Indian market requires right balance

02 July 2009

NEW DELHI: Multinational brands operating in India need to strike the right balance between adapting to the local market and retaining their distinctive appeal, argues Venkatesh Kini, global vp, juice marketing, at Coca-Cola.

Kini argued that, in the main, Indian consumers are "becoming increasingly aware of global brands and products, and will reject those that don't match up to their expectations."

However, "when faced with the task of entering India, most international brands struggle with the quirks of the market and consumers," he said.

Many of these challenges result from the fact that "Indian palates, wallets, sensitivities and regulations are different from most other countries.”

While this often requires a bespoke approach to the national market, a number of multinational operators have also succeeded because they have strived to "retain their core brand equity."

Fast food chains, packaged food companies and numerous automakers have all shown it is possible to sell products that are the same, or similar to, those they deliver in other markets.

Similarly, in the FMCG sector, many detergents, soaps, bottled water and personal care brands have successfully travelled across borders, albeit sometimes under different names.

Luxury goods companies are also typically able to ensure "the brand and the product usually remain constant," largely because "their global nature is part of their appeal."

In terms of establishing when localisation will work, Kini suggested it was important to "never break the brand promise and never sacrifice quality."

More specifically, he posited that "you promise a brand experience that offers a certain price-value equation in other countries, then stick to the same in every country."

This means a brand should not be "a premium player in one country and a discount player in another", and should not "sacrifice quality to meet price points."

As a 125-year-old brand with a presence in 200 countries around the world, Coca-Cola is a "prime example of a global brand and a global product".

However, when the soft drinks giant "localised our portfolio by focusing single-mindedly on affordability in India, we generated short term growth that did not sustain," Kini said.

By contrast, "once we reiterated the basic promise" of the brand, based around factors such as quality, taste, availability and price, "our portfolio growth momentum has accelerated."

Indeed, Kini argued that "our most successful advertising campaigns on Coke have also been those that stayed true to its global values."

Data sourced from Economic Times; additional content by WARC staff