How Indian Entrepreneurs can Successfully Collaborate with Foreign Brands
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Franchise 2018-03-16

How Indian Entrepreneurs can Successfully Collaborate with Foreign Brands

Foreign brands are very inspirational for the end consumer, making it a major reason for entrepreneurs to tie-up.

By Yellow Tie Hospitality
How Indian Entrepreneurs can Successfully Collaborate with Foreign Brands

Bringing foreign brands is very aspirational for Indian entrepreneurs. We have seen success of few foreign brands in F&B especially players like Domino’s, McDonald’s to name a few and there is footprint present of many outlets like KFC, Pizza Hut. So, Indian entrepreneurs feel that the foreign brands do well in India.

Foreign brands are very inspirational for the end consumer, making it a major reason for entrepreneurs to tie-up with foreign brands. Inorder to get initial traction and good marketing there is always goodwill and fan base established of that brand. There are lots of challenges that come when you tie-up with a foreign brand. However, there are a few points that an entrepreneur should take care of before bringing a foreign brand.

The right commercial deal: Foreign brands look at India as a country of 1.5 billion populations. Based on this when compared with USA, India has 3 times more population and a much larger population in comparison to UAE. Hence the business potential is that much more. Foreign brands fail to understand that the actual target clientele that’ll spend such amount of money is much lesser than the total population of 1.5 billion. Hence to understand what kind of brand an entrepreneur is getting and what will be their potential of growth across India, there should be a very well laid out commercial plan put up.

Study Competition: It is very important to study the local competition of the product that is being brought from abroad. Foreign brands have their own standards and norms because of which they are limited to change or tweak their menu & pricing strategy in a certain way. This leaves them with a very tough competition and the foreign brand ends up becoming just another brand in the market. It’s very important to be very cognizant about the current competition and the competition that can arise even if you are introducing the product in the market for the first time. Ignoring the competition that is present today and most importantly that can come in the future in the product category that you are signing off can be very fatal and dangerous because we are committing to foreign brands for a perpetual or a long-term agreement of 10-20 years and it’s very important to sustain in the markets for that duration to get good returns.

Localisation of brand: Localisation of any brand is very important not only for the brand identity and brand communication but also mainly by the localization of the menu. The common Indian palette is not used to experiment and even if it experiments it takes a long time to adapt to a new taste. Hence it’s important to localize the menu as per Indian standards.

Localising vendor sourcing for projects and interiors: We have seen a lot of international brands that insist on buying the project materials like furniture, kitchen equipments etc from their principal market. Also, we see a lot of brands insisting on buying basic raw material from the principal market. However, they ignore the high import cost, logistics, and excise which sums up to a higher project cost or capital investment or higher recurring food cost which leads the Indian partner to increase the menu price. Thereby, making them non-competitive.

Customise standard operating processes, training modules and software: All the countries have standard operating processes, training modules and software, suiting the requirement and the operations of their own country. It is very important to study the ground realities of each country and region and customize the SOP’s, training modules and software as per the skill & requirement in that particular region. Only when the entire eco-system revolves around the requirement of the region and it is customized to those requirements there will be better results of the intellectual property that can be leveraged in India.

Identify the strength of brand and deciding the roles and responsibility: It is very important to identify brand stands for if the brand is standing for a particular product or addressing to a particular demography and its current stores operating in current countries has to be very clearly identified and the strategy around India has to be made accordingly.

Plan B: It is very important for a brand to have a fall-back plan. This does not mean that there will be compromise in the quality of the products served but it is always important to work out the kind of menu & pricing that the local partners will be offering if first strategy fails. India is a very unpredictable market and it is very important to be on your toes to understand customer demands and make an overnight change to be able to cater to those demands. Of course, keeping in mind the strength & identity of the brand.

Strategy of growth (rollout plan and city wise plan): One needs to really define the rollout plan of any new brand. It’s important to study the demography and current customer requirements of cities in India and the product offering and the current TG of the brand in the country that it exists and then draw out good synergies and then draw out a very good strategic roll out plan.

Leverage partnerships/collaborations: It is very important for a potential Indian entrepreneur to understand who are the key partners and collaborators of the international brand that they are aiming to tie-up with.

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