Can India Inc. Build Global Brands?
The Business Standard - December 7, 2005
The question is not whether Indian companies have the capability to build global businesses i.e have appropriate products and price points to fulifl consumer needs in markets around the globe, with whatever is the most efficient way to supply to and serve these ma
rkets. But of course this capability does exist across several industries, and there are many vibrant examples of this. But the question to debate is whether they have built or have the capability to build global brands.
What's the difference between brands and businesses? Brands are where you talk your business walk. Your customers and potential customers recognize your name and recall it whenever they think about the business arena you exist in. And firmly attach certain positive (and sometimes negative) rational and emotional benefits to the name, which travel with the name, no matter what category of products or services the name is attached to. Consider for example, Infosys marriage bureau; it will have process, and truthfulness and will improve your odds for sure, and you can feel safe and sensible! As a result of all this there should be a potential to command a price premium and / or have a guarantee of a certain value of business - ideally business that seeks you out rather than the other way; but more pragmatically, business that is very easy to sell, since the customer is predisposed to buy, to begin with.
Do Indian companies have such brand building capability in overseas markets? Across sectors, and there is really no pattern, many Indian companies have chosen to pass on the onus of market development and customer ownership to distributors, marketing agents and middlemen and merely supply as demanded; or have chosen to be suppliers of choice / partners to other international businesses. Such companies do not even begin to qualify on having brand capability. However, there are a few Indian companies across sectors, who have taken the painful route of owning end customers themselves, either DIY or by acquiring and growing an existing brand. They can show the way and inspire the rest. Provided we manage to capture and disseminate their learning, through industry fora and academic research - something we are historically not good at.
The two big areas of learning that Indian companies need to have for building global brands are (1) how to gain market access all the way to the end customer, and still retail reasonable bargaining power with retail intermediaries and (2) how to find innovative ways to reduce the enormous cost of conventional brand building communication? What vehicles, what partnerships, what new channels etc.
The best way to accelerate this learning is for Indian companies to acquire an appropriate size strong brand company that is preferably global or at least is strong in one major geography, and use it to learn. Whenever I have seen this happen, I have noticed that the "what if" timidity vanishes and the whole body language of the company changes with respect to how they think about operating in overseas markets; however I often wish that they have a stronger, and more formal program for capturing the learning and experimenting to create the new way. I recommend that boards of companies should push for at least one global 'brand building learning through acquisition program' very soon. The rest will follow automatically.
Rama Bijapurkar is an
independent market strategy