Friday, August 26, 2011

THERE’S NO PLACE LIKE INDIA

We all love ‘Anna’! He seems to have united India and its youth. But is India really one, especially when it comes to business? This is one country where all the laws of marketing will fail, because it’s so diverse. If you have just one theory, then it will not take you anywhere. India changes every 200 km. Yes, a few basics remain the same across India, but a lot changes too. For starters, language changes (we have 192 official languages and dialects), culture changes, traditions and festivals change, food habits change. If this is not enough, think about it – even the geography and political views change. Yes, it is vast, but it is not an easy market. Only the hardy marketers will be able to survive and thrive here.

THOSE WHO MISUNDERSTOOD INDIA

A lot of multinationals have come into India but failed – not because their products were not good, but because they failed to understand India’s culture. Globalisation has been the new trend, but ‘standardisation’ will not work always. As a marketer, you need to be sensitive to each culture’s identities and its unique regional preferences and customise your product offerings.

Our local markets are not barren as many multinationals thought. There are very strong players in almost every local market. Take the case of Kellogg’s. Apart from the taste not really matching the Indian palette (we like to put warm milk with sugar in our cereals, unlike the west that has it with cold milk), it under estimated the presence of local competitors like Mohun cornflakes (priced lesser than Kellogg’s) and Champion (whose price is almost half as that of Kellogg’s). Retail chains may never be able to understand the bonhomie that people share with their local kirana shops or the Mom & Pop stores as they are popularly called in the West. They share a bond and enjoy a mutual level of trust (giving things even on credit to their favorite customers) that big retail chains will never be able to enjoy. CavinKare challenged the multinationals in various segments. Earlier, it was Clinic shampoo and Fair & Lovely fairness cream (both from HUL) that were touted as the only good options. But homegrown brands like CavinKare are giving them a tough fight. CavinKare used sachets to sell its shampoos. It understood that the consumer was not willing to buy a whole bottle. But a small sachet was a luxury she could indulge in. [Today, 40% of the shampoo market consists of sachet buyers.] It used India’s weakness for ayurvedic products and ensured that its fairness cream Fairever – with saffron and milk – promised not just fairness but also good skin, and quickly cornered a significant chunk of the market share from the giant HUL and its brand Fair & Lovely. So strong has been this positioning that it made Fair & Lovely change its positioning from “badle aap, badle zindagi” to “gorepan se kahi zyaada, saaf gorapan”, meaning “not just fairness but a clear skin too”. CavinKare understood the Indian consumer and her changing needs, and this homegrown brand has become a formidable competitor today.

Going the ayurveda way, Emami too has managed to keep the biggies out of the way with unique Indian brands like Boroplus, Navratan oil and Fair & Handsome cream, that command a significant market share today. Marico’s Parachute oil is way ahead of HUL’s Nihaar. Agreed. Products like hair oil are distinctly Indian and MNCs may not have an edge here, but even when it comes to products like toothpaste and hair color, our Indian brands are doing a pretty good job! Dabur toothpaste is giving Colgate and HUL a tough fight. In the hair color sector, Godrej still has the largest market share (more than 30%),with L’Oreal coming a distant second (a market share of 19%).

Just because a brand has a foreign tag is no guarantee that it will be perceived as superior. It needs to match the local sensibilities too. KFC entered India with its American menu of chicken wings and wraps in Bangalore. The Indian consumer did not identify with it and it had to pack its bags and leave. In 2004 when it did come back it had a vegetarian menu, rice meals and Indianised chicken recipes. It survived.

Tupperware designed a beautiful ergonomically sound, rectangle spice box for the Indian housewife. It bombed. She was used to a round one for years and however good the rectangle box it did not work for her.

Marketers with a keen sense of observation have succeeded here. Maybe not many people can afford an Omega or a Rolex, but people love to own a good watch, and no one grabbed this opportunity better than Titan. It realised that the only watches available in India for the low-end were poor in quality and lacked after-sales services or even warranties. Today, Titan dominates the watch market and offers very good quality watches with warranties and service networks for not just the consumers at the low-end but also, pure gold watches for the ones with deeper pockets. This local hero is a big, dominant player.

These local champions have overcome all obstacles and have made their own roads. If Indian roads were not good, then Tata Motors came up with cars and trucks that had a strong and rigid suspension system. Not state of the art, but its vehicles had easy maintenance. Poor infrastructure could not deter Amul from going ahead and conquering the market. If farmers could not reach out to the company, then the company decided to go to them. Amul is an amalgamation of more than 13,000 cooperatives. It installed Automatic Milk Collection Systems in the villages, where farmers went and deposited their milk. It was immediately measured for volume and fat content and the farmer was paid instantly. It worked well for both the parties, and till date, Amul rules the Indian markets. Open your refrigerator and you will find the Amul butter packet there too!

The reason some Indian brands have become so strong is that they have understood this country and its problems well, and have found innovative ways to work around them. ITC (which began operations as an MNC in India in 1910, but whose ownership has progressively Indianised over the years) – has been in India for close to 100 years now and has understood its problems like no one else has. It realised that farmers had no access to markets or any information about markets. So it installed a PC in the house of the largest farmer in the village, providing him and the rest of the village, a window to the world. This not just improved the knowledge and awareness of the farmers, but made them fall in love with ITC. Any competitor would find it tough to break this bond. It also ensured that ITC got a steady supply of good quality soybean for its processing plant.

It takes just one strong homegrown brand to shut out a huge multinational. Only those have got it right can do so.

THOSE WHO UNDERSTOOD INDIA

While many MNCs faltered because some assumed the Indian market was behind their home market, or thought it was not yet ready for superior products, other failures thought that the “foreign” tag would be enough to attract the consumers. Thus they became myopic and failed to adapt or innovate. Such brands failed or were forced to leave the Indian market, even as so many local brands filled the void. However, there have been a whole lot of MNCs who have kept their eyes open and survived. They realised that the product could be made in any part of the world but it was important that the product be “Made FOR India” for it to succeed in this market.
McDonalds knows that food is the most culturally sensitive product, and everywhere it has gone, it has ensured that its menu is customised to suit Indian tastes. Pizza Hut has a full-vegetarian restaurant in places like Gujarat et al, where the population is mostly Jains. Nowhere in the world will you find another only vegetarian Pizza Hut. LG believes not just in localisation but micro-localisation. Its microwaves have an idli mould for the south- Indian market, and a plate for heating kulchas for the north. It sells bright colored refrigerators in Punjab, for it does not get stained easily with the strong spicy and oily cooking of that region. Samsung’s phones now have an Indian calendar too. Perfetti Van Melle knew its old distribution system was weak, so it created its own network of 5000 distributors, did not give up on the rural market and today, is way ahead of competitors. Hyundai saw that most foreign car manufacturers were selling their old models in India. It entered with new models. It even customised the Santro to suit Indian roads. It used its technical expertise, which the local manufacturers did not have and today, it holds the number 2 spot in the automarket – just behind Maruti, which has been in this market for 25 years.

THOSE WHO WILL BE THE NEW MNCS

As these homegrown brands learnt the hard way to survive in developing markets like India, they found a whole new set of business opportunities opening up for them in other developing markets. These markets had similar problems and opportunities. So Tata Motors found that its vehicles were in demand in many African countries where the infrastructure was not good either. ICICI Bank and many others too saw an opportunity to do business in the emerging markets of Sri Lanka, Africa, China, Bangladesh, Indonesia et al. They have mastered the art of functioning and adapting in difficult markets, and are thriving like never before in these places. These new emerging markets are the future of business, and with markets of the developed world shrinking, it is only those companies who can do business in these very markets that will survive and thrive. The MNCs of the developed world are suddenly realising that the companies they once brushed aside as small homegrown brands, have become the new and powerful multi -national giants of the emerging markets.

India is diverse and difficult. But it has proven to be an apt training ground for its homegrown brands, to prepare themselves for the future. Those who have succeeded and survived here, will be able to survive anywhere, after all there is no place in the world like India!

52 comments:

  1. why many MNCs are working like "L'Oreal" when it shows a total foreign image where as indian marketers claims products with herbal or ayurvedic or localisation is important. ???????

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  2. Excellent write up ! I must add that Patanjali brand of products are becoming a hit among the users. At present it is using a direct distribution system and slowly making a foray into the open market.I am a total fan of the patanjali products !

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  3. At the time I write this, the movement has almost reached its peak. Millions of Indians are now on streets. Many more millions are constantly glued to their television sets. The ‘political class’ is in all topsy-turvy, speculating the ramifications of the present state of affairs. The government’s flip-flops prove that it is going to have a heart attack soon.

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  4. Yes, it is his credit. Well, he, by the way, is also fighting for the implementation of the Jan Lokpal Bill, as proposed by his team in opposition to the ridiculous bill proposed by the government.

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  5. But, since Anna has only initiated the movement and cannot own the movement, it is extremely possible that a large majority of the people, who have come out in support, might not have the faintest ideas about the nitty-gritty’s of the proposed ombudsman. But does it matter anyway? Who on earth can give me an example of a mass movement where people attended workshops before going to the streets!

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  6. In the midst of all these, country’s intelligentsia has constantly engaged itself in the dissection of the entire movement since it sprang up in the month of April. Popular movements need introspection and debates in the true democratic spirit. No one denies that.

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  7. There has also been a considerably large number of views echoing in many circles that corruption cannot be completely rooted out in this authoritarian fashion when the grass-roots of our socio-economic system itself are so highly flawed.

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  8. Hegel had rightly said-“We learn from history that we learn nothing from history!” Since its first introduction in 1968 in the 4th Loksabha, the Lokpal bill never got passed in the parliament in the last 43 years. That is how the parliament works. Had this great moment of anti-incumbency not sparked off, the bill would have remained a distant dream for the next forty years as well.

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  9. India also needs to show collective solidarity and compassion to the other voices protesting on legitimate concerns in the remotest corners of the country. This is a historic opportunity for all of us to evolve as a nation united in diversity. It is high time the cynics woke up to the sunlight of history and reality.

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  10. There are lots of misconceptions about internet users in India that run around. One example, consumer doesn’t shop on internet because it can’t negotiate on price. Let’s give it another thought. Have you worried about bargain at a petrol pump? Or may be at a store like Globus?

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  11. No, and that’s because you know there is no need. They will quote the lowest price they can afford and they will not quote different individuals different prices

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  12. On internet, price of an item is same for all the users with shopkeeper selling at the best possible price which he can afford. He is aware of the fact that customer can’t and won’t negotiate and which forces him to keep lowest price possible. So even if you are used to bargain, there is no need to do that.

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  13. In other parts of the world, people have been spending money online like they do in a grocery shop. But Indian internet user isn’t that enthusiastic and is definitely not at fault. In order to find the answers we have to look into what they have been offered till now.

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  14. at present means marketplace portals which connect sellers and buyers. Although a good concept, the purpose gets defeated when user experience is not good. These stores have more become a medium for scams than anything else. You will see them selling iPod replicas using original iPod pictures, at higher price than that of Apple iPod.

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  15. They sell duplicate chocolates, watches and perfumes. These portals have virtually no control over the sellers which leaves users cheated in the end. It’s bad for the ecosystem altogether as cheated first time buyer turns out to be a last time internet buyer.

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  16. There is need of serious online retailers and not just auction portals or marketplaces. These will be people who can stand behind sales made from their sites and provide full customer satisfaction.

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  17. Interestingly, most of the big names for ecommerce in Indian space are part of a bigger umbrella which isn’t that innovative in web space. These companies leverage brand name and marketing from sister concerns and enjoy the high visitor count.

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  18. With something coming in so easily, they don’t have to focus on a long term relationship with customers which will require significant efforts from their side. I would like to see statistics on how many people in India are repeat buyers and for what items

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  19. To many people who think that Anna’s movement is nothing but dadagiri (or blackmail), there was more evidence in store yesterday. To many who think that his movement has political undertones, again there was more evidence yesterday – the rallying cry of “Lao ya Jao” being seen as another such piece of evidence.

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  20. Till a few days back, Anna was saying that he wasn’t interested in toppling the government; but only in getting his Jan Lokpal Bill introduced in Parliament. Suddenly yesterday, he increased the pitch by demanding that if the government could not get the bill passed by August 30th – then it should go.

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  21. To many people who think that Anna’s movement is nothing but dadagiri (or blackmail), there was more evidence in store yesterday. To many who think that his movement has political undertones, again there was more evidence yesterday – the rallying cry of “Lao ya Jao” being seen as another such piece of evidence

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  22. The first of course is that the government’s version of the Lokpal Bill must be withdrawn and Anna’s Jan Lokpal Bill should be introduced. Importantly, the Bill must be introduced as a government Bill. In effect, the government must introduce a Bill that it does not itself believe in.

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  23. the Bill must be passed by August 30th. No discussions in the Parliamentary Committee. No views from other sections of the society. No regard for Parliamentary processes. Nike would be proud that its slug line “Just do it” has had such a powerful impact on Anna!

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  24. the method of protesting - the fast-unto-death. There is nothing non-violent about this method. Everyone knows that should something happen to Anna, the crowds would go berserk. There would be violence across the country. The comparisons with Gandhi are untenable. Gandhi would also do fast-unto-deaths, but he would do so against an occupying force.

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  25. The same act has a totally different meaning when the context is different. We Indians call Kashmiri separatists as terrorists, but the same terrorists are freedom fighters for the Kashmiris. It’s the context that makes the difference. Anna’s fast-unto-death is not comparable with Gandhi’s because the context is totally different. Anna’s fast is against a legally elected popular government.

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  26. he self-righteousness inbuilt into the movement. It appears that only Anna’s team is clean, intelligent and independent.

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  27. All others are mere puppets in the hands of the government (the question about why the NCPRI draft has come out now indicates that it is a puppet in the hands of the government) or are intellectually lower or are perhaps corrupt themselves.

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  28. There is nothing right about the Anna movement except for its basic core objective. That corruption has become a huge bugbear and people are really upset with the amount of corruption they are made to face every single day of their lives.

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  29. The “lacs” of people who came out on the streets yesterday were against corruption; not necessarily in support of Anna’s version of the bill. Most of them do not even know the different versions of the bill; most have heard second or third hand what the bill is all about. Privately, most of those who know about the Bill agree that Anna’s Bill has its own loopholes.

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  30. Anna is tapping into popular angst against corruption; not into their wish and demand for a particular type of bill. It’s important to make this distinction. It serves Anna’s purpose to confuse the two distinct points – to make it appear as if the outpouring of people is for his version of the Bill while in reality it is only against the scourge of corruption.

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  31. From a legislative perspective, it makes no difference how an alternative view-point reaches the standing committee. Let’s say that the standing committee has got Anna’s bill from Anna’s team and not from the government itself. So what? Does it mean that Anna’s bill cannot or will not be discussed? Whether the government bill states “include the PM” or “do not include the PM” has no bearing on what the final decision may be

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  32. If Anna’s team is worried that their bill will be discussed only in the standing committee and not in the full Parliament, then that also is unfounded. When the final bill – after amendments made by the standing committee – comes to Parliament, it will be discussed again

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  33. If members feel that there are inadequacies still left, then more changes can be made. If the government goes against the will of the two houses, it could be toppled. In any case, it does not have a majority in the Rajya Sabha. It would never take such a chance.

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  34. I will end with an analogy. Anna is behaving like a spoilt child. A child who was spanked in the past; but whose parents have since made amends. Now the child is taking advantage and being opportunistic. He is demanding more candies; not ordinary candies, but those laced with poison. He wants these candies, come what may.

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  35. The beautiful wood and jade carvings, painted silk screens and other memorabilia had faces created on them. I thought they would be holy Chinese images, but on closer inspection they turned out to be portraits of Brad Pitt, Angelina Jolie, Tom Cruise and even George Bush. This would never happen in India. We have our own set of demigods in Bollywood actors and cricketers.

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  36. The Maoist Revolution in China turned their cultural identity into a clean slate, which is the reason their dressing, tastes and aspirations are largely inspired by the western world. India, in contrast, has given a stubbornly tough time to McDonalds, KFC and others as they tried to gain a foothold in the Indian market unless they "Indianized" their menus

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  37. “All in all, Indian advertising is reflective of the overall sentiment of pride in India.”

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  38. Consumers believe that these people are Indian, and they start to identify with the product, but are still drawn to fairer skin. This is rather simple math – in a country where fair skin is identified with wealth and beauty, just the color of the model's skin can elevate the value of the brand.

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  39. This phenomena is dominant across Asia, where fairness creams are the highest selling cosmetic product and are even available for men.

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  40. A few years ago, ads were largely targeted towards the middle-class where the wife would be a simple and unassuming lady dressed in a cotton sari. The other type would be foreign ads with images of a better land and lifestyle, with a white person as the protagonist.

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  41. What is heartening to see is that the importance of local heroes in film and sport has made western celebrities less prominent. It gives us a sense of pride when an Indian film actress walks down the red carpet at Cannes, and she is a role model for many young Indian girls

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  42. We like to see people we identify with as successes and this will increase the ambitions of the large youth population in India. Our role models now are Indians who have made their mark abroad and made the country proud.

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  43. India is a country where the culture and language changes every 100 miles, and so does the mindset. Foreign brands have realized that the way to reach the hearts of the vast variety of consumers is by getting their products endorsed by a Bollywood actor or cricketer

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  44. watch company TAG Heuer has the best formula-one racers and actors on its endorsement payroll. Yet, they have signed Indian actors as ambassadors in India because Leonardo Di Caprio is just not going to cut the cloth among Indians.

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  45. All in all, Indian advertising is reflective of the overall sentiment of pride in India. The ads are targeted towards the youth and the medium is the "International Indian." The products that have succeeded are those that created a new recipe that suits local tastes yet promises global success to the user.

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  46. The message is loud and clear – if a foreign brand wants to succeed in India, you gotta add a little spice to it. It's quite a far cry from being nationalistic, but it's a strong message that Indians are prouder of their identity than ever before and won't be interested unless they see an effort from a brand to 'Indianize' their offering.

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  47. In the past decade, product development is slowly and steadily taking off in India. Automobiles, tractors and even commercial vehicles started to be “made for India”, in addition to merely being “made in India”. Tata Nano is perhaps the best example

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  48. Core banking software from Infosys and iFlex Solutions (now part of Oracle), Tata Chemical’s drinking water purifier “Swach”, Titan Edge watches, BEL Electronic Voting Machines are typical and well-known examples of this trend. Such innovation is not limited to Indian companies alone.

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  49. Toyota recently launched Etios car in India. Nokia 1100 mobile handset that was “made for India” was a spectacular success. GE’s low cost ultrasound machine VScan is yet another innovation inspired by India

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  50. HP launched its Dream Screen 400 product in November 2010, specially targeted at the entry level Indian consumer. Attractively priced at Rs 19,999, HP Dream Screen 400 is a great “value for money”; one more in the line of “Made in India, Made for India” products.

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  51. MERA PURANA BHARAT

    The customer was never a king and will never be.
    Most parts of India is sulking and survive on PURANA SAMAAN.

    Be it your Mithai Wala or your fav. fruit drinks or Soft Drinks.

    People are used to drinking and eating stale. No wonder every now and then 100's of people die of food poisoning.

    There is adultration in food and milk.

    Indians are fooled and duped not only by sophisticated foreigners, but patriotic Indians too.

    Or are people used to the TAMSIC food.

    Rajeev Vashisht

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