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India as a market is vast and diverse. A population of more than 140 crore makes India a bank of customers/consumers. This increases the chance of any business, whether domestic or foreign, to survive in India. India is also an ideal destination for business as the Indian Government is consistently supporting the business sector through trade liberalization, tax regulations, and opening up to foreign investments. The diversity in culture and taste also comes in handy for foreign businesses to invest in India. The conducive environment and tremendous opportunities make India attract foreign businesses. However, to ensure the smooth functioning of a foreign business in India what is paramount is to have an “entry strategy” to enter the Indian market. Entry strategy refers to the sales and marketing structure that a business should adopt to expand itself in India. To determine an entry strategy several factors like the nature of the business, tax and regulatory environment, and approvals from the government come into the picture. If you are a business entity planning to enter the Indian market then below is a list of how to plan a market entry strategy into India.
Table of Contents
It is one of the most important steps while building an entry strategy. If a business entity is planning to make an entry into the Indian market, it must first consider the population tally and regions where its customers are based. A business must also research the psycho-graphics of its potential customers in relation to the products or services sold by a business.
The new entrant can have a local partner who helps the business to identify the complexities of the Indian business environment for a new entrant. The local partner will also help the investor with valuable market insights, governing laws, and other issues which is difficult for the new entrant to know. They can also help introduce the new entrant to the right network of people and assist the new entrant in reaching the target prospective clients.
After ascertaining the target market, the focus should be on analyzing the current and future potential of the market sector. India is a populous country with attractive opportunities there is no shortage of competition. For this purpose, detailed market research should be conducted for assessing the market trends, determining the size of the market, identifying competition, and understanding how the competitors function in the market and the laws that will be governing the business. Some of the important things which the new entrant must keep in mind while conducting market research are:
For finalizing which market to enter, market research on every market should be conducted. All market research should be compared and then using the results of market research, the final selection should be made. Choosing the right market plays an essential role in the success of the business therefore, it should be done carefully. Each market entry strategy has its advantages and disadvantages. The market strategy a business selects should align with the business objectives and must not be chosen primarily based on cost or convenience.
Based on the market strategy, the investor must create a business plan. A business plan consists of details on the products and/or services, strategies to reach the customers, meet the cost of the business, etc.
While building a business plan, there are a couple of factors that must necessarily be considered by the new entrant. These factors are as follows:
Indian market is very dynamic and diverse. Entry into the Indian market requires careful study of customer preferences, existing distribution, sales, and marketing practices, market regulations, etc. Without in-depth research, it is very difficult for a new entrant to survive in the Indian market. Further, it is risky for a business to enter the Indian market without a proper entry strategy. Therefore, having a well-planned strategy to enter the Indian market is necessary for the success of a business.
Read Also: Market Entry Strategy in India for a Foreigner
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