Indian brands dominate foreign markets?

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Indian brands could dominate foreign markets: Emory's J Sheth

 

www.financialexpress.com

"The Triad of Power", which consists of three blocs: North & South

America, European Union and Eastern Europe and the Asia Pacific

region."

 

Our Marketing Bureau in New Delhi

 

The world is regionalising not globalising and Indian companies need

to wake up to this reality. The challenge for Indian companies then

is to align with one bloc from the current Triad of power, which

consists of three blocs: North & South America, European Union and

Eastern Europe and the Asia Pacific region. The Asia Pacific bloc,

which includes China, will ultimately be driven by China, with Japan

acting as a support nation, leaving India no choice but to align more

with the American bloc, including UK.

 

This was predicted by management and marketing guru Prof Jagdish

Sheth, professor of marketing, Emory University, while addressing a

seminar on `Managing global customer relationships—the challenges and

opportunities for Indian companies' in the Capital. The seminar was

organised by the CRM Foundation in collaboration with IIM Lucknow &

iCRM (Institute for CRM), Atlanta.

 

Taking a futuristic view he also predicted that in 5-10 years one may

well see the reverse trend of Indian MNC companies dominating foreign

markets with their brands. He went on to explain how most economies

were interacting within blocs, not between blocs. There is a

restructuring of industry based on the theory of Competitive

Advantage, which means that nations are exiting from many segments

and specialising in others. For example, in the European Union,

Germany is specialising in automobiles, France in aerospace, while

others are exiting from these categories. US and Europe have

virtually withdrawn from consumer electronics (Thomson, Philips are

doing badly). The industry is moving to places like Korea and China,

which is emerging as the largest TV maker. Similarly, Japan is

exiting ship-building, consumer electronics, textiles and

concentrating on new areas like services, banking, computers,

telecom. The US is also increasingly outsourcing non-competitive

industries to emerging nations. ``In such a scenario Indian companies

can dominate in non-competitive industries. In diamond cutting for

instance, 90 per cent of the world market comes from Surat, while the

largest buyer is the US. Currently a mere supplier, companies could

go in for branding and emerge global winners,'' Prof Sheth said.

 

It is here that global customer relationship management becomes

critical. Indian companies would need to scale up through internal

consolidations in order to compete globally. The Tatas, for instance

should ``give up the hills and concentrate on the mountains.'' Its

recent buying out of Tetley of UK is a good step in this direction.

Speakers at the seminar also talked about the distinct power shift

taking place globally, with retailers and distributors consolidating

and going global. So manufacturers can't dictate terms any longer.

This is in sharp contrast to the Indian industry where the

supplier/manufacturer continues to be king and the

distributor/retailer comes second.

 

Prof Atul Parvatiyar of Georgia State University, stressed the

growing importance of long-term relationships with vendors since the

process of vendor development is very expensive. Following the

example of Proctor & Gamble, which was the first to move into a

partnership relationship with retail giant Wal-mart in 1988-89,

companies are beginning to get partnership oriented and beginning to

look at the retailer as their biggest customer. In fact, Wal Mart, a

$ 191-billion entity, is a customer segment in itself. In a digital

world with products launched concurrently in all markets, global

suppliers and integration of products & services makes economic

sense. In such a scenario, distributors also demand service, not just

transaction-oriented relationships.

 

Speakers defined a global company as one that feels resources, skills

and opportunities could be anywhere in the world. Its global

operations are integrated across nations and it has the ability to

both think global and act local and vice versa. The first functions

to be integrated are purchase and R&D, while sales are the last.

 

The seminar also detailed how a global customer management (GCM)

programme needs to be designed, with criteria, process and portfolio

composition, a contingency model for GCM effectiveness, managing

global account relationships and a GCM performance evaluation metrics.

 

The CRM Foundation, which organised the seminar, is a non-profit

organisation with 100 participating companies. ``It aims at pushing

the CRM initiative forward by helping organisations find the best

tools for improving and assessing CRM practices,'' says Mr Alok Kumar

of Bharti Telenet Ltd, who is also the president of the Foundation.

Such efforts gain significance in the light of India's poor placement

in the `Global Competitiveness Report' of the World Economic Forum,

which placed India 43rd among the 49 nations surveyed on the Customer

Orientation parameter.