| Managing a Business activity in India is not the easiest | | | | The Indian 'Middle class' seems to be the favorite |
| of tasks. In fact it is one endeavor where even some | | | | target for almost all Multinational businesses and their |
| of the world's biggest organizations have failed. The | | | | offerings. The consuming patterns of this class of |
| single reason for this is the flawed perceptions most | | | | people is definitely undergoing a transformation, with a |
| business concerns have about the Indian Business | | | | significant quantum of earnings being spent on |
| space. The media in a certain way has contributed to | | | | 'discretionary' items such as entertainment, consumer |
| these perceptions. There are certain cities in India that | | | | durables, books and so on. Yet this class is not |
| seem to have hogged the limelight with the Western | | | | necessarily 'brand' driven and therefore evaluates |
| press and they include Bangalore and Hyderabad. But | | | | every product and service purchased, in terms of |
| remember the realities are not necessarily what you | | | | 'value for money'. It does not have any qualms in |
| read about, in these media stories. | | | | shifting to a non branded offering if the offer were |
| Some of the 'must know' realities about India, which | | | | perceived as better value. The 'value' perception in |
| can help any Business concern wanting to make an | | | | many cases is 'price' sensitive. India's individual |
| entry, are - | | | | purchasing power may climb from $2149 in 1999 to |
| Land of Diversity | | | | $16500 in 2040. The brand driven culture in India can be |
| Do not ever assume India to be one big homogenous | | | | limited to a few metropolitan cities, such as New Delhi, |
| mass. That is, the consumers cannot be slotted as one | | | | Mumbai, Bangalore, Chennai and a few other smaller |
| single huge entity. Unlike most western countries | | | | cities that have attracted a migrant crowd because of |
| where elements such as language and religion could | | | | the growth in services sector in them. They include |
| contribute to a certain homogeneity that could exist in | | | | Pune, Hyderabad and Gurgaon. |
| society, in India there are myriad factors that contribute | | | | The states that promise a burgeoning middle lie to the |
| to unbelievable diversity. Take language for example, | | | | south and west of the country. These states show a |
| the constitution of India has stipulated the language for | | | | promise of a huge middle class community with the |
| official communication as English and Hindi. In addition, it | | | | necessary purchasing power at least by the year |
| classifies a set of 22 scheduled languages which are | | | | 2020. Contrasted against these states would be the |
| languages that can be officially adopted by different | | | | states to the east of the country that include Bihar, |
| states ( there are 22 States and 7 Union territories ) | | | | Uttar Pradesh and Orissa which will take even more |
| for administrative purposes, and also as a medium of | | | | time to develop this 'middle class'. Add to this the North |
| communication between the national and the state | | | | eastern states,and the picture is not too rosy. |
| governments. Though Hindusim is the religion that is | | | | Bureaucracy |
| practiced by majority ( 81% ), Islam, Christianity, Sikhism, | | | | The bureaucratic system that is found in India is stifling |
| Jainism, Buddhism and Zoroastrianism, are practiced | | | | slow, problematic and corrupt. In the words of Mr. T N |
| too. Food Habits too change from region to region. | | | | Seshan, former election commissioner and Cabinet |
| Religion, Caste restrictions, geography, weather, and | | | | Secretary, ( quote ), "We have the largest number of |
| influences from other countries ( invasions and | | | | laws covering and uncovering almost every aspect of |
| occupations ) have all contributed to the diversity in | | | | human life. But the inside out of Indian democracy |
| Food Habits. | | | | today is that law is obeyed more in circumvention and |
| All of this points to a diverse population that cannot be | | | | defiance than in effect...All that we built to enshrine |
| painted with the same brush in terms of | | | | freedom has been eroded by a plethora of decrees, |
| characterisations. Doing business in India almost | | | | laws, rules, ordinances which serve a few; it serves |
| stipulates an understanding of this diversity. Some | | | | the State, but not the citizens. Today it has become |
| Business Concerns have understood this very well and | | | | desperately difficult for the citizens to defend |
| have therefore ended up being successful in their | | | | themselves against the onslaught of laws, rules and |
| ventures in India. | | | | ordinances, and against the overpowering destruction |
| The best example of this is McDonalds. The primary | | | | of individual freedom and dignity...there is palsy at the |
| reason for their success apart from their 'competitive' | | | | centre and paralysis at the periphery...We have |
| pricing which made the burger extremely affordable, is | | | | practiced socialistic principles for 46 years or more. At |
| their menu. The menu at McDonalds hase been | | | | the end of it, today, 20% of India's population takes |
| customised for the Indian palate. 'Beef' does not | | | | 25% of its gross national income and 40% of the |
| feature on the Menu, due to religious considerations. | | | | population takes 2% of the national income." |
| The customised Menu, features items such as 'McAloo | | | | Just recently, the visiting Singapore Prime Minister, Lee |
| Tikki Burger, Maharaja Mac and McCurry among other | | | | Hsien Loong commented on the Indian Bureaucracy |
| Indianised dishes. Contrast McDonalds with Kelloggs | | | | and called it a stumbling block to investment by |
| which failed to understand the Indian palate and so | | | | Singapore companies in India. He remarked that |
| found the going tough in India with its offerings. | | | | Singapore companies wanted to invest in hotels in India |
| What also needs to be borne in mind is that at times, | | | | but the Indian bureaucracy was "too complicated" and |
| customisations should not just be restricted to the | | | | outsiders took a long time to understand it. |
| country, but must also be extended to specific regions. | | | | An example of the difficulties posed by the Indian |
| In the business of Food and Beverage the Menu items | | | | Bureaucracy is the case of American Agro Business |
| must differ from region to region. For example, to the | | | | Company, Cargill Corporation. In spite of a go-ahead |
| south of India, where vegetarianism prevails, this | | | | from the central government for a $15 million Salt |
| aspect must be reflected in the Menu Items. Similarly | | | | processing Venture, problems from the State of |
| Coffee as a beverage finds greater favour in the | | | | Gujarat, where the plant was to be located, forced |
| south of the country. | | | | Cargill to shelve the project. |
| The Great Indian Middle Class | | | | |