Top 5 Ways to Build Brand Magic in India
26 Mar 2014|Added Value
With fast-rising disposable incomes and a growing middle-class consumer culture, multinational brands have been salivating at the thought of bringing their brands to over a billion new customers. Unfortunately, many MNCs have struggled to get it right in India. Ill-prepared examples abound of brands and products that sell big in western countries but flop in India. So how can brands harness the world’s third largest economy and maximize its potential to drive its brand growth? Added Value China shares the top five strategies to entice India.
1. Straddle the Pyramid
Winning companies don’t just stay at the crème de la crème consumers but also focus on the middle market by developing products tailored for India that span across different price points.
Unilever offers Liril and Dove in the premium sector, Lux as a mid-range brand, and Lifebuoy in the budget sector. By adopting the strategy of category flooding, Unilever has become a solid market leader in toilet soaps in India, appealing to groups with lower disposable incomes with quality assurance promised by their well-known corporate brand name in an affordable price range.
2. Indianization: Be an International Brand But Have an Indian Heart
Best brands are confident enough to adapt their products and services without compromising their core strengths. Localizing offers have proven to be successful for a number of brands in India, which translates the value proposition in meaningful ways that are consistent with the brands heritage and their new potential in India.
Frito-Lay’s have adapted flavours of their potato chips to cater local tastes, offering “Magic Masala” and “Mint Chutney” flavours, linking the concept of non-Indian snacks with familiar Indian flavours. They’ve also taken the concept of typical Indian snacks and created “Kurkure” (meaning crunchy in Hindi), resembling western Cheetos but with localized flavours such as “Chatpata Chaska”. Frito-lay ensures that its products suit local tastes and are familiar, whilst making no compromises on the global norm.
3. The Distribution Edge
Nokia has one of the highest market shares in India’s mobile market, taking the lead ahead of companies such as LG, Motorola and Samsung. Nokia’s strategy of establishing crucial distribution partnerships contributed to its market leadership; “In 50,000 of 95,000 outlets that sell mobile phones, only one brand is available, Nokia” says Shivakumar, Nokia India’s VP and country manager.
The price points of the products dictate the type of outlet, responding to the demands of evolving customer expectations by providing them with relevant competency and skill sets in distribution locations. Nokia’s distribution strategy gave them competitive edge in India’s fragmented market that demands multiple-channel distribution. Successful brands such as Nokia invest in creating a supply chain that overcomes local challenges and delivers margins even at aggressive price points.
4. Create a Localized Business Model
Companies should avoid simply imposing global business models and practice on the local market and learn to do business the Indian way. McDonald’s India invested nearly $100 million in developing a low-cost, localized business model before increasing its prominence across India. By running India as a geographic profit center and empowering their local organization to take charge of business growth, their localized management team reduced their dependence on expatriate managers, developing resilience to India’s corruption and uncertainty.
Samsung created its brand awareness in India by signing seven cricket celebrities, crashing in on the religious popularity of cricket in India. By launching its “Team Samsung India” campaign, Samsung was able to create patriotism through cricketers under its brand name. The campaign was a huge success and enabled Samsung to increase its brand awareness, making impressive growth ever since.
5. Demonstrate a Strong and Visible Commitment to India
To fully realize India’s potential, companies must make a strong commitment to the Indian market; investing in the empowerment of local operations, uncovering local talent, and creating an aspirational brand ahead of demand and its competitors.
Korean companies such as Hyundai have been more successful than other MNCs even though sometimes they entered the Indian market as many as ten years later than their competitors. Hyundai have been clear in making India as a market they need to be successful in and hence invested significant amounts, starting with an India-specific department to understand the context and consumers. They launched products most appropriate for India, making product modifications to suit Indian conditions – first to provide washing machines with a function to re-start from the same point at a time of power outage.
What should MNCs do to be successful in India? To make a mark in India, they should make India a long-term strategic priority, give India a special geographical focus and trade short-term profits for growth and market leadership.
Image credits: Istock, Samsung, Nokia, Kurkure, McDonald’sprev next