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The report categorically looks into the the foreign initiative of Ashanti Marketing Solutions whereby it tries to find a suitable company and product/service which the company could be offering to the people. Through the understanding and research review of the report, it uncovers that an untapped and rapidly growing economy in the world is India, where Ashanti Marketing Solutions can invest. Further research and consideration of the company profile revealed that the company’s greatest profits lie in event management ventures in India; namely wedding planning.
The report uncovers that there is a large need for wedding planning services in the country as the wedding industry is a rapidly expanding industry which only hopes to see upward growth in terms of expenditure in the coming years. Combined with the increasing liberalisation of the Indian economy and increasing internet usage of the population, now is an ideal time to invest in the nation, the report recommends. The report also recommends that the company enters into a partnership deal while it is venturing into the market and that its initial strategy in the market should be to be the most cost-effective service available and to be the most trustworthy wedding planning service available.
The purpose of this report is to closely examine the market of India with respect to the provision of a service or a product and how well it could perform there. This report recommends the service of wedding consultancy in India, which, the report believes, is a service that is largely missing from the Indian market. The report believes that there is a dire need of such a service in the Indian market and Ashanti Marketing Solutions (AMS), which already provides services related to event management in several countries, will find the introduction of this service an easy one and will be able to generate significant profits from this business endeavour.
The Indian market is proposed to be a significant market in its region in the coming years. In a 2017 report by the company Deloitte, they revealed that India has the fastest growing service sector industry in the world. Considering this, India becomes a very important industry for the entry of foreign business which can successfully cater to needs in India. This is a particularly good time to invest in the Indian market as in 2021, India hopes to double its efforts in the industrial sector after the COVID setback. Something which has been attractive to foreign investors since time immemorial is the relative cheapness of labour in the country and the cheap availability of raw materials. Most recently, it introduced its latest consolidated foreign direct investment policy, which it came out in 2020 and it provides 100% foreign direct investment scope (Business Standard, 13 October 2020). Hence, it is a good idea to invest in the Indian market now because the Indian government is very forthcoming to foreign investment at present.
For the purposes of understanding, in greater detail about what are the factors which may affect the business of AMS in India, a PESTLE analysis has been conducted which will look at all the aspects of political, economic, social, technological, legal and environmental aspects of conducting business in India.
2.1 PESTLE Analysis of AMS in India
The following section will consist of the PESTLE analysis for India and understand further the scope that this company has with respect to the Indian market. Doing so would help the business understand what are the deterrents to its entry into the market. The PESTLE analysis is as follows:
1. Political Factors: In terms of political factors, it would be a good time for the company to enter India. There are many reasons for it, namely the governmental policies which have steadily liberalised over the years the political economy of the Indian state. In a survey conducted among multi-national corporations, it was discovered that India was one of the top three destinations for foreign countries to invest in and will probably top that list by 2025. Hence, it is a good time for foreign investors to invest in India.
2. Economic Factors: As Nomura predicted, India will be the fastest growing economy in 2021, and its GDP is projected to grow over 9.9%, surpassing even China’s. The coming year would witness further expansion in the Indian economy (Nomura, 9 December 2020). Post-COVID, AMS needs to invest in a market which will for sure give returns in the largest way possible and the only safe way to do that is invest in India. The report recommends that the company invests in the wedding industry, which is dominated largely by the middle-class of India, in terms of the consumers. The per-capita income of people in India is expected to grow almost three times in the next few decades and in that respect, it is expected that Indian families will invest more in weddings (Madaan, 2015).
3. Social Factors: The wedding industry in India is a multi-million dollar industry which has sustained itself over centuries. This is mostly due to the fact that the burgeoning Indian middle class is becoming more and more interested in investing in the wedding market and are finding new ways of investing in the industry. Currently, it has been estimated, that the wedding industry is worth 11 billion dollars and is believed to be growing at 25-30% annually (Ibid). In this respect, the report expects that people in Indian consumers will be looking to innovate more with weddings and will be open to availing services like wedding consultancy services.
4. Technological Factors: According to a report by Statista (16 October, 2020), the number of internet users in India has been substantially grown over the years, and nearly 700 million people, at present, are internet users. Statista also postulated that the number of internet users is projected to grow over 974 million users by 2025. Hence, there are going to be a number of internet users in the country, which bodes well for AMS’s chances in the country as the company will be able to offer its services and advertise its consultancy through the medium of the internet. This will be a cheap and effective way for the company to advertise its services and also document the successes it has with its clients online. Additionally, it is a good way to access clients and get in touch with them by connecting with them online.
5. Legal Factors: Legally speaking, there are no laws prohibiting the working of wedding consultancy or wedding planning businesses in India.
6. Environmental Factors: Environmentally speaking, the wedding industry in India doesn’t quite depend on the seasons or swell during the seasons of spring or autumn. But Indian families follow auspicious dates which are decided before the beginning of each year (Republic World, 21 December 2020).
This section will look at the possible points of entry of AMS’s wedding consultancy business in the Indian market. The PESTLE analysis clarified that the external environment is very conducive to the growth of wedding consultancy businesses in India. The following section will look at three market entry points which the consultancy can avail in order to enter the Indian market. From these three market entry points, it will conclude and recommend the market entry strategy that it thinks will profit the company the most.
In terms of safety and guaranteed returns, franchising could be a form of entry through which the company could enter the nation. Through franchising, the company would be entrusting the rights to do business on its behalf to a local business or institution. The company and the local business could draw up a contract whereby they could conduct the consultancy business in their name, this ensures that the company treads carefully in foreign market as having a local partner taking care of the business end in India ensures that there is no miscommunication on the part of AMC because it has never ventured into the Indian market before. Additionally, it also ensures that it doesn’t waste any time learning about the business ethics and practices of India (Paul et al, 2018).
Partnering is another form of initiative which the company can take into the Indian market. Partnering calls for more direct involvement for the investing company and also calls for a higher investment in the market. Basically, what partnering entails is that the company enters into a contractural agreement with a local company and both equally invest in the company’s operations. The difference between partnering and franchising is that partnering allows for control over the managerial aspects of the company’s aspects as well. Also referred to as strategic alliance, this strategy is usually adopted by companies who are looking to get into a new market for the first time (saylordotorg.github.io).
It is is a good option for AMS as it allows for the company to percolate into the Indian market while at the same time not have to worry about losing its autonomy over the managerial process.
3.3 Greenfield Venture
Considering the research that this report has discovered on the economic and political factors leading to the ease of business in the country, there is little doubt that a complete and full venture in the country would lead to favourable results. A Greenfield venture is a venture where a company builds a business from the grassroots in a foreign nation and invests in the building up of all kinds of infrastructure and services which are required for the business to sustain (Investopedia, 25 July 2020).
3.4 Whats Best for AMS
Considering the nature of investments and the profile of the company, this report believes that it would be best if the company initiates a partnership with an event management company which is already functioning in India. The report believes that this will be the wisest course of action for AMS as it has no prior experience in working in any Asian country, much less India. There are multiple examples of successful foreign companies which have teamed up with Indian companies and run successful ventures. Some of the successful ventures are Hindusthan Aeronautics, Vistara Airlines, Tata Global Beverages, Mahindra-Renault Limited and so on. The advantage of such an arrangement is that the company will be able to retain control over its management but at the same time be guided by a company which has already seen commercial success in its ranks.
The tool which is used by companies in order to understand what are the areas in which the company needs to penetrate a new market is referred to as market segmentation. It is a key element in strategising the entry of a new player in the market and making sure the strategy is based on all the right aspects. It helps the business by breaking up the market in different segments so that it is easier to see the individual aspects of the market (Dolnicar et al, 2018). This is especially important in a country like India as there are several variables which need to be considered, like cultural groups and religious identities. This becomes especially important as weddings in a country like India is dependent on the adherence of certain customs and values which differ from region to region, religion to religion.
There are different approaches that one could take with respect to segmentation in the Indian market. Based on the research of Dibb and Simkin (2008), the research believes that the best approach that the segmentation can take is by relying on the existing consumer classifications to built upon its strategy. They recommend that while in some cases it is more useful to start quantitative research from scratch, in a lot of cases it is more wise to build upon the already existing research. This report believes that while it is important for AMS to capture the gaps in the Indian wedding industry where the local industries have not been before, it is imperative that it doesn’t spend more capital than it is already spending because a partnership venture in the country will lead to a sizeable capital investment.
Dibb and Simkin (2008) referred to this kind of segmentation as evolutionary segmentation whereby the existing framework is updates instead of building a whole new framework. Based on that, one can segment AMS’s entry into the Indian market as follows:
Segmentation Goals: The goals of the segmentation is to understand the groups that AMS wants to target with its wedding consultancy business. Research discovered that the average cost for an Indian wedding is around 20.76 lakh rupees or close to 30, 000 pounds. Most of these weddings are in families which fall under the category of middle-class (Farzana and Ilayaraja, 2015). Hence, this report will be recommending that AMS’s target group for marketing and advertising purposes should be the burgeoning middle-class of India.
Customer Segments: The report needs to identify the segments of customers the company needs to target. The report believes that it is more feasible for the company if they provide wedding planning services on a budget, not luxury planning services as those kind of services are already present in the market. Besides the idea of hiring wedding planners in India is a new concept and the company should strive to capture the market before others do that.
Segmentation Strategy: The company needs to rely on already available data, as discussed above, in order to save money on new research. Based on the preliminary data that it has gathered, it needs to conduct further research into the area where it thinks more scope presents itself. For example, it may find that planning the budget in the wedding is mostly informal task which is undertaken by mostly family members (Ibid). To this end, it could suggest undertaking that activity and having the family provide them with a final amount they are willing to pay. This means that the process of budgeting belongs to the planners and such a service will be appreciated by the families.
Execution Plan: The final step in segmentation should identify the key stakeholders in the plan and also define how the launch of the service should go. The report recommends that the company starts marketing with a steady stream of social media posts and blogs and eventually move on to broadcast advertising. It believes broadcast advertising will be a good way to reach its target audience, because of the PESTLE analysis it did earlier, which uncovered that a significant amount of people in India use the internet. Hence, through making wedding pages on Instagram, Facebook and through blog posts, it hopes to carve out a place in the psyche of the people who are accessing these apps.
The following section will look at the strategies which can be used by the company in order to penetrate the Indian market in the marriage consultancy industry. Porter’s generic strategies were first spoken of in Michael Porter’s book titled, ‘Competitive Advantage: Creating and Sustaining Superior Performance’ (2011) . Following are the aspects of his generic strategies and how they are related to the proposed AMS ventures:
The Cost Leadership Strategy: This strategy involves strategies to become a veritable leader in the provision of low cost of the goods/services you are providing. For AMS, this will be an easy task because, as discovered and elucidated earlier, the marriage planning industry for its target group, the middle-class in India, is largely non-existent and hence, it will be easier for the company to get competitive prices as they have very little competition in the sector in the first place. Additionally, the report proposes that the company enters the market through a partnership and in accordance to partnership rules, the partner company is also liable to pay for the operational costs. Hence, the company will be able to become a cost-leader in its sector.
The Differentiation Strategy: This is a strategy which needs further research into the target area to come up with some concrete plans. The company needs to cater to a need which has been previously ignored but also must make sure that their company name and the trust associated with it makes families return to them for their services time and again. This is a process which will take years and the company needs to be mindful of that.
The Focus Strategy: The focus strategy looks more at the niche market and tries to understand the specific market, this strategy narrows down to the specific need they are trying to cater to and seek to develop their services/goods and marketing towards that need.
The report believes that the company should pursue two strategies side-by-side; the cost leadership strategy and the differentiation strategy. The former is easily achievable by the business as the report deduces that there is a huge untapped market in India for wedding consultancy services which the middle-class can avail and thus if it manages to corner the market, it will gain undisputed command over the pricing as well. However, it is also important to understand that since it is one of the first companies which plan to prominently offer these services, there would be pitfalls it would be subjected to, which companies that come after it would learn from. Hence, it is important that the company establishes a name for itself before it moves on to expanding its operations, by providing luxury weddings and so on.
The report discovered that the most lucrative country that the AMS group could initiate business in, at this time is India and the business where it has the most scope would be wedding planning and wedding consultancy. Although it expects to run into difficulties inevitably because it expects to be one of the first companies which offers such a service to its target audience, the report believe the chances of its success is fairly high if the company engages in a partnership and strategically conducts research only in specific areas.
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