Question

1a) Please find and describe a unique communication method that a multinational has had to adopt in another country…something that goes beyond and is different from what it does in its home market. The communication adaptation may be in terms of content/message of the communication OR the media channel used to communicate.

1b) Discuss the probable reasons for this adaption, e.g., economic, cultural etc. Provide rationale for the above by drawing upon what you learned in Chapters 2-6 about the external environment. For example, if a reason is low income of consumers, then use statistics about that target audience’s income/education. If the reason is cultural, try to use Hofstede or Hall’s framework to explain.

Please mention references.

Answer 1

1a)

Penetration into rural markets in South Asia is a challenge due to topographical factors, as well as cultural and economic factors.

A large FMCG multinational has adopted unique and innovative approaches to marketing in rural India. They utilized the services of traditional mobile traders, who sell a wide variety of products in unique ways based on their proximity to the customer and understanding of their preferences. They created a rural-focused campaign to promote their low cost detergent soap. They created short video ads that were shown using cinema vans throughout the country. These ads combined entertainment with advertising, and were created as short capsules appealing to the tastes of the rural audience.

In addition, the services of street performers such as magicians, singers, dancers and actors, were employed, who tailored their scripts and acts to the local audience.

Smart and targeted positioning of promotional material was employed, such as placing of stickers promoting the detergent on hand pumps, on the walls of wells, and on trees surrounding village ponds.The objective of this campaign was to advertise not only at the point of purchase, but also at the time of consumption.

The above approaches are markedly different from those used by the multinational in their home country, not only in terms of the different and unique communication channels used, but also the content of the communication, emphasizing on cost and affordability.

1b)

Economic:

Although the GDP of South Asia is only a small fraction of the global GDP, almost all the countries in the region have been experiencing sharp growth during the past decade. Although India's GDP makes it among the largest economies in the world, given its large population, the per capita GDP is only around USD 2900.00. However, the fundamentals of the economy are strong in terms of the growth in per capita income and foreign exchange reserves.

In terms of income distribution, households belonging to the lower income segment have been declining and middle income households have been on a rise. The number of households classified as consuming (have money and ready to spend) and climbers (desirous and willing to buy, but having limited cash on hand), have been increasing significantly and the proportion of poorer households has been declining. The rich class has also been increasing both in urban and rural areas.

These trends indicate a higher demand for FMCG products, due to growth in income and more households with higher purchasing power. This also gives companies an opportunity to address new consumers and introduce new offerings.

The marketing strategy has focused on making use of these opportunities in the campaigns outlined above.

Cultural:

India is a land of diverse languages, cultures and religious beliefs, with people practicing six major faiths and speaking a multitude of languages.

Differences in language, customs, social norms, and habits make the socio-cultural environment complex. While certain cultural elements are common across the country, certain elements like language, dress code and eating habits vary from region to region. Needless to say, these have a direct bearing on marketing communication. Product and brand preferences vary from region to region and has to be understood by the marketer in order to be successful.

As per the Hofstede framework, below are the rankings for India. These explain to a large extent the need for a customized marketing effort especially for rural india by reaching out to housewives and elders who may be constrained to stay at home, but have a large say in daily buying decisions. This also explains how strong local brands can be created and sustained by appealing to popular tastes, making best use of locally available resources and traditional and regional preferences in the promotional campaigns.

• Power Distance: 77, indicating the acceptance of hierarchy and cultural differences
• Individualism: 48, indicating a balance between concern for the self and for the family and society
• Masculinity: 56, indicating a tendency towards achieving success and power; however this is balanced by the underlying spiritual ethos
• Uncertainty Avoidance: 40, indicating an acceptance and tolerance for imperfection
• Long-term Orientation: 51, indicating a balanced approach with the underlying belief in the concept of "karma"
• Indulgence: 26, indicating a strong orientation to restrain individual preferences and desires