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It takes guts to move out of one's comfort zone. It takes sweat and blood to build something of your own in unknown territory. But it takes a well-thought out strategy and plan of action to make that something a roaring success. Fine examples cutting acro
When Mc Donald's came to India, the brand very well knew that it would never click with its customers if it sold beef burgers in the country. There is a reason why this QSR giant decided to introduce rice products in its menu in China last year- to appeal better to the local tastes and strengthen its position vis-à-vis KFC that occupied the top slot.
It takes a lot to establish oneself in a new market. With new conditions, unknown customers and different cultures, the brand needs to do a thorough R&D before it takes the leap of faith.
Understand your product
Introducing a new product in a new market is often accompanied by butterflies in stomach and deciding on a price strategy often leaves a lump in the throat. One needs to understand his/her product very well and how it needs to be projected in the new market. Exactly what Jumbo King experienced when it set out for national expansion from its home base Mumbai two years back.
“Understanding how 'vadapav', our core product is perceived in non-vadapav eating markets was a big challenge for us. How to market ourselves in places and regions where there was absolute no presence of ours, was a task. Deciding on pricing strategy was another major decision,” says Dheeraj Gupta, Managing Director, Jumboking Foods Pvt. Ltd.
Talking about flower business, Pawan Gadia, CEO-Retail and Online, Ferns N Petals says, “The foremost challenge for us was that our product was a perishable one and it was very difficult to convince people to take franchise of such a commodity which was a luxury but would die the very next day. Overcoming high wastage and overhead costs was a major challenge.” Franchising since 1999, today, Ferns N Petals boasts of 180 outlets in 75 cities in India.
Find right franchise partner
Finding the right franchise partner is the key to success in unknown waters. “During our expansion in the North, finding the right franchise partner was a challenge; someone who could understand our vision and shared a similar passion for the business. Understanding the nuances of business in North was quite challenging as the dynamics of working in North and South are very different,” describes CK Kumaravel, Co-founder and CEO, Naturals (Groom India Salon and Spa Pvt. Ltd). A name to reckon with in South India, Chennai-based Naturals decided to spread its wings pan-India in the recent past. The brand currently has 360 salons pan-India, of which seven are company owned and rest are franchise led.
Another name in the beauty business that needs no introduction, brand Shahnaz, seconds the importance of apt franchise partner. “The most important aspect through our journey has been stringent selection of franchisees and training them in beauty and our specific treatments and products,” divulges Shahnaz Husain, Chairperson and Managing Director, The Shahnaz Husain Group of Companies.
Franchising since 1979, Shahnaz Husain chain of salons has come a long way with around 250 franchise led salons in the country.
Robust distribution system
Setting up a robust distribution system at the national level is of paramount importance in gaining national prominence. It forms the backbone of a successful and free-flowing business. “How will our supply chain work? This was one of the key points we needed to decide on as we set out expanding our market,” says Dheeraj Gupta of Jumbo King.
“A strong distribution system at the national level and a successful business model that can keep up with changing trends and new advancements form the very basis of success when you look at broadening your horizons,” comments Shahnaz Husain.
Maintaining standard and quality
Maintaining standard and quality of the product/service throughout is a challenge that all brands need to address. Shahnaz Husain provides insight saying, “There needs to be continuous Research & Development and product quality needs to be maintained. New ideas, innovations, new products and new techniques are absolutely necessary to sustain the business.”
“In Rome, do as Romans do”, goes the famous idiom. More or less, it stands true when brands decide to expand. It is important to understand one's customers, their needs and gel in well with their culture and way of living in order to cater to them well and make them feel at home with your brand.
“In order to play the game right, I had to learn how to do business in the North which included understanding the people, place and price. We completely believe in the importance of localization. What works in North may not work in South and vice-versa. For example, bridal make-up is one such area where we emphasise on customization,” says Kumaravel of Naturals.
Agrees Vasanth Kumar, Executive Director, Max Retail India, "Customization is of utmost importance. We have our stores pan-India and our design team customizes 15% of the clothing range as per regional requirement. Rest of the range is similar through all our stores. The range is changed every quarter."
Dheeraj Gupta of Jumbo King adds, “Most brands are not clear of what consumer need their product caters to. Focused brands understand this and look for satisfying the same consumer needs in other markets too. I firmly believe this is the only way to expand. Taste preferences are there, however the key is to get the product understanding right. I would give 20 per cent importance to taste preferences and 80 per cent to product understanding.”
As they say 'eyes provide sight, heart provides insight', any success is a mix of both. Keep your eyes wide open to observe and study the market, competition and customers and listen to your heart when it comes to the product/services you are dishing out. You know your product the best. Play on the strengths and don't forget the core value of your business.
Checklist for expansion:
þ Understand your product well and how will it be positioned in a new city.
þ Form a robust distribution system. A strong supply chain is the back bone of any business looking at expansion.
þ Pricing strategy needs to be zeroed on.
þ Finding the right franchise partner is of utmost importance.
þ Right and strategic location will ensure maximum exposure.
þ Maintain uniform standard and quality across all outlets
þ Understand the importance of customisation