Expanding a brand is always a challenge. It requires positioning, awareness building, distribution, selling, delivering the brand promise, and so on. But Indian brands face five special challenges when expanding abroad. Here are the challenges along with strategies to address them:
- Foreigners don’t trust Indian brands.
According to PR consulting firm Edelman’s 2017 “Trust Barometer” – a ranking and analysis of the trust and credibility that global consumers placed on respective international businesses, various governments, and global media organizations, the faith that developed market consumers have in Indian- based MNCs (along with their products and services) have depreciated steadily from 40% to 32% since 2011.
Negative press covering India’s corruption, inadequate infrastructure, and fractured government has done far greater damage to Indian companies, than those companies have done defending their brand, counteracting negative public opinion, and ultimately building rock solid strategies to expand abroad.
First strategy: Build trust
The cornerstone of any foreign expansion must be to build trust by delivering on the brand promise. The maxim: “Never advertise a bad product,” was never more true. Expansion must not out run its ability to deliver.
- It’s a (fertile) jungle out there.
The term “fertile jungle” implies there are so many opportunities, so many unmet needs, that Indian brands may be tempted to scatter their fire, attempt too much, and fail at all of their attempts.
Second strategy: Maintain Focus, Leverage Core Competencies
Delivering the brand promise requires a company to efficiently set and exceed customer expectations. Yet, Indian companies have consistently failed to understand the importance of doing this; aiming instead on delivering many different kinds of goods to different sectors, in order to diversify its offering.
According to a McKinsey & Company study, 90% of Asia’s value creators derive more than 80% of their revenues by focusing their businesses on one industry sector. Many companies in India have such a broadly defined portfolio that it has in effect, “muddled” the brand, confused the customer, and created organizations that try to do too many different things. In the end, those organizations not only fail to deliver value to some customers, they fail all of their customers. The Reliance Group of India is an example of an Indian company that dabbles in so many industries—petrochemicals, financial advisory services, telecommunications, and oil explorations that they have failed to be really good at any one of them. To succeed, Indian companies should leverage their core competencies by cutting back in areas they don’t execute well, and focus instead on where they can deliver the most value, most efficiently.
- India does not have the reputation for innovation.
There is no doubt that India has some of the smartest talent on earth. Yet public perception would have you believe that the wealth of Indian talent lies within a call center on the other end of the telephone line. But consumers buy brands to get “the latest thing,” the hot item, the most innovative.
Third strategy: Innovate
In tech alone, India offers some of the largest pool of technically skilled graduates in the world (second most in the world (after China) with 2.6 million STEM – Science, Technology, Engineering, Math graduates in 2016 alone) The problem’s not talent, but rather Indian companies’ resistance to put top talent to work on R&D and innovation. In fact, Nielsen research reported that only 30% invested 10% or more of their annual revenue on innovation related R&D, while 33% of Indian companies invested 5% or less.
While India has traditionally targeted lower-end customers, selling low quality affordable goods –India will lose to China, Vietnam, and others who are far better and experienced at low cost competition. Indian companies’ pool of talent can enable them to rise above “low cost low quality,” and meet their customer’s real needs in new and creative ways. Indian companies can look to L’Oréal, whose French personal care products dominated developed markets, and ultimately as a result of in-depth market research, were able to dominate Asian ones too. To succeed, Indian brands entering new markets must strive for something better, not cheaper.
- Bollywood doesn’t scale.
Branding in India has been logos, design identities, and Bollywood endorsements. While these are important ingredients, successful branding involves all aspects of a company that must be aligned with the brand promise. Beyond Indian consumers, Bollywood doesn’t scale.
Fourth strategy: Global Brand, Local Knowledge
To create commanding points of difference, Indian companies must fuse foreign products with Indian characteristics (or Indian products with foreign characteristics) to meet the needs of the world outside of India. Indian companies can look to KFC, who’s China strategy not only required training local staff in customer service and cooking western food (western traditions rooted in the core of the company’s fundamental organizational structure) but also included customizing product offerings and advertising to meet the demand of Chinese consumers at the provincial level.
- The advertising department can’t fight the CEO.
Bollywood ads and celebrity endorsements can create a brand promise—but can’t deliver it.
Fifth strategy: Elevate Branding to the Boardroom
To build a strong brand, consistently delivering on the brand promise is vital. The marketing silo doesn’t have the clout to deliver the promise. And when the boardroom focuses exclusively on financial performance, no one is managing this essential requirement. Boardrooms and upper management (both CMO and the CEO as well) need to take on the task of infusing the brand in all activities of the company. Procter and Gamble’s solution was to elevate “brand managers” to be the “CEO” of their product, responsible for ensuring that the company was producing what the customer wanted, not what the company found to be most cost efficient to make.
It isn’t too late to change course. These five counteracting strategies offer Indian companies an effective roadmap to address the challenges they face and expand beyond the borders of India. When Indian companies execute these strategies, global consumers will be sure not only to welcome Indian products and services in to their homes – but demand them.
Matthew Hellman, Head of strategy for GE Digital, the Americas, and Asia Pacific