Vision - September/October 2007 - (Page 26) Government policies are encouraging the arrival of global investthe government can encourage greater IT investment by further reforming the tariff regime. This will not only add more jobs and ment as well as international suppliers. LG’s Shin observes that inward investment, but will also help enhance India’s position in “the Indian government is very supportive for any new venture coming into the country.” He cites “simplification and single winthe global IT hardware supply chain.” Also confronting marketers are India’s 18 “official” languages. dow clearance”, and notes that the authorities are reducing the Although English is the dominant tongue, especially for busi- “procedural hassles…[which] are getting simplified.” ness, devices must often be customized for use in various regions. Shin cites relaxed import rules and the introduction of a For example, Motorola’s entry-level phones have Hindi keypads new classification system, both of which make it easier for because customers at that level may not be fluent in English. Cul- importers to get “fast track clearances” through customs. He tural awareness also prompted handset makers to make sure ring acknowledges, however, that the rapid growth means that other tones are loud because of ambient noise in many bazaars and to issues must be resolved, such as “infrastructure issues” including put very large SIM cards in phones, because successful Indians like “port developments, roadways and rural electrification”. to carry hundreds of names in their personal directories. Motorola’s Sharma voices a similar balanced view of the ecoAs a result, advertising is diverse. nomic environment in India. He is encouraged that “regulations “When you buy media, you must buy 15 to 20 different channels,” have become significantly more liberal” with a focus on Foreign says Motorola’s Mathias. Manufacturers and their distributors “the naMe of the gaMe iS the diStriBution (with their agencies) create and network,” SayS SharMa, Pointing out that manage almost all advertising, 70 Percent of the indian PoPulation liveS including placement and support in rural areaS.—amit Sharma at retail outlets. Mitek’s Ivey affirms the value of having distributors in India handle the marketing. “We send trainers Directed Investment. to India to work with local distributors and dealers to train them “Duties and tariffs have dropped steadily,” Sharma adds, noting on how to display and install the products,” Ivey says. that electronics products face rates in the five percent to 20 percent Motorola’s Mathias advises marketers to “be culturally sensitive” range. “Not a significant barrier,” he says. and “be culturally relevant.” One of the campaigns to introduce Sharma points out that some products face local evaluation, the SLVR handset featured a Bollywood star whom Mathias calls notably the telecommunications products Motorola sells, which “comparable to Tom Cruise.” Video and print advertising include are reviewed by a department of the federal telecommunications “cultural nuances that people here can understand,” he adds. agency. But he notes that reciprocity smoothes the way for many Mathias cites “two passions that bind the country: cricket and global products. Bollywood”. The popular sport is widely followed, and the flamboy“If you can show that in your own [home] country, you’re ant movie musicals are a popular element, leading many electron- licensed to sell the product, you [easily] can get approval here,” Sharma explains, citing agencies such as Indian Mobile-Phone Subscribers (Millions of Subscribers) the European Testing Standards Institute and CAGR 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 similar agencies in the 06−11 U.S., Japan and Korea 13 33 55.1 85.1 149.5 226.0 298.0 364.0 424.0 484.0 26.5% that are recognized by Indian authorities. Source: iSuppli Corp., April 2007 India’s policy to ics companies to use sports stars and movie celebrities in their encourage foreign operations offers a variety of opportunities. For advertising and to seek product placement of their devices in Bol- example, foreign investment as high as 100 percent is permitted in Indian electronics ventures set up exclusively for exports. Under lywood movies. these rules, non-Indian firms can build bonded factories eligible to import all capital goods, raw materials and components, including opportunities abound A Deloitte & Touche report in July identified India, along consumables. with China, as the most important countries for technology venture capital firms placing foreign investments. The complexities in an expansive Society study, conducted for the National Venture Capital Associa- Like other fast-emerging markets, India faces the challenges of tion, found that India is favored for research and devel- managing growth, especially as it seeks to balance urban and rural opment and engineering projects, adding to the expecta- lives. Electronics marketers recognize the need for balance, with tions that a growing technology audience will be ready to buy high- Motorola’s Sharma echoing the view of Mitek’s Ivey, even though their products are substantially different. tech products. 26 September/October 2007 www.ce.org http://www.ce.org
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