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Promoting India abroad isn't easy

One good idea which has emerged from the inner, usually business-illiterate, recesses of the Union government but which has failed to get off the ground, is the India Brand Equity Fund. The second meeting of the India Brand Equity Fund Trust was scheduled to be held in New Delhi on May 21 under the chairmanship of the Union commerce secretary. Most likely, it was as unproductive as the first meeting of the trust held last December.

Over two years ago the Union government made the right move by allocating a sizeable Rs 500 million to enable a high-powered committee headed by the recently retired Industrial Credit and Investment Corporation of India chairman Narayan Vaghul to find ways of making Indian brands and the 'made in India' label more acceptable overseas. With the nation's import bill consistently higher than its export earnings, developmental growth and the value of the rupee are being adversely affected by the chronic trade deficit.

While a spirited attempt to refurbish the Indian industry's image, which was almost irrevocably ruined, to foreign markets during the past four decades of centrally planned development is overdue, IBEF managers need to guard against the temptation of over-reaching themselves.

For a start, IBEF managers should resist the temptation to market India. During the past four decades of central planning and public sector led development, the nation's image has suffered such grievous damage in the international marketplace that it will take a very long time and much more than Rs 500 million to repair it. Let's face it: the 'made in India' label is synonymous with shoddy goods, lack of standardisation and tardiness.

Instead, the IBEF Trust would do well to identify some industries in which Indian manufacturers have attained near international standards of quality. And within these industries to identify firms whose brands can be vigorously promoted.

Industries within which centres of excellence have emerged despite a official development model designed to chain Indian industry to obsolete technology and marketing strategies, are computer software, tea and coffee, leather footwear, watches, gems and jewellery, light alcoholic beverages (beer, rum, gin etc), light consumer durables (electric fans, irons, geysers), ready-made garments, hotels and tourism and travel.

Within these industries, companies such as TCS, HCL and Datamatics Exports (computer software), Brooke Bond and Consolidated Coffee (tea and coffee) Gaitonde Shoes, Suraj Diamonds, Titan Watches, the UB Group (light alcoholic beverages)., Orient, Crompton Greaves and Bajaj Electricals (fans, irons and geysers), Madura Garments, Chirag Din and Pantaloons (ready-made garments) and the Taj, Oberoi and Welcomgroup hotel chains could with some advisory and financial assistance from IBEF quickly impact their brands in foreign markets.

Yet if the IBEF inspiration is to attain fruition, it is important for managers of the fund to resist the temptation to metamorphose into the proverbial bull in the china shop. All the companies which have attained leadership positions within the domestic marketplace have some -- though not entirely adequate-marketing savvy and expertise. Therefore, the appropriate role of IBEF manages would be of advisors and facilitators in terms of providing top-up marketing finance.

IBEF trustees can also play a very useful advisory role in helping managers of indigenous market leader firms to devise and adopt appropriate and cost-effective marketing strategies to establish their brands in overseas markets. The harsh truth is that because they have cut their teeth in a domestic marketplace over-protected against both internal and foreign competition, Indian marketers tend to know very little about cost-effective marketing.

A highly cost-effective and proven brand promotion option to which Indian industry has reached with a curious tepidity is the mail medium. Offering the advantages of targeting, personalisation and opportunity for detailed product and corporate information, the direct mail medium can induce product trial and market penetration at costs affordable to Indian industry. Contrary to popular belief, it is the old-fashioned mail box which is the most preferred medium in the US for business-to-business advertising. In 1995 national advertisers spent a massive $32 billion (Rs 1,000 billion) on direct mail advertising.

Indian exporters seem unaware that exhaustive and detailed mailing lists of potential purchasers of virtually every product under the sun are available off the shelf in the US and most European countries at very affordable prices. IBEF and Indian marketing managers with aspirations to make an impact in competitive western markets would do well to purchase proven mailing lists and despatch creative mail packages to business decision makers overseas detailing their products and corporate reputations.

Going direct -- rather than making futile efforts to stretch pitifully small brand promotion budgets -- is the path to salvation for Indian brand managers intent upon making an impact in competitive markets overseas. The IBEF trustees and think-tank would do well to seriously educate Indian industry on this score.