Take Aways

Insights and actions for building valuable brands in today’s India

Question Basic Assumptions

1. Meet desire with affordability

In India, if you can create a product or service, you can find a market for it. You need to create desire and deliver an affordable price. Don’t assume your market is limited to the wealthy. It’s not only the middle class in the cities who have aspirations. Less well off people in both the cities and rural areas are eager for the good life. Figure out a way for them to afford the piece of the good life that you’re selling. Hair coloring is a big business, and not just for the wealthy. Mobile phones, cars, innovative consumer products, and healthcare are just a few of the categories where marketers need to match product and service affordability with consumer desire. India may be one of the few markets where a consumer can purchase an iPhone with installment payments.

2. Build scale and depth

It’s not one or the other in India. With 1.25 billion inhabitants, India clearly offers scale. But to fully realize that opportunity, it’s also necessary to achieve depth, to connect emotionally. Indian service brands, like telecoms, are excellent at building scale. FMCG brands do a better job developing depth or emotional connection. To achieve meaningful differentiation, build both scale and depth. This dual focus is particularly relevant in India because of the diversity of the country. Building scale requires serving the particular interests and tastes of many different consumer segments. For international brands, it’s useful to think of India as Europe, a large geography with states that are both unified and distinctive. For Indian brands, achieving both scale and depth can help sharpen the competencies necessary for overseas expansion.

3. Understand the special role of master brands

In many of the world’s markets diversification hasn’t been the optimum path to brand success because too often it diffuses focus, producing more inefficiencies than synergies. That assumption doesn’t work the same way in India, where some of the most successful brand builders are the family owned Indian conglomerates. Their master brands, symbolizing efficacy and quality, enable these companies to expand across dissimilar categories, IT to FMCG, generating consumer trust and accruing economies of scale. These conglomerates have achieved these results over time and with the advantage of Indian heritage, so master brands are not a formula for instant success. However, major MNCs (Multinational Corporations) have demonstrated that master brands, when accompanied by deep market insight and patience, can create brands that Indian consumers view as Indian even if the actual provenance is not.

4. Seek insight in contradictions

Indians live surrounded by the artifacts and traditions of their ancient civilization. They also live in the same day-to-day reality as the rest of the developed world. Indians constantly mediate between these realities. The same person may wear contemporary clothing one day and traditional dress another. The balance between old and new depends on time and circumstances. It’s a factor in many purchasing decisions. This balance also means that Indians are receptive to accepting brands whether they are old (Bank of India , established in 1906) or new (Airtel, established in 1995).

5. Set the clock on Indian time

This duality of embracing the past while living in the present is one of the reasons, along with political differences, that the pace of change in India is relatively slower than in China, where until recently infrastructure construction took priority over preservation, and consumers faced the future with less equivocation. Brands need to set their expectations in India according to a clock that spans millennia. Paradoxically, progress that seems slower may be faster. When change happens deliberately and incrementally, society’s material, communal, and spiritual needs are more likely to remain aligned. The result can be long-term growth and stability at a deep level.

6. Study the young; view the future

India is a young country demographically. The median age is 27. In contrast, the median age in the US and the UK is more than 10 years older. Young people desire the newest and shiniest products. And they’re more likely to purchase them – even with lay away plans – than their parents. The older generations lived through difficult economic periods, without an elaborate social safety net, when the prevailing mentality was about saving for a rainy day. Young people are less risk averse. But there’s a caveat. Although young people are more likely than their parents to challenge tradition, young Indians share with their parents the need to balance the old and the new and don’t reject tradition totally.


“Indianize”

7. “Indianize”

Don’t expect to simply repackage a global product and sell the same formulation successfully to 1.25 billion Indians. That’s a thrilling idea. But it usually fails. The international brands that have experienced the greatest success in India – and there are many – took the time to understand Indian needs and tastes and adapt to them. When Nestlé introduced Maggi instant noodles, in 1982, it gave them a Masala taste, and today Indians generally think of Maggi as an Indian brand. Even the most iconic of global brands, McDonald’s, did not fully succeed in India until it introduced Indian flavors and vegetarian menu options that would seem out of character for the world’s largest hamburger chain. Along with adapting to the mass market, “Indianizing” can involve another step, understanding the myriad regional and cultural variations within the mass market. That knowledge unlocks possibilities for more focused offerings that, given the overall size of India, can still be produced at economic scale.

8. Think and act regionally

Managing India’s diversity remains a challenge for marketers. What sells in one part of the country might not sell well in some other part, so marketers have to constantly customize their offerings for regional needs, taste and sentiments. While people in the north tend to believe claims made by ads, in the south they look for reasons to believe. Even celebrities enjoy different levels of popularity and appeal in various parts of the country. Taste varies immensely from east to west and north to south – in food habits, media consumption or any other way of life. Marketers need to keep in mind these differences in their efforts to create successful national brands in India. The message may be national, but the communication needs to be local market specific. With possibly one exception. Conventional marketing wisdom holds that two things unite the billion-plus people of India – movies and cricket.

9. Maintain focus on traditional retailing

Marketers need to distribute in the modern retailing sector, which is expanding slowly as the Indian government incrementally relaxes market entry restrictions. But today, Indian retailing still is dominated by traditional retailing – the local kirana shops, the independentlyowned neighborhood general stores, chemists, footwear shops, apparel shops, shops selling paan (betel leaf) and beedi (tobacco), the hand-cart hawkers and pavement vendor. While marketers must use the modern trade format for promoting their brands and gaining distribution efficiencies, they need to continue refining their distribution and promotion strategies through the traditional route – because the modern sector accounts for only about 7 percent of Indian retailing.

10. Define and deliver good value

Indian consumers are extremely value conscious. Well travelled and educated, they’re aware of what’s available in the West. They want the latest, most modern technology at a reasonable price. Marketers need to innovate and keep up with the consumers’ constantly changing interests and desires. Perceived good value is pivotal. But the consumer’s understanding of good value varies by category and brand. Marketers need to decode consumer behavior and define good value by category and brand – and deliver it.

11. Help the consumer feel smart

While the details of value differ by category and brand, this much is consistent: value no longer means cheap. Consumers are discerning. Especially in poorer rural areas, household budgets require purchasing products that work well the first time and for a long time. That’s why regional brands proliferate in many categories. They offer enough quality at a good price. Consumers feel they’re getting their money’s worth. They feel smart. Offering traditional price discounts and sale periods may help attract these valuedriven consumers. But not as much as providing an honest product or service at the right price.


Drive Brand Power

12. Be Meaningful

In today’s India, where consumers know what they want and are aware of the different brand offerings, being meaningful and relevant is imperative. As the preference for branded products increases, consumers seek more relevant and personally significant brands. Building affinity, an emotional connection with the consumer beyond the transactional relationship, is critical for marketing success. Some brands, like the bakery and dairy brand Britannia, have connected so strongly with consumers, that in the minds of many Indians the brands actually represent not just particular product ranges, but entire categories.

13. Differentiate

Indian consumers today have a strong sense of identity and they want to stand out in the crowd. A me-too brand is not acceptable anymore. A brand needs to have a meaningful USP that differentiates it from competition. Differentiation does not necessarily mean developing a new offering. Marketers can look at differentiating with service, brand experience, ambience or anything else that suits their brand.

14. Build trust

Trust and reliability are the most critical attributes for a brand to possess in India, relative to other country markets, research suggests. Closing any gap between the brand promise and the delivery of the promise builds trust. While legacy brands like Tata and State Bank of India have built trust over many years, global brands like McDonald’s and Nokia have also cultivated trust by, over time, finding the right localized approach. For heritage and global brands, the common factor is being true to the consumer and providing authentic products and services.


Market Creatively

15. Crack the value code

Consumers have many choices. Find something that makes your brand or service locally relevant, different, and necessary. Make something about your offering – the functionality, delivery, or emotional appeal – superior to the competition. Or make your offering more accessible. And execute effectively.

16. Get social

India is the world’s second largest market for social networking sites. Major social media brands, such as Facebook, Twitter and LinkedIn, operate relatively freely in India, in contrast to China. Facebook has approximately 100 million users in India. The country has the world’s third largest Internet base, with 210 million Internet users, according to the Internet and Mobile Association of India. Social networking in India helps improve brand engagement. Social media platforms, detailing the user’s demographics, preferences, social connections and behavior, provide an attractive proposition for advertisers. The high granularity of information allows advertisers to target consumers much more effectively.

17. Get mobile

India ranks third among countries for mobile device users. Around 84 million Indian Facebook users access the website using their mobile devices. Mobile marketing is the next big platform for brands in India. Especially in rural areas, where illiteracy and erratic electricity supply sometimes hamper traditional marketing platforms, marketers need to leverage mobile’s advantages. Missed-call ads – ringing and leaving a message to save the recipient the cost of the call – have proved successful for some leading brands in India. With the increasing number of utility transactions – like paying bills, banking, and booking tickets – being made on mobile phones, the medium has huge potential.

18. Implement clever ecommerce strategies

Increased trust, low price offers, and the ability to transact 24/7, drive ecommerce growth in India, where there are over 25 million online buyers and over 210 million Internet users. Marketers must explore the ecommerce route more aggressively and adapt it to the particularities of the Indian market. For example, because credit card ownership is limited and customers hesitate to pay for merchandise before receiving it, many ecommerce brands have successfully adopted a cash-ondeliver strategy.

19. Optimize media spending

The media industry has changed significantly, driven by the changes of 2001, when liberalized government regulations invited more competition in print, television, radio and eventually social media and out-of-home. Add in the numerous variables like geography, language, religion and socio- economic status, and the Indian media market becomes very complex and challenging for advertisers and media planners. Consumers don’t consume media one medium at a time anymore. They browse websites on mobile devices while watching TV, or notice an out-of-home ad while browsing through the pages of a magazine. Marketers need to optimize their media mix to get the highest ROI.

20. Simplify the route to market

Having an efficient route-tomarket strategy helps consumerfacing businesses gain market share at an optimal cost. But the route that a product or service needs to travel before reaching its end user remains complex in India. Marketers need to develop more creative strategies to reach the consumer. Combining bricks and mortar retailing with ecommerce is probably the starkest example of this creative thinking. Other strategies include: using unconventional channels, like self- help groups in rural markets; using mobile technology to reach every consumer; and focusing more on modern trade, a less complex channel.

BrandZ India Top 50 2014

BrandZ Global 2014 Report Top 50 Report

Top 50 Chart

Top 50 Infographic


Methodology and valuation by Kantar Millward Brown


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