India - Growing Opportunity & Cultural Nuances of this Rapidly expanding & changing market place. Made this presentation for a presentation at a European forum - still remains relevant: -Insights into Indian Customers' Expectations from Products & Customer Service -Getting into Indian customers mind -Understanding of Indian Buyer Classifications -Some Mistakes western companies make while entering India

1. Understanding
A Rapidly Growing & Evolving
Market place
Amit Sood
amitanandsood@gmail.com
April 2012

2. India:
Unique Socio-cultural
& Economic aspects
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3. Source: TELEMATICA and http://en.wikipedia.org/wiki/Fact_sheet_on_India www.articque.com/news/508/785/Linguistic-diversity-throughout-the-world-in-2010
No country has a greater ‘thread count’ !
‘Highly developed capacity to absorb dissimilar concepts– yet retain originality.’
•Over 2000 ethnic groups 1.2 b people, 18 official languages, 844 dialects
•Rich traditions and myriad ancient cultures.
•Largest population in the world of Hindus, Zorashtrians, Bahai and Jain faiths.
•3rd
largest population of Muslims in the world.
•Many religions were born in India – Hinduism, Budhism, Sikhism and Jainism etc.
India – “Crazy quilt of a nation”
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4. A Western visitor’s view on India,
….is very different from an Indian’s.
“Chaotic! catastrophe waiting to happen”
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5. Gandhi was once asked what he thought about Civilization of the
West. His response was:
"I think, it would be a good idea.”
Mahatma Gandhi
(1869 - 1948):
… an Indian too views the west differently….
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6. A western visitor sees it as-
“Diverse.
Tolerant.
Open culture, free communication.”
“Confusing. Weird!
Apathetic.
Noisy. Chaotic place.”
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An Indian sees India as-

7. An Indian conceptualizes TIME …differently
Western Concept of TIME
Linear
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Indian concept of Time
Circular

8. …an Indian sees ‘India’ as world should be….
India is one of the most deeply religious societies.
Spirituality seeps into every aspect of life.
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9. “Superstitious. Weird..?”
A Western visitor see India as
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10. India believes that it is …getting there
Growing, Improving
• India is among 3 countries that have built Supercomputers (US, Japan)
• It is acknowledged as one of the leaders in Space research- One of 6 nations
that launch satellites. India launched a staggeringly cheap mission to the Mars
in 2014.
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11. But certainly a huge market!!
It would be good to understand it
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12. Slowing Population Growth
India is ranked 102nd
in population growth rate
out of 212 countries
High GDP Growth
(likely to stay > 8% on average)
3rd largest economy in the world in terms of PPP
10th
largest in nominal GDP
GDP USD 1.84 Trillion in ‘11
Rising Literacy Levels
71.7% (Age 7 & above, as of 2001) [32]
81.4% (Total population, Age 15-25, as of 2006
Declining Poverty
1% crossing poverty line each year for 25 years
(all Figures in %)
One of the fastest growing economies…
Sources: 1990-2000:Census of India (2001) , 1900-1990: Angus Maddison (1995), Monitoring the World Economy, World Bank.
http://en.wikipedia.org/wiki/Demographics_of_India
Goldman Sachs and Price Waterhouse Coopers predicts that
‘India would emerge as 2nd largest economy by 2050 (after China)’
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Source: http://en.wikipedia.org/wiki/Demographics_of_India
• Today, 54% of Indians are under 24 and 65% are under 35 years old.
• In 20 years working population will rise by 30% - among highest growth in the world.
• It is expected that, in 2020, the average age of an Indian will be 29 years,
(China: 37years and Japan: 48years ).
Large young population – Growing Fast

14. 1985 2025 Forecasts
.
Source: Consuming Class, National Council of Applied Economic Research, 2002 and Mckinsey Global Instt.
Growing Middle Class
(mio)
Very rapid growth in middle class.
But will India turn from a Pyramid to a Diamond?
Middle Class
“I get good value at reasonable price”
House hold income Rs. 0.2 – 1 Mio per annum
Low income “I pay less to get less”
House hold income up to Rs. 0.2 Mio per annum
Affluent “I pay more get more”
House hold income Rs. 0.5 Mio per annum
~32%
583 Mio people
~ 58%
~ 11%(1 Mio people)
Share of consumption 20%
~ 6%
~93%
1%
Share of consumption 7%
14
22600
24000
26800
31300
35600
40600
2001 2003 2005 2007 2009 2011

15. o 2nd largest English-speaking population (125 Mio).
o Strong Family structure - growth of nuclear family.
o Stable Democracy.
o Strong public institutions - Courts, Election commission, Controller &
Auditor General, Right to Information (3rd
in RTI Index - AT Kearney ‘10).
o Free Press.
NEW WAVE
o Information reaching even illiterate, through television.
o Growing impatience with Corruption – call for action.
o Time for administrative reforms, improvement in governance.
INDIA as a MARKET
o Will remain predominantly rural economy, despite urbanization
o 50% employment in agriculture.
o Growing self confidence in youth – have cash. New patriotism. Love
brands, gadgets, but are equally in love with Indian values and culture.
Very vocal about experience.
o Increasing participation of children & women in purchase decisions.
Understanding India –market evolution
A huge market …1.2 b people, with 100 Million Credit cards (!)
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16. Indian model is different from China or SEA
India East & South-east Asia
Domestic Consumption driven market Export driven
Services driven growth Manufacturing
High technical capital intensive Low technology, labour intensive industry
Success is market lead –
entrepreneur driven
East – particularly China is a
state-induced market
Developed rural & retail Banking sector
with <2% NPA (bad loans)
Huge Domestic Saving 30% of GDP
Family structure,
Largest importer of gold
Far higher bad loans, banking density far
lower
Lower savings.
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• Cash starved economy
- High interest rates (12-15% p.a.) and
- High inflation (10% on consumer price index)
- High domestic saving (>30% of GDP)
- High deficit
- Large population at low income end
• Price sensitive buying behavior
o Indian buyer, no matter what class or product category, goes for a
‘good bargain’ or ‘Value for money’.
o Clear preference for performance over features
o No compromise in reliability (ergonomics & styling gaining as
desirables)
o Simpler technology but not lower quality
….. different from the low income segment in China.
Understanding India market: Value - Price points

18. ‘Large bottom’ Market
• HUGE market for Low price– simpler technology (affordable) products*
• Conversely, a smaller market for high price/ complex technology / large capacity /
premium products ( …even this size of the market is only ‘relatively’ small !)
• Multi tasking products also must do One bread-winning job.
• Eg.. Skid-steer loaders, backhoes, tractors etc.
• It is unwise to presume that India would go where developed markets did.
• Eg. 1 Top 4 players in Tractors 600,000 market are Indian manufacturers
• Eg. 2 Tata LCVs beat global players
• Emerging markets often skip stages that western world has been through.
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Understanding India market – PRODUCTS

19. SERVING CUSTOMERS
IN RAPIDLY CHANGING INDIA
INDIA
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SERVING CUSTOMERS
IN RAPIDLY CHANGING INDIA
INDIA

20. Rising Expectation of Indian customers
• Indian customers are most likely to consider customer service as main
factor for choosing a new provider - after leaving a previous one.
• 79% consider Customer Service as the top main factor
• 69% consider Convenience as the top factor
• 67% of Indians describe their expectations higher than an year ago.
• 85% describe expectations higher than 5 years ago.
• 70% consumers intended to, but decided against a transaction, due to poor service.
• 2/3rd
of consumers lost their temper with a customer service professional in the past year.
• When dissatisfied, Indians are among the most likely to complain
• To talk to the supervisor (37%) and
• Most likely to send formal complaint (21%)
• Most dissatisfaction is with ability to resolve issues on their own
• And for having to call repeatedly.
• 22% cite ‘waiting too long’ as the most likely service issue to influence them to switch
brands.
Source: American Express 2012 ‘Global Customer service Barometer – India and
Survey by Accenture CRM (Mr. Woody Driggs, MD quoted in Fin Express March ‘09)
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21. • In India, service standard has improved
• 65% think businesses are paying more attention to service
• 69% feel waiting times reduced
• In India Customer experience has greater brand impact
• More Consumers are telling about their customer service experiences
• Nearly all (97%) tell ‘some times’
• 66% tell someone every time
• Customers are telling more people about their experience
• 44 people about their good experiences (up from 32 in 2011),
• 47 people about their bad experiences (up from 35 in 2011).
Source: American Express 2012 ‘Global Customer service Barometer – India and
Survey by Accenture CRM (Mr. Woody Driggs, MD quoted in Fin Express March ‘09)
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Service has a greater impact to the brand in India

22. Indian market nuances
• Customer service cant be relegated
• Ownership of result of service will always rest with the manufacturer-seller.
• Customer satisfaction will always reward or punish the parent company.
• Biggest challenge is logistics; and Parts => Service
In India, logistics is the biggest bottle neck to parts availability
• Huge geography (N to S 3050 km and E to W: 2950km)
• Poor transport infrastructure and Regional barriers
• Goods transport normally takes more than twice the time it would take in US
• Like products, Indian buyer also goes for highest value in service and parts
• Neighborhood local repair shops
• Preference for simple designs (easy repairs)
• Distinction in ‘Commercial’ products for business & ‘Own use’ products
• Commercial products bought for operational income (eg. Truck/Backhoe/Taxi)
• Expectation of round-the-clock service. (No ‘9 to 5’ day, 5 days week)
• Will pay for reliability if commercial business makes sense.
• Own use products will await service to avoid inconvenience, accept higher cost.22

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Only the one who serves selflessly
may have an opportunity to receive
Bliss or Ananda.
The recipient of service may at best
be pleased, satisfied or relived by
the service.
Humans have an inherent craving for
Bliss - highest joy or Ananda.
Indian philosophy of Karma
promises rewards for a good acts
such as an attitude of selfless
service.
Indian culture lays highest emphasis on serving well

24. Some ‘common-sense’ learnings from
serving the Indian market
• Employee would inherently prefer to serve customers well
.. Must train to bring out the inherent good intention to serve well, remove hurdles,
encourage, allow discretion.
• On warranty decisions - Speed is as important as the Spend.
•Put the service decisions closest to the customer
‘One of the surest way to ruin service – is to put all decisions at the HO.’
•Personal relationships win customers loyalty
(Regional diversity - languages, foods and cultures are typical of India)
Long serving employees ensure long associations with customers
•LISTEN to customers
- He knows his needs best
- It does wonders to the culture of the organization.
- Helps in staying dynamically competitive + is good for brand
- So, respect employees, who LISTEN to customers.
•Role of leadership – help make good POLICIES, plus make EXCEPTIONS. 24

25. A case study- Unique Dabba walas of India
Dabba – ‘ lunch box’. ‘Dabba wala’ –Lunch box delivery man
•Office workers in Mumbai have a cooked meal sent from home, or a caterer, in boxes and
then have the empty boxes returned same day
•Over 200,000 lunch boxes get moved every day by an estimated 5,000 dabbawalas.
•Each dabbawala, regardless of role, is paid about Rs. 2-4,000 per month (£25–50 or US$40–80)
•Forbes Magazine ‘02 found utmost punctuality & reliability of six sigma standards.
•Less than one mistake in every 6 million deliveries, (delivery staff is illiterate).
•Trade involves no advanced technology, except for trains (and as mentioned above, SMS
services for booking).
•All this is done for a monthly fee of just about 2 pounds.
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Unique Case of Dabba-walas of India
• NY Times reported in ‘07 that this 125-year-old industry continues to grow at 5–10% p.a.
• BBC has produced a documentary on them, and Prince Charles, visited them. He also
invited them to his wedding in London on 9 April 2005.
• Dabbawalas have been invited to give lectures in some of the top business schools.
• Named in “GUINESS BOOK of World Records”.
• Registered with Ripley's “ believe it or not”.

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Thanks