The Indian market is complex and requires carefully crafted strategies to survive. In this article, we talk to systems integrators and consultants to identify certain key steps necessary to win here.
In our last article on
opportunities in the Indian market, we presented a perspective of the global manufacturers who are already strong in the subcontinent. Here we will take a look at what the systems integrators and consultants on the field have to say on the matter.
The most important aspect to remember as a foreign company entering the Indian market is that a local partner is critical to establishing a business here. But this is only the first step. According to Nanda Kumar, President of
Electronic Security Association of India, getting the right partner plays an important part in this.
Kumar gave the example of a certain Chinese manufacturer who failed to make a mark in India, unlike some of their counterparts. One of the major reasons for their failure here was because they were not able to find a partner who could support them all the way.
First three years – the crucial period
There is also the issue of the parent company’s priorities.
"Finding a partner here is not impossible, but what we see most of the time is that the parent company is not willing to invest in marketing and branding of their products here,” Kumar said. “For any company to make an entry here and creating an awareness among customers about their product, they need to work hard for at least three years.
These first three years are all about survival in the market and educating the customers on what the new company provides that the other major players in the country cannot. In simple terms, don’t really expect to make money in these initial years, but be ready to shell out for marketing.
There is an even more important factor to consider when finding a partner. According to Kumar, a foreign entrant might be tempted to look for a partner who is already working with other major brands. This potential partner may be doing extremely well for his current parent company and would even promise to give similar results to the new company.
“But what a foreign company will not understand is that the business that he has been able to develop, which could be worth billions of rupees, will be limited to his current company because that’s the product which has the demand,” Kumar said. “To sell a new company’s product, he should start from scratch, and this will take time and expertise.”
So, educating the customer and gaining the trust of dealers is extremely important. The dealers need to be convinced of the support they can get from the parent company. If a customer comes to them with a defective product, the dealer’s main concerns are the expenses and expertise to repair it along with getting a replacement while it's being repaired.
For all this to happen, the parent company has to be present whenever there is a need. In fact, now, some of the major manufacturers even take care of courier charges when there is a defective piece that needs to be serviced. Such kind of a support goes a long way in getting into the good books of the dealers, which in turn will encourage them to push the new products to their customers.
Need for a different marketing strategy in India
Another angle to this whole system was presented by Pawan Desai, CEO of
Mitkat Advisory Services. According to him, the channel market is already quite saturated with products and companies that cater to the needs of the dealers. Now the demand should come from the end users. Only when the end user can understand the benefits of a new brand and begin to demand this from the dealer, will there be an opening in the market for new entries.
This approach actually calls for a change of strategy from what is seen in the international security market. In other countries, manufacturers would be content taking a Business to Business (B2B) marketing strategy, but here, Business to Consumer (B2C) is equally important.
“Another point is that when we talk about the Indian market, the key is where and what in India,” Desai said. “North, South and West, for instance, are very different. The value proposition and buying behaviors are different. Each region has to be considered as a different country altogether and accordingly the market entry strategies for each region should be different.”
In Desai’s opinion, the South and West of India would be easier than the rest of the country for a foreign company to enter. The way business is done in the North tends to be a bit more complicated and hence difficult for foreign companies to tackle in the beginning.
Perseverance and a tiered approach
As Kumar suggested, the initial years are going to be a struggle for any company trying to establish in the Indian market. Desai agrees to this need for perseverance and added that there should be a tiered approach to the market.
“India is too fragmented a market and so joining hands with just the largest SIs will not fulfill your business requirements,” Desai said. “Your dependence on such a limited number of SIs will be detrimental to your business or your growth won’t be as fast as it should be. So, you need to work with different SIs in different regions and segmenting them as per the vertical/clients they are catering to.”
Understanding this segmentation of the market is important. Mid-end customers will never go to high-end SIs to get their projects done because of the perception of high costs. The case is similar to low-end customers too. So, as a manufacturer, you need to be able to partner with SIs in all the segments to ensure proper penetration.
Key takeaways
In short, there are five major points to keep in check as a foreign company looking to enter the Indian market. Find a suitable partner, invest in branding and marketing for the first three years at least, convince the dealers of support, target end users and educate them, and take up a tiered SI collaboration approach.
Needless to say, these five strategies will require a lot of effort and patience. But that is the reality. If it were easy, given the potential of the Indian market, every Tom, Dick and Harry would already have been here.