Since the "golden summer of 1991," when India's economy was liberated from decades of restrictive regulation, U.S., European, and Asian multinationals have salivated at the thought of bringing their brands to almost a billion new customers. Fast-rising disposable incomes and a growing middle-class consumer culture make the market even more enticing. Many CEOs now dream of declining cost curves and rising profits from capturing the mythical "1%" of India's huge and fast-growing market.
Unfortunately, success in America, Britain, Japan, Korea, or even China doesn't mean that consumers in other countries, especially new consumers, will have heard of your product -- or like it once they do. This has been the case in India.
ILL-PREPARED Examples abound of products that sell big in Cleveland and flop in Calcutta. The stories range from the relatively simple, such as the disappointing launch of Corn Flakes in India, to the complicated, such as McDonald's (MCD
) big challenge in adapting a beef-centric product line to a country in which cows are sacred.
Traditional brand theory is ill-prepared to help. Companies exporting brands abroad often begin with the basic translation of names, packaging, and ads. That is the classic "make centrally, translate globally" model, and it can fail miserably.
The truth is that cultural expectations, not merely languages, are too often mismatched. In the November, 2005, issue of Harvard magazine, Homi Bhabha illustrated just this type of gap with a devastating failure.
COLD RECEPTION. "Kellogg's set up a branch in India and started producing Corn Flakes to give consumers the real thing. What they didn't realize was that Indians, rather like the Chinese, think that to start the day with something cold -- like cold milk on your cereal -- is a shock to the system," says Bhabha. "And if you pour warm milk on Kellogg's Corn Flakes, they instantly turn into wet paper. In business studies, when you look at a market, you have to know something about its anthropology and its cultural rituals."
Given how many marketers worship at the altar of brand integrity, the attempt to protect a product by changing it as little as possible around the world is understandable. And for some geographic expansions, it may be exactly the right thing to do. In India and many other countries, however, transplanting a business from one cultural, economic, and political setting to another requires more.
ON THE RIGHT TRACK.In the last century, many railroad companies nearly drove themselves out of business by believing they were in the locomotive industry rather than the transportation business. Today, many big global companies cling so tightly to their brands as they globalize that they forget what the brands actually stand for in the first place.
Had Kellogg's aimed at winning in the "breakfast" market rather than importing intact the cold cereal category with which it was familiar, the company's full talents could have been focused on creating products that suited the Indian preference for a hot breakfast.
In 1960, Harvard Business School professor Theodore Levitt chastised the train industry for not taking off into air travel, and he proposed a fundamentally user-centered approach to corporate positioning in the face of technological change. Too many companies, he argued, overvalue their current investments and undervalue opportunities for growth that are deemed outside the core business -- but which address more effectively their customers' basic needs.
The problem of taking established brands to success in high-growth markets is quite similar, and it is time to dust off Levitt's framework, turn it ninety degrees, and return it to service. Whether responding to differences technological or cultural, the basic lesson remains the same.
In the long run, core competencies can change, but a fundamental focus on the consumer is always essential. It is better -- and easier -- to develop new skills than to lose your customers.
FREE YOUR BRAND.The best brands are not superficial logos or slogans but organisms that robustly and regularly satisfy some fundamental human need. They are bigger than the sum of their supply chains and storefronts. Their competitive advantage is in knowing, understanding, empathizing, anticipating, and serving their customers better than the competition -- not just making more copies of the same.
When considered in this way, Coke ((KO
)) is not a sweet, brown cola but cool refreshment. McDonald's is fast, clean, and easy for families to enjoy together. Citibank ((CITI
)) doesn't just store money but offers trust. Vodafone doesn't sell GSM technology but connections to friends, family, and business associates.
Pizza Hut's success has increased in direct proportion to its adaptation of its pizzas to the local palate. According to Alok Lall, general manager of Saatchi & Saatchi in New Delhi, who managed the account previously at JWT, the company struggled in this market, primarily because the [standard Italian] toppings were completely alien to Indian taste buds.
"But with the launch of a Tandoori Pizza," says Lall, "the results were amazing -- store traffic quadrupled. It was a flavor Indians were already comfortable with, and Pizza Hut has since launched many more flavors tuned to Indian tastes. Today, Pizza Hut has more than 150 restaurants in India, and the cash registers are ringing overtime."
AIR CONDITIONING. Pizza is from Italy, where tagliatelle, not tandoori, is the native tradition, and Pizza Hut is a thoroughly American creation. Yet both the dish and the brand were able to thrive in a new setting because Pizza Hut's leaders understood that their offering of fast, hot food in a clean, casual setting could transcend a recipe book.
Sandeep Kohli, managing director for the Indian subcontinent at Yum Brands ((YUM
)), Pizza Hut's parent company, puts it best: "We follow a simple philosophy: Pizza Hut is an international brand, but it has an Indian heart."
Yet while Indians have come to enjoy Pizza Hut's offerings, there are some parts of the global brand that they do not want to change, such as air conditioning, the quality of ingredients, and customer service. "There is a fine line between making sure the brand doesn't lose its international heritage," says Kohli, and ensuring that it suits local tastes. "We make no compromises on the global norm, but make it familiar."
The best brands are confident enough to adapt without compromising their core strengths. When faced with a new technology or market, they can translate the value proposition in meaningful ways that are consistent with both their heritage and their potential.
BIG CURRY MAC.McDonald's dispensed with its most prominent ingredient in order to respect, and to please, its Indian customers. Many Indians eat no beef or pork, or any meat at all. According to Vikram Bakshi, managing director of McDonald's India North, it was necessary to adapt the company's offerings while keeping the core brand values consistent across cultures.
"The menu has evolved over the years as a result of constant innovation and our customers' needs," says Bakshi. "Local creations like McAloo Tikki Burger, Curry Pans, Wraps Pizza McPuff, and McVeggie are established departures from what we had in our introductory restaurant offerings.
"Today 70 percent of our menu is ‘Indianized', and the McAloo Tikki burger is our highest selling product. While the menu may be different in some ways, the McDonald's experience around the world is consistent, offering quality, great service, cleanliness, and value."
Since drive-through service is not common in India, scooters and bicycle delivery services extend the concept of a quick, hot meal on the go in a way that is quintessentially Indian yet consistent with the global brand. It's still McDonalds, and Indians love it. Think global. Be local.
Niti Bhan is a global nomad who apparently calls India, Singapore and the United States home. Based in San Francisco, she creates and
implements strategies for entering new markets, identifying revenue generation and growth opportunities for her growing roster of clients.
She is a columnist for BusinessWeek's Innovation and Design section and a regular contributor on business and design for Core77.com.
Brad Nemer has worked in global marketing and product management for more than ten years. A graduate and instructor of design and business at the Illinois Institute of Technology, he is currently a Senior Business Planner at Motorola.