Tag Archives: india

Politics and Culture: Growing Your Brand in India

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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.

Languages

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.

Political Structure

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.

 

Private-label Goods, India and the Nature of Shopping

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Private-label is a growing in India.  The slow but steady turn from small, family-owned retail and the growth of organized retail has helped shape the process, as has the growing wealth and infrastructure of the country. But the growth of private-label food brands has not been limited to large, organized retailers. Private label goods are finding their way into traditional markets. Increasingly, “loose” foods (food stuffs sold in bulk from bins, are finding themselves well-packaged under the store name, stacked neatly on the shelves next to branded products.

Traditionally, the appeal of loose foods over branded products stems from their perceived quality, authenticity and lower price. However, incidences of tainted food have created negative perceptions in the minds of shoppers for the loose foods, especially among those who are less price-conscious and more driven by quality attributes. Branded foods were once seen as having an advantage due to convenient packaging and guarantees of consistency and proportion. They have also come to be seen as safe.  And increasingly, quality of taste and ingredients have become major selling points.

To give more context, the “loose” format, traditionally sold in most Indian mom and pop stores, includes foods like rice, flour, sugar, salt, spices, lentils, etc. Lacking abundant shelf or aisle space and a smaller client base that typically has less storage space in the home, they are bagged by the retailer for each order. Small scale processes for CPG goods has become is seen as a great opportunity for the people supplying the goods.  In addition to representing new sources of revenue for the manufacturers, this solution gives the store owner better margins than that of branded products. It also helps build a brand equity for the retailer, helping shoppers overcome negative quality perceptions associated with loose foods.

Perhaps most importantly, it also offers up the appearance of greater choice to consumers, providing an increased sense of status, democratizing food consumption across socioeconomic class.  The result for the retailer is to differentiate themselves from other small grocers by providing greater access to less expensive branded products that are not traditionally sold at other such stores.

So what does it tell us?  It tells us that marketing and selling products in India is much more complex than it is in the West, where the mom and pop store has largely become a destination for the relatively affluent and mechanization defines our palette.  It may seem trivial, but it signals that when thinking about branding and selling in India, we have to completely rethink the paradigm of grocery shopping (or any kind of shopping, for that matter) and understand the system in which goods are marketed and sold.  You don’t get that from spending a week observing shoppers in India, you get that from learning how things like work habits, labor divisions within the home, neighborhood structure, views about food preparation, etc. all play into the shopping experience and building your brand with a different worldview in mind.

Why Anthropology Matters to Fashion and Retail

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Fashion is far from frivolous. The location of dress on the borders of the body, facing both inwards and outwards, makes it something decidedly interesting and important. Its capacity to shape the body even as it is detachable from it, its portability and its distribution and consumption have made it a rich medium for studying the symbolic and material dimensions of self-formation, cultural interaction, human-object relations and globalization.  Fashion tells us about how we construct our place in the world, how we conceive of tools in various contexts and how we interact.  For retailers, those are pretty significant things that go well beyond price points and sales.

Anthropological studies of global fashion circuits demonstrate the many ways ideas of tradition and fashion are articulated and reworked. They trace how apparently traditional dress and textiles such as Scottish tartans or Indian home-spun cottons emerged at particular historical junctures as ‘”invented traditions”, redefining regional and national identities and ushering in social and political change. That means they come to demonstrate the strategic implementation of the classification ‘”traditional” by local groups as they adapt regional dress to suit cosmopolitan tastes for the indigenous, the exotic and the ethnic.

Using Asia as an example, fashion traces the multidirectional flow of ideas as designers in the West incorporate elements of Eastern fashions, contributing to the re-popularization of Japanese kimonos, Indian Salwar kamizes and Vietamese ao dais amongst Asians back home and in diaspora, some of whom also participate as designers and producers of Asian chic. In a postmodern world, where boundaries are blurred they tell us about how power is shifting and “culture” is a commodity. Some anthropologists interpret this as a form of self-Orientalism by which cultural differences become reduced to a performative fashion statement of Asianness; others see it as a sign that previously marginalized communities have become significant actors in the global economy by creating, wearing and marketing new hybrid Asian-inspired designs.

And from a business perspective, it means that there are opportunities and challenges that go well beyond the spreadsheet and distribution model.  It means that understanding the complex interplay between history, politics and culture factor into any good marketing plan and launch strategy. As retailers look for new markets and expand into new regions they need to be aware of how fashion represents identity or suffer financial setbacks.  China is more inclined to adopt Westerns brands as symbols of modernity and status, while India is more likely to stick with traditional dress.  While that may change, being aware of the reasons behind the current state and the probability of change are important if you plan to open shop abroad.

Brand Considerations for Emerging Markets

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Over the last decade, many multinational brands have rushed in to emerging markets, agog at the potential of billions of new consumers who had been liberated from planned economies and protectionist barriers. Their wealth has generally grown much more impressively than in the US or Europe.  They are the next goldmine.  But it’s not as simple as we had assumed it would be. There have been as many disappointments as success stories.  As the initial euphoria wanes, there is a growing realization that the billions of consumers have not embraced the brands, the products or the modes of messaging these companies have employed.  Local competitors are stronger than expected, having the funds and the name recognition to maintain or grow their influence.  National pride and cheaply made local goods often supersede the brand equity of a western brand.  Competition for the top tier of the market is fierce.  And unfortunately, companies have dismissed the roles of history and culture in their strategies for growing their brands in emerging markets.

Most multinationals have traditionally long resisted targeting the local consumer, preferring instead to transplant offerings that were developed for their traditional developed markets. The assumption has been that if we think a certain way about the world, then so goes the rest of the planet. But context and culture have a funny way of changing meaning and purpose.  That being said, Three reasons are often cited for the reticence to localizing strategies and messaging. The first is that the mass market for any single emerging economy is not large enough to justify the effort and cost of localization. In other words, there may be a billion potential customers down the road, but there is risk in jumping in at the deep end.  Second, multinational managers rationalize, emerging market consumers are growing more affluent by the day and are becoming more like their affluent-market counterparts both in behavior and in purchasing power.  Again, if we act and behave a certain way in Cleveland, so do the good people in Bangalore.  As such, the belief is that the company is better off offering globally standardized products and waiting for the consumers to evolve towards these. Luckily, with the success of brands like Pizza Hut and Nike overseas, the view is beginning to change.  Finally, it is argued that to adapt to local market conditions in every emerging economy will undermine core assumptions about standardization that are fundamental to the success of multinationals. The catch in all this is that these assumptions just don’t hold water.

First, products and brands transplanted from existing, economically powerful markets typically appeal to the affluent or those aspiring to the upper socio-economic echelons.  Delving deeper into the consumer base to establish mass-market positions would create the economies of scale necessary to justify localization. And localization along characteristics that are common across emerging markets, allows the costs to be spread over much larger volumes. In other words, while size matters, we need to fundamentally rethink how we structure our cost assumptions.

The argument that emerging market consumers are rapidly becoming more like their Western markets is true, but only to a point. The rate of change is not as rapid as contended. We need to remember that change is not a one-way street – emerging markets influence us, changing the nature of what a brand means on a global scale.  Also, we have to bear in mind that what we see as becoming “like us” is derived from our worldview, not theirs.  That means it is an interpretation that is filtered through existing cultural norms.  Americans and Chinese may both embrace the cowboy image of Coors, but the cowboy image means radically different things in each culture. It is far from certain to what degree Chinese and

Indian preferences will converge with those of Europeans or Americans. It is as most reasonable to assume that they will be driven by cultural norms. That means that to be successful, brands should focus on current needs and cultural patterns, evolving with them as they grow and change.

Consumers in emerging markets tend to shop daily and have 365 opportunities a year to switch brands. That provides more opportunities to message, yes, but those messages have more competition, more distractions and shorter periods to make an impact. Consequently, thinking about how we reach people in emerging markets requires a significant reorientation of how we use media.

The billions of consumers we seek in emerging economies will remain elusive targets unless we are able to rethink how we approach these populations. It isn’t enough to jump into a market and assume people will buy, we need to understand who they are and how they understand make sense of the world.