The ‘Made in India’ effect — it’s time for McDosa

August 3, 2011

(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Apple iPod has a cutesy little legend on the back which reads ‘Designed in California, Made in China’. Well, the implication of that is quite clear — we in California do the clever stuff and they just stick it together. If it was made in France or Germany, the Apple people certainly wouldn’t be quite so dismissive. ‘Engineered in Germany’ perhaps, or ‘Designed with French flair’.

There’s no doubt that the country of origin effect in certain sectors has a real edge. There’s a cosmetic company in Poland called Dr. Irena Eris; in a quotation from the UK’s Guardian the founder says, “We made a mistake by putting Polish on the packaging. Polish products still have a poor reputation in the west. It’s not like in France where you can stick ‘Made in France’ on the side and people will want to buy it.”

The fact of the matter is that, for some countries and some products, country of origin puts extra money on the price. BMW is German — everybody admires German engineering, so you pay extra for that. L’Oreal makes it quite clear that it comes from Paris.  You pay a bit more for that too.

So, what about India? Well, traditionally the issue has been that many Indian products were, one way or another, emulators of products from other countries. Thums Up, now owned by Coca Cola, was originally designed to compete with it at a lower price.

The implication being that, even if it wasn’t quite the Real Thing, at least it was a bit cheaper — nearly the Real Thing — so to speak. And it’s still the case that lots of Indian companies use Italian or English or German or Scottish sounding names on the products they make and brand. Is this because they think they will be able to charge more for the product with a foreign name? Or because they have still some kind of inferiority complex about being seen to be Indian? Or is it just because they haven’t thought it through?

But it doesn’t have to be like this. We’ve seen in the software industry how companies like Infosys and TCS can turn Made in India into an advantage — better product, competitive price. Maybe other sectors of the Indian marketplace should think a bit more carefully about how they do this kind of thing.

Not every country can have a great reputation in everything it does. German technology? Yes. German fashion? Perhaps not so much.

India has clear strengths and individuality in the global marketplace — anything to do with health, textiles, software, food — and that’s just for starters. Where is McDosa?

If you are an Indian company thinking of going on to the global stage, don’t just hide your Indian origins. Start by thinking how you can take advantage of it and, in that way, get higher margins. It’s all a question of really thoughtful and differentiated branding.

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