In this era of globalisation, it has now become crucial for any company to adapt to different marketing and sales strategies as per the cultural viewpoint of the desired economy.
Before entering any country, it is imperative for a brand to study about the culture (Professional and Personal), the preferences of the prospective customers and the product specific demands that they have. Only then, a company can formulate marketing strategies that best suit the kind of market they are dealing with. It has always been in the books that knowing your customers is the most important thing for a company and it is a well-established fact that what is working for one market would necessarily not work for another.
Taking into consideration the cultural influence of the society can benefit in creating a well-suited marketing strategy for an organization. These cultural aspects vary from societal dictation of being acceptable and unacceptable behaviours to symbols and languages in different countries and their meaning to the local audience.
Luxury brands that entered the Indian market are still not marketing themselves right considering the kind of potential the Indian market has. These brands follow the approach of creating a niche which has been their go-to strategies in the western market.
But does it really work in India?
Instead of being in the hindsight, they should be going all-in with their strategies by creating desire and by taking up good marketing techniques that not only reach the luxury prospects but also educate them.
The Indian consumers have not been educated about luxury and its various elements compared to the western countries. A desire for a thing comes with the knowledge about it, its appreciation and the reason why it is what it is. Till the time the Indian consumers are not made to understand the product and its associated value towards them, they won’t be convinced to buy a luxury product.
It is all about answering the question ‘why is this product worth so much money?’
Investing money on marketing in India. Is it worth it?
As per the recent reports from Deloitte, the Asian economies have been growing at a consistent pace due to the increase in the disposable personal income and is expected to grow steadily till 2028 and make sizeable contribution to the market
India is slowly and steadily taking the centre stage for fashion in the world with this coming year where its GDP has been expected to grow by 8 percent by 2022 (source McKinsey & Co.). It is no debate that the changing face of the retail spectrum of India and changing consumer preferences along with an increasing disposable income will transform India from a sourcing centre to an attractive consumer market outside the western world horizon.
Indian economy will be worth $ 5 trillion in the next 5 years and $10 trillion in the next 8 years thereafter (source McKinsey & Co.). This is in effect with the increase in the disposable income among the young millennials who will account for most sales in the coming future.
Greater appreciation for high-end luxury products, global trends awareness, rising aspirations and growing purchasing power across the middle class and upper middle class has also given a boost to the sales of such global luxury brands.
With the senior managements in the Indian corporates accounting for more millennials than ever, there has been an apparent growth in the tech-enabled solutions in the marketing landscape. These C-level employees, new emerging entrepreneurs, medical practitioners, and the likes are the ones that have more income and have more inclination to learn about other cultures, fashion and luxury. And since the market in India is not yet matured to favour luxury with the same enthusiasm as any other developed economy, it is the right time for luxury brands to break the rule of subtle marketing and go all-in to capture these prospects.
Findings that matters
The author had been involved in a survey that included people from different walks of corporate life with the same question:
- Name five Luxury brands that come to your mind this instant.
- Why do you think you remember these names?
Majority of them came up with few common brand names, namely Louis Vuitton, Gucci and Armani. And when asked about the reason why they thought of them, they referred to the instances of witnessing counterfeit products, products owned by their friends and acquaintances, that sparked desire in them to know more about such brands. It is no denying the fact that counterfeit market is something that is inevitable in a market, but this is where the need for communication arises for the luxury brand, the opportunity to create a better and lasting image in the Indian market and explaining why they are what they are.
With the increase in HNIs (High net worth individuals) with an estimated rise by 53 percent between 2018-2023, India will host as many as 3,400 UHNIs (Ultra high net worth individuals) worth more than $50 million, according to the Credit Suisse Research Institute’s 2018 Global Wealth Report. Considering this market potential, a correct communication strategy should be placed in front of them to make the best of their interest and purchasing power.
Creating a value proposition is the key
Another survey the author underwent was related to the brand Berluti in New Delhi, India. Almost 50% of the customer who entered the store in New Delhi didn’t even know what the brand was and what was special about them. This is something that impacts the brand because opposed to the brands like Louis Vuitton and Gucci, who have a good exposure in market due to counterfeit products, regional movies and music videos, Berluti has done barely anything to explain itself to the prospective customer.
If the customer doesn’t know who you are and what you do, there is no reason for them to think about you
Creating a desire for the product and pairing it with the right marketing strategy that emphasises on the reason why the said luxury product is worth the money is what drives sales. This is what the scenario has been in the automobile and hospitality sector in India where they have been creating desire and have been successfully communicating the same to their audience as well.
The figure above explains the Year on Year growth of the luxury car segment in India despite the demonetisation, GST regulations, Ban on diesel cars and Spike on the import duties of spare parts and completely built Units. This is due to the marketing efforts combined with the utmost customer service that are associated with these brands.
But the fashion brands are not communicating themselves to the prospective consumers who may be interested in their products but are not aware of it. To target new entrepreneurs from different industries and the people who have low technical knowledge about luxury products, the brands need to teach them these concepts and technicalities of luxury products in order to make more sales and create a loyal clientele. The brands need to create strategies that leads the customer directly inside the store and the rest is done.