Sunday, January 10, 2010

Marketing Strategy : Don't Enter a Market Without Strategy

Marketers of iconic brands often find themselves in a difficult spot when entering Indian market. It is no doubt that India offers a huge marketing opportunity for such iconic brands.Indian consumers are well connected to the global branding trends and are ready to splurge themselves into those aspirational iconic global brands.

iphone was a brand which was one of the most awaited brand launch in Indian mobile phone market and look at how that brand priced itself out of the market. At a price of over Rs 35000, the brand was virtually out of reach of many aspiring consumers. For those who could afford such a price, iPhone did not match their value proposition. The result was a lukewarm response to one of the world's largest selling smartphone brand by Indian consumers.

After the liberalization in 1991, many global brands came to India lured by the huge potential but blinded by aggression. These brands priced themselves aggressively thinking that Indian consumers will open up their purse strings just to own those 'phoren' brands. But they went for a rude shock and realized that aspirational or not, value drives the Indian consumers to buy.

After 20 years, some brands never learned the lesson. Recently Volkswagen announced the price of their iconic brand Beetle at Rs 22 lakhs. I bet that you are going to see very very few Beetles in the Indian market. It is not going to have the iconic status it commanded elsewhere because in India, this product will be viewed as a 'pompous' product rather than an icon.

Although not iconic, Kindle brand is considered to be a game changer in the global electronics/publishing market. The brand is considered to be a serious threat to the physical book publishing industry . Kindle which announced its India foray disappointed many consumers by pricing it at Rs 18000-Rs 250000 virtually killing any chance of mass adoption. It is a skimming strategy that will potentially go wrong in the Indian market.

Harley Davidson which is going to be launched in the Indian market if priced steeply will open up a market for a reasonably priced cruiser bikes in the Indian market.

Compare it with the strategy of BMW. BMW entered Indian market with a robust strategy. The product were priced extremely sensibly and the result is that it became the leader in that segment dethroning Mercedes.

For most of these global iconic brands, they enter a market like India without much strategy. The only reason for entering India is to have a presence. One of the reason for iPhone's pricing is that the brand is not interested in capturing Indian market since it is too busy with its other markets. It is in India for " Nam ke Vaste" ( Name Sake). Same is the case with Kindle.

There is a larger issue for such name sake launches. These launches often creates opportunities for other players. In the case of iPhone, its much hyped entry virtually exploded the smartphone and touch screen mobile phone market in India. Brands like Nokia , LG, Samsung etc capitalized the frenzy of touch screen smartphones thanks to the launch of iPhone. In value terms, iPhone will have a tough time beating these players in the Indian market when it want to get serious about India.

Kindle and Beetle also will have the same fate in the Indian market. The hype and aspiration created by these brand will be satisfied by other brands which are serious about the Indian market.

The only way out is to enter a market only with a strategy. If there is no strategy, it is better not to enter it. Sometimes, doing nothing is a better strategy than doing something for namesake...


  1. Anonymous12:18 AM

    for all the blogs and analysis u do i really appreciate your effort..
    I am sure you are aware of the following you have for your blog which makes it much more important for you to put things in right perspective so people can benefit maximum out of this..

    Some facts i am putting up. Please correct me if i am wrong.

    1. Beetle is imported into India as CBU from Mexico and thats the main reason for its price tag being 22 lakhs. The company does not have a separate line for producing Beetles in its Pune plant and feels that the volume uptake doe not justify setting up of one.

    2. The price of the unlocked Apple I Phone in US is similar to that in India. the cheap price is due to the subsidies given by the carrier netowrk something which indian telecom companies cannot provide because lack of 3G does not make it viable for them to offer this subsidy to indian customers.

    The volume sales of any product is not the sole criteria for determining a successful market entry strategy.. and also branding has nothing to do with pricing.

  2. Anonymous8:57 PM

    I too personally don't believe prices helps decide if a brand is iconic or not. A brand may not be for the masses but can still be an iconic. I know i cannot afford to own a Harley Davidson but to me it still remains an icon.
    I do believe in your point that these launches creates opportunities for other players though.

  3. Thank you for making part of our global market available around the world. It is great reading you stuff about India. "After the liberalization in 1991, many global brands came to India lured by the huge potential but blinded by aggression." Crazy to see how this is affecting modern day business.

  4. I really liked your article. Keep up the good work.I love flowers...I am also interested to send flowers all over the world....

  5. Awesome! Some really helpful information in there. Bookmarked. Excellent source. Fresher Resume

  6. do not enter a market without any strategies, that true because u will lose in the market and even cannot target the correct market.

  7. Hello ,. I know i cannot afford to own a Harley Davidson but to me it still remains an icon.


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