The economic reforms initiated since early 1980s in India and China lead to a huge increase in the standard of living of people living in these countries (Sachs, et al., 2002). Millions of people were lifted out of poverty in a very short span of time. Increased spending power of people in these two Asian countries opened tremendous opportunities for western marketers. The ageing of baby boomers and the global financial crisis of 2008 limited the growth opportunities for companies in the western markets. With their rich young populations that have a liking for western style consumerism, India and China offer many opportunities for western companies desperately looking for new growth opportunities.
Being driven by youth, some of the goods and services that interest the youth markets of China and India are Cars and Internet Services. Young consumers with high disposable incomes spend a lot of money of the above mentioned goods and services. The rural markets with its increasing incomes too remain untapped (Bijapurkar 2008). A lot of micro and macro environmental factors impact the marketing strategies for marketers operating in these countries. Micro-environmental factors like the availability of cheap labor and the number of competitors can have a big impact on the functioning of companies in these two countries. The cost of labor is lower in both India and China that makes it easy for companies to produce goods for a cheaper price. Availability of cheap labor is one of the main reasons why many big automobile companies have made China and India as their manufacturing hubs. The availability of qualified human resources for a cheaper price also makes India and China facilitate the growth of Internet services.
Companies who operate in India and China follow different kind of marketing strategies when compared with western marketers. Products like cars need to be heavily customized to meet the local market conditions. Poor infrastructure necessitates companies to come with cars with features like higher ground clearance and mobile phones with longer battery backups. Despite their growing income levels, consumers in India and China put much emphasis on the value they receive for money paid. Companies operating in India and China follow value-based pricing strategies with emphasis on discounts and promotions. Lack of an organized retailing and poor Internet connectivity poses further challenges for marketers.
Goods need to be distributed through a complex and sometimes inefficient distribution systems leading to higher costs (Dholakia and Dholakia, 2012). When compared to the western markets, traditional media like Print still have a higher reach and continue to grow. Companies need to put more focus on conventional media channels like Print, Radio, and Television in order to reach the target customers effectively. In markets like China where English is not understood by a number of customers, marketing communications need to be designed and executed in local languages.
Given the huge untapped market and limited local competition prevalent in markets like India and China, U.S. companies have a lot of opportunities than can be profitably explored. However, U.S. companies that want to make a fortune in the eastern markets need to remember that the marketing strategies followed in their home markets will not work in markets like India and China. Academic literature is full of references to U.S. companies that have failed by entering the markets without understanding the local conditions properly. Vast untapped Asian markets await U.S. companies that can come out with their own customized marketing strategies keeping the local conditions in mind.
References
Bijapurkar, R. (2008). Winning in the Indian market: Understanding the transformation of consumer India. New Delhi: John Wiley & Sons.
Dholakia, N., & Dholakia, R.R., Chattopadhyay, A. (2012). India’s emerging retail systems coexistence of tradition and modernity, Journal of Macromarketing, 32 (3), 252-265.
Sachs, J.D., Bajpai, N., & Ramiah, A. (2002). Understanding regional economic growth in India, Asian Economic Papers, 1 (3), 32-62.
White, S. (2012). Principles of marketing. San Diego, CA: Bridgepoint Education.
