Question no1: “S&R has taken a risk in entering a market that is large, but offeres little flexibility in terms of price and business eenvironment”. Discuss.
Entering Indian market was quite a challenge for Simon not only convincing the board but taking up the responsibility to personally assist the whole process of franchising in India was a major challenge in his career. Indian market is famous for its “value buying” behavior; and S&R is a brand known for its high quality and value for money all around the world. Unfortunately in India however the tariffs and strict regulation for direct foreign investment has been major hurdle in offering low prices. Though the launch of the two franchises have been a huge success but Simon believes asking for premium prices for the products is soon going to turn this profit into long term loss. He believes that as soon as the novelty factor wears off the customers will opt back to the value for money buying behavior.
Question no.2: This may be the right time to enter India. But has S & R positioned its brand right?
The festivities .such as Christmas and Diwali has been the best time for Smith and Robin to take over the market for increased sales. This helps their two stores’ initial stocks to be sold out in three days flat.
Since while positioning the brand, it is necessary for the organization to identify a market niche for a brand, product or service utilizing traditional marketing placement strategies (i.e. price, promotion, distribution, packaging, and competition). S & R is well aware of their preposterous prices, but that ultimately makes Smith and Robin a premium brand, one with aspirational trimmings. This made their direct competitors turn into the boutiques. They were also perceives as a high end value for money brand.
Question no.3: Do you think the current retail environment in India is conducive for the entry of a high-profile foreign brand? If yes – why? If not, state the reasons clearly.
The current retail environment in India is not conducive for the entry of a high-profile foreign brand. Indian customers are becoming more self aware and conscious of the market trends. Therefore, post modernism along side the globalization has given the Indian market an edge to their customers. Indian economy has been raising substantially due to their own products and manufacturing plants. Despite that companies such as S&R enjoy a brand equity in the Indian markets, the novelty factor surrounding S&R’s launch wears off. Also, since these brands have to pay high tariffs, the brands offer premium prices, which are questionable by the customers. With such brands, their franchises would not be ready to show any interest in expanding a loss-making operation. Keeping in mind all these factors, one also has to remember the existing competition. A grey market already does a thriving business in both branded products smuggled into the country, and ersatz ones.
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