The business first approach of Indian entrepreneurs

There are over 5000 listed companies in India but few hundred brands which take the guided approach to market, involving research and advertisement agencies.

In other words, Basic Principals of marketing were not entirely followed in India. Following factors have led to a differentiated approach towards marketing in India.

1)     1970s saw emergence of creative and design elements among Indian brands.

2)     Indian firms started thinking beyond product presentation in 80s and started incorporating brand management principals from late 90s.

3)     But the natural step of focusing on overall strategy for brands didn’t appear next. What came next in India was increased awareness of importance of distribution over other basics of marketing probably because ‘one can find a corner in India to sell products if your product and price are right” – please refer to my article “The great Indian market” on Linkedin for details.

4)     Early 2000 also saw advertising agencies being split up into separate wings for Media and creatives. This eliminated scope of a third party being able to offer holistic marketing solution to firms and the country just didn’t have enough number of trained Brand personnel.

5)     India spent next one and half decade experimenting with various kinds of business models involving – backward / forward integrations, import based value added products, small scale operations providing in-process materials etc.

6)     India’s domestic consumption kept growing with population and there hence there was no great urge to look at international markets. Besides, international markets required very strong manufacturing bases and creation of strong brands. Whereas it was easier and less expensive to focus on only distribution and just sell in the large domestic market.

7)     Manufacturing lead of China – China emerged as a major player in manufacturing sector for all consumables at a time when India was still experimenting with different economic models and toggling between socialist approach to market vs. capitalist approach to market. By the time Indian government started process of market liberalization China had a solid three decade lead over India and hence their scale of operations were already large enough and prices low enough to not only create entry barrier for India in international markets but rather compete with Indian firms in Indian market too.

8)     Sectors to emerge on solid foundation were Pharmaceuticals, IT and Services.

9)     Indian population doubled between 1975 and 2018.

10)  The so called growing middle class may be a myth because out of estimated number of                270 million families hardly a million families earn over USD 715 per month which is the definition of middle class in India. Yet consumption is growing with population

As a result of all the above factors India entrepreneur were always hard pressed to resort to short term tools of marketing and just handful of companies could take long term approach of entering market systematically or had resources to plan long term brand building.

Therefore, India emerged as a giant trading economy and smart business people always focused on short term profits over long term brand building.

To conclude Basic Principals of marketing were often ignored by Indian entrepreneurs in favor of short term profits.

However, oncoming fourth industrial revolution brings new set of opportunities and so does increasing global protectionism. It will be interesting to see how the new breed of Indian entrepreneurs leverage the opportunities on the horizon. Especially now that large pool of skilled Indians are looking back to their homeland due to changing global employment structure.