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Branding strategies in emerging markets

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Branding strategies in emerging markets
  • 1. Lloyd Blankfein MARCH2006 Harsha Bhogle Rs 1000 Rs 14000 Rs 600 Rs 700 Rs 9 Rs 5000 Rs 780 R 9 0 00 00 4800R 00 500R C O V E R S T O R Y in emerging markets Brand strategies INSIGHT SPECIAL PRESIDENT BUSH VISITS THE ISB George W Bush

2. George W Bush President of the United States, at the Atrium of the ISBs Academic Centre 3. March 2006 | ISBinsight | 1 Dear Reader, This issue of the ISBInsight has interesting opinions on the hot topic of Branding. The markets are abuzz with the news of the tremendous growth potential and the huge opportunities that emerging markets present. Professors of Marketing, Marketers, Consultants all of them see a bright future when they peek into the crystal ball, and all of them agree that the new markets need creative approaches to branding. Brands have the power to change peoples lives and to change the world. The BRIC countries featured again in the speech of Lloyd Blankfein, the President & COO of Goldman Sachs Inc., during his maiden visit to India and the ISB. He talked about the irreversible progress of wealth creation in them. His visit and contribution of $1 million to the Centre for Analytical Finance was the high point for the ISB this last quarter. It appears that India is on a winning spree all around. With the cricket season in full swing, we were fortunate to get Harsha Bhogle and Professor Bob Stewart, who teaches Sports Management at the ISBs Executive Programmes, together for a chat on the challenges of encouraging excellence in sports in developing countries. It was the season for the annual student led events - the ILS, Solstice, Poseidon and some unusual topics such as Youth Particpation in Politics were discussed. The mood at the ISB has been upbeat with the entire community feeling that we in India are on the verge of something really big. The ISBInsight reects this mood. We share the brief and exciting encounter with President George W Bush, when he visited the ISB on March 3, 2006. The world needs India, he said and added, I am honoured to be at the ISB, almost endorsing Brand India and Brand ISB. It was a memorable visit in which the faculty, students, staff, and entrepreneurs participated. The Insight Special captures the visit and the reactions. It will be great if you could share your opinions on what we think. As always please email us at [email protected] Bhuvana Ramalingam Editor From the editors desk IFROMTHEEDITOR ISBInsight team Bhuvana Ramalingam Sreedevi Yadavalli Mrinal Kanti Ray Varshaa Ratnaparke Madhavilatha G Design: Trapeze Cover Illustration: Anupa Jayakrishnan Resources: Learning Resource Centre at the ISB Printed at Kala Jyothi Process Pvt. Ltd. Indian School of Business Gachibowli, Hyderabad 500032, India Phone: 91 40 23007000, Fax: 23007012 Email: [email protected] www.isb.edu Back Cover: The architectural splendour of the ISB buildings A view of one of the Student Villages 4. 2 | ISBinsight | March 2006 Contents 4 Cover Story: Brand Strategies in Emerging Markets With emerging markets experiencing an economic boom, marketers are being challenged to nd unique brand solutions. 6 Understanding Tomorrows Tigers Academicians,consultants,andindustry leaders share their perspectives and practical experiences about brands that work in emerging markets. 11 Strategies for Harnessing Local Brands Vijay Mahajan and Kamini Banga discuss strategies that can help companies leverage their brands to create opportunities in the 86 percent markets. 16 The Emerging Consumer Professor Sridhar Moorthy discusses the branding challenges for marketers considering the decreasing power of television, and increasing power of word-of-mouse. 19 Shouting Over the Fray: An Academic Perspective on Measuring the Impact of Advertising in a Cluttered Environment Professor Seshan Ramaswami on how academic research can contribute to a greater understanding of the effects of advertising in a cluttered environment. 22 Insight Special: President George W Bush Visits the ISB The ISB grabbed headlines the world over recently when the US President visited its campus. Our special feature captures the event. 26 Learning Lessons from Australian Sport Management Harsha Bhogle exchanges notes with Professor Bob Stewart on how an emerging economy like India can learn from the experience of Australia in managing sport. 30 ISB Leadership Summit 2006: India Next Politicians and business leaders, along with an academician and a social activist, discuss the need for greater youth participation in politics, and on synergies between the government and businesses for India Next. 31 India on a High Growth Trajectory: Lloyd Blankfein, President & COO, Goldman Sachs Group Inc. Lloyd Blankfein addresses the ISB students on his experience at Goldman Sachs, and compliments India on its emergence as a destination for direct investments. 32 Competitive Intelligence for Staying Ahead in the Market Phani Tej Adidam discusses cases where CI analyses have been successfully employed by companies to stay ahead of their competitors 34 The Current Status of Indian Economic Sector Reforms A report on the proceedings of a unique conference organised by the Stanford Center for International Development (SCID) and the Centre for Analytical Finance (CAF), ISB. GSVC judges Alice Lin, Kim Alter, & Sara Olsen Sandeep Dikshit MP, Lok Sabha 5. March 2006 | ISBinsight | 3 Tejendra Khanna Chairman, Ranbaxy Laboratories Ltd. Rajendra S Pawar Chairman, NIIT Rakesh Mohan Deputy Governor, RBI S Narayan Former Economic Advisor to the Prime Minister of India, & Former Finance Secretary, Goverment of India 36 GSVC: Social Ventures That Look Beyond the Bottom Line The Asia Semi Finals of the GSVC held at the ISB, attracted a lot of attention for the competitions focus on business plans that are protable, and also provide tangible social benets. 38 The Erosion of Categorical Boundaries: Interview with Professor Hayagreeva Rao Three students interview Professor Hayagreeva Rao on the blurring of categorical boundaries in organisational structures. 40 My Journey with the ISB: Memoirs of an Alum Aarthi Ramesh, Class of 2003, on the special bond that she shares with the ISB. 42 ISB Happenings There was plenty happening at the ISB, as always, with eminent visitors and guest speakers, student competitions, and colourful events that had the campus buzzing with activity. 44 Book Review 6. Brand Strategies in C ountries such as China, India, Brazil, Mexico, Russia, South Korea, South Africa, Egypt, and several others, are currently experiencing a heightened consumerism owing to a boom in their economies. These countries comprise a whopping 86 percent of the worlds market, a term used by Vijay Mahajan, former Dean of the ISB, and current holder of the Harbin Centennial Chair in Business at the University of Texas in Austin. Marketing successfully to the 86 percent is imperative for companies that want to remain globally competitive. On the one hand, the heightened consumerism, and rapid globalisation, is presenting global marketers with immense opportunities. On the other hand, these opportunities are riddled with some unique challenges for market solutions for emerging markets are different from those for the developed markets. Developing and implementing these solutions often demands innovation, and an inexhaustible drive to overcome obstacles in adapting to local conditions. This is because emerging markets have some characteristics common with the more mature markets; they also exhibit features that are unique, and regional. Time tested brand strategies that worked very well in the developed world, sometimes fail in emerging markets, causing companies to incur losses, and lose great marketing opportunities. Some characteristics that are common to customers in both the developed and the developing economies are an enormous appetite for devouring television entertainment while displaying a marked tendency to avoid commercials, the Net savvy consumer preferring to seek brand information through word-of-mouse sources rather than the conventional Emerging Markets 4 | ISBinsight | March 2006 7. word-of-mouth ones, etc. Academic studies also point to a cluttered advertising environment in emerging markets such as India, a problem earlier associated only with the mature, developed economies. What is singularly distinctive of emerging markets is a strong regional inuence. The inuence could be cultural, linguistic, socio-political, and even religious. Emerging markets are extremely price sensitive, as well as quality conscious. They can display a erce loyalty to a local brand in a show of patriotism, and also prefer a foreign brand in a show of sophistication. These markets demand the right mix of glocalisation, which is a complex tapestry of global and local attributes, and isoften variable from one emergingmarket to another, and more perplexingly, from one region within an emerging market to another. Our cover story is an amalgam of all these perspectives about brand strategies in emerging markets. Leading academicians and consultants share their expertise on brand strategy, while market leaders describe actual experiences in developing and marketing their brands. With companies developing a variety of solutions to meet the needs of emerging markets, what remains challenging is the need to be constantly innovative. As Dipak Jain, Dean, Kellogg School of Management, said during his address to the participants of Ikshaa the ISB Marketing Summit, In todays brand strategies, the word anticipation becomes more important than prediction. We no longer have the luxury of being reactive, we need to address not only the articulated needs of consumers, but the unarticulated needs as well. March 2006 | ISBinsight | 5 8. 6 | ISBinsight | March 2006 Understanding In US dollar terms, China could overtake Germany in the next four years, Japan by 2015, and the US by 2039. In

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