Blair Company is a small U.S. manufacturer (1996 sales expected to be $400 million) of products designed to make water safe and palatable for human consumption. The company is considering entering the Indian market for home water purifiers with its “Delight” purifier. According to Blair Company Engineers, the Delight purifier should outperform anything currently on the market.
Students face the primary issue of whether or not Blair Company should enter the market. However, before they can answer “yes” or “no,” students should consider mode of entry (license, joint venture, acquisition) and examine advertising, pricing, and channels possibilities. Students must undertake both qualitative and quantitative analyses to arrive at a good decision.
A. Compared to a developed country like the U.S or Germany. what is different about marketing in a less developed country? What is the same?
Students will find it easy to identify differences in marketing between developed countries and LDCs. The two types of countries show marketing environments that differ in every fundamental aspect—political, technological, social, competitive, and economic. Infrastructure in LDCs is less advanced than in developed countries, making communication, movement of goods and money, and change more difficult. Compared to a developed country, rural and urban consumers in LDCs will show greater contrasts in income and lifestyles. Governments and people in LDCs fear or mistrust multinational corporations and even smaller foreign companies; governments may limit the company’s ability to remove profits. LDCs offer far greater potential for rapid growth in many product categories (e.g., automobiles, telephones, household appliances) than do developed countries.
After these and other relevant points come out in discussion, the instructor can turn to marketing similarities between developed countries and LDCs. After perhaps an awkward silence, someone might volunteer that good marketing strategy in LDCs still must consider consumers, competitors, and environments in a creative fashion. Marketers still must attempt to satisfy consumers while accomplishing organizational objectives. Marketers still must develop strategic alternatives, analyze each in a detailed fashion, and then choose one to implement. In short, after a few minutes of thought, students might conclude that differences in marketing between developed countries and LDCs are more ones of detail and degree rather than ones of principle and procedure.
B. How attractive is the Indian market for home water purifiers?
This is a good question to continue the discussion. The topic matter is important, the analysis complex, and the answer neither obvious nor unanimous among students. Students might note the following:
The Indian market for home water purifiers is attractive for several reasons. The market is huge and growing—see case Exhibit 1. Moreover, if the market could be expanded to India’s rural areas, forecasts in Exhibit 1 would increase by some six to ten times (Chatterjee estimated that “existing manufacturers were reaching only ten to fifteen percent of the entire population.” In addition, India’s extremely low wage rates and central location offer the possibility of export sales to a number of nearby LDCs. Indian consumers are aware of problems with their water quality and are favorably disposed to Western products in general. The Indian government is actively seeking foreign investment into the economy. Water filters and purifiers currently on the market appear inferior to Blair Company’s Delight purifier. India represents almost a prototypical case with respect to Blair Company’s goal of thriving in LDCs (case’s first paragraph). Finally, as will be seen in C. below, India can be entered with relatively little investment of Blair Company resources.
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