EDUCATION EVENTS MUSIC PRINTING PUBLISHING PUBLICATIONS RADIO TELEVISION WELFARE

   
f o r    m a n a g i n g    t o m o r r o w
SEARCH
 
 
JANUARY 15, 2006
 From The
Editor-In-Chief
 Overview
 Columns
 Trends
 From The Editor

Interview With Giovanni Bisignani
After taking over the reigns at IATA, Giovanni Bisignani is in the cockpit directing many changes. His experience in handling the crisis after 9/11 crisis is invaluable. During his recent visit to India, Bisignani met BT's Amanpreet Singh and spoke about the challenges facing the aviation industry and how to fly safe. Excerpts.


"We Try To Create
A Joyful Work"
K Subrahmaniam, Covansys President and CEO, spoke to BT's Nitya Varadarajan.
More Net Specials
Business Today,  January 1, 2006
 
 
25 CHALLENGES FOR INDIA
What Will It Take
To Make Made In India A Preferred Tag?

 

Frankly, the oft recommended objective of creating a powerful "Made in India" brand is somewhat akin to the mythical search for the Holy Grail: a profound concept, immensely desirable, inevitably inspiring, always elusive and, in reality, illusory. I say this not because it is beyond our grasp, but because time and trade are making the country of origin increasingly unimportant and, in fact, irrelevant.

That may sound irreverent, but consider the facts. There was a time when country of origin labels genuinely helped to build confidence among buyers, especially the general public. Today that role is played by brands. You do not buy a Sony because it was made in Japan but because it is a Sony product. When you buy an Apple or Microsoft product, you do not ask where it was made. In fact, the chances are that these products were made in China! Increasingly, many countries participate in creating a single product. Even Swiss watchmakers, successful in perpetuating the Swiss Made cachet, source components from Asia, requiring that only the watch movement and watch assembly, worth a fistful of dollars, be Swiss. But the final product sells for a fortune!

Country of origin labels are essentially relics of an economic imperialism that is both past and passé. If people still sing the country of origin tune, be assured it is a swan song. In fact, I believe that a time will soon come when many country of origin labels will be labelled as acts of deception-which is what they are, unless a very large proportion of value is added in that country (which most often is not the case).

Having said that, let me also admit that country negatives as perceived by people worldwide will always prove a hindrance to brand acceptance. Japan struggled with an adverse image after World War II, as have Taiwan, Korea and China in more recent times. And there's the rub as far as India is concerned.

India conjures up many negative images in the mind of the global common man. At best, India is an enigma. Space exploits, nuclear weapons, it successes, the Taj Mahal and yoga co-exist with an image of a country backwardly rural, scarred by urbanisation, driven by religious and ethnic discords, riddled with corruption, its democratic institutions held hostage to criminals.

The fact is that we are a most heterogeneous country and media's preoccupation with the bad news can scarcely help. Public relations exercises and advertising will not change these seedy images with which foreign minds have been seeded. The reality itself must change. As Indians struggle to establish their brands and products in overseas markets, they are keenly aware that great brands do not bloom like lotuses out of malodorous pools.

We are moving into a situation of oversupply as multitudinous developing countries of the world choose exports as their route out of poverty. Competition will be ruthless

Yet, Indians venturing to establish brands and products abroad have many things going for them. We have access to enormous talent-managerial, engineering, marketing, computing, design, and so on. We have an unerring eye for business. We are familiar with the institutions and processes of global commerce. We speak English. We emulate the lifestyles of the rich and famous in Europe and America and are at ease among them. And, thanks to many years of economic misrule at home, we have many sympathetic members of the Indian diaspora who have acquitted themselves with distinction and are willing to do their bit for their country of origin. In this respect, country of origin still matters!

Fortunately also, the corporate executives with whom we deal have a more refined understanding of India and Indians. A global business class is emerging that is looking for strengths even as they are wary of others' weaknesses. They are keen on building transnational partnerships and relationships. And they are thinking long term.

It is for this reason that it often makes sense to grow foreign trade not through the brand route but through the product route: from supplying components to supplying sub-assemblies to supplying finished products. China wisely chose this route and is only now venturing along the brand path. For many of us in India, the route of launching our own brands, marketing our own products and seeking the shelf space of wary retailers must await better times-when there is a keener understanding among the common folk of other countries that heterogeneous India, like the Hindu Pantheon, has multiple avatars!

There is, of course, rather less honour, glory and money in making products or parts thereof for others. Riches and fame come with brands. But so also does risk. We are moving into a situation of oversupply as the multitudinous developing countries of the world choose exports as their route out of poverty. Competition will be ruthless. Mortality will afflict many corporations. Risk minimisation then becomes a cardinal principle. There is safety of sorts in taking marketing risks out of the paradigm. The focus, then, has to be the quality of the product, its cost, and the reliability of our business practices and principles. I get the feeling that not enough is being done at either governmental or industry level to ensure the quality of the products we export and the business practices that we espouse in dealing with foreign buyers. Exporters need to remember that they have an obligation both to themselves and to their country.

I believe that if there is anything that can dispel the negatives currently associated with India, it will be creating innovating products for the developed nations of the world

Launching a brand overseas is altogether another ball game. For one thing, you are no longer competing with underdeveloped, low-cost supplier nations but with powerful players in high cost, highly developed consuming nations. Your enemies are now much bigger, the cost of battle is much more expensive, and the outcome is survival. Here, there is no "live and let live".

Apart from requiring a deep understanding of consumer behaviour i.e., likely responses to the product and its positioning and promotion, as also having deep pockets, you won't get far with just another mouse-trap or even a better mouse-trap. Innovation is the name of the game. At one end of the innovation spectrum is a clever new way of meeting an old need as with xerographic copying machines, mp3 players and digital cameras. At the other end of the spectrum is creating a whole new need-as with computers, email and mobile telephony. But wherever you are in the spectrum, design is crucial. And design must become our destiny.

India has all the ingredients needed for becoming an important design centre: it has outstanding engineers and software developers; it has excelled in the design of industrial projects; it has a strong artisan culture, and it conducts much of its business in English, the international language of commerce. We now have to make the transition to designing excellent industrial products-sophisticated engineered goods.

The world is now witnessing the deconstruction of businesses and of manufacturing processes on a monumental scale. Going are the days of vertical integration. And with this disintegration at work, design is increasingly becoming a bought-out item. This phenomenon not only opens out the huge door of design but it creates an opportunity to go beyond designing to creating well designed and (sometimes) futuristic products.

Here is an opportunity that is waiting to be seized. I believe that if there is anything that can dispel the negatives currently associated with India, it will be this: creating innovative products for the developed nations of the world. And it is a pity that so little has so far been done to develop this capability. It is to be hoped that Indian industrialists (how many of our business tycoons have fled the advancing Chinese typhoon?) will shed their fears of manufacturing, see the opportunities that design and manufacturing present and take giant leaps forward.

Unfortunately, the reverse has been happening in recent years. Millions of industrial jobs have been lost and the industrial workforce has shrunk. I strongly maintain that developing a strong and rapidly expanding industrial base is the surest way of creating jobs and national wealth and finding our way out of poverty. And much of that industrial base has to be used to make products for the rich people of rich countries. Progress can only be tardy when that industrial base is used solely or even chiefly for making products for the poor and the miniscule rich of our country. We have to follow the pug marks of the Asian Tigers. And progress will be very much worse than tardy if those who take decisions in big business houses take fright from the rough and tumble of manufacturing and leave the field to their smaller brethren in India or to the Chinese behemoth.

Perhaps Business Today can help the process of making India a great design and manufacturing centre. We may not be able to make the Made in India a preferred brand. But we should certainly be able to rescue it from being a deferred brand.

The author is former VC and MD of Titan Ltd

 

    HOME | FROM THE EDITOR-IN-CHIEF | OVERVIEW | COLUMN | TRENDS | FROM THE EDITOR

 
   

Partners: BT-Mercer-TNS—The Best Companies To Work For In India

INDIA TODAY | INDIA TODAY PLUS
ARCHIVESCARE TODAY | MUSIC TODAY | ART TODAY | SYNDICATIONS TODAY