Article by ICG member Priti Verma
https://www.linkedin.com/in/priti-verma-2811208/
Entering the Indian market requires a well-thought-out strategy that considers the unique cultural, economic, regulatory, and competitive factors. Indian market requires careful planning and consideration of various factors, and it can be complex, but with thorough planning and a well-executed strategy, organizations can position their business for success in this dynamic and promising market. It is advisable to consult with experts familiar with the Indian market to tailor the strategy to specific industry and market conditions.
Here’s an informal guide for market entry strategy for the Indian market:
Market Research and Analysis:
It is imperative that organizations conduct thorough market research to understand:
- Target audience, consumer behaviour, and preferences
- Analyse the competitive landscape to identify key players, their strengths, weaknesses, and market positioning
- Assess the regulatory environment, including legal, tax, and trade regulations that may impact business
Choose the Right Entry Mode:
Depending on the business model and resources, businesses should decide the appropriate entry mode: exporting, licensing, franchising, joint ventures, partnerships, or setting up a wholly owned subsidiary.
Adapt Your Offering:
Indian market is diverse and customising the products or services to meet the specific needs and preferences of the Indian market is imperative. Organizations should consider factors such as pricing, packaging, branding, and features that resonate with local consumers.
This is one of the most important steps for success in this market.
Establish Local Partnerships:
Collaborate with local partners, distributors, or agents who have a deep understanding of the market and established networks. Partnerships can provide valuable insights, help navigate regulatory challenges, and accelerate market penetration.
- Strong Relationship with distributors: Distributors are not forthcoming to get associated with new players. They are always hesitant to take the distributorship for a new or lesser-known player. New entrants have to establish good business relationship with them. They have to give extra support to their distributors, this includes:
- Giving good credit terms: Most of the distributors buy the products on their own and keep a stock and in case of an established player, they buy extra stock and keep it with them. With the lesser-known brand, they are a bit risk averse and do not want to buy and keep the stock. In these situations, the organization can work out good credit terms with them so they always have the stock and can promote the product.
- Help with the sales pitch (in case of a B2B product company): End users like to interact and get support from the manufacturer. That gives them a lot of confidence. It is advisable for the company representatives to accompany the distributor for few initial discussions and for closing the deal as well.
- Support with competitive price- India is a cost conscious market and right price is crucial to success in the country.
Invest in Marketing and Branding:
There is a need to develop a comprehensive marketing strategy that leverages both traditional and digital channels. By utilizing social media, online advertising, and localized content, businesses can reach their target audience effectively.
This initial phase is essential in ‘setting the tone’ and will eventually lead to the creation of a right placement of products and services, building positive brand image and generate further demand.
Long-Term Commitment:
Entering the Indian market requires patience and a long-term commitment. Establishing a strong presence takes time, and success may not be immediate.
Business in India is built and expanded through trust-based relationships. There is a fair amount of informality in the way business is done. A typical business relationship is not strictly professional, it is partly social. Another important element to keep in mind is that geographically India is a vast country which means that distance/time factors and regional aspects cannot be underestimated. Seeking guidance from local experts and consulting with professionals who have experience in the Indian market can greatly enhance chances of success.
Priti Verma, Market Entry Expert, President, ResearchnConsulting, Bangalore, India