Foreign Brands finetuning to Indian customers

Published by MBA Skool Team, Published on May 23, 2015

Ricardian theory of comparative advantage enables the country produce the commodity in which it has a comparative advantage rather than absolute advantage. By practicing this, they gain expertise in utilizing the resources efficiently. This results in countries going for International Trade.

Global marketers know that buyers hold distinct attitudes and beliefs about brands from different countries. These perceptions can be attributes in decision making or influence other attributes in the process. The various brands prevalent in India and the foreign brands applying this international trade companies add value to the products in terms of changing packaging and customizing it as per the awareness level of consumers. Reading the minds of the Indian consumers is really a cumbersome task as their attitude and perception towards any brand can be different in different regions in the same one country, one India. There is so much of cultural differences and variations in customs and thought process of every next individual.

Companies pursuing a global business strategy attempt to achieve economies of scale by producing identical products in huge quantities for a variety of different markets. In contrast to the home-replication strategy, where a product is developed for the home country and then exported (with little or no modifications), companies pursuing a global strategy , develop products for the global market. Decisions are taken at the headquarters, the organization can be characterized as a centralized hub. The particular firm has to target and satisfy all customers. A global business strategy works much more in a centralized fashion.

Global product strategies:

Economic Adaption

The world has moved from an era of telegram to Instagram. People are becoming more technologically efficient, paving ways for more innovative products to come into the market.

There is a definite pattern of decision making and purchasing behavior  of consumers.

Successful Foreign brands have been able to place themselves in the choice set of the consumers. The four global strategies are used to bring in business and cultural Integration

Needless to say, Companies catering to this segment have to necessarily keep in mind the affordability and expense burden while functioning in India. India has varied income group people and Samsung, a Korean Company has made the best use of exploiting these opportunities.

The spanning of Indian market by Samsung mobile phones, ranging from low end to premium smart phones, tabs and smart TVs have significantly affected the market share in India. Samsung in the recent years has been the global leader in mobile technology. They are the ones to beat when it comes to Android platform and easily give the beating to Apple when it comes to products sold per number.

Samsung explicitly spends on Marketing and follows a Dynamic and ever changing strategy focusing on rebates and discounts which are done in order to drive sales. It addresses the needs of Indians by bringing in great sales offers that are bound to be great add on and in sync with the competition.

Pricing has played a significant role in Samsung's success. It has best captured the value for money concept, keeping in mind the price elastic consumer .Samsung products are easily accessible due to its strong and efficient distribution network. Samsung segments its audience in different categories and makes its products visible by opening many stores.

There can be seen a strategic turnaround of LG Electronics in India .Initially it faced major challenges due to failure of joint ventures and de-licensing of consumer electronics Industry leading to discontinued operations in Indian market. But the company overcame all difficulties by using innovative marketing strategies specifically planned for Indian markets. In order to develop a strong connect with the target group, it initiated a close tie-ups  with cricket that included signing on Indian cricketers and launching cricket games on its television models .It focused on products which took care of the health of the Indian consumers only with the launches like “Golden Eye” color television. The advertisements are designed in ways to attract the consumers, making a bond with them in order to obtain full market coverage.

In 1996, Pizza Hut an American restaurant chain and international franchise, known for pizza and side dishes entered into Indian market and has since then tried to customize its products to the taste and habits of Indians. The company knew the food products like pizza and pasta are a completely different basket of products for Indian palate. Hence, it organized and brought Indianisation in its methodology right from the ambience and the varied menu offerings. In India, family dinner and outing is meant for an auspicious occasion and therefore it opened up restaurants such that a family can visit the place and have their fun time.

They created Indian toppings and vegetarian pizzas along with pizzas for non-veg lovers with taste of spicy chicken and flavors like korma and Chicken tikka on pizza base. Budgets are critical to think about and in order to appraise and maintain customer relationship and satisfaction, schemes like “Buy 1 on 1” ,”Wednesday offer”, “side dishes free on minimum bill of Rs 350” attract the regular users for repeat purchases and are an invitation for the new users to try and exploit the best offers available.

This is an example of customer engagement to know about their usage to try and bring different strategies received through feedback. Office goers especially the corporate houses are being given special discounts of 20-30% while ordering pizzas. The company has been successful in targeting the correct audience as the corporate and the IT guys are the on top of the hierarchy in terms of consumption of Pizza.

The advertising strategy lays emphasis on communicating it to be an International brand with an Indian heart by developing a special bonding with its customers and expects every employee to be customer maniac.

The biggest competitor Domino’s Pizza has been able to differentiate its products in terms of pricing strategies. The single level business strategy of having its operations under Jubilant Food works Limited, India’s largest and fastest growing food service company has helped the company’s growth graph move upward.

It has used cost reduction techniques by not focusing specifically on its ambience. It serves the best in home delivery which gives Indians a feel of lesser expense on their pocket. The 30 minute’s delivery is successfully implemented and delivers excellence in terms of service.

It allows people to choose their toppings, size and crust and customize its pizza to suit Indian taste. The mantra of success are mass customization, home delivery specialist, conformance of quality and stringent service standards.

.In India, only the cash purchases are planned depending on cash availability while the credit purchases are impulsive. No immediate flow of cash makes life simpler for the consumers. This is the prime reason why Credit cards and Emi schemes are so very successful.

The automobile companies like Mercedes-Benzes and Audi have used integrated marketing communications in country like India to attract elite class people to purchase their high end premium segment products. Audi over the years have managed to keep itself in the public eye by Advertising in magazines and TV commercials, which are just heart throbbing. The cars are launched by celebrities and because of its niche market, Audi never takes part in mass marketing but instead advertises only in the very premium segment .pricing is done strategically for the proper positioning of the brand hence dealerships and showrooms offer repayment plans allowing a wide variety of people access to the brand.

Volkswagen is also using social media platform to market its products. In a bid to strengthen its brand image. The company also sponsors numerous car events as well as other corporate events.

Few of the companies have been successful in positioning their brands into the Indian market because they attempt to understand well the needs of target group before introducing a brand into the market. The India entry strategy for most global retailers is guided by the economic and demographic dynamics of leading metropolitan cities.

Young consuming class has new aspirations and is more open to experimenting with fashion brands and modern designs. Therefore the foreign brands like Louis Viton and other international luxury brands, including Armani Junior, Dior open shop at the posh malls in capital city due to elite clientele and the presence of other exquisite brands.

.Online shopping has become a trend as well as easily accessible to people, so they are making their products available through e-commerce websites The marketing strategy of 4Ps –product, positioning, price and place used by global brands have made the metro cities as their base in order to target fashion freak people and elite class with high monthly expenditure. They follow selective presence strategy and are considered as niche products. Interestingly, Chandigarh is the most penetrated city in terms of global fashion apparel.

Reebok is one of the classic examples of brand entering into the Indian market. The company very well knew by hitting the notes of hearts of consumers, it was successful despite of competitors like Nike and Puma .Reebok understood the importance of localizing its brand, positioned itself as a fitness brand and made a strategy to associate with Cricket for achieving a competitive advantage. It also sponsored the KKR outfit in the IPL to appeal to masses to set into the minds of consumers .

Thanda matlab Coca-Cola” was able to create the mass appeal for the brand in the market and subsequently Indians used to refer to anything that was chilled as “Thanda”. The company again used two iconic things of India-Bollywood and cricket.

Various film stars and cricketers were paid so as to promote the brand in the Indian market,

To increase penetration in Indian market, small packets, affordable cans and family packs bottles were manufactured to enable all sort of consumers to buy as per their affordability.

The company was also able to successfully overcome the biggest challenge it faced in the year 2003 of the pesticide controversy by ensuring quality check measures in factory and  after overcoming all these challenges, Coca-Cola is easily available at all stores right from McDonald’s to every other nukkad store.

The article has been authored by Chiti Shree, TAPMI


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