What do you do when you are a leading MNC and want to tap into the Indian consumer market? Look at how the second best global brands have executed their India strategy.
While global market leaders have proven to be flat-footed and bookish, brands like Reebok, LG, Hyundai and Lee have stolen a march over their arch-rivals by burning the book and thinking on their feet. “Most MNC companies are run by a global manual, but those succeeded in India have shredded this manual and taken the ‘when in India, go local’ approach and developed on local consumer insight to chart their strategy,” reasons marketing consultant Harish Bijoor,CEO, Harish Bijoor Consults. Consider Lee. When it entered India in 1995, there was a very nascent market for branded apparel, much less premium jeans wear. Premium brands like Levi’s chose to play it safe by using the multi-brand outlet route, but Lee chose to go it alone and set up exclusive showrooms. According to market watchers, Levi’s suffered from a brand perception problem because it was clubbed with non-premium brands.
Further, Arvind Brands, which owns the licence for Lee in India, decided to retain ownership of operations for Lee. According to Chakor Jain, head (business development, Lee), Arvind Brands, “Exclusive showrooms and owning the operations added to our costs. However, it also added to the overall customer experience, which we considered most important.”
When Reebok came to India in 1995, it forged alliances with health clubs and fitness centres to create brand awareness. When the retail market matured, Reebok changed focus. Says Subhinder Sing Prem, MD, Reebok India, “On the retail front, we went about opening up new markets beginning with metros and large cities, we swiftly moved into tier II and III towns.” To further establish its brand, Reebok signed up Indian cricketers, while Nike continued showing its international advertisements in Indian media. Today, Reebok has a exclusive retail presence through 400 plus outlets, second only to Bata, while Nike lags behind.
LG’s is the proverbial ‘third time lucky’ story. After two failed joint ventures, it made a re-entry into the Indian market in 1998 all by itself. The other chaebols were on their way here, too, while Phillips and Sony were already well-established. LG began with a rapid national roll-out, mass customisation and products adapted specifically for Indian markets. It also kept its dealers happy with a wide portfolio and allowed them to cut sweet deals. “Our success in India can be attributed to our ability to focus on empowering people, profit-driven market presence and being an open organisation, with just about all employees having access to the company’s finances,” says LG India’s MD, KR Kim. Today, with over Rs 7,500 crore in sales, LG leads in almost all the categories in consumer durables.
When Hyundai, with a name prone to mispronounciation and virtually no global heritage, entered India in 1998, it signed up Shah Rukh Khan to educate the consumers about the brand. Behind the scenes, the company resorted to extensive market studies and technical camps before coming up with its first offering, Santro, a hatchback with tall boy design. And it had chosen its market well, starting with the small car. To date, Hyundai has stayed true to its strategy and played by the conventional Indian market rules tailored to suit its specific targets.