Foreign Brands in India

Description
brands in Indian market and how they expanded their business.

Foreign Brands in India Market
Presented By: Vinay Dabholkar Akshay Vartak Suhas Sonvalkar Devans Patwa Nilesh Kambli Gaurav Mewati Vaibhav Chavan

M1108 M1160 M1155 M1121

P1111

Need of Liberalization Before 1991- Impediments for foreign investments • Industrial licensing under IRDA,1951 • The size consideration under MRTPA 1969 • Limits on the level of foreign share placed by the FERA,1973 • High rate of taxation • Restrictive labour laws • Inadequate patent protection

Post Liberalization Scenario Post 1991- Changes in Policy for Foreign Investments
•De-reservation of many public sector reserved areas •Doing away with registration under the MRTPA •Removing the general ceiling of 40 per cent foreign equity under FERA •Can use foreign name in Local market •Entry into low technology consumer goods •Dilution of the dividend balancing condition and export obligations •Liberalization of the terms for import of technology and royalty payments •Permission to invest up to 24 per cent in small scale units •Reduction in tax rates

Strengthening through JVs
• Honda raised its stake in Kinetic Honda to 51% • GE acquired Elpro’s 49% in GE-ELPRO JV • Birla allowed majority stake to Foreign Partner in VXL Landys GYR, Birla 3M, Birla Kent Taylor • TVS Whirlpool to Whirlpool • Fuller-KCP to Fuller Intl • Suzuki attempts at gaining majority stake in Maruti-Suzuki • Mercedes Benz seeking 76% in JV with Telco • Bridgestone gaining 74% stake in JV with ACC • Pepsico + Voltas + Pujab Agro Industries = PEPSI (today)

Category wise Foreign Brands in Indian market
Alcoholic Beverages: Automobile Garments: Confectionery: Bacardi BMW Intl Benetton Agrolimen Brown & Foreman Corp DaewooChup KB&T Chuppa Douglas Fiat Chocolate Lacoste Lotus Laing Foster's Brewing Group Ford Levistrauss Mars Henninger-Brau General Motors Mexx Perfetti Hiram HondaCardin Pierre Walker Van Melle International Distillers Hyundai Wriggley Macdonald & Muir Mercedes Benz Seagram Volkswagen United Distillers Volvo White & Yamaha Mackay Other Food: Miscellaneous: Domestic Appliances: Soft Drinks: Danone Schweppes Black & Decker Daewoo Cadbury Heinz Gillette Electrolux Coca Cola KFC Kimberley Clark General Electric Pepsi McDonald Reebok LG Electronics Pizza Hut Sara Lee Perfumes : Samsung Cosmetics, Quaker Oats TimexProducts Whirlpool Avon Dunken Electric General Donut Baccarose Kandos Group Cussons Baskin L'OrealRobbins Maxim Cosmetic Nectar Overseas

Impact of Foreign Brands (A)Negatives a) elimination of small time local brands b) Increased competition and pressure c) Take over of Indian brands by foreign ones

d) Increased stress on local natural resources
e) Outflow of revenues

Impact of Foreign Brands (B) Positives a) Better learning for Indian brands

b) push for better performance
c) Increased consumption base d) increased employment base

Foreign Brands in Fashion Industry
Some of the brands that have sustained are among the early entrants having a presence in India since the late 1980s and 1990s or even earlier. e.g Bata, Benetton, Adidas, Reebok, Levi Strauss and Pepe. •Expansion Strategy for India •2006 and 2007 : Reebok largest apparel and footwear brand •2010: Benetton and Levi’s are expected to cross the $100-million In 2009: Shift from Franchise model to Subsidiaries and Joint Venture Model to exert more control over the retail operations, products, supply chain and marketing. •Mothercare : Changed from Shoppers Stop Franchise to DLF JV for stand alone store. •Licence Nautica, Jansport and Kipling looking for new partner for JV •Burberry: franchisee arrangement with Media Star – 2 Stores New Joint Venture with Genesis Colors - 20 stores in India. •Esprit : Approached Aditya Birla Nuvo: Distribution arrangement to a joint venture due to excellent potential in the Indian market.

Positive Impact on Indian Market
Development of well established supply chain:
MacDonald has decided early on to source its material from local suppliers to achieve • To operationlise its Quality, Service, Cleanliness & Value (QSCV) • To enjoy flexibility in pricing • To launch new products when necessary Currently its sources 95% of its raw material from 38 local suppliers

How did they do it?
• MacDonald & its international suppliers worked closely with Indian suppliers six years before opening store • MacDonald transferred its state of art food processing technology to India

Success stories
• Technology upgradation: • MacDonald’s helped Trikaya Agricultural company to grow high quality lettuce year round at Pune, Ooty • They shared advanced agricultural technology such as drip irrigation, selection of high quality seeds • Now Trikaya’s post harvest system include large cold storage facility, cold chain consisting of pre cooling room to remove field heat & large refrigerated vans with humidity control • Trikaya Agriculture now supplies & exports this crop to a number of hotels, clubs, flight kitchens etc. • Facility upgradation • Vista International which provide nuggets, pies to Macdonald’s built new facility in 1996 with their help • It now includes insulated panels, temperature controls & chill rooms • Business development: • Indian companies like Dynamix Dairies had technology but no market for their product • McDonald’s introduced Dynamix to two of its global suppliers – Schreiber Foods, USA and Erie Foods • Today they supply not only to MacDonald's but also have export order of 12 million dollars to US

Negative Impact on Indian Market
Nutrition & Health
• McDonald's food is high in fat, sugar and salt, and low in fibre and vitamins. • A diet of this type is linked with a greater risk of heart disease, cancer, diabetes and other diseases. • It contains many chemical additives, cause ill-health, and hyperactivity in children • Many critics blamed McDonalds that its menus and portion sizes contribute to obesity, diabetes

Environment
• Conservationists accused McDonald's as an industry leader promoting practices detrimental to the environment • Taking advantage of the natural resources globally, damaging forests • Accusation cattle ranching (as the world's foremost promoter of a beef-based diet) • Extensive growing of cash crops thus affecting balance of other crops like cereals • Production and disposal of thousands of tons of packaging material

Exploiting workers
• McDonald's do not pay overtime rates even when employees work very long hours • Pressure to keep profits high and wage costs low results in understaffing, so staff have to work harder and faster • As a consequence, accidents (particularly burns) are common

Robbing the poor
• Vast areas of land used for cash crops or for animal farms, or to grow grain to feed animals • It is done at the expense of local food needs • McDonald's continually promote meat products, encouraging people to eat meat more often, which wastes more and more food resources

Foreign Cosmetic Brands in India
Why Foreign Brands Influenced Indian population
• Influence of western culture on Indian population
• Rising consumer awareness and affordability of Indian population • Increased consciousness about looks and lifestyle resulting in demand for specialized products- growth driver for foreign brands • Identifying the opportunity foreign brands fulfilled the demand • Media and communication impact on Indian population • Brand consciousness in Indian consumers • Indians look towards international brands as lifestyle enhancement products • Perceived foreign brands as being of superior quality

Growing Market Size of Cosmetics

Foreign Top Cosmetic Brand in India – L’oreal
•L’oreal entry in India in 1991 in the cosmetics industry • Fierce competition from established leaders such as Unilever’s and P&G • India not in the top ten markets for but l’oreal’s Indian market has grown 30% annually • Currently 30 million Indian buyers for L’oreal • L’oreal strategy for India : Small packs of expensive products for less affluent and bigger size products for affluent

Market share in Hair Color – Major Foreign brand

INDIA STRATEGIES
• Looking at Indian consumer L’oreal to set up R&D facility in Mumbai • Investing INR 65 crores across the product value chain right from research and innovation, manufacturing, distribution and marketing • Stepping up its retail presence with specialised boutiques housing its Kiehl’s range of luxury products

L’oreal Products
Hair Conditioner Hair Coloring Skincare Shampoo

Market Share (India)
41.5% 38.0% 6.5% 4.6%

Perception Map of Watch Brands
Formal/Classic

Nebula

Low Price

High Price

Fashion/Sporty

International Watch Brands in India

Japanese watch maker company

Brand of watches owned by Timex Group B.V. which is a Dutch holding company

•Both these brands are perceived as local brands by Indian consumers •They cater to both, the upper middle class consumers as well as the middle class strata of the Indian society •An example which shows that not all International brands are expensive

International Watch Brands in India

USA

Italy

Swiss

Swiss

Swiss

Italy

•All these brands are luxury International brands that operate in India •Indian consumers look at these brands as not just watches but a style statement •These watches are more of an accessories than just watches •They have a snob value and hence are very expensive

Effect on India Watch Brands

•World’s 5th largest & India’s leading watch manufacturer •Collections like Raga, Purple, Nebula, Octane, Orion, Edge

Caters to the lower middle class & middle class people

Caters to the youth segment with all its trendy watches

•Caters to the upper class people •You don’t possess a Xylys, it posseses you

THANK YOU !!!



doc_968131671.pptx
 

Attachments

Back
Top