Professional Documents
Culture Documents
Supply Factors
1) Production Costs
Compensation costs in India’s organized manufacturing sector were 91 cents per
hour for all employees in 2005; this amounted to about 3 percent of hourly labor
costs in the U.S. manufacturing sector (Bureau of labor statistics US)
2) Logistics:
The government unveiled the National Manufacturing Policy (NMP) in October
2011. One of the key features of NMP is the establishment of National
Manufacturing & Investment Zones (NMIZ). NMIZ is proposed as a Greenfield/
Brownfield industrial cluster having state-of-the-art infrastructure and offering
business-friendly policies or services. The infrastructure would range from
logistics, power, skill development, public utilities, environment protection,
which are all the essential requirements of a competitive manufacturing base
3) Warehousing
Inadequate warehousing is one of the biggest bottlenecks in the entire supply
chain structure. Statistics show that at 108 million tonnes (MT), the present
agriculture warehousing capacity is short of the requirement by about 25 MT
5) Level of technology
- A study by Deutsche Post DHL last year had revealed that the time taken for a
hypothetical one-way trip covering 300 km in India was between 24 to 36 hours.
But the same in China would take less than 18 hours and in EU between 8 to 10
hours. While trucks in India log an average of 200 kms a day, those in China and
Japan cover 600 kms and 800 kms, respectively
Demand Factors
1) Customer Access: India’s rapidly rising middle class should grow from more than
160 million people in 2011 to 267 million people in 2016.
2) Capital
During 2011, overall FDI inflows committed US$58,261 million in India. Leading
Japanese companies, such as Toyota and Suzuki, have made substantial
investments in India. The country accounted for 11% of the investment projects
(448) in India between 2007 and 2011.
3) Export promotion
Key government initiatives, such as setting up of tax free zones, Software
Technology Parks of India (STPI) and Special Economic Zones (SEZ), have given
strong impetus to the export of IT services. These increase the exports of the
country thereby contributing to a stronger foreign exchange reserve
4) Generating employment
- The US remains the leading investor in India both in terms of projects and jobs
generated, and accounted for more than 355,600 jobs created between 2007 and
2011. Top investment sectors for US companies include ICT, primarily for design,
development and testing; and business services, such as customer care centers
and construction relation services.
- The liberalization of the Indian Multi-brand retail sector & allowing big
retailers to come in and set up shop is expected to create 10 million jobs in India
5) Infrastructure
- In 2010, Nestlé announced the establishment of its first R&D center in India
(functional by 2012), allowing it to cater to consumers in and around the
country. Nestlé plans to invest US$275 million in India by 2015, including an
R&D center at Manesar, which will serve as the base for rolling out India-specific
products, along with investments in Karnataka, Haryana and Punjab.
6) Social effects
In the span of a generation, India's automotive market has transformed a failing
local industry into a thriving producer of reasonably priced, reliable small cars,
some for export. Alongside the assemblers, successful component manufacturers
and suppliers have developed. Still, while India's industry is booming, consumers
are reaping the greatest rewards
For Multi brand Retailing (eg- Walmart) the cap is proposed at 51% foreign & 49%
Indian therefore laying the control in the hands of the foreign retailer
IKEA—proposes to invest 10000 crores in India & Open 200 stores
c) FDI requires “Indianized” Products—KFC tandoori chicken with spices, Pizza Hut
BBQ Paneer Pizza, Mc Donalds serving non-beef burgers
b) Real Estate Rates are very High—eg- BKC- 80000/ sq.ft, which is one of the highest
prices in global real estate. Therefore there are very few stand alone outlets in India (D-
Mart) & retail outlets must rent spaces either in malls or otherwise. However, with
malls failing in certain cities, the failure of a mall directly results in the failure of the
retail outlet.
c) Each State has a different tax structure—Difficult for retailer to standardize prices.
EG- Mc Donalds never writes actual rates WITH taxes on their menu cards & there is no
uniformity in prices across joints in different states in the final price on the bill.
HOWEVER, one can use absorption pricing to keep uniform prices across India (eg-
Thumbs up, Pepsi, etc. who have a standard price throughout the country).
www.thehindubusinessline.com
RBI Website
Ernst & Young Report— Ready for the Transition- E&Y’s 2012 Attractiveness Survey:
India
Consolidated FDI Policy from April 2012-- Department of Industrial Policy and
Promotion, Ministry of Commerce and Industry, Government of India
53. INTERNATIONAL MARKETING BLUNDERS
1. Pepsi used the slogan ‘come alive with the Pepsi generation’ as an international
marketing campaign. But when translated into Chinese, it read ‘Pepsi brings your
ancestors back from the grave’.
2. The American beer Coors used the slogan ‘Turn It Loose’ in its marketing
campaign. That was fine in the US, but when the phrase was translated into
Spanish, it read "Suffer From Diarrhoea.”
4. PepsiCola lost it dominant market share to Coke in South East Asia when Pepsi
changed the color of its vending machines and coolers from deep "Regal" blue to
light "Ice" blue as Light blue is associated with death and mourning in SE Asia.
5. In 2011, Puma, a German sports gear and Apparel Company, decided that it was
going to launch a shoe in the United Arab Emirates with the colors of the national
flag. Obviously, Puma did not intend to offend the Emirati people. However,
placing the colors of the national flag on their feet was seen as ‘walking on their
flag’. Thus, associating their colors with the lowest of insults.
6. A hair products company, Clairol, introduced the "Mist Stick", a curling iron, into
Germany only to find out that mist is slang for manure.
7. Cue’ was the name of Colgate’s new toothpaste. It also happened to be the title of
a notorious adult magazine.
8. The Coca-Cola name in China was first read as “Ke-kou-ke-la”, meaning “female
horse stuffed with wax”.
9. Calvin Klein through his unofficially titled “sex sells” campaign in 1995 placed
teenage boys and girls in sleazy recreational rooms and photographed them in
suggestive poses wearing next to nothing. Parents and parents groups hated it.
Somehow the fashion magnate thought it would be a good idea to stick them in
underwear and apply the sexy black and white lens of his usual ads.
People HATED it, and the ads were pulled in 24 hours.
10. Chevrolet Nova failed in Latin America. This is because “Nova” in Spanish stands
for “It doesn’t go”.
11. Things did not go well for Ford when they introduced their Pinto model in Brazil.
After watching sales go nowhere, the company learned that “Pinto” is Brazilian
slang means “tiny male genitals“. Ford changed the name to “Corcel” which
means “horse” and things got much better.
12. Gerber is the name of one of America’s best-known makers of baby food but
“gerber” can also be translated into French as “to vomit” – somewhat limiting for
the brand’s next global marketing push.
13. There’s nothing like the smell and feel of real leather. That, at least, was the
message that Braniff Airlines was trying to communicate when it launched its
“Fly in Leather” to the Hispanic and Latin America market, in order to promote
the airline’s new first-class seats. Braniff translated the call to “Fly in Leather”
too literally for the purpose of the local market, rendering it with the slogan
“Vuela in Cuero”, which literally means “Fly in leather”, but which sounds
identical in a radio ad to “Vuela en Cueros”, the Spanish for “Fly Naked”.
14. In the late 1970s, Wang, the American computer company could not understand
why its British branches were refusing to use its latest motto "Wang Cares". Of
course, to British ears this sounds too close to "Wankers" which would not really
give a very positive image to any company.
16. The US Dairy Association was reportedly so pleased with the success of its "Got
Milk?" campaign that it decided to extend it to take in neighbouring Mexico. The
only problem was that the Spanish translation of “Got Milk?” that it came up with
allegedly read as "Are you lactating?"
17. In April, 2003 the Hong Kong Tourist Board tried to either pull their ads or
have their slogan changed. But it was too late. The slogan that was running
“Hong Kong: It will take your breath away.” unfortunately coincided with the
SARS epidemic that resulted in numerous deaths. Shortness of breath is one of
the main symptoms of SARS.
18. Nike offended Muslims in June, 1997 when the “flaming air” logo for its Nike Air
sneakers looked too similar to the Arabic form of God’s name, “Allah”. Nike
pulled more than 38,000 pairs of sneakers from the market.
19. Camellia flower is used for funeral purposes in Brazil. Revlon overlooked
Brazilian customs and beliefs and launched a perfume with the aroma of
Camellia in Brazil.
20. Air Melt, Air Grill, Air B-Que and Air Bakin series were launched by Nike. Each of
these had a design imprinted to resemble fire. However, the flame design
unintentionally resembled Allah in Arabic. Nike was forced to recall shoes.
21. Schweppes failed in Italy. One of its products, namely, Tonic Water, means
“water from toilet” in Italy.
23. Puffs, an American Facial Tissue manufacturer did not go well in Germany. In
German, Puff means “brothel”.
24. Even as grand a brand as Rolls Royce can make mistakes. The Rolls-Royce Silver
Mist never sold well in Germany. Perhaps because In German, mist means
"human waste."
25. Ayds, a weight loss product had the unfortunate circumstance of trying to find
an audience right around the time AIDS was scaring the hell out of people across
the world. Considering that AIDS was, at the time, a disease that withered its
victims away to nothing. Sometimes marketing disasters are man-made. For this
one, Fate seemed to play a significant role.
26. The fragrance line from Tom Ford decided to screw subtlety and launch a 2007
campaign that consisted solely of a woman with her legs spread wide, the only
thing separating you from her special place being a bottle of their scent. Not sure
what the message is, but the first thing that occurs to us is, “This fragrance smells
exactly like what it is covering up.
27. Nissan’s Moco didn’t sell too well in the Spanish markets, especially the green
cars. This is because in Spanish, Moco means “mucous”.
28. A golf ball manufacturing company packaged golf balls in packs of four for
convenient purchase in Japan. Unfortunately, pronunciation of the word "four" in
Japanese sounds like the word "death" and items packaged in fours are
unpopular.
29. Powergen Italia, an Italian maker of battery chargers registered the obvious
internet domain name i.e. www.powergenitalia.com
30. To commemorate its initial flights from Hong Kong, United Airlines handed out
white carnations to the passengers. However for many Asians white flowers
represent bad luck and even death.
Sources:
http://www.studymode.com/essays/Top-10-International-Marketing-Mistakes-465657.html
http://answers.yahoo.com/question/index?qid=20091106185410AAXS9Po
http://www.cbsnews.com/8301-505183_162-28550031-10391735/apple-marketings-top-10-
dumb-mistakes/
http://sandaionescu.wordpress.com/2010/12/14/international-marketing-mistakes-the-
answers/
http://blogalize.typepad.com/micro/2009/11/global-marketing-mistakes.html
http://www.adweek.com/adfreak/10-stupidest-marketing-blunders-2010-11754
http://uk.ask.com/beauty/Mistakes-Made-in-International-Marketing
http://collateraldamage.wordpress.com/some-samples-of-my-journalism/in-memory-of-
george-sykes/
http://m2weekly.com/commentary/nigeria%E2%80%99s-10-marketing-mistakes-of-2010-
and-their-lessons-2/
http://marketing.about.com/od/advertising/tp/marketmistakes.htm
http://www.inc.com/geoffrey-james/7-big-marketing-mistakes.html
http://www.businessweek.com/small-business/ten-common-marketing-mistakes-
10112011.html
54. SUCCESSFUL INTERNATIONAL MARKETING CAMPAIGNS
1) OLD SPICE: SMELL LIKE MAN, MAN
Whether or not you’re a fan of Isaiah Mustafa parading his pecs in nothing
but a towel, you can’t argue with the success of the Old Spice’s “Smell Like a
Man, Man” campaign.
Mustafa became popular doing the brand’s TV commercials, but things really kicked
off when Old Spice moved the campaign to the web and invited fans to use Twitter,
Facebook, YouTube and other social media outlets to pose questions that he
answered quickly through 180 videos posted online in a few days. The questions
came pouring in and the campaign generated huge buzz worldwide as millions of
fans followed the campaign.
Old Spice experienced a 107% increase in short-term sales after the campaign
launched, but the campaign is estimated to have cost a modest $250,000 to run, so
the ROI is likely to be very positive.
DHL, the international express services provider, launched the second wave
of its successful International Specialist advertising campaign. Accompanied
by the signature "Ain't No Mountain High Enough" soundtrack, the campaign
featured on pan-global TV channels and national channels in China, India,
Mexico, Norway, South Africa, South Korea, Turkey, the United Arab Emirates
and the UK.
The campaign celebrates DHL's world-class partnerships with Formula 1 and
Manchester United with two dynamic spots filmed on location in Abu Dhabi
and Dubai, plus Brazil, Japan, and at the legendary Old Trafford stadium in
the UK.
The advertising campaign has not been limited to the screen, however. DHL
Express has also celebrated its Official Logistics Partner relationship with
Manchester United by giving each of its 100 000 employees around the world
a Manchester United training top emblazoned with the DHL brand, spreading
the excitement around the relationship via dedicated "brand ambassadors" in
over 220 countries and territories worldwide.
1
http://memeburn.com/2010/09/viral-marketing-five-of-the-best-international-
campaigns/
http://www.dhl.com/en/express/shipping/campaigns_promotions/international_speci
alists/isc_2012.html
http://www.cisionwire.com/deutsche-post-dhl/r/the-international-specialists--launch-
second-wave-of-award-winning-advertising-campaign,c9265199
http://designshack.net/articles/graphics/the-greatest-print-campaigns-of-all-time-
volkswagen-think-small/
http://www.exchange4media.com/48929_volkswagen%E2%80%99s-big-move-with-
%E2%80%98think-small%E2%80%99.html
http://science.howstuffworks.com/environmental/earth/geology/diamond5.htm
55.INDIAN COMPANIES DOING WELL IN INTERNATIONAL
MARKETS
The emergence of globally competitive companies is evident in majority of the
industries. Infosys, Wipro, TCS, in the software industry; Marico and Dabur in the FMCG
industry; Ranbaxy Laboratories, Dr.Reddy’s Laboratories, and Aurobindo Pharma in the
pharmaceutical industry; Bharat Forge and Sundaram Fasteners in the auto component
industry; Tata Motors in automobile industry; Tata steel in iron and steel industry, Taj
group in the hotel industry.
1. INFOSYS
Of this revenue, the majority comes from international business. In 2009, Infosys
collected 90% of its income from the international market.
On September 23, 2011 Gartner, Inc. has positioned Infosys in the Leaders Quadrant of
the recently released 'Magic Quadrant for International Retail Core Banking (IRCB)
2011 report for its Finacle core banking solution.
As of March 31, 2011, TCS had 145 offices across 42 countries, catering to some 1034
active clients.
The break-up of offices by geography is Africa Asia Australia Europe North America
South America.
Ziraat Bank, Turkey, has selected the TCS BaNCS core banking platform for a multi-
country implementation as part of its international growth strategy. This
transformational engagement, which commenced in July 2012, follows a “model office
solution” approach toward the deployment across multiple countries in Europe.
3. WIPRO
In 2007 WCCL bought Unza for about $300 million, it was Wipro’s second largest
acquisition ever. At that time it was the largest international acquisition by an Indian
consumer care company.
Wipro’s big-ticket acquisitions have brought to the table iconic brands such as Yardley,
Woods of Windsor and Enchanteur, heritage companies such as L D Waxsons, and
Singapore-based Unza.
4. GODREJ
Godrej Consumer Products (GCPL) draws 38% of its revenues from global markets.
Popularity of GCPL products has been growing rapidly in international market, and to
meet this emerging demand, the company is also expanding the breadth of its
operations. GCPL products are now exported to 30 countries worldwide.
GCPL has been rapidly expanding globally and in the past few years it has been
acquiring companies and brands in international markets like Indonesia, South America
and Africa.
GCPL, which has increased its global footprint by acquiring 51% rights in the Darling
group in Africa and 60% rights in the Chilean hair colour company, along with previous
acquisitions such as Tura, Issue and Argencos, international business sales had reported
a 54% growth last fiscal to Rs 1,864 crore.
Subsidiaries of Godrej Consumers Products include Kinky Group (Pty) Limited, South
Africa, Keyline Brands Ltd, Godrej Global Mideast FZE, Sharjah, and Rapidol Pty Ltd.
South Africa.
5. MARICO
Today, Marico has a strong presence in over 25 countries across India, South East Asia,
Middle East and Africa.
Marico is present in the Skin Care Solutions segment through Kaya Skin Clinic in India,
Middle East and Bangladesh, along with Singapore- based Derma Rx Asia Pacific Pte.
Ltd.(derma Rx).
Back in 1983, the Rs 3,390-crore Dabur India was one of the earliest Indian companies
to set up operations in international markets, when it started exporting products such
as hair oil and honey to the Middle East.
Dabur has set up manufacturing units in Dubai, Nepal, Egypt, Bangladesh, Nigeria and
the UAE. It also has regional offices in the UK, the US and other countries. The
international business is worth Rs 678 crore and contributes a fifth of the revenues of
Dabur India.
Through the years, Dabur has stuck to a purely organic growth path in its overseas
expansion. The reason is simple, says Dabur India CEO Sunil Duggal: the company’s
ayurvedic roots. “We have a portfolio of products based on Ayurveda and nature, and
this is a USP no other company has offered.
7. RANBAXY LABORATORIES
The company’s offices have spread over 49 countries with employment of 12,000. It is
one of the ten generics players in the world. Three-forth of Ranbaxy’s revenue comes
from international sales, with the US alone accounting for almost one third.
For the year 2011, the company recorded Global Sales of US $ 2.1 Bn. The company has
a balanced mix of revenues from emerging and developed markets that contribute 47%
and 46% respectively. In 2011, North America, the company's largest market
contributed sales of US $ 791 Mn, Europe contributing US $ 297 Mn and Asia clocking
sales of US $ 503 Mn.
In June 2008, Ranbaxy entered into an alliance with one of the largest Japanese
innovator companies, Daiichi Sankyo Company Ltd., to create an innovator and generic
pharmaceutical powerhouse. The combined entity now ranks among the top 20
pharmaceutical companies, globally.
Dr. Reddy's Laboratories Limited has established subsidiaries across the globe - the
USA, Germany, the UK, and Russia, to name a few. The company has entered into
partnerships and transactions with global pharmaceutical companies such as Novo
Nordisk, Novartis, Merck, GlaxoSmithKline, and Roche.
It is engaged in marketing its products in more than 100 countries with a focus on North
America, Europe, India and Russia.
Further, it has entered into joint ventures in China, South Africa,and Australia.
9. AUROBINDO PHARMA
To help further expand its international reach, it concentrates its focus on such major
countries as China, Brazil, Japan, Netherlands, South Africa, Thailand, UK, USA, Russia
and many more.
Aurobindo exports to over 125 countries across the globe with more than 70% of its
revenues derived out of international operations.
The Company currently has manufacturing operations located in India, Germany, the
UK and China. The Company has also established sales and warehousing operations in
the US. The corporate headquarters are located at Chennai, India.
Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's
biggest corporations
Tata Motors has been exporting its products since 1961. Currently, the company's
commercial and passenger vehicles are being marketed in several countries in Africa,
the Middle East, South East Asia, South Asia, Europe and South America. It has
franchisee / joint venture assembly operations in Bangladesh, Senegal and Ukraine.
Tata Motors was the first company from India's engineering sector to be listed in the
New York Stock Exchange, in September 2004.
Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial
Vehicles Company in 2004
With the acquisition of Jaguar Land Rover (JLR) from the Ford Motor company in
early2008, the company has entered into the world of high-end luxury brands.
Later, when it became serious about its international operations in developed markets,
it shed all the initial acquisitions and acquired prestigious hotels such as the Ritz
Carlton in Boston and Blue Sydney in Australia.
What made Taj persevere? R K Krishna Kumar, vice-chairman of Taj Hotels, said: "The
Tata Group has always recognised that the world marketplace is not divisible ... There's
a strategic compulsion to go outside India for many of our businesses because we
believe the global market is one marketplace."
http://www.infosysinternational.com/
http://www.tcs.com/news_events/press_releases/Pages/Ziraat_Bank_Turkey_TCS_BaNCS_inte
rnational_banking_operations.aspx
http://www.tcsinternational.com/operations.html
http://www.looklatest.com/2013/01/19/it-major-wipros-50-of-revenues-from-international-
operations/
http://articles.economictimes.indiatimes.com/2011-05-25/news/29581783_1_integration-
godrej-household-products-gcpl-chairman
http://www.dabur.com/en/investors1/Annual_reports/2004-05/International.pdf
http://www.marico.com/html/our-presence/overview.php
http://economictimes.indiatimes.com/bharat-forge-ltd/directorsreport/companyid-13958.cms
http://www.tatasteel.com/global-network/index.asp
http://cvglobal.tatamotors.com/
http://www.tajhotels.com/About-Taj/Company-Information/Management.html
USA
On meeting and leaving, a firm handshake that lasts for about 3-5 seconds is the
norm.
Gift giving is discouraged or limited by many US companies. A gracious written
note is always appropriate and acceptable. A gift may be considered a bribe.
Business meetings are usually arranged as breakfast, luncheon, or dinner
meetings depending on time schedules and necessity. Generally a dinner, even
though for business purposes, is treated as a social meal and a time to build a
good rapport.
SPAIN
Time is very relaxed. It is wise for foreigners to be punctual, but Spaniards do not
put a great emphasis on time themselves. The Spaniards often consider deadlines
an objective that will be met if possible, but do not become overly concerned if
the deadline is not achieved.