GLOBAL MARKETING

STRATEGIES OF INDIAN
FIRMS
GROUP 19 – BM C

B16131 ARNAV BISHT

B16136 DINESH BHARDWAJ
B16182 ZUBIN UNWALLA
 PART I – LITERATURE REVIEW

A. Marketing and Internationalisation

International Marketing Strategies in India: An Application of Mixed Method Investigation
Prathap Oburai and Michael J. Baker
Vikalpa, Vol.30, No. 4, Oct-Dec 2005

In this exploratory study, Oburai and Baker examine the multifaceted nature of global marketing as
undertaken by Indian firms belonging to varied industry sectors. It uses a combination of research
methodologies, including case research, grounded theory approach and modeling techniques, to identify
12 variables that characterize international marketing strategies across business sectors. By presenting the
similarities and differences therein, the paper attempts to reveal connections that bind unlike sectors using
a holistic global marketing approach.

The sectors studied in this research paper include Automobiles, Compact Discs, Cement, Paints,
Pharmaceuticals, Socks Manufacturing, Software, Syringes and Needles, Tea, Textiles, Two-Wheeler
Tyres, and Watch Components. The variables identified are categorized into Business Characteristics,
Product Characteristics, and Market and Transaction Characteristics. The first category consists of Capital
Requirement, Technology Requirement, Process Skill Requirement, Value Addition Prospects, Need for
Supplier Network and Export Volume. The second category comprises Unit Value, Durability and Freight
Cost. The third category includes Market Sophistication, Direct Contact with Customers and Competition.
For each of the 12 sectors under consideration, Oburai and Baker have indicated the relative
relevance of these 12 variables, and created two-dimensional perceptual map. Perceptual mapping has
been followed by clustering, whereby 5 identified clusters classify the various sectors according to the
main elements of their international marketing strategies.

Automobiles and Software singly define two entire clusters, Cement and Paints make up another,
Compact Discs, Socks Manufacturing, Syringes and Needles, Tea and Textiles constitute the fourth, and
Pharmaceuticals, Two-Wheeler Tyres and Watch Components form the final cluster. The marketing
strategy for the Indian Automobile sector needs to focus on value addition possibilities and close
customer contact for prolonged periods of time. The key global marketing success drivers for the fourth
cluster include moving from being generic goods to being branded and value-added products. Bulk
pharmaceuticals, Two-Wheeler Tyres and Watch Components typically find OEM’s as customers and
need a different approach to marketing. However, branding efforts do play an important role as end
customers are becoming increasingly aware and sensitized to intermediate and component products.
Software is a sector that has taken the Indian economy to new heights thanks to the era of outsourcing by
developed countries. Global marketing for this sector presents challenges of its own, in that key
differentiators are value-added services and customer relationship management.

Our review of this article brings to light the following key points:
 It is a brave attempt to derive underlying similarities between seemingly uncorrelated industry
sectors when it comes to developing marketing strategies for the global market, though the scope
is limited to 12 sectors and 12 variables.
 Sectors such as Socks Manufacturing, Syringes and Needles and Watch Components make up a
miniscule proportion of the Indian economy. The study would have done well to include more
relevant sectors, especially in the FMCG industry, where the impact of marketing strategies on
firms is prominent.
 Considering a globalized world wherein markets are more dynamic and consumer decisions are
more informed, Oburai and Baker do a commendable job in recognizing that global marketing

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 strategies for Indian firms are multi-faceted in nature, need to be flexible, and need to focus on
continuous value-creation.

Building Capabilities for International Operations through Networks: A Study of Indian Firms
B. Elango and Chinmay Pattnaik
Journal of International Business Studies, Vol. 38, No. 4, International Expansion of Emerging
Market Businesses (Jul., 2007), pp. 541-555

In this paper, Elango and Pattnaik examine the challenges faced by businesses in emerging markets to
expand internationally. After studying 794 Indian firms, they show how these firms draw on the
international experience of their parental and foreign networks to build capabilities that help them
succeed in the global marketplace.

Before formulating global marketing strategies, Indian firms need to recognize three key issues that they
might face – a difficult transition process to put their stamp on the world map owing to traditionally
developing products and services independent of international markets, the inability to leverage
competitive advantage through technological superiority or product differentiation, and their relatively
smaller size as compared to their developed country rivals.

One suggestion provided is that Indian firms looking to go global would do best if they focused their
marketing strategies on the benefits derived from low-costs of production, rather than on product
differentiation, simply because Indian firms have traditionally evolved independently of foreign markets.
Moreover, given the lack of exposure of these firms to global markets, it is unlikely that such firms will
be able to recognize and understand customer needs adequately to allow for development of significant
differentiation strategies over shorter durations. Elango and Pattnaik make it clear, that based on
empirical research, the competitive advantage of emerging market firms in international markets does not
lie with differentiation advantages such as brand names or technology. In fact, they emphasize the
‘country of origin’ effect, or the ‘halo’ effect, whereby countries such as India do not have the luxury of
establishing differentiated products on the basis of superior quality or technological engineering prowess.

The study emphasizes the importance of firms that are affiliated to business groups. Business groups
represent confederations of legally independent firms bound together by a united maze of economic and
social ties. The advantages derived thereby, include the formation of a strategic network, which facilitates
access to information, knowledge, resources, technologies and markets. Member firms can readily draw
on their existing foreign relationships with customers, partners, suppliers, government officials, and
intermediaries. Parental networks hence present a critical resource for firms with respect to reducing
search and transaction costs, ambiguities, contracting costs and moral hazards in global markets.

By performing regression analyses, the study examines the impact of several variables on the Indian
firm’s success in global markets. One of these variables is marketing intensity. Surprisingly, the
regression analysis concludes that marketing intensity is insignificant, though not negatively correlated, to
internationalization success. On the other hand, as is the idea supported throughout this article, network
internationalization is significant in the success of a firm’s internationalization.
Our review of the article compels us to believe that the conclusions therein are somewhat flawed, when it
comes to discounting the importance of global marketing efforts in internationalization. The focus on
networks for building international capabilities seems acceptable when considering initial market entry.
However, once this goal is met, significant marketing intensity is required to sustain the hold of the firm

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on foreign shores. Also, the low correlation of the ‘marketing intensity’ variable is supplemented by the
fact that the firms studied lacked superior marketing resources. Had they possessed such a differentiating
advantage and leveraged it, it is possible that their success in the global scenario might have reached
greater heights.

HBR PAPER:- Strategies that fit emerging markets

Strategies That Fit Emerging Markets
by Tarun Khanna, Krishna G. Palepu, and Jayant Sinha
(Winning in the World’s Emerging Markets,2nd Edition Harvard Business Review : June 2005)

Khanna, Palepu and sinha talks about the global strategies which a company should keep in mind and
adopt while extending their business to international markets in emerging economies with their products
and services. Most of the corporations have always performed much better in their respective home
domestic markets than in the foreign markets. This facts becomes more prominent in the case of emerging
markets of the world. For example American mnc companies had $2.1 trillion worth of assets in the
US,UK and Canada but only $173 billion in the combined lot of China India, Russia, Brazil. Many
corporations face heat to enter new markets and leave their home turfs to go global because of Senior
management’s propaganda, personal experiences, family and friend’s connect or even anecdotal evidence.
Others just follow key customer segments or event their primary competitors. The principle of ‘herd
instinct’ is act as a strong motivation among multinationals.
Here Companies systematically choosing tools like country portfolio analysis, political risk assessment,
focus just on potential profits in doing business and ignore the essential information about the soft
infrastructure that would eventually have an impact on their businesses. As per McKinsey Global Survey
of Business Executives 9,750 senior managers were asked to poll about their priorities when they go
global:- 61% agreed that market size and growth were the dominating factors which compelled their
firms to go global. The authors propose 6 assessment factors along with the example countries pertaining
to the market research strategies which needs to analysed, especially in context of ‘institutional void’, to
form a comparative risk and return advantages before going global.
US BRAZIL RUSSIA CHINA
PRODUCT DEVELOPMENT & IPR
Govt. enforce IPR and Local design capability Regulatory authority Imitation and piracy
protect trademarks, exists. IPR disputes, exists, but enforcement abound. Punishment
brands clutters Consumers accept both is in grey. Strong local for IPR theft.
consumer choice local and global brands. design, ambivalent IPR. Consumers prefer to
Consumers prefer buy
global products from
brands in automobiles American,
and high tech. European, and Japanese
companies
LOGISTICS & SUPPLIES
Outsourced logistics good network of EU has decent Has strong
and services transport system logistics networks, but manufacturing
trans-Ural Russia is not capabilities, but lacks in
well developed. advance logistic
technology
LABOUR MARKET
well-trained Great pool of English Great pool of English Relatively small
management speaking talent. Trade speaking talent. Trade English managers, large

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 talent and labour. unions are strong and unions are strong and labour pool. No
pragmatic pragmatic in railways industrial trade unions
only as such
CAPITAL MARKET
Stock exchange vertical Wealthy individuals Mostly state owned local banking system
integration provide investing through banks, global and equity markets
access to VCs and offshore accounts. good accounting system. are underdeveloped.
investors banking system with Crowd funding is rising, Foreign companies
global accounting wealthy individuals act raise equity & debt in
standards as investors home markets.
FINANCIAL DISTRESS
Efficient bankruptcy Processes allow Bankruptcy processes Writeoffs are common,
processes tend to favor companies and legislation are fully Corruption is highly
certain stakeholders to stay in business developed, but prevalent
rather file Bankruptcy, Corruption
this is inefficient disrupts the proces
POLITICAL & SOCIAL SYSTEM
Open to all forms of democracy is vibrant. centralized government The Communist Party
foreign investment. Bureaucracy is rampant. and some regional maintains a monopoly
Vibrant democracies, Influential local media fiefdoms coexist. on political power.
law Serves as a watchdog. greenfield investments media is muzzled, civil
is very strong and acquisitions are society unable to check
possible entry strategies power abuse

Internationalization paths of Indian pharmaceutical firms — A strategic group analysis

Raveendra Chittoor, Sougata Ray
Indian Institute of Management Calcutta, May 2007

Internationalisation of Indian firms is a challenge esp. when moving towards developed economies. The
study suggests that Indian MNCs are better off using dodger tactics i.e. fit into the lower end of the value
chain. Using these tactics is a gateway to developed markets to gradually move to a higher end of the
value chain. However Transmultinationals (TNMCs) leverage locally available or competitive advantages
to reduce costs in order to compete in foreign markets. This is esp. true for the Indian pharmaceutical
sector where over 50% of the firms in the organised sectors generate 25% or more revenue through sales
to other nations. The advantage was mainly due to the Indian Patent Act that previously exempted
royalties for patented drugs if the manufacturing process is altered thus saving major costs in R&D and
royalties for Indian pharmaceutical companies.

While FDI has increased over the years, export has been the dominant strategy for Indian pharmaceutical
firms. Indian firms however, are not as R&D intensive as western counterparts to match the R&D
intensity as it costs 800m$ over 10 years to successfully develop a new drug. Therefore focus is skewed
towards:
:
# Strategic group Description Profitability % Return on Assets %
1 Lower end of the Active Pharmaceutical 1.97 18.34
value chain – Ingredients (API) or ‘bulk
EXPLOITERS drugs’ instead of a formulated
product. E.g. Neuland Labs
2 Generic market – By targeting the manufacture of 10.82 22.58

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 EXPLORERS off-patent drugs where the cost
to file with the US FDA is
significantly less than
development costs of new drug.
E.g. Cipla
3 : Loan license This is equivalent to 7.83 14.11
manufacturing – outsourcing where certain
OUTSOURCERS stages of manufacturing are
carries out by Indian firms due
to their cost competency. E.g.

ROA and profitability were highest for explorers followed by outsourcers. However, explorers had the
highest R&D spend to sales ratio 5.*% as against ~2.5% of other groups. A higher (more successful
outcome) of R&D spend could increase profitability of Indian companies.

Rules of the Game for Emerging Market Multinational Companies from China and India
Tanvi Kothari, Masaaki Kotabe, Priscilla Murphy
Journal of International Management 19 (2013) 276–299

The study proposes a three stage dominant expansion strategies of Emerging MNCs (EMNCs) during
their l;ifecycles:

Stage 1: The study proves that the highly segmented, niche markets in domestic market along with
competition from MNCs force local TMNCs into developing local competencies and replicating them
globally:
 Unique Distribution: Replicating home strategies in foreign markets e.g. ZTE & Huawei
entering into the USA by tying-up with pre-paid network operators without any contract
 Moving up the value chain: Indian IT companies are moving from ‘low cost labour’ services to
more high end services through major investments in innovation and L&D
Stage 2: Accelerated growth abroad is attributed to organisational innovations at client, customer, supplier
and employee levels. EMNCs that can make such transitions are more competitive against due to their
propensity to change. E.g. Wipro enhancing its capabilities by servicing clients in the financial sector,
OEMs like Lenovo turning into ODMs. Further such acceleration is attributed to factors such as state
ownership, diversification, etc. Entering into strategic alliances with foreign MNCs further enhances
chances of survival and growth as it helps EMNCs to better acclimatise with the foreign culture. E.g.
Ranbaxy entered into an alliance with GSK for late stage molecular development to establish a more
innovative strategy to ensure sustainability across markets.

Stage 3: EMNCs can bridge institutional gaps in foreign markets. By exploring new market segments,
expanding product lines and patenting EMNCs can create unforeseen demand Furthermore, they can
synthesising local and domestic expertise, knowledge of new markets, strategic partnerships, M&As to
enhance supply side capabilities. Using a two-pronged approach as a dominant strategy, EMNCs ensure
long term growth in foreign markets.

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 B. Pre Internationalization And Post-Internationalization
6372 Routledge: From pre-internationalization to post-internationalization:
relationship marketing perspective Morteza Khojastehpoura and Raechel Johnsb
Industrial Management Institute, Mashad, Iran; B-School of Management, University of Canberra,
Canberra, Australia (Received 16 November 2013; accepted 12 March 2014)

Relationship marketing is essential to create a mental framework where the global domestic buyers and
foreign sellers interact behaviourally, coordinate their transactions and other activities and help in
establishing and strengthening relationships This in turn helps in reducing the psychic distance between
the consumer and the foreign firm communication and trust are most important factors in the pre-
internationalization stage.
The commitment and satisfaction play a very important role in the post-internationalization stage.
establishing of relationships is considerable, especially at the pre-stage of internationalization.

A high level of trust engenders a positive attitude and promotes goodwill which in the end increases
customer satisfaction and aids loyalty. The pre-internationalization stage is focussed on identifying the
customer pain points and addressing them. The relationship is communicated through trust and
commitment to deliver.
Post-internationalization phase primarily focuses on reducing the psychic distance between the consumer
and the foreign firm while converting the initial satisfaction into commitment to deliver and strengthening
existing relationship.

Colloquium2004 : Indian Companies in Overseas Markets: Perspectives, Patterns, and Implications

J Ramachandran, Habil F Khorakiwala, Jerry Rao, Pramod Khera, Niraj Dawar, and B N Kalyani
Rajnish Karki : Vikalp- Journal Of Decision Makers Indian Institute of Management Ahmedabad V 5 N2
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 C. Branding

International Marketing Strategy for Indian Companies: Value, Image and Other Issues
Rajendra Nargundkar & Chetan Bajaj
ICFAI Journal of Marketing, vol.1, no.1, November 2002, pp.67-73

The paper begins on a dismal note, questioning India’s meagre share in world trade despite the nation’s
humongous population. Comparing Indian firms to Japanese firms, Nargundkar and Bajaj talk about two
dimensions – Image and Recognition. Firm image is built by country image, perceived technological
prowess and quality of products. Recognition is the extent to which the individual firm is known in the
global markets it seeks to operate in.

Barring a few corporate sultans such as Tata Consultancy Services, Infosys and Wipro, there aren’t many
Indian product or service providers recognized globally and portraying a good image. One major reason
for this is that Indian firms are not known for process reliability, internationally accepted packaging
practices, environmental safeguards and scrupulous business practices. Japan, on the other hand, has built
up an image over the years as a highly scrupulous and quality conscious nation, exemplified by
companies such as Canon, Toyota, Nissan and Honda.

The paper indicates marketing strategies for Indian firms to succeed in the global marketplace, with focus
on two aspects – Building Value and Cultivating Image. Traditionally, Indian firms have focused on
exporting raw materials and semi-finished goods. A move down the value chain can have a profound
effect on international business for Indian companies. After identifying the correct product or service,
care needs to be taken of continuous product design and development, taking the needs of consumers into
account. Experience-based marketing – where Indian companies can focus on the ‘tastes’ and ‘flavours’
of India, especially in branded agricultural products, spices and apparel – could be a successful strategy to
tap the modern global consumer. However, the authors warn of this approach ensuing in the stagnation of
these markets into ‘exotica’ markets, rather than culminating in sustainable and profitable markets. Where
the services sector is concerned, Indian firms have been doing well, but it is time that they seek new
means of value-addition to avoid remaining stuck as a low-cost service sector. Another means of value-
creation suggested is strategic alliances with foreign giants as marketing partners. Examples include HMT
and Guildemeister, and Kirloskar Brothers and SPP.

Where image-building is concerned, Indian firms need to first recognize which factors are within their
control and which are not. The country’s image, as depicted by the press and media, and as relayed back
to foreign lands by tourists, is beyond control. However, customer satisfaction, complete knowledge of
the product, and high quality promotional material are some examples of what Indian firms need to focus
on when seeking to enter global markets.

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 D. Segmentation, Targeting and Positioning
Understanding the New Bases for Global Market Segmentation
Salah S. Hassan, Stephen Craft, Wael Kortam
Journal of Consumer Marketing, Vol. 20 Issue 5 pp. 446 - 462

The paper calls for a universal approach to market segmentation to help global marketers identify
parallels across national borders, while appreciating inherent international differences. It stresses the need
for global consumer orientation in the formulation of global segmentation strategies that strike a balance
between customization and standardization. The hybrid segmentation strategy assumes that it is possible
to cluster countries based on the homogeneity of target customer groups within these countries.

Global market segmentation strategies for firms may focus on identifying clusters of countries that
demand similar products, targeting different segments in various countries with the same product, or
identifying segments present in most countries. The first strategy essentially focusses on geopolitical and
economic factors, while the second focusses on differentiated selling, and behavioural and lifestyle based
segmentation factors. The authors assert that in the new global context, the third strategy of adopting a
universal segmentation approach can provide a significant competitive advantage to the firm. It gives the
brand a coherence in image and positioning that is reinforced globally. The other two strategies for global
segmentation might incur high costs of differentiation and risks due to unanticipated, drastic local market
changes. The new approach seeks homogeneity in product, image, marketing tools and advertising
message.

The paper asserts the adoption of a hybrid approach to segmenting global markets, taking into account the
benefits of both, the geopolitical as well as the behavioural bases. It essentially calls for integrating
segmentation bases such as Economic, Cultural, Technological, Geographic and Political Structure, with
Lifestyle, Response to Marketing, Attitudes, Tastes and Predispositions. Based on the study, which
examined the perceived effectiveness of various macro-level segmentation bases and within-country
segmentation bases using Principal Component Analysis, we can conclude that Indian firms looking to go
global would do well to create market potential through stimulating demand for products with
homogenous or universal appeal. To account for regional discrepancies, tailored marketing approaches
can be adopted at the micro level, with respect to packaging, services, accessories, etc. The authors
emphasize on the importance of strategic market segmentation and positioning in a firm’s success
overseas. The strategic attractiveness of an inter-market segment is based on criteria such as reachability,
receptivity, measurability, sustainability and profitability. This determination is aided with the
standardized marketing processes.

The main conclusion of this paper is that successful international marketing strategies involve leveraging
the universal appeal of products across cultures and nations. Universality of appeal is closely linked to
universality of the benefit sought. Hence, the authors argue for benefit segmentation as an integral part of
implementing the new segmentation strategy. One proposed way forward is to make products hi-tech, as
buyers of hi-tech products share a common technical language, and because of the fact that hi-tech
products are more image-oriented and respond to universal needs such as heroism, romance and wealth.

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Linking Global Market Segmentation Decisions with Strategic Positioning Options
Salah S. Hassan, Stephen H. Craft
Journal of Consumer Marketing, Vol. 22 Issue 2 pp. 81 - 89

This paper suggests a portfolio of global brand positioning strategies in conjunction with the new bases of
segmentation proposed in an earlier work by the same authors. In the international context, positioning
decisions take on a broader scope that include the understanding of similarities and differences between
markets. Citing examples of firms, the study offers a 2x2 matrix, linking positioning strategies with
segmentation in international markets.

A focused strategy involves positioning the brand similarly in substantially similar segments. The Body
Shop has been cited as an example. An optimization strategy, as has been exemplified by Miele, includes
a differentiated brand positioning strategy across similar market segments. The third combination
represents similar positioning strategies across varying customer segments, as employed by Gillette, Coca
Cola, Kodak and Nike. The last type involves a much tailored approach that employs different positioning
strategies across different segments. This seems justifiable only for new market entry strategies, as
undertaken by Nestle.

The study involved conducting a regression analysis of the four positioning options against 7 identified
macro and micro level segmentation bases, and yielded results that can help firms to determine the ideal
segmentation basis along with the corresponding positioning option. Existing literature confirms that
buyer needs are converging in international markets and Indian companies would do well to address this
convergence by targeting cross-national groups of consumers sharing important characteristics relative to
the firm’s products or services. Effectively using hybrid bases for segmentation in conjunction with an
appropriate corollary positioning strategy provides clear economic benefits to firms, including cost
efficiencies ensuing from reduced duplication of efforts in markets with similar segment members,
opportunities to transfer products, brands, and ideas across different world regions, and access to new
inter-market segments

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 E. Case Studies
The Internationalization of Indian Companies: The Case of Tata
Andrea Goldstein
CASI WORKING PAPER SERIES, Number 08-02, Center for the Advanced Study of India

Goldstein provides a detailed study of the internationalization of the Tata Group, India’s largest
conglomerate, as an example of how Indian firms can go global. Of special interest is the fact that Tata
exemplifies a company that has turned good corporate citizenship into good business. Goldstein questions
whether this approach to domestic operations resists a global strategy of rapid growth.

The paper attributes the success of Tata overseas to several factors, and hence, provides a cogent
understanding of what it takes for Indian firms to make a mark on the international frontier. It has a strong
brand image that is deeply rooted in good business practices and philanthropy. The Tata’s have been
known to take giant steps in capturing foreign markets. Two significant incidents were the acquisition of
Tetley by Tata Tea and that of Corus.

Tata Tea used innovative packaging to position its 5 brands within India, and ensured a strong hold over
the domestic market. It focused on building a brand with universal appeal. Moreover, cost efficiency was
ensured by leveraging partnerships and alliances overseas, rather than incurring large distribution costs.
Post the acquisition of Tetley, the brand developed markets overseas by focusing on going organic. In
fast-developing countries which still used tea in packets, Tata Tetley introduced tea bag packaging. 6
years after the acquisition, Tata Tea transformed itself from a commodity producer to a global FMCG,
emphasizing on marketing and brand building. Growth in global markets is driven by integrating new
brands in new segments and countries.

Globalization of Indian Movie Industry

The Globalization of Indian Hindi Movie Industry
Rajesh k. pillania Management Development Institute, India

The Indian film industry has made approximately 27,000 films. It capitalized on ‘Brand India’ image and
millions of Indians settled abroad. Many Indian film companies like Eros, Adlabs, UTV are now listed on
the London Stock Exchange and have raised hundreds of millions of pounds.
The industry has been getting increasingly more corporatized.
The quality of prints has been improved and provides better visual graphics and viewing experience.
Digitization has resulted in consolidation of the scattered film makers and this has led to large scale
exhibition networks. Participating in international film festivals like Aan had a French release after its
premiere in London and tying up with foreign technicians like Himansu Rai made visually stunning films
in cooperation with the Germans like The Light of Asia and A Throw of Dice, and Slyvester Stallone in
Akshay Kumar’s kambhakht ishq plus hiring foreign artist like Awara with Russians has helped in putting
them on the global platform.

The industry has grown for around 60% in its revenues from international market, with USA & Canada
making
30% and UK with 25%. However films now need to move towards more international theme based story
lines and cut down film length to 100 mins which is generally accepted film length globally.

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ICICI Bank in Canada
International marketing strategy in the retail banking industry: The case of ICICI Bank in Canada
(Revised form): 15th August, 2008, Leighann C. Neilson and Megha Chadh, Sprott School of Business at
Carleton University (Canada)

ICICI faced several obstacles while expanding its base in overseas market of Canada, including lack of
understanding about cultural awareness and dynamics of retail banking market. It adopted international
strategy to target home customers in Canada. ICICI realized that customer needs are dependent on their
socio-economic status and the cultural environment of the country they live in. Elements of localized
approach were needed with the marketing mix to succeed. Most of the banking done now is online and
customers are well informed which aids low switching cost. In Canada the challenge for immigrants was
that domestic banks did not recognized international credit history of
Immigrants, this prevented them from obtaining credit. A vicious circle was formed where immigrant
needed employment for credit history, further to secure a loan for business or studies and a degree to find
a job.
Value-added promotions is a legal form of selling in Canada and ICICI utilized in effectively by the
customer a gift for purchasing their services
The Writing Lab was mandated to make quality check through all customer communication.
The transnational strategy allowed ICICI to exploit core competencies via subsidiary firm.
The autonomy was given to the subsidiary to respond to local customers
The held training sessions by Canadian consultants and launched product the ‘ Hello Canada
Newcomers Account ’ which allowed to obtain house, education and car loan based on back home credit
history and promoted money transfer to back home branckes without any charge for which Canadian
banks used to charge $25-$100. Outsourced back end operation work to cheap Indian labour back home
and strategically established seven branches in Canada. Opened ATM branches which operated in
Chinese, Punjabi, Hindi, French and Tamil.
To cultivate trustworthy image, made Shahrukh Khan as its brand ambassador with taglines of ‘ I endorse
this product ’ and ‘ Take my word for it ’ . The ads were made of extra large size, which made the
audience feel that Bank is large and strong. Since ICICI Bank went to Canada with its global marketing
strategies the customer deposits has risen from Rs. 1,599,785(2004) to 24,044,875 to Rs.60,890,218
(2006).

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 F. Marketing and the environment

Dealing with Institutional Distances in International Marketing Channels:

Governance Strategies That Engender Legitimacy and Efficiency
Zhilin Yang, Chenting Su, & Kim-Shyan Fam
Journal of Marketing: May 2012, Vol. 76, No. 3, pp. 41-55

The authors explore the hypothesis that firms expanding beyond domestic boundaries can design
governance strategies to improve performance and gain legitimacy (social acceptance). Institutional
framework may be divided as follows:

Institutional distance can be on account of regulatory factors which are dictated by the law of the land,
normative factors which are based on what the society believes ‘should and not’ be done, whereas
cultural-cognitive factors based on culture/tradition that affect the legitimacy of the business. Theuthors
suggest that firms can swing governance to increase their legitimacy:
 Contract customisation: Firms should tweak contracts as per local environment by inserting
clauses that are better suited to the climate to negotiate better deals with suppliers, local partners,
etc.
 Relational governance: Firms should try to assimilate in the culture of the host nation through
sharing of information and flexibility with local partners to enhance the firms’ ability to learn and
adapt to the new environment.
The authors, through statistical tools, demonstrate a positive correlation between customisation and
legitimacy, relational governance and performance.

The Effect of Cultural Distance on International Marketing Strategy:

A Comparison of Cultural Distance and Managerial Perception Measures
Tae Won Moon, Sang Il Park
Journal of Global Marketing: 23 Feb 2011, pp 18-40

Managers face the challenge of standardization and adaptation as an international marketing strategy.
Standardization refers to the execution of a common product, marketing mix, etc. and the relationship
between cultural distance and international marketing strategy adaptation can be framed as:

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The authors advocate adaptation as a sounder strategy. Culture affects a buying’s behaviour as per
findings to prove the hypotheses that cultural distance will:
 Relationship between cultural distance and promotion and the degree of price adaptation strategy
 95% confidence about cultural distance being positively related to the degree of promotion
adaptation strategy.
 Cultural distance will be positively related to the degree of product adaptation

The Role of Culture in International Relationship Marketing

Stephen A. Samaha, Joshua T. Beck, & Robert W. Palmatier
Journal of Marketing: September 2014, Vol. 78, No. 5, pp. 78-98

The authors employ Hofstede’s dimensions of culture to conduct an analysis of 47,864 relationships
across 170 studies, 36 countries, and six continents by synthesising results across disciplines.

Study 1: Meta-effects of Cultures effect on relationship management by evaluating moderating

effects of multiple cultural dimensions on “RM strategies -> relational mediators (commitment, trust) ->
outcome” framework (Morgan and Hunt 1994).

Individualism–Collectivism
 Collectivists garner greater communication intimacy than individualists and are more inter-
dependent

Power Distance
 People from high power distance cultures are more influenced by expertise and have positive
effect on group
 Higher benefits of relationships with increase in power distance. Impact of relationship mediators
and word-of-mouth also increases

Uncertainty Avoidance
Cultures high on this factor are more likely to resist change and experts are better equipped to perform in
uncertain situations
Activities reducing uncertainty foster stronger relationships

Masculinity–Femininity
Masculine cultures are more competitive whereas feminine are more collaborative

On the basis of the culture, the beneficial effects of relationships on outcomes and the power of word-of-
mouth were explored:
Individualistic High Power High uncertainty Masculine

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 distance avoidance
Word-of-mouth Moderate High High Low

Study 2: Effects of Country and Regional Cultural Profiles on RM

The study offers country-level insights into the effectiveness of different RM strategies be it dependence,
relation mediators, etc. The effectiveness of RM was lower in western countries and the USA only ranks
13 out of the top 25 countries (in terms of GDP). Management of firms expanding overseas should take
the same into account beforehand as it would shape their RM strategies e.g. a country with low RM
would be ideal for B2B (export). RM is 28%, 20%, 71%, and 100% more effective in Brazil, Russia,
India, and China, respectively.

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 PART II - RELEVANCE TO DIFFERENT SECTORS IN INDIA

A careful analysis of the various studies and papers referred to in the previous section helps us to relate
the findings and ideas to various sectors in India, with respect to firms developing global marketing
strategies.

Automobiles

India is a strong automobile exporter and the government has introduced several initiatives to make the
country a leader in the Two Wheeler (2W) and Four Wheeler (4W) market in the world by 2020. Its foray
into hybrid and electric cars further strengthens its chances of capturing market share on foreign shores.
Companies such as Tata (Jaguar Land Rover), Maruti, Bajaj Auto and Mahindra & Mahindra are
examples of Indian auto giants that have made it big globally. Based on the literature review in the
previous section, we can put forth the following points regarding global marketing strategies that can be
adopted by Indian automobile firms. Automobiles constitute one of the few products that Indian
manufacturers can market overseas with scope for value addition. Cars are highly personal items for
consumers globally and Indian firms can tailor their products and create value by focusing on aspects
such as aesthetics, design and performance standards. From Hassan and Craft’s paper “Linking global
market segmentation decisions with strategic positioning options”, we can identify a segmentation-
positioning strategy for Indian automobile manufacturers, which either suggests positioning the product
uniquely across varying segments or creating tailored products for different global segments.

Banking

With innovative financial products finding their way into the Indian banking sector, the economy opening
up, and digitization penetrating the very fabric of banking, the scope for expanding globally is more than
ever for Indian banks. As demonstrated in the paper “International marketing strategy in the retail
banking industry: The case of ICICI Bank in Canada”, the Indian banking sector needs to obviate certain
challenges while they seek to expand in global markets. The success of the banking sector is highly
dependent on close customer relationships and cultural awareness. As online banking gains ground,
switching costs for customers are lower than ever, and it becomes more significant than ever to adopt
elements of localized approach. Promotional strategies on entering new markets will play an important
role in attracting customers, just as ICICI launched the ‘Hello Canada Newcomers Account’ product.
Trust is another factor that is essential to a bank’s success overseas. A brand ambassador in the form of
Bollywood superstar Shahrukh Khan portrayed this image of trustworthiness in the case of ICICI.

FMCG – Food

The Indian foods industry has greatly evolved over the years, moving from staples such as dairy, to
packaged and processed foods, confectionaries and edible oils. As India becomes increasingly prominent
on the world map, Indian cuisine and food products are becoming more and more sought after. Global
marketing strategies for Indian food companies must focus on experiential marketing, as explained
earlier. There is great scope in expanding into developed nations by bringing the Indian flavour to foreign
taste buds. This requires substantial value creation and a sound marketing approach. Indian agricultural
products, tea, coffee and spices can occupy a space of their own on foreign shores by leveraging the
‘exotica’ image of the nation.

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Manufacturing

Indian manufacturing firms such as Godrej, Tata and L&T have long transcended national borders when
it comes to doing business. What scope do other manufacturing firms have to expand globally? It must be
understood that manufacturing is a diverse sector, ranging from cement and glass, to chemicals and steel.
A common trait that has been observed in the literature review is that Indian firms focus on raw materials
and intermediate products when going global. It is absolutely essential that they progress to more finished
and value-added products. A point of concern for any Indian manufacturing company seeking overseas
expansion is that they have to bear with the image of having sub-standard technology and quality. Till
now, the domestic as well as global fight for market share has been through severe price competition. It is
essential that these firms adopt more comprehensive strategies for segmenting global markets and
positioning their products. Though competitive advantage can be gained by cheap labour cost, the authors
suggest employing marketing strategies wherein companies correctly identify optimum segments and then
use the right brand positioning tactics. The literature also indicates that to make a breakthrough in foreign
markets, Indian manufacturing firms must get ISO certified. Moreover, Indian manufacturing firms would
do well to leverage the capabilities offered by parental networks as mentioned in “Building Capabilities
for International Operations through Networks: A Study of Indian Firms” by B. Elango and Chinmay
Pattnaik.

Telecommunications

Tata Telecom and Airtel are examples of Indian telecommunication companies that have forayed into
global markets and seen success. The Indian telecom sector is highly competitive and dynamic in nature.
The recent example of Reliance Jio shows how price-based marketing dominates the industry.
Furthermore, the scope of telecommunications is gradually increasing, comprising, but not limited to,
voice, data, mobile payment and cloud-based services. Entering foreign markets would pose problems
such as late entry disadvantages, lack of technological superiority and country-of-origin effect. The best
way forward for Indian telecom companies to expand globally would be to form strategic alliances with
or acquire local telecom companies in the target overseas markets. Price-based selling would not be a
good idea and firms would have to focus more on value creation for customers. More importantly, as a
service industry, an understanding of the foreign consumer and his needs would be essential to spelling
success on the global front.

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 PART III - MARKETING METRICS
The international marketing strategies to go global also depends on the extend of business penetration and
sophistication required by the firm and the orientation in which it wants to establish itself. There is neither
some hard and fast rule nor one dominant strategy that would work in all the cases. However a general
strategy can be formulated in form of some marketing metrics and postulates which my act as a North
Star in terms of providing a holistic view of strategizing, planning, evaluating, implementing and
measuring the practicability and rationality of such a venture. Geocentric may appear desirable but
adequate customer information and consumer behaviour study is needed to assess its feasibility because
as it as has low degree of market orientation. Regiocentric approach with improved regional coordination
along with national marketing
strategies with autonomous decision making authority both at regional/subsidiary level and centralized
corporate levels is much better suited for going international. Being Ethnocentrism will be successful only
in some special cases where the firm has to reinvent itself just for the sake of entering the market. It may
lose its parent identity in such a case. Each firm must thus evaluate independently and its desirability of
where it wants to position itself.
For Indian Industries to Go Global the Commandments are:-

 Production of world class quality and international standardization especially in Pharma (like
Ranbaxy)
 leverage India’s comparative low cost advantage (like ICICI, Infosys, TCS)
 Have strong Product development which identifies with international consumer needs (like
ICICI, Tetley, Scorpio)
 Upscale domestic production houses as per international standards and increase foundation for
exports (like Bajaj, Tata- Indica)
 Carefully assess soft infrastructure like political systems, logistic market, accounting and
banking systems, labour and capital markets to raise equity.
 Create ‘Trust’ and ‘Satisfaction’ first and then move on to ‘Brand’ building
 Providing authenticated research and help in formulating good industrial government policies
and connect with policy makers to create conducive business.

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Parameters affecting decisions areas and selecting different international marketing strategies and
orientations

Decision Areas Ethnocentric Polycentric Regiocentric Geocentric

(for a particular (for country (for a particular (for entire globe
Ethnic group) specific but all foreign region one brand
people) only) strategy)
Measurement 2 69 16 13
and forecasting
Segmentation 12 38 18 33
Research 1 65 16 18
Product 3 45 14 38
Development
Product design 5 40 10 45
Product quality 6 35 9 51
Customer 4 60 10 26
service
Product Mix 1 57 18 24
Brand Name 7 36 13 43
Price 0 67 12 21
Sales Promotion 5 45 7 43
Advertising 8 43 5 45
Distribution 1 39 19 41
Sales persons 6 31 15 49
Market Control 6 30 25 36
Cumulative 4 47 14 35
Profits

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Alternatively, it can be measured as follows:

Business Characteristics
Value Supplier
Industry Proces Export
Capital Technology addition dependenc
s skill volume
prospects y
Autombiles H H M H H M
Cement H L L L M H
Paints M M M M M H
Pharma H H H H L H
Software L H M H L L
Tea L L L L L H
Textile M M M M M H
Two wheeler M H M M L M

Product Characteristics Market transaction characteristics

Unit
Industry Freight Customer
valu Durability Sophistication Competition
cost contact
e
Autombiles H H H H H H
Cement L H H L L L
Paints L M H M M H
Pharma L L L H L H
Software H M L H H M
Tea L L L M L M
Textile M M L M L H
Two wheeler H M M H M M

L – Low, M – Medium, H - High

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