All for personal taste

Vrinda Oberai, Retailer
August 2011

A crucial point which needs to be addressed while referring to the influx of foreign players in India is the customisation of products as per the Indian customer’s preferences. While innovation forms to be a crucial part of today’s marketing strategy of brands, customising as per the market’s requirements is something which holds an important grip over a brand’s experience in a market. What better than taking the MNCs into picture which launch their products across the globe! Companies sure do have to take into account the diverse Indian market in order to take their brand(s) to the next level.

Devangshu Dutta, Chief Executive, Third Eyesight shares his insight on the same and points out that some products are obviously non-starters (for instance, skin tanning lotions may sell in Europe, but there is no significant domestic demand yet in India). Other than that, product customisation needs to cater to the specific needs and nuances of the market segment.

How’s it different from abroad?

Most large markets worldwide are extremely diverse. Dutta explains by sharing that the US market of 300 million people is built of multiple segments, many of which need to be addressed with distinct strategies. Similarly, the 500 million citizens of the European Union live very differently, offering unique lifestyles with diverse cultures and languages. Even China has multiple languages and cultures within its 1.4 billion people. So in that way India is no different.

Sanjeev Kumar, Brand Manager- Surface Care, Reckitt Benckiser (India) Limited asserts, "Most of the sale happens over the counter with very limited consumer-product interaction unlike in developed markets where Modern Trade (Key Accounts) forms bulk of the business and has higher consumer-product interactions."

Indian audience: Tough to cater?

It all depends on category. Some new categories in FMCG like Hair Gels or Hair Colours won’t be that difficult to introduce. "While food is so local and taste buds are so different, thus, in many categories you need to cater to the Indian palate," points out Devendra Chawla, President (Food & FMCG), Future Group.

The Indian audience is tough to cater primarily because of the diversity that we have in India, ie, so many languages, religions, geographical preferences, etc. "This makes the job challenging for a marketer as the groups are so diverse that we cannot use a blanket approach pan-India. Besides product offering, communication also warrants customisation to make inroads across geographies within the country," comments Kumar.

For instance, before launching any global brand or product in India, extensive researches, both qualitative and quantitative, are carried out in order to understand consumer usage and attitudes. Also, on the basis of this learning, required changes are made in the offering so as to cater to the requirement of the Indian consumers.

Customise as per the Indian taste

In a country where food and tastes change every 200 km, localisation of assortment to suit communities and regions is going to be important. Indian market is highly fragmented with very high contribution coming from traditional trade outlets (mom & pop stores contribute over 90% of the overall business). "We have a large rural as well as urban consumer base, so, again, there are more variables to satisfy due to sheer stage of evolution we are in," says Chawla.

For any segment of a significant size, some customisation is needed, whether of the core product, or its packaging or promotion, or the way in which it is sold. "I don’t think that the Indian market or Indian consumers are any more difficult or any more demanding than consumers anywhere else in the world. However, the challenge in India for large international FMCG companies is achieving economies of scale. The price points here are typically lower, and both supply chain infrastructure and the retail front end are fragmented, which erodes margin even further. This makes it initially more difficult and needs a more strategic commitment to building the business in India," avers Dutta.

Kumar brings forth a simple logic by sharing that the requirement for customisation clearly stems from the fact that what consumers are expecting from the product, ie, on the functionality front and other aspects like look and feel, value, etc. It is on the basis of these inputs that changes are made in the product offerings so that the consumer expectations are met across parameters.

Indian market: Attracting MNCs

India offers a unique opportunity for the MNCs because of the huge consumer base across the strata (socio economic classification). "On one hand, India is seen as a market with huge consumer base at the bottom and at the same time, because of improvement in the per capita income, there are more than enough consumers at the top of the value chain. This presents a unique opportunity for the MNCs to enter India and launch products/services across the spectrum, ie, top end as well as true value for money offerings," asserts Kumar.

The prime attraction that India offers, despite its initial hurdles, is that the market here is already significant in size, and also growing very rapidly. "Any company that establishes a presence in India today has several decades of growth ahead of it. So, any sharpening of the product and marketing strategy to meet India-specific needs can be expected to pay off handsomely," adds Dutta.

"At 10 per cent projected growth of economy for the next 10 years, it’s going to be on every consumption driven company’s radar, sooner than later, given that the growth is here," sums up Chawla.

In their endeavour to enlarge their market share , marketers are coming up with more personalised, tailor made products. The focus is to please the customers of all strata, to reach out to a larger customer base. Though this phenomenon is common across the globe, in India this is imperative as diversity is India’s core characteristic.

(This article appeared in the August 2011 issue of RETAILER.)