell’s India plant in Chennai becomes operational
Configure and customize as you wish
Only vendor who gives original OS media (With others you need to create recovery discs)
Only Vendor from whom you can ask Windows XP instead of Vista (Not available in Dell website, you need to ask for this manually later with Dell Representative.)
Available in Multiple colours (Inspiron and XPS series)
Blu Ray writer available optionally (Rs 28k extra!!!)
Prices can be negotiated

Cons:
You need to pay 100% in advance and wait for few weeks for delivery
No showrooms No Service centers
You can not see and feel the product before purchase.
No finance options arranged
Dell has no tablet PC as of now (Expected early 2008)
Trouble shooting can be a headache if you’re a computer novice.

Hewlett Packard (HP)
Quite popular among domestic consumers-Competitive pricing, good sales and service network, lots of features and occasional promo offers

Pros:
Lots of value added features: Like Remote Control, Fingerprint recognition, Webcam etc, not available in most of the competition models of similar configuration
HP liveperson chat is quite useful (Available only during US hours-You can chat with a sales executive who will answer your queries related to HP products and services
HP promoted lightscribe technology available in most of the units (Read this post for more on lightscribe technology- http://enidhispeaks.blogspot.com/2007/06/lightscribe-direct-on-disc-labeling.html )
Decent sales and service network
HP imprints can give good look to your unit (it is a sticker kind of thing with attractive images/scenery etc which you can stick to back of monitor)
Excellent collection of Accessories

Cons:
Latest processors are not incorporated.
No option to make any changes in the specifications
Not so robust compared to Dell and Sony.

Sony
Some of the most expensive notebooks available (Highest one costing INR 1, 99,990), can be seen in most of the movies, more as a style statement.

Pros:
High resale value and excellent brand recognition
Good build quality and attractive colours
Latest processors incorporated readily (In June, while most of HP notebooks had Dual Core processors, Sony Vaio were powered with latest Core 2 Duo (T5500 onwards))
Blu ray technology (Blue ray writer) available
Sony gives official 3% discount on MRP
Finance arranged through Bajaj Finance.
Excellent screen clarity

Cons:
Relatively expensive (Starts Rs. 50k INR onwards)
Blu Ray drives not available in entry level models
NO Tablet PCs
No option to make any changes in the specifications.

Other brands:

Acer: Sub 20k notebooks are available only from Acer. Nothing exciting about other models. Ferrari fans can go for their flagship Ferrari notebook, but I didn’t like the configuration.

Lenovo: Chinese firm Lenovo bought IBM’s PC and notebook unit few years ago. Their license to use IBM logo expires soon. Only brand to have face recognition. Legendary ThinkPad series starts 90k onwards and beyond the reach of common man. Y and R series are doing good business.

LG: They’re not focused on notebooks. Just have X-note series in their portfolio besides hundreds of other products in consumer electronics. Pricing appears to be expensive for the given configuration.

Toshiba: No specific comments

Let me know what you think.

Can We Make Public Toilets Free For Use?

enidhi — Tue, 18 Sep 2007 07:58:39 EDT

Poor sanitation facilities is one of the reasons why most of our cities look ugly. Most of the population do not have the luxury of proper toilet facilities at their work place (and few do not have the same even at their residence). Such people are expected to make use of public toilets (wherever there's one), but many of them use public places as toilets even when they have access to a public toilet, since they are expected to pay a rupee or two to use public toilets.

If we can make the public toilets free for use, more and more people will use them and our cities will look more clean and hygienic. In this post, I try to present a business model, which if implemented can not only make public toilets free for all, but also make them a profitable business.

In short, the idea is to place advertisements inside public sanitation facilities and recover operating expenses, thereby avoid asking users for money.

If you find that crazy and not viable, please read further.

Why do people hesitate to pay for public toilets?

Firstly, many people think it is a waste of money when they can urinate, etc., free of cost by the roadside. That demonstrates a total lack of civic sense. These same people do not mind spending one-fourth of their daily income on Beedies, Cigarettes, Gutka, and even more on alcohol, but do not want to spend a couple of rupees every day on sanitation. That is a kind of attitude problem- Since I don't have a mechanism to change their mindset and make them pay; I would prefer focus on a business model that doesn't require them to pay.

Secondly, We (Municipal Corporation/police/public) neither punish those who do ugly things by the roadside, nor appreciate someone who spends his hard earned money to use public toilets. This gradually leads to an attitude: Why should I waste my money?

How much does it cost to run a public sanitation facility?

Excluding one time expenditure on infrastructure, maintenance expenses would involve mainly water, electricity and salary for cleaner and supervisor. All these together shouldn't cost more than Rs. 10000 per public toilet per month. If one wishes to recover this, one expect over 333 people to use it every day by paying Re 1 each, which doesn't always happen.

By placing suitable advertisements, one can recover much more money than the expenditure and eventually can create a win-win-win situation for everyone involved.

What is the advantage?

Please keep the stigma aside and read further:

1 When you're driving or traveling in a vehicle, you spare only few seconds at the hoardings or other advertisements on the road side. But ads displayed inside a loo would get a couple of minutes of undivided attention of the user. Thus it ensures a deeper penetration into his brain.

2 While using a loo, a person will usually be free from any tensions and won't have hundreds of thoughts running in his mind. If something is displayed in front of him, in all probability he will read it in detail. This simply means higher success rate for the advertisement.

3 When it is made free, more and more people will come and use it. More readership for the ads.

4 Our cities will look cleaner and hygienic as considerable number of people will head towards free public urinals.

What kind of ads can be displayed in public toilets?

I classify public toilets into two categories for this purpose:

One: Those which are near bus terminals/railway stations, etc., which are used primarily by inter city commuters. Here consumers will be interested in services like lodging, hotels, restaurants, travel services and tourist information etc.

Two: Other places: Here users will be construction workers, streetside vendors, locals, and other people who work/stay around the utility and would use it on a regular basis. Advertisements related to personal loans, discount sales being run at nearby stores, products that might be of interest to work force etc suite best here.

The cost of advertising in a loo will be much cheaper and more effective than other public advertising options and I'm sure advertisers will be willing to give it a try.

In both places, leftover places can be used to display public awareness messages on HIV/AIDS etc.

Infosys Foundation, several municipalities and NGOs have set up several pay and use "Sulabh Shauchalayas" across the country. If only they can make it free for usage with little more effort, it will change India's image to a reasonable extent.

Scope for improvement:

If the model works, we can even think of having touch screen monitors with Credit card swiping machines attached in urinals...We can display Google ads on these monitors and users can make on the spot online purchases swiping his credit card...

These public toilets could be GPS enabled so that drivers could find the nearest ones easily.

Incentives can be given to people for using public toilets when profits start pouring in.

It might sound crazy at this point, but give it a thought. Please comment your views if it is feasible or not.

Moser Baer's Cheap Movie CD/DVDs

enidhi — Sat, 15 Sep 2007 00:29:09 EDT

If you wish to watch a movie on your computer or Home theatre, what do you do?
Option 1: Buy an original VCD/DVD from a branded showroom by paying several hundred rupees (Legal high quality content but expensive)
Option 2: Buy a pirated VCD/DVD for say 50-100 Rupees or less (illegal, quality may not be good, but pretty cheap)
Option 3: Rent a VCD/DVD for Rs.15-30 approx (Usually good quality, Watch and return it (some people make a copy of it though))

Since cost is primary concern for most middle class people, many of us will be tempted to go for option 2 or 3 which directly or indirectly promotes piracy, when multiple illegal copies of a movie are made.

Are you aware (if you've seen their ads on TV) that original VCDs and DVDs can be purchased at the cost of pirated ones? Moser Baer India (BSE:MOSR, a leading digital media manufacturer) has taken an initiative in this regard wherein they sell Full movie VCDs Rs 28 onwards and DVDs Rs 34 onwards.

What? Tell me more...

Hindi and regional language film VCDs are priced at Rs 28, English movie VCDs are priced at Rs 49, DVDs priced at Rs 34 onwards (Regional Languages-Rs 34, English: Rs 69). The price is so aggressive that it is at par with option 2 and 3 listed above. For the price of a pirated one you get original one. Even if you thought of taking a VCD on rent and making a copy using your DVD writer, it still makes more sense to buy original one.

Where do I get them?

All leading music stores, departmental stores like Big Bazaar, even some stationary shops sell these cheap VCDs and DVDs. To buy online or for exact address of outlets checkout Moserbaer Home entertainment website.

Is it profitable for Moser Bear to do this?

Yes. Moser Baer has its own manufacturing unit for digital media (CDRs and DVDRs etc) so the cost of CD/DVD for them is negligible (Blank CDRs retail at around Rs 6 onwards while DVDRs retail at Rs 15 onwards. Manufacturing cost should be around 20% of that amount). The movies they sell are usually old ones which do not have much demand as such, so it makes profitable sense to sell them with very low margin.

Advantages for buyers:

1. Satisfaction of buying a legal copy
2. Good quality video, with casings (Rs 28 VCDs come in pouch while rest come in jewel case/boxes) and colour labels. CD case free if you buy 10+ VCDs online
3. No dent on pocket. Price at par with pirated or rented movies
4. Not only Hindi and English movies, but also video items (movies as well as several other videos ) in several regional languages (Kannada, Tamil, Telugu, Malayalam etc) are also available)
5. Current offer: Free shipping and Free CD case for purchase of 20+ Units

Other things one should know:

1. No refund, No exchange, No guarantee. Few may be of bad quality or may not play properly if faulty. You need to take that risk.
2. Latest movies may not be available like this. Only those which are few years old are sold this way (if the movie is good and if you've not watched it yet it is still worth collecting it.) (Note: Some exceptions may be there: for example, Apne and ek chalis ki last local, Hindi movies few months old but weren't a success at box office, are already available with MB. Newer movies are priced few rupees higher.
3. All movies will have Moser Baer watermark on them.
4. DVD-R is capable of storing more than just 1 movie, but only one movie is available per DVD.(No additional videos as well, say the making of the movie) (They could have clubbed 2-3 movies and sold for few rupees extra (It would be really convenient to have Home Alone 1, 2 and 3 or Spiderman 1 2 and 3 etc in a single disc instead of half a dozen of them)

My experience: I bought three Moser Baer VCDs and 1 DVD recently from Big Bazaar (Ameerpet Hyderabad). VCDs were quite good, but I am not happy with picture quality in the DVD I bought (This might be a selective case and may not be applicable to all DVD movies. The movie was very very old and probably no DVDs were in existence that time. Maybe the movie was stored in DVD directly from a VHS or CD)

This is an attempt by Moser Baer to focus on sales volume and gain profit, which is beneficial for both consumers who want genuine content at reasonable price and for companies who do not want to loose their market to piracy industry. I remember Lahari Recordings in Karnataka were selling original audio cassettes for Rs 20 once upon a time. These moves, if become popular among masses, should help eradicate video piracy and save entertainment industry. A pirated DVD (containing 3-4 latest movies) gets sold for around Rs 40 (negotiable) at Burma Bazaar Chennai (and at similar places in other cities), hence there's still a competition for Moser Baer. I hope people change their mind and shift towards MB.