1. International Institute Of Professional Studies
Marketing Strategies and Progremmes Adopted by
MNC’s in India According to Indian Culture
Guided by: Submitted by:
Dr. Pooja Jain Ankur Pandey
MBA (MS) 5yrs.
IM-2K8-007

2. Introduction
India is one of the world‘s most promising and fastest-growing economies. Many
MNCs entered to cash in on the exciting opportunities there. But overall, they have
had a mixed performance. Many, who were remarkably successful elsewhere, have
failed or are yet to succeed. Indian market poses special challenges due to its
heterogeneity, in terms of economic development, income, religion, cultural mix
and tastes. On top is the heating competition among local players as well as the
leading MNCs. Not all companies have been struggling to understand Indian
consumer behaviour. Doing business in India is at a turning point; market entry
strategies, for example, that clicked once do not promise success every time.
Success in India will not happen overnight; companies need to have an open mind.
This requires commitment, management drive and focus on long-term objectives,
and proper business models too. They have to invest substantial financial and
managerial resources to understand customer‘s needs and come up with suitable
products.
OPPI Global Sourcing Committee chairperson Alok Sonig said ―In the Indian
context, working successfully with global sourcing players involves deeper
understanding of India around three broad areas - capability, capacity and culture"
UN Secretory Kofi Annan said ―We must ensure that the global market is
embedded in broadly shared values and practices that reflect global social needs,
and that all the world‘s people share the benefits of globalization‖
As more Indian companies push ahead with their aggressive global growth
strategies, many middle and senior management personnel in these organizations
are faced with significant challenges. They have to ―go global and take charge‖ in
a very short time, and learn how to manage complex businesses on a global scale.
They need to acquire the managerial skills needed to deal with varied customer
needs and diverse competitive forces; learn to work with team members from
different cultural backgrounds; and also learn how to manage the companies that
have been acquired through the M&A (i.e. mergers and acquisitions) route.
For the company to compete with established global brands, it requires a deep
understanding of local customers‘ needs in different markets, and significant
investments in brandbuilding over long periods of time.

3. What leading MNCs do tap into the
Indian consumer market ?
Look at how the second best global brands have executed their India strategy.
While global market leaders have proven to be flat-footed and bookish, brands like
Reebok, LG, Hyundai and Lee have stolen a march over their arch-rivals by
burning the book and thinking on their feet. ―Most MNC companies are run by a
global manual, but those succeeded in India have shredded this manual and taken
the ‗when in India, go local‘ approach and developed on local consumer insight to
chart their strategy,‖ reasons marketing consultant Harish Bijoor, CEO, Harish
Bijoor Consults. Consider Lee. When it entered India in 1995, there was a very
nascent market for branded apparel, much less premium jeans wear. Premium
brands like Levi‘s chose to play it safe by using the multi-brand outlet route, but
Lee chose to go it alone and set up exclusive showrooms. According to market
watchers, Levi‘s suffered from a brand perception problem because it was clubbed
with non-premium brands.
Further, Arvind Brands, which owns the licence for Lee in India, decided to retain
ownership of operations for Lee. According to Chakor Jain, head (business
development, Lee), Arvind Brands, ―Exclusive showrooms and owning the
operations added to our costs. However, it also added to the overall customer
experience, which we considered most important.‖
When Reebok came to India in 1995, it forged alliances with health clubs and
fitness centres to create brand awareness. When the retail market matured, Reebok
changed focus. Says Subhinder Sing Prem, MD, Reebok India, ―On the retail front,
we went about opening up new markets beginning with metros and large cities, we
swiftly moved into tier II and III towns.‖ To further establish its brand, Reebok
signed up Indian cricketers, while Nike continued showing its international
advertisements in Indian media. Today, Reebok has a exclusive retail presence
through 400 plus outlets, second only to Bata, while Nike lags behind.
LG‘s is the proverbial ‗third time lucky‘ story. After two failed joint ventures, it
made a re-entry into the Indian market in 1998 all by itself. The other chaebols
were on their way here, too, while Phillips and Sony were already well-established.
LG began with a rapid national roll-out, mass customisation and products adapted

4. specifically for Indian markets. It also kept its dealers happy with a wide portfolio
and allowed them to cut sweet deals. ―Our success in India can be attributed to our
ability to focus on empowering people, profit-driven market presence and being an
open organisation, with just about all employees having access to the company‘s
finances,‖ says LG India‘s MD, KR Kim. Today, with over Rs 7,500 crore in sales,
LG leads in almost all the categories in consumer durables.
When Hyundai, with a name prone to mispronounciation and virtually no global
heritage, entered India in 1998, it signed up Shah Rukh Khan to educate the
consumers about the brand. Behind the scenes, the company resorted to extensive
market studies and technical camps before coming up with its first offering, Santro,
a hatchback with tall boy design. And it had chosen its market well, starting with
the small car. To date, Hyundai has stayed true to its strategy and played by the
conventional Indian market rules tailored to suit its specific targets.

5. Cultural Differences and Integration
Global business brings people from different cultures together. The managers need
to overcome cultural differences and collaborate with each other, in order to
succeed. Another aspect is to understand Cultural sensitivity that means to
understand the behaviour and attitudes of personnel from different parts of the
world, and develop an operating culture for the team which builds ―bridges‖ across
the cultural differences that will inevitably surface. While it is unrealistic to expect
that every manager entering the global arena will exhibit all of the above elements
of a global mindset, it is important for the manager to recognize that these
requirements do exist, and make efforts to develop and strengthen areas where he
is relatively weak.
The failure of the Daimler-Chrysler ―merger of equals‖ tells us that cultural
integration is a key pre-requisite for global managers to be effective and
successful. While there could be several exceptions to the rule, most Indian
managers, especially those employed in the brick and mortar industries exhibit
some common cultural traits. Here are some examples:
• He is very comfortable with clear, well-defined organization structures, where
reporting relationships are explicit, and there is no ambiguity as to who the
manager‘s ―boss‖ is. The organization is the classic pyramid.
• Compared to simpler organization structures in Indian firms, large global
corporations routinely resort to complex matrix organizations to drive their global
business strategies. The Indian manager is relatively less effective in (and less
comfortable with) matrix organizations, where vertical and horizontal
―relationship‖ lines cut across functions, businesses, and geographies. The
resultant ambiguity is something that he finds difficult to manage.
• In spite of the introduction of holistic performance evaluation systems and
processes, the average Indian manager is still more comfortable with the traditional
concept of ―seniority.‖ Grey hair still matters, in spite of many organizations
pushing ahead with meritbased decisions when filling senior positions. This
contrasts with the US practice, for example, where age is not allowed to be used
even as a criterion in such situations.
• In India, public ―face‖ (i.e., the person‘s standing and image among colleagues) is
crucial at individual level. Feedback of the negative kind – even when couched in

6. the most objective terms – is best given behind closed doors, and not in a group
meeting. The West is less cognizant of such sensitivities.
• Deadlines and commitments are still reasonably ―elastic‖ – missing a target date
for a response by a day or two is not seen as a major issue. In Germany, this would
be seen as unprofessional.
As stated earlier, these are generalisations about India, and many of these are
getting modified under the relentless pressure of globalisation; but given that these
traits are widely prevalent, the Indian manager now ―going global‖ needs to
recognize that managerial beliefs and behaviour in other cultures – e.g., in Japan,
Germany or the US – are likely to be very different from what he or she has
experienced in India.
Once these differences are understood, the Indian manager can work out ways and
means of integrating himself into a hybrid ―global‖ culture, where the group goals
take precedence over individual differences. Many Indian organizations have now
started giving their managers specific training in this vital area of cultural
integration, before exposing them to the dynamics of the global business
environment. This minimizes the cultural shocks, and pre-disposes the Indian
manager to expect and manage cultural differences.

7. Understanding and Managing Cultural
Differences: Models and Tools
When asked to deal with a fuzzy, hard-to-define concept called ―culture,‖ it is
natural that the practising manager from India would say, ―All this is fine. I am
prepared to be culturally sensitive, and adapt my ways in the interests of team-
work. But how do I start getting a handle on this vague subject? How do I measure
the cultural differences?‖
Fortunately, considerable research has already been conducted in this area,
resulting in the formulation of models and tools to assist the manager. In this
article, we will highlight three approaches which share a large degree of
commonality in the way they look at cultural differences, organizations, and
teamwork.
Approach #1: Geert-Hofstede Cultural Dimensions
Prof. Geert Hofstede (2001) of Maastricht University, based on his research across
different countries and organisations (starting with IBM, and extended
subsequently to include other organisations), has postulated four cultural
dimensions, with a fifth dimension – longterm orientation – getting added to the
model at a later stage:
• Power Distance Index (PDI): This dimension deals with the degree to which less
powerful members of a society or a group accept, and indeed expect, unequal
distribution of power, e.g., ―That‘s the way it is.‖
• Individualism vs. collectivism: Is the individual a lone person, who is expected to
look after his interests by his own efforts? Or is he a member of a collective group
which looks after its members, in return for loyalty shown to the group ?
• Masculinity vs. feminity: This refers to the distribution of roles between the
genders. In ―masculine‖ cultures, there is a significant difference in the values
exhibited by men and women, with men being seen as assertive and dominant and
the women, modest and caring; in ―feminine‖ cultures, this difference is less stark,
with men also showing caring traits.

8. • Uncertainty Avoidance Index (UAI): This pertains to tolerance for uncertainty
and ambiguity; the degree to which a ―culture programs its members to feel either
uncomfortable or comfortable in unstructured situations.‖
• Long-term orientation vs. short-term orientation:
This dimension deals with values that people exhibit. Values associated with long-
term orientation are thrift and perseverance, whereas those associated with short-
term orientation are respect for tradition, fulfilling social obligations, and
protecting one‘s ‗face.‘
Approach #2: Trompenaars and Hampden-Turner’s
Cultural Dimensions
Fons Trompenaars and Charles Hampden-Turner (1997) identified several
dimensions along which cultures vary. These dimensions can be summarized as
follows:
• Universalism vs. particularism: This dimension deals with how people look at
actions of others. Universalism depends on specific rules and regulations;
particularism, on the other hand, relies more on relationships.
• Individualism vs. communitarianism: This deals with the balance between an
individual‘s interests and the group‘s interests.
• Achievement vs. ascription: Is status something that we get through
achievements? Or is it something that is ―given‖ – through attributes such as
seniority and hierarchy ? This is the key question in this dimension.
• Neutral vs. affective: Neutral cultures avoid open display of emotions, and try to
stay focused on the subject at hand whereas affective cultures use gestures and
animated conversations.
• Specific vs. diffuse: People from specific cultures tend to keep business and
personal lives separate and distinct. There is very little mixing between the two.
Diffuse cultures permit intermingling of the two spheres.
• Internal vs. external: Internally focused cultures are likely to have a strong belief
in their own actions, and are resistant to changes induced by the environment; in

9. contrast, external focus promotes the belief that the environment is the dominant
force, thereby encouraging a more ready acceptance of changes and events.
• Time as sequential vs. time as synchronized: Does one see time as something
linear (that is, sequential), where discrete elements follow one after the other? Or is
it something where many things happen simultaneously? This will determine
whether the culture encourages ―one thing at a time,‖ or will permit parallel-
processing.
Approach #3: The Cultural Orientations Model from
Walker, Walker and Schmitz
Walker, Walker and Schmitz, in their book (2004), Doing Business Internationally,
have postulated a ―Cultural Orientations Model‖ (COM), which is a framework for
understanding cultural differences between people from different countries and
cultures. This model consists of ten cultural dimensions along which the beliefs
and actions of different people or cultures can be mapped. Here is a brief
description of each of these ten dimensions:
• Environment: This dimension deals with how the person relates to the
environment in which he operates. Does the person believe that he has reasonable
control over the future, or is it all ‗written‘ – decided by a higher force? Is harmony
important? Is the environment seen to be full of constraints? And so on.
• Time: Is time seen as something fixed, to be measured and tracked? Is ―being on
time‖ of paramount importance? Or is time something fluid, something secondary
to higher priorities like taking care of your relationships?
• Action: Is the emphasis more on action that leads to measurable results? Or is it
on building relationships and caring for one another?
• Communication: Does the meaning of words depend on the context? Does ―yes‖
mean ―yes‖? Does silence mean something? Are conflicts dealt with through open
communication? Or in an indirect fashion?
• Space: Is space (physical and psychological) seen as public or private? Is the
office designed on an ―open plan,‖ or is it full of cabins and cubicles? Do people
stand close to each other while talking? Or at a distance?

10. • Power: Is power driven by hierarchy, or is it more decentralized and equal? How
are decisions made? By consensus, or by the boss?
• Individualism: Is a person‘s identity determined by individual achievements? Or
does the group‘s identity over-ride that of the individual? Is loyalty to the group
important?
• Competitiveness: Is the individual encouraged to take aggressive action on his
own? Or is it a co-operative working style that is valued? Is the reward structure
designed to emphasise individual achievements?
• Structure: What is the degree of comfort with change, risk, ambiguity, and
uncertainty? Does the culture value predictability and order? Or does it permit
some degree of flexibility and chaos?
• Thinking: What is perceived to be more important. The abstract, and the
‗principle‘? Or large volumes of hard data? Is the approach holistic, or is it tuned
to breaking the issue down to small manageable chunks?
Building Bridges
As mentioned earlier, these three approaches exhibit a fair degree of commonality
in the way they look at cultural differences. These models show that people from
different cultures think and act differently while operating on the same dimension–
e.g., on communication, or time, or status. Once these cultural differences are
recognised and understood, the global manager has a greater chance of succeeding
in getting a set of people from different cultures to work together reasonably
harmoniously. Lack of sensitivity to deep-rooted cultural differences is likely to
result in misunderstandings and diversion of energy into negative directions. The
key to success in global business lies in building bridges across the cultural gaps,
and not seeking to achieve ―one size fits all‖ homogeneity in the team. The global
manager has to collaborate with the team in establishing ―cultural ground rules‖ for
day-to-day work that focus on the common tasks and goals, rather than try to
eliminate the individual cultural differences. It is a two-stage process:
understanding the differences in culture among team members, and then building
bridges across the differences. These bridges can be built on a simple, but powerful
principle– which is to place the customer‘s needs above individual cultural
preferences.

11. Strategies for Going Global: Some
Current Indian Examples
While in-depth research output on specific strategies adopted by Indian MNCs is
still not available, there are sufficient examples, at company level, to show that
Indian companies are fully capable of drawing up and executing strategies that are
sensitive to customer needs, culture, brand equity, and teamwork. The Tata
Group‘s approach to its acquisitions—in terms of cultural integration, branding,
and customer focus has been based on very pragmatic considerations. The top
management teams at Corus, Jaguar, and Land Rover have been pretty much left
intact, with the Tata headquarters getting involved primarily in long-term
direction- setting and large investment decisions. The global brands that have been
acquired are getting careful nourishment for the long run. There have been no
abrupt attempts at implementing drastic changes. Overall, as seen from the outside,
the philosophy seems to be one of encouraging continuity and growth, while
ensuring adherence to the Tata group‘s core values. In the case of Sundram
Fasteners, a trend-setter in the auto component industry in India, the approach has
been similar. The UK and German companies that have been acquired in recent
years have been allowed to retain and strengthen their brands and identities. Fresh
investments in equipment have been made where merited, thereby overturning
conventional wisdom that such acquisitions are always followed by loss of jobs
and ―hollowing out‖ of manufacturing assets. There is continuity in senior
management staff. Global customers — whose needs can be met from Sundram
Fasteners‘ multiple manufacturing units in India, Germany, UK, and China — are
being managed as single ―accounts‖ globally, through coordinated marketing and
sales efforts. Best practices in operational excellence are being transferred from
one unit to the other through horizontal deployment, without implications of
superiority or inferiority between countries, companies, and cultures. Bharat Forge,
with its headquarters in Pune, is another aggressive player in the engineering
industry, with the goal of becoming one of the top players in the global automotive
forging industry. The company has made a series of acquisitions in Germany,
USA, Sweden, and Scotland, and has also formed a JV in China. The company
follows a strategy of ―dual-shoring‖ where its global customers‘ needs can be met
from at least two of its plants worldwide. This allows the company to satisfy its
customers‘ requirements with fast, possibly ―local‖ responses, while at the same
time meeting the constant demand for more competitive prices.

12. Impact of Culture at Operational Level
While the above instances are examples of clear thinking, planning, and execution
at the strategic level, it is important to recognise that individual managers need to
be sensitive to each other‘s cultural expectations, when working at the operating
level on a daily basis. While this might seem like stating the obvious, real-life
experience shows that this is not something that comes naturally to operating
managers. Since globalisation has been a relatively recent phenomenon in India,
most managers have not had the opportunity to get in-depth exposure to different
cultures. Correspondingly, the manager from the other culture (say, from Europe or
the US or elsewhere) also has had no opportunity to observe and understand how
the Indian mind works. This results in a gap, which needs conscious effort from
both sides to bridge. The following caselet will make this point clear.
A Real-life Caselet: The Meaning of “Time”
In this example, a manager from a German company had given a project for the
development of a new product to his counterpart in the Indian company (in the
same group of companies) at a significantly lower cost. The German was getting
increasingly frustrated with repeated delays in the delivery date. He took this to
mean that the Indian manager was not serious about his commitments, and that he
was insensitive to the negative impact that was created with the end customer. In
reality, the product was inherently complex, and represented something of a
challenge to the Indian team. If the Indian manager were culturally more aware, he
would have said, ―Look, this job is more complex than what we have done in the
past; but I am reasonably confident we can pull it off. Tell your customer this is
being attempted in good faith, and that it will take a few iterations before we get it
right. We will keep you updated on the progress, and let‘s target six months for the
whole process to get completed.‖ Instead, the Indian manager had said ―yes‖ to the
project, and had taken on an unrealistic deadline, because he was operating in a
culture where people were encouraged to take on difficult challenges. The hard
work being put in was considered important; and the slippage of dates – while seen
as not good – was not a matter of life and death. Where are the cultural
differences? The Indian was comfortable with ambiguity (of the outcome); the
German was not. The Indian saw ―time‖ as something fluid and continuous; the
German saw a finite date, and a discrete period. The Indian was used to dealing
with other customers (Indian), who were, by and large, forgiving of slippages. The
German saw his (German) customer walking away. The Indian valued the input,

13. i.e., the efforts being put in to develop the product; the German was focussed only
on the output, i.e., the date of completion. To the Indian, saying ―no‖ or ―may be‖
meant an admission of lack of capability and a perceived loss of ―face‖; to the
German, receiving a ―no‖ for an answer would have been equally acceptable, and
more professional. He would have found another source for the product, and got on
with his life. Ultimately, the two sides evolved a working method for future
instances, by which they agreed to discuss the risks and assumptions explicitly
before the start of any new project so that the ambiguity was sharply reduced, and
everyone ―was on the same page.‖ The commitment to be made to the end
customer was agreed to be held sacrosanct.
Learning from such examples, Indian MNCs can proactively implement cultural
sensitization programmes at both ends of the ocean, so that such gaps and
problems are minimised, if not avoided altogether. Many specialist organisations,
which offer expert training in this relatively new and fuzzy area, have come into
existence in recent times. Given that the financial logic for many M&A decisions
is based heavily on achieving significant synergies in a short period of time, such
training should become a mandatory part of the corporate M &A playbook