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Sep, 07 2010

INTERNATIONAL BRANDS LOCAL SUCCESS

EVERY BRAND HAS TO FIND ITS OWN BALANCE BETWEEN LOCALISATION AND THE DEEP ROOTED RAISON D'ETRE OF GLOBALISATION.

EVERY BRAND HAS TO FIND ITS OWN BALANCE BETWEEN LOCALISATION AND THE DEEP ROOTED RAISON D'ETRE OF GLOBALISATION. THE IDEAL STRATEGY IS TO GLOBALISE LOGOS, BRAND NAMES AND TRADEMARKS WHILE INTRODUCING PRODUCT VARIATIONS AT THE LOCAL LEVEL. IN SHORT, HAVING THE BEST OF BOTH THE WORLDS.

WHETHER brands should have one voice around the world or should they adapt to local cultures, the dilemma remains. However, with global boundaries getting blurred, international brands are opting for a more local or Indianised version of marketing and brand promotion to cement their presence in the retail industry. From price reduction to clothing colours, global brands are doing it the Indian way.

Spanish apparel brand Mango launched a unique way of brand promotion through the i-Phone to catch the fancy of the customers. Ninona Vila, Corporate PR Manager, Mango, explains, “In May 2010, Mango launched a new application for iPhone, which allows its users to discover the latest company news and stay informed about the latest promotions while offering them exclusive discounts. This new application, which allows it to share its entire content via e-mail or social networking sites, is available worldwide in Spanish, English, French and German. Users can download it free either on the device via the App Store or on the computer via iTunes. iPhone is used as a selling tool. In the near future, we might consider customising our application for the iPad.”

(Re)positioned to success

In a rapidly evolving Indian market, repositioning is another way to achieve the fine balance. Martin Jones, CEO, Marks & Spencer Reliance India, says, “Through our joint-venture partnership with Reliance, we have been able to reposition ourselves from a premium retailer to a mid-market retailer, which is consistent with our positioning internationally and in the UK.”

But brand repositioning does not mean compromising with the core values of the brand. As says Jones, “Our core values of quality, value, service, innovation and trust apply to everything we do and are as important in our international stores as they are in the UK.”

Subway, too, has also walked on the same path. Sanjiv Pandey, Marketing Manager, Subway (India), informs, “In India, the brand takes great pride in its ability to adapt to the Indian cultural and religious food preferences. It provides core menu items designed specifically to satisfy Indian tastes, including additional vegetarian offerings and items with bolder flavours.”

International coffee giant, Gloria Jean's Coffees, has started to diversify besides providing Indian consumers the ultimate coffee experience. “Realising that the Indian consumers are vastly different from consumers in other parts of the world, we had to make changes in both our beverage and food offering. This included streamlining the menu and introducing ice cream-based beverages to fulfill the needs of the local audience,” shares Manish Tandon, CEO, Citymax Hospitality (Gloria Jean's Coffees International Master Franchise Partner in India).

Similarly, international beauty brand, The Body Shop, has repositioned itself by shifting focus towards the mass market rather than just the premium strata. Shriti Malhotra, General Manager, The Body Shop, India, shares, “When we launched in India four years ago, our consumers were women from the upper economic segment, those who already knew the brand well and were buying The Body Shop products through years of international travel. On our part, we spent the last three years listening to our customers and taking their feedback and in early 2009, became one of the first retailers to proactively reduce prices by up to 30 per cent.”

Budget allocation

Brand promotion is a key element to cut deep into the pockets of the target audience. Budget allocation for brands include brand-building strategies and promotions. Revealing the specific share of brand promotions in the annual budget, Sukanya Dutta Roy, Country Manager-CGB, Swarovski India, shares, “Swarovski has commitments to grow in the Indian market and we are investing in promoting the brand extensively in India. This promotion not only depends on media but also on investments in store design and fit-out and service training for front line staff. We believe all this adds to the customers' image of a brand. We spend over 10 to 12 per cent of our turnover on all these channels for promotions.” Sharing similar thoughts, Vila says, “Our annual budget in advertising or brand campaign is 4 per cent of the total sales of each market.” While for McDonald’s, “Advertising and marketing are key functions at McDonald’s and holds significant importance. An annual budget of Rs 50-60 crore is allotted for the various innovative campaign to come this year,” informs Amit Jatia, MD & JV Partner, McDonald’s India, South & West.

Challenges at the core

However big the brand may be, making a mark is often a challenge for international brands. Challenges in the form of brand positioning, understanding the correct market mix and suitable promotional strategies form the crux of the brand's success story. Yet preliminary hurdles rule the roost.

Malhotra shares the challenges that The Body Shop had to face while establishing itself in the Indian market. “Specifically speaking, the shortage of trained manpower and limited retail skills are some of the challenges. India is a very unique market, it is chaotic and very tricky with huge and diverse customer base with different preferences, needs and requirements and poses a challenge to any retailer,”  she says.

J.C. Biver, CEO, Hublot International, observes, “I feel that any brand which is not successful in India is due to its own lack of in-depth knowledge about India and the market environment.”

Promoting it big

Brand promotions generally range from advertisements to fashion shows and even goes on to the extent of dedicated community services and resizing of stores.

Justifying the importance of brand promotions, Pandey states, “As the world becomes a smaller place to do business, a brand's reputation, relevance and desirability might not travel with the brand when it ventures into new markets. Herein lies the importance of brand promotion.”

For Gloria Jean's Coffees, brand promotions are vital in terms of brand's relations with new franchisees, catapulting the brand to new levels of expansion. “Brand promotion helps in fuelling our brand on both franchise and guest levels. It helps us to attract new master franchise partners in new markets and grow our existing markets by creating brand loyalty among our existing guests while also attracting new guest to experience our brand. It's also critical to maintain our differentiation from our competitors by demonstrating our coffee expertise and innovation,” adds Tandon.

While campaigns continue to rule as a fundamental tool for promotions, brand visibility goes on to speak volumes about its presence and success in the market. For Marks & Spencer, bigger stores mean better visibility and a pathway to attract footfall and solid revenues. Jones explicates, “Expanding our Indian operation with our partner Reliance Retail has enabled us to transform our position in the market. Through our joint-venture (JV) partnership with Reliance Retail, we have been able to open larger stores and realign our prices by locally sourcing up to 38 per cent of our products, with an aim to reach over 60 per cent by 2012.”

Marks & Spencer have also lined up a massive portion of its brand promotions in line with the festive seasons in India. States Jones, “We have a great opportunity to grow our brand awareness in India. Continuing with our established marketing campaigns, we are looking at incorporating Indian festivals and holidays into our promotions. We will have store events for the Indian festival season, starting from Dussehra in September and October covering Eid and Christmas to the end of the year.”

The Body Shop holds promotional activities every month after the launch of new products. “We have our unique loyalty programme 'Love Your Body' to reward our loyal customers each time they shop with us. Members win reward points, stamps and gift vouchers as per ongoing offers. We have Member Previews, Member Specials, Member Rewards Programmes and many different promotional activities to make our members feel really special when they shop at The Body Shop,” reveals Malhotra.

Market it right

Inevitably, the success of a brand is dependent on innovative and localised marketing strategies. Jones explains, “By increasing our local sourcing for Marks & Spencer, we are tailoring our products for the local market. For example, in India we sell polo shirts in three times the number of colour variations as we do in the UK to cater to the local market's taste of bright colours.”

Malhotra states, “The marketing for the products from The Body Shop is very targeted and done in a fun and quirky manner to engage customers.”

However, most of the international apparel brands like Mango have exceptional marketing mantras. The 'Design On Demand' is its one unique strategy. Explains Vila, “Mango designs its collections eight months in advance, based on the emerging fashion trends and our own experience. Around 20 per cent of the collection is adjusted according to the different markets. We also launch special editions for specific markets like Zuhair Murad for the Arabian Countries or Moisés de la Renta.”

The marketing strategies involve high glamour quotients like increase in the number of fashion shows with designers and developing prêt lines in collaboration with the brand's muses like, Penelope and Monica Cruz and Scarlett Johansson.

Pricing strategies

Even though sales and discounts are an integral part of any brand's marketing strategy, price points also determine a brand's success, sustenance and feasibility in challenging markets like India. After undergoing rigorous pricing strategies, several international brands have now become more practical and slashed their prices and the results have been overwhelming. Most of these brands that entered the Indian market as premium ones are now focused to reach a larger base via low pricing strategies.

Confirming, Malhotra explains, “Our strategy has been to listen to our customers. That has been our singlemost important direction. When we first proactively lowered the prices of our iconic best sellers last year, we wanted to help our customers to shop in our stores at affordable prices during the economic downturn.”

And what was the response to that? “We had such a fantastic response, which is why this year, we decided to extend the lower prices to 600 more products by reducing prices between 10 to 35 per cent,” gushes Malhotra. What's more, the company has even launched a campaign based on the new lower prices. “Through our 'The Body Shop Loves You' campaign around new lower prices, we want to provide everyday essentials cosmetics and toiletries products to our customers at affordable prices,” adds Malhotra.

For Subway, the lowering of prices has lead to the brand's value addition among the price-sensitive Indian consumer. As says Pandey, “Value is one of our core brand platforms and we always have a value option in India, such as 'Sub of the Day.' This year, we revamped our value offering with the Rs 50 WOW value sub. This makes our value option more competitively compelling beyond the low-price point offering. It also provides value to our customers through the cornerstones of the Subway experience.”

However, certain international brands have adhered to the premium segment and have decided to go for the class route rather than the mass market domination. Swiss enterprise Hublot is all for exclusivity. States Biver, “We have kept the prices high because we offer exclusivity. We shall remain high-priced and cater just to the top 5 per cent of the market only.”

Innovate to stay ahead

Amidst the growing economic trajectory, India is emerging as the hotbed for retail brands, paving way for cut-throat competition amongst global brands. As a policy for brand sustenance, international brands in India are now headed for innovative brand promotion and marketing strategies to strike a chord with the Indian consumer.

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