[research report] the glocal marketing mix

E INFO SOLUTIONSREPORT | The Glocal Marketing Mix E INFO SOLUTIONSREPORT |

THE GLOCAL

MARKETING MIXStrategies & Insights for the Indian

Consumer Market


“Marketing is everything.” — Regis McKenna

Regis McKenna’s bold statement exemplifies the school of thought that everything you do – not just your products, pricing, promotion, and

distribution, but even your billing, how you answer the phone, your speed of handling problems –it all affects how your customer perceives your company,

so everything is marketing.

E INFO SOLUTIONSREPORT | The Glocal Marketing Mix

International Marketing

International marketing involves recognising that people all over the world have different needs. Companies like Gillette, Coca-Cola, BIC, and Cadbury Schweppes have brands that are recognised across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand regional differences, hence the importance of international marketing.

Organisations must accept that differences in values, customs, languages and currencies will mean that some products will only suit certain countries and that as well as there being global markets e.g. for BIC and Gillette razors, and for Coca-Cola drinks, there are important regional differences - for example advertising in China and India need to focus on local languages and other cultural sensibilities.


Marketing Environment

Just as the marketing environment has to be assessed at home, the overseas potential of markets has to be carefully scrutinised. Finding relevant information takes longer because of the unfamiliarity of some locations. The potential market size, degree and type of competition, price, promotional differences, product differences as well as barriers to trade have to be analysed alongside the cost-effectiveness of various types of transport. The organisation then has to assess the scale of the investment and consider both short- and long-term targets for an adequate return.


Consumer lifestyle: UK

End of the House Price Boom Makes Consumers Feel Poorer UK home owners have become used to seeing the notional value of their homes rise at a much faster rate than inflation over the past decade. This situation produced a substantial wealth effect, as many consumers borrowed money at relatively low rates of interest using equity withdrawal loans or even remortgaging. This additional spending power drove consumption, as consumers splashed out on home improvement, cars, holidays, appliances and consumer goods, as well as a frenzy of property investment, which drove prices higher still.

However, since the so-called credit crunch dawned in the summer of 2007, these halcyon days have become a memory. With mortgage credit becoming increasingly unavailable, first-time buyers are all but priced out of the market and rising interest rates have made mortgage repayments less affordable. The value of residential property has begun to fall, having declined by an average of 10% in the 12-months to July 2008. Moreover, the number of properties repossessed by mortgage lenders in the UK grew by 48% during the first half of 2008. According to the Council of Mortgage Lenders, there were 18,900 repossessions in the six months to June, up from 12,800 during the same period last year.


Outlook It had been argued by many that UK house prices would only fall if unemployment rose, as occurred during the previous housing market crash of the early 1990s. This view has now been thoroughly discredited. Indeed, the danger for the UK economy now appears to be the risk of a significant contraction in construction activity leading to an increase in unemployment. The threat of consumer price inflation represents a further threat, as it has forced the Bank of England to raise interest rates to levels that are putting the finances of many households under pressure.


The continuing risk in the housing market is that the combination of high interest rates and rising unemployment and repossession rates could establish a vicious circle, wherein falling house prices lead to a reduction in the level of

economic activity, which results in further declines in housing values. Such a scenario could conceivably see residential property values falling 40% below their peak valuations, putting hundreds of thousands of UK homeowners into “negative equity,” a situation where their home is worth less than what they paid for it.


Impact Deflation in the residential property market is likely act as a drag on UK consumption levels until well into 2009 and perhaps until 2010. As a result, UK residents are likely to move home less often. This situation will depress demand for home furnishings, garden equipment, appliances and consumer electronics, as many people tend to buy these items when they move home. However, demand for DIY products may actually be boosted by this trend, as consumers may choose to redecorate and improve their existing home, rather than moving. The negative wealth effect produced by falling house prices will lead to declines in overall consumption, particularly for goods and services with a high income elasticity of demand, i.e., where demand is extremely responsive to changes in income.

For example, many consumers will postpone replacing their cars until after the downturn is over, while many other consumers will become more-value conscious when shopping for necessities like food, clothing and footwear.


Rising Fuel and Food Price Squeeze Disposable

Income

There were significant increases in 2007 and 2008 in the prices that UK consumers

paid for food, petrol and utilities. The price of hydrocarbons like oil and gas reached record prices on commodity

markets, due to a combination of tight supply, rising demand from developing

economies and security concerns in the Middle East and elsewhere, as well as a

dose of speculative investment. As a result, prices paid by consumers to put fuel in their cars, heat their homes and

cook their food have risen sharply. Moreover, rising prices have also had a

significant indirect impact by raising production costs, pushing producer price

inflation (PPI) to levels unseen since the early 1980s. PPI reached 10% in July 2008, driven by a 30% year-on-year increase in

input costs.


Apart from rising petrol, gas and electricity prices, the cost of basic food has also been rising rapidly. Again, driven primarily by a

combination of supply problems and rising global demand exacerbated by speculation,

the price of wheat, corn, soy, meat and dairy products have risen sharply on

international markets, significantly raising the input costs of packaged food

manufacturers.

As a result, the cost of such basics as bread, milk, eggs,

cheese and cooking oil have risen significantly.

Indeed, food price inflation surged to 9.5% in the year

to July 2008, as supermarkets passed on

higher energy and transport costs to their

customers.


Outlook

By the middle of 2008, there was some easing in the input costs of the packaged food industry, as speculation unwound and a relatively favourable harvest was

reported. However, it is very difficult to predict future price movements in such a volatile market. What can be said is that high prices are producing increased

supplies, as more land is brought into cultivation, which may provide some relief in the medium term.

However, with rising affluence and changing dietary habits in China, India and elsewhere likely to drive strong demand and climatic fluctuations set to exacerbate fluctuations in supply, it is reasonable to speculate that both producers and consumers will have to adjust to the end of the era of low food prices.


Impact

With petrol prices higher than £1/litre and a standard loaf of bread costing more than £1, the

purchasing power of consumers is being undermined. In April 2008, it was estimated that the annual grocery shopping bill of the average UK family had risen by £750. As a

result, the discretionary income of many households is being squeezed, leaving them

with less money to spend on necessities. This problem is likely to be particularly acute for

those on low and fixed incomes, such as pensioners, who spend a relatively high

proportion of their income on such necessities as food and fuel. This trend has already helped to boost sales at discounters like Aldi and Lidl.


Consumers Spending More

Time at Home

The expression “an Englishman’s home is his castle” has never rung

truer than in recent years. Rising property prices in the city have

forced many people to commute lengthy distances to work, leaving

many consumers are too tired to socialise out of the home on a regular basis during the week.

Moreover, having to spend a growing proportion of their income on

mortgage repayments has left many consumers with little income for

socialising.

Other home owners are simply determined to derive the maximum utility from what they consider to be an extremely costly investment. Increased worries regarding the incidence of crime and the risk of terrorist attacks have also contributed to this trend. Other factors include the rising cost of transportation, increased social isolation and the new ban on smoking in public places.


Outlook

Although deteriorating macroeconomic conditions

would appear, at first glance, to encourage this

trend even further, it is often said that misery loves

company, which implies that bad economic news

could encourage people to socialise more. However, with such innovations as high-definition television

and social networking becoming more prevalent

and as disposable incomes become squeezed by rising

food and fuel costs, a renaissance in socialising

outside of the home would appear unlikely at the

moment.


Impact

This trend, called “cocooning,” has influenced consumer demand in many

ways.

It has boosted value sales of homewares and home furnishings, as consumers demand more luxury at home. This

trend has also increased demand for such appliances as fridge freezers and cookers, where brand names and styling have become much more important in purchasing decisions.

It has had an impact in consumer electronics, where flat-screen TVs and surround sound systems have enabled

people to replicate the cinema experience in their homes. It has also boosted demand for DIY and garden products, as

many consumers now consider their gardens to be an extension of their living area and, as a consequence, they

are more willing to spend money on items like decking, garden furniture and patio heaters.


Consumer lifestyle: India

In recent years, India has witnessed a huge transformation in the consumer lifestyle which has been influenced by the geo-demographics, socio-cultural factors, psychographics, preferences, norms and behavior. The Indian consumer today wants to lead a life full of luxury and comfort. Indian middle class has provided a big boost to the consumer culture due to fast growth of the services sector per capita income of people has increased.

Rising disposable incomes continue to drive increased spending and to generate consumer demand for a

wide range of new goods and services.


A consumption economy

The consumption pattern of a country depends on liberalization of economic policies, buying habits of the younger generation, financial independence at a young

age, increase in number of nuclear families and increase in media exposure of the people. The current generation

does not mind paying extra for better facilities and ambience. Another major factor that has led to increased consumerism is the growth of credit culture in India. The

Indian consumer does not feel shy to purchase products on credit and pay tomorrow for what they use or buy today.

The Indian consumer market has never had it better. According to a 2007 report by McKinsey & Co., India is set to grow into the fifth largest consumer market in the world

by 2025.

There is need to understand, formulate and successfully implement the changing concept related to consumer behavior because there are few resources and other constraints to meet

the basic requirements of running business.


This report focuses on significant attention of the practitioners and academics researchers which emphasized on market place ambience, conventional shopping wisdom of consumers, long term customer services, technologically-led selling processes and establishing customer centric strategies to be successful in Indian subcontinent.

The Indian demographic

landscape has witnessed enormous changes in the past

few decades. The increase in income levels, priority given toward education, and rapid industrialization coupled with

liberalization policies pursued relentlessly by the Indian government has transformed the Indian economy. Indian

values and national culture have not been spared from the attack from Western values.


Changing prospectus with an “on the go” lifestyle is one of the key factor for influencing buying behavior that exhibits a high relevance for formulating marketing strategies. Being a nuclear family and individual’s hectic work schedule consumers preferences for shopping malls, agglomeration of shops in the commercial area, stores assortment, accessibility, convenience, distance, economic advantage, leisure facilities are the essential factors to attract them. A competitively potential way to assist consumers in making dynamic shopping decisions is to disclose price and product information to them before they shop, for example, through Websites, virtual outlets on the Internet offering quick product search; comparative data on product, price, promotion, availability and additional services to shoppers; and build shopping motivation.

Research suggests that recent years have seen a change in consumption preferences of Indian consumers.

(Dwivedi 2010; KPMG 2009)


Catch Hold and Retain Consumer values and lifestyle dimensions are related to impulsive buying behavior, fashion consciousness/personal appearance, health consciousness, brand perceptions, personal financial management, life satisfaction, financial satisfaction and optimism, product innovativeness, family orientation, life security, gender roles, and opinion leadership.


Market Ambience People frequent ‘hip’ joints such as Barista and Café Coffee Day not just to consume coffee but to savor the

experience they get from the ambience, taste the smell, for the fun and color. And, for all this, they don’t mind paying that extra buck. It is understood that people consume experiences too (USP AGE; 2005). Shopping malls are dynamic

business centers that attract a large section of customers for experiencing modern shopping pleasure. A categorically planned assortment of stores in a mall would provide diversity, arousal, and propensity to shop,

entertain, dine, leisure, refresh and relaxing environment around the mall.


Long Term Customer Services

The consumer choice in long-term service industry is growing at breakneck speed and marketers are eager to steal a march over the competition by redefining

service value (Marketing Mastermind; 2007) like Banks and Insurance firms providing extended servicing hours and 24*7 access to them through ATM’s, VISA

cards, Credit cards, Internet, Telephone, etc.; Airlines offering access to tickets through travel agents, petrol pump kiosks, websites, call centers, etc.; PC market

redefining customer through direct access through phone and internet. The followers of such practices are ICICI, SBI, PNB, AXIS, Emirates, Continental, Jet

Airways, DELL, IBM, Lenovo, etc.

Customers are expecting more than long term service with their higher disposable incomes. People don't

want to just put their money in their bank accounts. They want to invest and reinvest to increase it more,

so the financial companies can provide them more options to invest through various investment schemes which will be a beneficial catch for both. Specially, the

short term profit schemes in which customers would like to invest again and again because it will providea

quick return to them. Thus, it can affect long term service market in near future.


Amazon, Yahoo!, Google, Facebook, OLX, Quikr, Jabong, Flipkart, Yehbhi, FashionandYou, Yepme etc. are all the facilitators to the new techie freak fashionable youth as well as the stylish professionals who on the other side have high aspirations. The combination of both- service provider and the internet savvy consumer are changing the rules of the game, setting up a new digital world of marketing in India. This young consumer has money power which she spends on any brand that catches her attention on the digitial medium.

The emergence of Digital

Darwinism


New Age Generation Consumer behavior is a perceived action that emerges to satisfy the needs of consumers

through appropriate reasoning. Busy lifestyles make changes in roles and preference associated with a fitness-freak health-conscious consumer.

This is evident from the increased sales of cereals, such as Kellogg’s Corn flakes; health drinks like Tropicana & Real juices; health biscuits;

vitamins like Himalaya tablets, etc. (USP AGE; 2005). “From pester power; kids have changed their role to become influencers. In fact, in the older age groups, kids have actually become consultants, whom parents

turn to for advice during the decision making process” (Advertising Express; 2011).

Johnson & Johnson, Lilliput, Gini & Jony, and Walt Disney cartoons are probably the most preferred brands for the child consumers, whereas, as

a teenager brands such as Fa, Axe, Fast track, Nike, Gillette, etc and in adulthood brands, such as Allen Solly, Dove, Park Avenue, Levis, Flying

Machine, Wildstone, etc. are associated as a strong sense of belonging to a specific social grouping and an expression of oneself.

Sometimes to attract this group of customers companies have adopted various strategies like Pepsi pushing contests on- www.contests2win.com, to resonate with its values of Fun & youth.

“ Sunsilk Gang of Girls”, TATA Tea “Jaago Re” online campaign, Airtel with “Express Yourself”, Idea with its “An Idea Can Change Your life”, Nokia- “Connecting People”, Maggie with “Meri Maggie”, Coca-Cola-“Open The Happiness”, Fast track- “Move On”, McDonalds, with its Rs.25 menu, Pizza Hut and Domino’s with its Rs. 40 menu have all positioned themselves as well known youth brands. This vibrant fluctuating youth which is now being brought up in the globalized era is the most complex and prosperous target for the practitioners.

http://www.contests2win.com

http://www.contests2win.com


2.4 Modern Metro Woman

‘Modern Metro Woman’ can be defined as a home maker, a working women, a mom, a daughter, a sister, a wife, a multi

tasker and multi role playing, cannot be pleased by showing fairy tale world as she is realistic and had harsh times in life; to

please her means to please her grey cells. To attract them many of the products ads like Hero Honda Pleasure, Kurkure, Horlicks,

Nakshastra, Reebok, Asmi, Tupperware, Tresme, Sunsilk, Maybelline. Ready to Eat products like Knorr, Mccain, etc has

shown them as ‘Woman of Substance’- being expressive, bold, independent and above all, a real women among a crowd of mean men. There has been a total change of her presence in the Indian families and society as whole, she is independent,

fast, smart, energetic, walks with pride, self esteem, the decision maker, leader, Modern women’s are the one who rules so, to tap

her need, comfort and desire is more important. Her role changing phase is the biggest factor that leads to the success

of business nowadays and its true if you cannot make the ruler happy than you cannot reach the kingdom.


A futuristic brand perspective will include the analysis, the ways in which consumer behavior has been and will be transformed by consumer expectations, socio-

economic change affecting lifestyles, the digital and mobile revolution. Practitioners need to adopt a dynamic strategy for gaining success in their marketing efforts through local sensibility, complex pricing actions, introducing new products or flanking-brand strategies enabling the firm to effectively target various local

segments of the customers.

CONCLUSION


Glocal Marketing Strategy

Either due to lack of coherent global marketing strategy or for cost/efficiency reasons, companies

choose to standardize their marketing mix for international markets.

Rationales for standardization strategy are many including1:

Standardization seems to be a cost-driven strategy for marketers, as it leads to leveraging the same

template/product/service configuration globally, creating economies of scale and cost savings.

Standardization can also lead to development of single and unified brand and corporate identity worldwide.

This can lead to better global recognition and provide global competitive advantage over competitors.

Standardization can lead to having a rationalized product line which includes only a few core global

brands instead of multiple localized brands and brand extensions. This could lead to a better allocation of

resources, higher efficiencies, consistent marketing, and higher profits.

When implementing a standardization strategy, companies assume homogenized consumer needs. Thus investments in international market research related to modifying the marketing mix are minimal. The marketing mix includes company efforts related to four basic P’s of marketing: Product, Price, Place (distribution), and Promotion.

Finding the balance between standardization and localization of the web content is one of the preeminent dilemmas that companies face

when tapping international markets.


Companies following a standardized approach to marketing tend to have a centralized global marketing program, and thus the need for coordinating, managing, and controlling local subsidiaries for local marketing strategy is minimized.


However, both research and business experience

suggests that standardization strategy

may not be the most effective way to meet

international market demands.

The complex nature of the international marketing environment promotes diversity in terms of

physical environment, political and legal systems, cultures, product usage conditions, and economic development. For example, Intel ads promoting a

microprocessor experienced severe backlash in the US for showing black men bowing in front of a

white man; this imagery evoked feelings of the dark practice of slavery.


Localization or ”adaptation strategy” takes into account the inherent diversity that exists in international markets and treats individuals as “cultural beings” whose values and behaviors are shaped by the unique culture in which they live.

A localization strategy is geared toward understanding local consumer preferences and other locale-specific requirements and then adapting the marketing mix and other business strategies to best satisfy consumer needs and wants. Several companies have created standardized products and communications that have offended people in international markets.


There is a long list of companies, including Pepsi, Electrolux, Chevrolet, Colgate, and Gerber, whose non-localized messages were misinterpreted in various countries. While several of the publicized marketing blunders came from US or other developed-country multinationals, we are now seeing multinationals from China, India, Brazil, and other countries making the same mistakes.


A STUDY OF MARKETING STRATEGIES OF

GLOBAL BRANDS IN INDIAN MARKETS


In its initial advertisements, Kellogg’s portrayed a traditional Indian breakfast to be unhealthy, hurting the sentiments of Indian housewives (key influencers) who

had been serving traditional breakfast their families. The advertisement negatively affected the mindset of major

influencers and initiator groups in Indian families.

Additionally, the kind of breakfast which Indians were having was available in many varieties at cheaper prices

than Kellogg’s modern breakfast of corn flakes. It was enormously difficult for the company to convince them to

leave their traditional food or breakfast options and replace it with cereal.

When the Indian consumer consumed corn flakes in warm milk, they found that the corn flakes were soggy and not

crispy as promised on advertisements.

Due to the above marketing blunders, Kellogg’s saw a sharp decline in sales in subsequent years after launch.

INITIAL BLUNDERS

The company could not understand another cultural aspect that Indian consumers have had warm milk in their breakfast whereas internationally, breakfast cereal is consumed with cold milk.


Firstly, to overcome the price sensitivity of Indian consumers, it launched small sized pack at Rs. 10 only for Indian market. Then, they decided to tap the Indian public’s love for Hollywood by launching a limited edition Kellogg’s Chocos Spider Man 2 “web-designed cereal”. The use of specific words taken from Indian language – Hindi, such as Corn Flakes with Iron Shakti (Strength) and Calcium Shakti in the launch of new variants gave it a local feel.

Packaging was used as an effective tool for brand communication with consumers which gave the brand an on-shelf differentiation from the competition. It also started some other brand building initiatives by portraying itself as a socially responsible citizen’s brand, whereby it started recycling and reusing materials, improving access to health and human services in local communities.

These moves customized the brand to Indian sensibilities and the TG immediately resonated with it. It also launched the sugar coated Frosties as Indians wanted to have food that was good in taste. Moreover, it launched Chocos Wheat Loops coated with chocolates to widen the product choices. The company reduced its costs to be able to make its offerings affordable for the price sensitive Indian customers by localizing the whole raw material and packaging material requirements.

INDIA SPECIFIC STRATEGIESAfter learning several lessons from the initial mistakes, Kellogg’s completely revamped its marketing initiatives as well as brand building programs and made it India-specific.


Also the company decided to appeal to the larger masses in order to increase its presence in the Indian market. It set up its

manufacturing facilities in India in Taloja near Mumbai, to reduce the overall transportation costs and undertook many other steps

to be able to succeed in Indian market.

To make the brand more acceptable among the female consumers the brand launched a new product Kellogg’s Special K for women who want to regain their fitness levels and chose Lara

Dutta (a famous Bollywood actress) as their brand ambassador for this variant, whom female consumers could identify with as

women aspired to be fit like her.

All these initiatives taken by the Kellogg’s for repositioning of its brand helped it in gaining around 60-65 percent of the market

share of the breakfast cereals market and hence became a market leader.

Indians typically accompany evening tea with an evening snack. To expand its business

further, the company has decided to promote the brand as an evening snack as well.


When McDonald’s made entry into the Indian market, it faced several challenges which it

needed to manage so that it could be successful in such a diverse market. They

entered with price points that were too high for the Indian consumers to be affordable.

INITIAL BLUNDERS(a) majority of the Indian population was vegetarian and even in non-vegetarian category the people did not eat beef which was an important component of McDonald’s menu worldwide.

(b) the people in India worship cows as motherly figures and it had to face a lot of resistance in the Indian market with political parties like Shiv Sena (an independent political party in India) making demands for the company to leave the Indian market for using beef in preparations of its French fries in US market.

But, McDonald’s clarified the situation by presenting the true facts that though it used beef in preparation of French fries in U.S. market, it had never used it as a component for making French fries for Indian market. In addition to all these, McDonald’s faced competition from lots of local food retailers who had been in the market for years and had an edge over McDonald’s in terms of prices, and knowledge of the local tastes .


This point was very beautifully conveyed through the advertisement campaign – with the tag line –“Aap Ke Zamaane Mein Baap Ke Zamaane Ke Daam” (Dad’s Generation prices in your Generation). They also used an open kitchen system where the customers could see with their eyes the levels of hygiene and safety conditions in the kitchen for the preparation of food and other items being served, which was not usually followed by the local restaurants that it was competing with.

It continued with a philosophy of Quality, Service, Cleanliness, and Value (QSCV) in the Indian market. . By ensuring that it catered to the local tastes and preferences by changing its marketing mix for the Indian consumers, the brand has been very successful in the Indian market.

INDIA SPECIFIC STRATEGIES

To make sure that the company succeeded in Indian market, it

followed the approach of being “Glocal brand”. Under this approach, it segregated the kitchen areas and

cooks for the vegetarian and non-vegetarian menus as Indians in

some areas did not even like to have the vegetarian food if it is touched by some non-vegeterian food item.

To address all issues stated above as well as the price sensitivity of Indian consumers, first of all it

introduced the Value Meal it its menu, making it affordable for Indian masses.

They Indianized their menu by adding Aloo Tikki, McSpicy, and special range Cheese burgers.

To cater to the price sensitive of consumers, they launched the happy price menu, which along with

affordable prices also focused on the family fun element. The pricing strategy used by McDonalds was

value based with the price points even at entry level reaching the levels of Rs. 20.


LG’s first attempted to enter India during early 1990s floundered as a result of difficulties encountered mainly working with the local importers. Initially it was known as ‘Lucky Goldstar’ and it faced two major challenges including the failure of joint ventures and de-licensing of the consumer electronics industry leading to the discontinuation of its operations in Indian market.

Moreover, as Lucky Goldstar, the company’s biggest fault was that it did precisely what other white goods brands of the 1990s were doing such as some half-hearted advertising and pushing the products only when the consumer entered the store . But, it again entered the market in January, 1997 after the Indian Government’s light for establishing state-of-the-art white goods factory in Greater Noida and it was named as LG Electronics India Private Ltd. During that time, there an intense competition with Japanese players dominating the Indian consumer electronics market.

INITIAL BLUNDERS

Low brand awareness among consumers was another challenge for

LG in India. It was one of the last consumer electronics MNCs to enter

Indian markets and its competitors had a two year jump start.

Secondly, it had to take care of high levels of import duty, the high levels of competition from the local players and

other MNCs, and the sensitivity of Indian consumers towards pricing

issues.


The company overcame all challenges by using innovative marketing strategies, specifically

planned for Indian markets, with the introduction of innovative technologies in consumer

electronics and home appliance segment. In order to develop a stronger connect with the

Indian audience it initiated a close tie-up with cricket that included signing on leading Indian cricketers and launching cricket games on its

television models . It was recognized as the first major MNC that forged very strong tie-ups with

cricket by sponsoring the World Cups in the year 1999 and 2003.



It focused on products which took care of the health of the Indian consumers only

with launches like “Golden Eye” colour television, ACs using the “Health Air

System” and the microwave ovens with “Health Wave system” etc. They also came up with localized products like

CTVs which had Hindi and regional language menus as options.

For price conscious customers it introduced low priced “Cineplus” and

“Sampoorna” range for the rural markets .


It had a distribution network in which the distributors work directly with the company. LG was also able to reverse its fortunes and be a successful

global brand in the Indian market.


Coca-Cola Initially entered the Indian market during the late 1970s and the Government’s order had forced the

company to leave the Indian market. The company again made an entry into the India in the year 1993 after the

government decided to liberalize the market again. This time the entry into the market was more dramatic for the company as it bought out all the leading Indian soft drink brands like Thums-up, Limca, and Gold Spot leading to a situation where it was accused of killing its competition

by using its financial strength.

But, even after years had passed in the Indian market, the company was not able to realize profits because of

its very aggressive strategies of huge amounts of promotions and very

aggressive pricing strategy to try and beat the competition.

It also suffered in the Indian market because of the pesticides controversy took place in 2003 that resulted in

11 percent decline in the sales during that time. It had a very negative impact on Coca-Cola’s brand image in the

minds of the Indian consumers.

INITIAL BLUNDERS


STRATEGIES TO OVERCOME CHALLENGES

While relaunching the Coca-Cola brand in India, it went ahead with global communications only, but sooner it realized its mistake and the company quickly adapted its communication to ensure proper appeal to Indian consumers.

The company rode on two of the strongest pillars, a brand can use in Indian advertisement and communication industry to succeed i.e. Bollywood and Cricket.

It roped in multiple filmstars and cricketers so as to promote its brand in the Indian market. Its campaign with the tagline “Thanda matlab Coca-Cola” was able to create mass appeal for the brand in the market.

This campaign was very well thought out, as Indians used to refer to anything that was chilled as “Thanda”. For positioning the brand Coca-Cola for rural consumers, the company roped in Aamir Khan (a famous Bollywood filmstar) who helped in popularizing the drink in rural areas. To increase penetration in rural market, the brand also reduced the entry level price point to Rs. 5.

To be successful, the company decided investing more than US$ 1 bn to build overall infrastructure required for succeeding in India. The company invested in setting-up 25 wholly owned bottling plants in India. All these steps taken by the company ensured that it was able to ensure a deeper level of penetration in the Indian market – even in the rural areas. (Mukherjee, et al. 2008).


They hired Aamir Khan and Smriti Irani - a very popular TV actor at that time to ensure that

customers retain the faith they had in the market and they showed commercial where Aamir is given a tour of the Coca-Cola factory and is

briefed about the 400 quality control tests that are a part of the production process to convince

the customers that the brand they are consuming is totally safe for them.

After overcoming all these challenges, Coca-Cola was again set to expand India as a market further and took it from number 7 in the global pecking order to a market that is number 5 for Coca-Cola globally and for achieving this objective the company has earmarked US$ 5 billion for ensuring that the company is not letting go its focus on developing the Indian market further successfully.


Most Global brands had to reframe their strategies and then enter the market with a completely changed mindset as per the market dynamics.

This mostly happened because what they had done for them was either guided by their parent markets or in the markets world over where they were successful.

In today’s scenario, for any Global brand to succeed in Indian markets, the companies need to shift their focus from forming global strategies for the overall market, to the strategies that adapt to the local market conditions in the India.

The Global firms operating in India must try to be as local as they can be, by converting themselves into Glocal brands i.e. being global at heart. The companies can achieve this objective, either by using local manufacturing, producing Indianised variants of their products to take care of local consumers tastes, to use local celebrities as brand ambassadors, and tackle the issue of price sensitivity of the Indian consumers by launching value for money products which are affordable for the masses; and forming long term relationships with intermediaries in the market- instilling in them a sense of confidence that they are your brand’s partners in your journey towards success and they too will benefit - if you as a company will succeed and if your brands succeed in Indian market.

CONCLUSION

This mantra has never been successful in India because of the

complex structure of Indian markets and diversity among people of the

country that have ever-changing tastes and demands.


For instance, GE Healthcare launched an Electrocardiogram(ECG) machine especially to be

used by rural markets where the clinics do not have much space to operate those complex ECG

machines which also runs on battery to overcome the electricity problem caused by the frequent

power-cuts in Indian rural markets.

Even Korean automobile company launched Hyundai Eon in the Indian market after conducting a research which revealed to them a slight change

in preferences of Indian consumers i.e. they now valued mileage, then styling, space, interiors and

then finally pricing while purchasing a care, while it earlier used to be mileage, price, styling and

interior space, and it was based on this research only that Hyundai Eon was launched in the Indian

markets.

So this new mantra of being global but acting locally is being adopted by most of the MNCs to

succeed in the Indian market.

MNCs must introduce the products or services matching to the needs of Indian markets in order to be successful.

Companies and their brands that are successful in Indian markets are switching to this strategy of presenting themselves as a local company so that people can identify themselves with these firms as their own.

This is the reason why most global firms are now focusing on local promotions, local products, pricing strategies as per local requirements and local distribution for Indian markets instead of using their global marketing communications mix to attract the Indian consumers to their brands.

The growth for these brands in Indian markets has been increasing throughout depending on how they are tapping the markets by offering more and more regional flavours and tastes which are pushing these brands forward.


-- Arpita Khare(2011), Impact of Indian Cultural Values and Lifestyles on Meaning of Branded Products: Study on University Students in India, Journal Of International Consumer Marketing,23,5.

-- Dwivedi, P. R.(2010), Saturation of malls in metros: Prospects in Tier II and III cities, India Retailing.

-- Kaushik Mukharjee(2007), Redefining Customer Value, Marketing Mastermind.

-- Powe, N. A.(2006), Understanding urban attitudes towards country towns: Considering their potential as visitor attractions, Journal of Retail and Leisure Property.

-- Rajagopal(2011), Determinants of Shopping Behavior of Urban Consumers, Journal of International Consumer Marketing,23,2.

-- Ranjan Saxena(2006), New Age Marketing, Indian Management.

REFERENCES


Thank You