Mumbai: Actions speak louder than words, goes the adage that seems particularly true of Indian companies as they scale up their international operations. In the last decade, Indian companies have made their presence felt in the global market place by acquiring overseas ventures, through innovative product launches, corporate social responsibility programmes and even best practices. But are they doing enough to be recognized and respected across the globe?
Market research firm Penn Schoen Berland’s study on the most recognized and respected Indian multinationals seems to suggest they are not. An online survey of 600 respondents across major regions including the US, Europe and the Asia Pacific shows that the highest unaided (open-ended) recall score for an Indian company was 29%, the top scorer being the Tata group. Reliance Industries Ltd followed with 14% recall and Infosys Technologies Ltd scored 10%.
Atul Agrawal, vice-president, group corporate affairs, Tata Services Ltd, attributes Tata’s higher recall to the group’s operations in overseas markets. Other than organic growth, there have been a spate of high profile acquisitions such as Jaguar Land Rover, Corus, General Chemicals, Teleglobe and, more recently, British Salt.
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The group’s hospitality company Indian Hotels also acquired the marquee Campton Place San Francisco as well as a management contract for the Pierre in New York. The world’s cheapest car, the Tata Nano, also made headlines globally.
Kiran Khalap, co-founder at Chlorophyll Brand and Communications Consultancy Pvt. Ltd, says if an Indian company can afford it, it should manage global perceptions rather than let them be defined by default. “Whether it has global ambitions or not, every Indian company is in the spotlight today,” he says.
Brand building should follow the strategic blueprints of the company, according to Amit Shahi, chief executive and co-founder of theIdeaWorks, a communication, design and strategy firm specializing in place branding and public diplomacy. If the company has to venture into new geographies, the communication strategy must follow suit, explains Shahi, adding that brand recall catalyses the acceptance of a company in a foreign market.
Companies can leverage brand awareness to access global resources such as raw materials (mining rights, skilled manpower etc.) as well as capital.
A report titled Brand and deliver: Emerging Asia’s new corporate imperative by the Economist Intelligence Unit, the business information arm of The Economist Group, also emphasizes the need for Indian companies to build brands. Asia’s emerging multinationals have grown because they were in the right place at the right time, it explains, adding that “brandless success” would not continue “as cost advantages are eroding, markets are opening and competition for customers is intensifying”.
According to PSB findings, the Indian chief executives had a poorer brand recall. Very few respondents to the survey could actually name an Indian CEO even though some of their international peers—Indra Nooyi of PepsiCo. Inc, Steve Jobs of Apple Inc and Carlos Ghosn of Renault SA, for instance,—are household names globally.
In line with the highest recall for the Tata group, its chairman Ratan Tata led the pack with a 12% recall among respondents. Mukesh Ambani of Reliance Industries, Rahul Bajaj of Bajaj Auto Ltd and Vinita Bali, chief executive officer of Britannia Industries Ltd followed. The defining attributes of the “most admired or valued company leader” included business vision, knowledge, ability to lead, integrity, values and clear goal focus.
To be sure, heads of the top 10 companies in the survey were recalled unaided and were well regarded internationally. The next 10 company leaders were lesser known but still well regarded by those who knew of them. The rest could not be recalled unaided, highlighting the need for Indian CEOs to build individual brands.
Branding experts, however, maintain that companies needn’t promote individuals as brands. “To my mind, what they do for the company is what finally matters,” says Rajan Kaicker, executive chairman of Franklin Covey, India and South Asia. Franklin Covey is one of the largest personal and organizational effectiveness companies in the world.
Successful CEOs do not impose their branding on the companies they represent. “Take Dhirubhai Ambani, for instance. He’s legendary because of the business he built with passion and dreams and not too much money. Money came later. Nooyi (of PepsiCo) is successful because everyone genuinely believes that she’s creating an environment for colleagues around her to unleash their potential which will only benefit the company. I don’t think we need branded CEOs. What we need are talented people to head companies,” he says.
For the right branding of Indian multinationals, their conduct as good, socially responsible brands is critical. “The by-product of the transparency-creating, multi-logue (opposed to dialogue) creating medium such as the web is that all brands are now corporate brands,” says Khalap. Earlier companies could distance the corporation from the brand. Online media has changed that.
Increasingly, users of brands know about the corporate as well and their decision to buy is based on what the company does. “They will be looking to see if you are a responsible brand,” adds Khalap, pointing to the SRI Index or the Socially Responsible Investing Index, which propelled companies such as Apple and GAP to change their product line to be more environmentally friendly. This will be increasingly important as a number of stock markets around the world feature the SRI Index, which allows investors to make informed choices.
However, the bigger challenge facing Indian brands as they venture out is the association with their country of origin. While brand India evokes some positive associations, for companies looking to make the cut on the global stage it can prove difficult to shake off country associations. “India is all about lack of transparency and lack of honouring the written agreements, so Indian brands have to work at shaking off that image,” says Khalap. Infosys and TCS have actually run advertising campaigns highlighting they are dependable, emphasizing in many ways that “What applies to my country does not apply to me”, he says.
Country branding may work wonders for chocolate or watch brands of Swiss origin, or for auto brands of German origin, but for Indian companies it is an uphill task.
The Economist report said that Indian Hotels, the Tata group company, was rejected in its attempt to associate more closely with Orient Express Hotels because the management was worried that links with an Indian business would diminish the value of its own brand. Similarly, Chinalco and CNOOC Ltd from China were rebuffed in their attempts to buy assets in Australia and the US partly because, in the absence of a clear identity of their own, they were viewed as merely extensions of the Chinese government, the Economist report explained.
In the face of challenges such as high cost of media, experts say that Indian brands need to work their budgets to ensure maximum impact. Infosys Technologies, for instance, overcame the challenge by working strategically. “Infosys as a brand has, over time, managed to own Davos as an event and successfully projected itself as a company that can help you in a ‘flat world’,” says Khalap. The company features at number 20 on the PSB list of most respected Indian multinationals.
The Tata group has over the years appointed agencies in four markets—South Africa, China, US and the UK—to undertake small activities and campaigns. “Outside India, the focus was on direct contact programmes and interactions with influencers,” explains Agrawal.
The group has also taken some of its programmes to other markets. The Tata Crucible Quiz is now running in Singapore and the UK. The Tata International Social Entrepreneurship Scheme allows students from the University of California, Berkeley, Cambridge University and the London School of Economics to come to India and work on the Tata companies’ community initiatives. The experience and the learnings from the programme are shared with colleagues and classmates when they return.
“One blind spot for Indian companies is lack of perception of scale and planning. Ad-hocism does not work on the global stage. Also, they need to augment their self-belief when they enter global markets and talk from a position of strength,” Shahi advises.
Graphic by Yogesh Kumar/Mint