A Project Report on: Market Research Applications Effect of Foreign Brands On Indian Brands

MMS-2
Submitted to :
Prof Poonam Chaudhari

DECLARATION We hereby declare that the Initial Report entitled datas and the facts that used in this project are true and not fictitious. There is no objection being made regarding the use of the facts and datas in this project. There is no false use being made of the facts and datas in this project. This project is developed to form a base for classroom exercise and discussion purpose only and not intended for identifying fault with any organization or their policies and procedures.

This Project Is Compiled By

"roup #embers S$$d %$&i '()* #oh$mm$d +$,eri '-)* Alt$m$sh Ahmed '.(* /$&$l #u0$li '12* Shu$ib %h$3 '4(* Nitesh Shetty '-.*

Introduction:
When India opened its economy to foreign competition in the early !!"s# it was termed a phased liberalization. $overnment decided to retain full control over certain sectors deemed sensitive by not allowing any foreign investment. Insurance# retail# domestic airlines and telecommunications were some of those sensitive industries that were protected for a long time. Telecommunications and insurance were the first of these sectors that were gradually opened to foreign direct investment %&'I(. 'omestic airlines followed suit in the last two years and the resulting boom is proof enough of the future potential of that industry. The retail sector is protected against any &'I. )ut a couple of developments recently have created a lot of buzz in the Indian business community. * +uic, loo, at the Indian retail sector gives reason for such buzz. The Indian retail mar,et is valued at -./0"" billion and is projected to increase substantially in size over the "1 2 years. 3rganized retail 1 or well established retail chains 1 accounts for only a meager -./4 billion. The rest of the bul, is accounted for by the more than 0 million neighborhood outlets and mom and pop shops. $iven the huge current mar,et and the future potential# it is only natural for the retail biggies such as Wal15art# 6arrefour and others to loo, for entry modes into the Indian mar,et. Recently the Indian government allowed joint ventures %78( in the retail sector where by a foreign company can set up a 78 with an Indian company# with the Indian company being the majority shareholder in the venture. *s such globalization has become a corporate buzz word in international business. )ut is all such cases# the brands have been careful to project a unified brand image with its brand identity and brand

personality intact. *fter all that is the underlying logic of globalization 1 standardize the brand identity and experiences across mar,ets so as to offer customers the overall brand experience but customize the brand communications# points of contact and personal interaction to suit the tastes and preferences of local cultures.

Foreign Direct Investment in Retailing in India:

After the waves of globalization, liberalization and privatization marketing scenario particularly retailing has changed radically. These changes have resulted in emergence of new environment for buyers behavior and purchasing habits. The upper and upper middle strata of the society now prefers to purchase well established branded goods from standard showrooms and it has transformed the entire picture and perception not only in the metro cities but almost in all big cities of our country. It is worth mentioning that retailing in India has been hailed as one of the sun-rise sectors in the economy. India is the second most attractive retail designation globally, among thirty emergent markets.! Till now unorganized retailing sector was dominating retail trade in India by constituting "#$ of all retailing trade but now not only traditional Indian retailers but giant Indian retailers like %eliance has entered in the area and is planning to e&pand its activities in this sector in a big wag. 'ven world renowned retailing organization like (al-)art has decided to enter in India via *oint venture with +harti and ,rench retailer -arrefour is busy in chalking out strategy to enter the hyper market and supermarket retail format in India through .ubai based retail ma*or /andmark group.

Why Global Retailers are Interested in India?

)ore specifically the global players are interested in India due to following reasons0

I) trategic !ocation " #eograph$0

India en*oys uni1ue geographical advantage. It is strategically located in Asia with access to all leading markets of the (orld. (ith total area of 23,

#4,5"6 71. 8m, -oastline of 4666 8m and borders with si& countries India becomes most promising destination for the foreign direct investment.

II) %ersatile &e'ographics:

.emographically with a population of more than 9.9 billion and diverse culture, India is a land of all seasons. India presents a real cosmopolitan population with diverse religions and culture. :induism, +uddhism, ;ainism, 7ikhism, -hristianity and Islam are the main religions of India. This variety of religions provides India with a diverse culture. +esides, India has versatile population of urban and rural nature. This versatility of population makes India a ready made market for foreign retailers.

III) %ast gro(ing Econo'$:

3n economic front# India the largest democracy of the world# have a stable $ovt. with robust programme of economic reforms. India with a foreign exchange reserve of more than -. / 0" billion# &'I of more than -. /!.! billion #average $'9 growth of more than :; per annum# rupee appreciation 8s -.. dollar of more than 0; in last two years and with a rapidly growing investment in infrastructure has all the ingredients of a emerging economic super power. India is tipped to be third largest economy in terms of $'9 by the year 0"2".

INDIA RETAIL ON THE GLOBAL STAGE CAN WE BE SUCCESSFUL:

POSITI5ES /OR INDIAN CO#PANIES IN RETAIL IND6STR7:

9. :ave knowledge of the Indian )arket, which could help them a lot as they are aware of the Indian mindset.

3. The /aws are clearly on the side of Indian <layers as currently ,.I has been blocked in direct %etailing thus controlling competition. 2. The initial set up has already been done by them, thus they wont be newcomers by the time foreign players set up their base. =. They have the e&perience of dealing with employees in India as most of them are already established players in their respective fields. This can be of great help for employing skilled as well as un-skilled labour. 5. Indian companies have a better recall value than their foreign counterparts and this can help to gain loyalty. This factor can be of a help in the rural areas as well as for the illiterate people.

DO8NSIDES /OR T9E INDIAN CO#PANIES IN T9E RETAIL IND6STR7:

9. The Indian organized retail industry is still in its initial phases and the concept is relatively new for Indian companies when compared to ,oreign %etailers. 3. >pposition from small traders. They have formed their own unions and are revolting in a huge way. 2. <olitical pressure has been seen in many areas like ?.<. and 8erela where the @overnment has not allowed some formats of retail trade.

POSITI5ES /OR /OREI"N PLA7ERS:

9. They can bring in huge investment which is not possible by many local players. 3. :aving their base in developed nations and retailing since a long time they have better technology which will be of great help when they enter India.

2. There is a class of Indian population which has likeness to foreign brands and will buy them with a misconception that they are of better 1uality. =. They have the opportunity to bring in lower priced goods as they can command over their suppliers by buying products in bulk for their global sales.

DO8NSIDES /OR /OREI"N PLA7ERS:

9. 7tringent ,.I /aws. -urrent laws allow only 59$ ,.I and that too for 7ingle +rands. Thus stopping them from setting up retail outlets. 3. They are comparatively new to India and the Indian conditions like vast differences in culture, high percentage of rural population. 2. Aast geographies making it difficult for new companies to set up a pan India presence.

Interpretation
Sex Male Female

1.What do you prefer the most?

2.Do you think government should allow more foreign brands in our ountry?

<es =3

!.Do you think Indian brands suffer be ause of foreign brands? "es #$

%.Do you think Indian brands have the apability of meeting the standards of foreign brands?

&. Do you think foreign brands are affordable to the ri h lass only?

'. What do you think are the main reasons for the in rease of foreign brands in India?

(. When you talk about popular foreign brands) whi h ategory of the following omes first to your mind?

*. Do you think ross+ ulture ex hange serves an important link in improving relations among nations at the global level?

,.What would you support?

1-. .

ording to you in whi h se tor foreign brands are dominating in India?

CONCLUSION:

This project gave us a wider ,nowledge about the different brands existing in India with both foreign and Indian brands. We also came to ,now about foreign brands which are dominating Indian brands. The topics which we had included in our project such as dominating brands# various franchise existing in India# consumer behavior towards international brand# retailing sector in India etc. gave us a vast information about the mar,et. *nd also the primary data conducted by us gave an opinion about the impact of foreign brands on Indian brands# consumer preference# what should be done to stop foreign brands to dominate Indian mar,et. *tlast we would li,e to conclude by saying that government should do something to stop foreign brands to dominate Indian brands. *nd also Indian brands should match the +uality standard li,e international

brands so that people purchase Indian brands. There should be more export then import our brands should also dominate foreign mar,et.

RECOMMENDATIONS:
9. Atleast allow controlled ,.I in the form of ;As with local players. 3. To cater to the local needs of each area and have a multiple format stores as per the re1uirement of the region. 2. Invest in technology and supply chain management, especially in -old 7torage facilities as food constitutes about B3$ of retail sales. =. <ut in place a system of %everse /ogistics which is pretty non-e&istent in India. 5. /ook for potential in the rural areas.

B. 466 million 71. ,t. of 1uality retail space will be re1uired by year 3696 as compared to a supply of 366 million 71 feet creating a gap of 566 million 71. ft. 4. :ave high Cuality measures so as to keep the confidence of the retail customers. #. +ig retail players should participate with local 8irana stores by giving them franchises and smaller outlets. ". Invest enough in education D training to sustain the boom and have proper man power to handle it. 96.@iving the sector an Industry status by the @overnment. 'espite some of the negative areas of the retail boom it seems I='I* 6*= .-R>?< .-.T*I= T@> 6359>TITI3= 3= T@> $?3)*? .T*$>.