Innovation Inspiration: Understanding India
26 Feb 2010|Added Value
India is the second most populous nation on earth and one of the world’s fastest growing economies (the 4th largest in terms of purchasing power). But it has in particular problems for marketers: 6 major religions and 23 languages, for example.
So, if you’re a Multi-National Company (MNC) facing issues in India or considering market entry, what should you be thinking about?
A good place to start is questioning your basic cultural assumptions: there are fundamental differences between the West and India. While the West values individuality, India is a society with ‘dharma’, clearly defined roles; the West prides itself on egalitarianism, while India is a patriarchy; and our obsession with youth contrasts with an Indian respect for age.
Now you understand the value system, what about cultural differences by region? At a global level, India has two economies: Urban – rapidly growing, with world-beating IT firms and the planet’s biggest slums; and Rural – which still depends on subsistence agriculture. Flexible strategies have to be adopted to meet the vast economic, lifestyle, taste and distribution differences. And then there are the intricacies of the cities in the North, South and West…
But the opportunity is enormous. India’s middle class is predicted to rise from 5% of the population in 2005 (13 million households) to 41% (128 million households) in 2025. 62% of consumption will come from Urban India – not just Delhi and Mumbai, but increasingly Tier 2 and 3 cities. With this growth in income will come a rise in consumption, as spending switches from basic necessities to discretionary items.
What about the massive rural economy? The key to unlocking the potential here lies in the ‘4 As Rule’:
– Availability: adapted distribution (e.g. bullock carts, NGOs, rural women) and service networks (hub systems; mobile service personnel);
– Affordability: for example, smaller unit packs for cheaper prices (Coke’s 200ml bottles; Unilever’s 50g soap)
– Acceptability: tailor-made, easy-to-understand products (Coke’s low cost ice boxes; HDFC’s tie-up with NGOs to offer low-price insurance)
– Awareness: 1-to-1 contact and promotion (entertainment, fairs, hatts, marts, mobile vans)
And finally, who’s worth taking a look at for benchmarking? Click on the pdf link below and find out who’s got is wrong and who gets it right time after time.
Read more: Innovation in India Case Studies
As well as working locally out of Mumbai, Added Value has partnered with MNCs throughout the world on how to approach India. And if you’d like to discuss how we can help, we’d be delighted to hear from you.
CEO, Added Value France
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