Companies are scrambling to decode Indian consumers. Granted, the same could be said for al the BRIC nations, but India in particular seems poised for transformational expansion over the coming decade. There is a young and energetic population, an abundance of resources and a growing population of highly-educated entrepreneurs with personal and professional experience abroad. In 10 to 15 years, India’s economy could be as big as China’s is today. And while there are certainly infrastructure hurdles to overcome, India’s political and social system appears to be addressing them, painful as it seem at times.
So with stagnant markets in Europe and North America, and India’s rapidly growing middle class, it has become a target for expansion by retail brands in particular. Plenty of companies are betting on India’s growth – Nestle has been in India for nearly a century and YUM! Brands have begun opening stores on the subcontinent. But it isn’t as easy as stocking the shelves with products familiar to Indian tastes. So what are some of the principle issues to consider when preparing to expand in India?
Brand Preference, Price and Identity
Many companies look to their successes in China as a model of brand introductions, but what applies to China doesn’t necessarily apply to India. One major difference is that Indians have not had the same preference for foreign brands. That may well change as Indians living abroad return home in search of more opportunities, but there is hardly a guarantee. As an example, when Coke bought up leading Indian cola brand, Thums Up, they intended to kill the brand off. But local managers quickly pointed out, rightfully, that Indians preferred the Thums Up brand. Despite Coca-Cola’s desire for consistency everywhere, the company decided to keep the brand alive, giving ample shelf space to both products.
Was it a flavor issue? In part, yes. But it is also representative of the fact that Indian brands often continue to have greater brand share once foreign products are introduced because they are associated with identity, price and nationhood. Foreign status brands exist (just as they do for every market), but local brands are often closely associated with notions of cultural-worth, growth and progress. The cultural clout of a foreign brand doesn’t necessarily translate in India. Indian brands mean Indian jobs and growing international status.
With over 1,500 dialects spoken in India, language can’t be overlooked, both in terms of product design and messaging. Trying to find products or produce advertising and marketing collateral that appeal to everyone can be difficult at best. Division over ethnicity, issues over perceived social and political power, and access (perceived and real) to the goods sold by foreign firms can be decidedly pronounced. Understanding the complexities of power and how language may factor into the discussion can be a deciding factor in how a brand is received.
There is nearly as much diversity in the political structures of individual states within India as there is language and ethnic diversity. Navigating specific regional laws and regulations is frequently something companies overlook – not so much from the logistics and procurement standpoints, but from the deeper socio-political position. Politics reflect worldview in a democracy as large as India and it is important to understand to motivations behind how individual states interact with multinationals. Add to that the fact that corruption has become largely endemic and you have a significant problem.
The point is simple. If you don’t understand cultural patterns at a more than superficial level you are doomed to failure. If you learn to look for deep, meaningful patterns and cultural processes you will succeed.