TWO-BUCK-CHUCK

23 Jun 2003

LESSONS TO BE LEARNT

Se enclosed article " Two - buck Chuck" from Eco - times of 20/06/03.

·     In enclosed pages, I have tried to compare Bronco's situation with our situation & draw conclusions.

·     Although, at first glance, it may appear that wine/ wine Industry is far removed from e - recruitment industry, the "Parallels" becomes clear as you go along. Basic marketing strategies remain same.

HEMEN PAREKH

Lessons To be Learned – TWO-buck Chuck
(Eco. Times: 20/06/03)

Point	Lesson To be Learned (in our context)
Fancy wines cost $300/bottle. Two-Buck Chuck wine costs $1.99 per bottle.	A wine meant for masses. We want to price Recruit-Guru transaction-tariffs so low that thousands of small/medium-sized companies would start using Recruit-Guru & would never think of installing/maintaining an in-house legacy system & then remain, forever, at the mercy of a software vendor!

| Since it came on to the market last year, Two-Buck Chuck has become the fastest-growing wine in the history of America’s wine industry. Two-Buck Chuck accounted for 15% of the wine sold in California in the first 2 months of this year. | This is a repeat of the DoCoMo story (40 million mobile users in 1000 days i.e. avg. 40,000/day!).

Obviously there are lakhs of small/medium corporates around the world, who do not use any recruitment/HR software (because they simply cannot afford costly legacy systems). Given a simple/cheap alternative, they would grab it. |

Point	Lesson To be Learned (in our context)
No single brand has ever had that kind of market share. It has become a “CULT” wine. — Shoppers carting it away, not by the case, but by the carload.	Obviously, a huge untapped market existed for a cheap/affordable wine, for middle-class Americans. Maybe they wanted to explore/experiment wines (having been fed up with beer/hard drinks?). Perhaps, it was all a question of having an “Affordable OPTION”! When Two-Buck Chuck gave them that option, it caught on as a wildfire!

We must position Recruit-Guru as the “poor corporate’s option”. But here, the comparison ends! Although Recruit-Guru would be “cheap” (as compared to legacy systems), it is by no means, cheap-quality!

If anything, Recruit-Guru will have SUPERIOR QUALITY & far greater ease-of-use (simple elegance) as compared to legacy systems. Big corporates will adopt Recruit-Guru for this reason and not because it is cheap. |

Point	Lesson To be Learned (in our context)
You have to try it – and then spring it on your friends alongside more expensive wines to see if they can tell the difference.	We hope that, when jobseekers receive their “ImageBuilder” version, they will show it to their friends/colleagues, who will instantly realize that there is absolutely nothing comparable available in the market!

We hope this (realization) would tempt them to try it out on their own email resumes – especially since it is free!

Question is:
Will recruiters also realize – and appreciate – this “difference”?
And, if & when they do, will they be motivated to share their pleasant experience with their co-professionals (HR/Recruitment Mgrs. of other companies)?

How do we bring this about? |

Point	Lesson To be Learned (in our context)
The appearance of such cheap wine in America, however, is something new, made possible by an unprecedented oversupply of grapes in California.	SUPPLY-SIDE:
India produces over 1 lakh IT professionals (college graduates) annually – maybe 50 lakh college graduates of all kinds annually (from a net increase in population of 18.3 million/year!).

| A series of excellent vintages.
Health benefits of wine.
Ageing baby boomers started drinking more of it. | DEMAND-SIDE:
Demand for IT/ITES is booming… So is demand for professionals in Telecom/Insurance/Retailing/Financial services/Auto/Health services/Infrastructure etc. etc.

We will need to convince HR professionals how they can dramatically improve their own productivity and their departmental productivity by using Recruit-Guru. They can save millions of rupees in Advt. costs & of course subscription-costs on Monster/Naukri etc. for Resume Database Search (7 lakh resumes free? – during Free Trial?).

Even a company having annual turnover of Rs. 5 crore can afford to subscribe to Recruit-Guru! (That is just $1 million!).

There are millions of such companies around the world! |

Point	Lesson To be Learned (in our context)
The dollar rose, making imported wines cheaper.	If American companies can “buy” our resume database of Software Professionals at $0.10 / $0.20 per resume, they may want to bypass the “body shoppers” & contact the candidates directly!

| It is cannibalising sales of mid-market wines below $10 a bottle, forcing producers to cut prices. | When we offer to 50,000 corporates, 7/8 lakh resumes “database-access” for Rs. 5000/= (Activation Fee) down payment, what would that do to the revenue models of:
→ Monster charging Rs. 1–3 Lakh/year
→ JobsAhead Rs. 1.5–7 Lakh/year
→ Jobstreet Rs. 0.5 Lakh/year
→ Naukri Rs. 1.5–2.0 Lakh/year |

| Two-Buck-Chuck’s low prices mean it is reaching new markets and changing patterns of wine consumption. | This could well be, for them, a “Life and Death” situation! But we do not want them to shut shop! They have 2 strengths, viz.:

(A) Large Resume Database
(B) Large Corporate Customer Base

By the time EGO & BARTER are over, their strength (A) would have gone, assuming we manage a MILLION resumes. But they can survive on (B) by becoming RecruitGuru “LICENSEES” (See HYBRID model note). |