I’ve just returned from supervising international research in China, India and Germany.  On the flight to Germany, I read an interesting newspaper article about the opportunities and challenges facing companies who want to do business in China and India.  With populations of 1.3 billion and 1.1 billion respectively and explosive growth rates, many companies feel they can’t afford to ignore these markets.

However, both markets pose some formidable challenges.  One such challenge is the difficulty in becoming established in countries with markets very different from those in the west and significant regulatory hurdles.  Some companies deal with this challenge by pursuing an integrated two-track strategy – looking both at selling to customers in these countries but also becoming a customer themselves and utilizing each country’s resources.  For example, Microsoft has set up research labs at some of China’s top universities, and this has made it easier for the company to get the government’s cooperation in enforcing intellectual property laws in the software sector.

Another challenge: with markets so big, companies may do themselves a disservice if they try to define an “average” Chinese or Indian customer.  Remember, the middle class is comprised of more than 300 million people in each of those countries.  Companies should look to market to finely targeted segments in each country.  For example, Chinese appliance maker Haier Group offers a washing machine for rural people that can not only clean clothes but also sweet potatoes and peanuts!  They also sell a tiny machine designed to clean a single change of clothes which is popular with urban customers.

And it’s important to become immersed in what’s going on in these countries to understand – and benefit from – the differences between their markets and Western markets.  For example, in India, billboard advertising is particularly effective at targeting two ends of the economic spectrum: the poor who don’t have televisions and don’t read newspapers, and business people who spend hours in chauffeur-driven cars (having a driver is quite common in India), and therefore have time to read the billboards and absorb their messages!

To learn more about marketing in China and India, contact us.  We’ll work with local researchers to understand what truly motivates your prospects there.  Call Bureau West at (818) 752-7210. 

Sources: “How to get China and India right,” Wall Street Journal Europe, May 1, 2007; “Mushrooming billboards offer a crash course on India’s growth,” Hindustan Times Mint, April 30, 2007