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Advantages Of Entering India Market Marketing Essay

India is a country in South Asia which is the seventh-largest country by area with the second most population country with over 1. 2 billion of people. Discussing the India current economic climate, it's the world tenth most significant GDP with average twelve-monthly GDP progress rate of 5. 8% and reaching about 7% during time 2000-2007 (Marketing Plan For Volkswagen India, 2011). Other than that, it was also with the 3rd largest purchasing electricity parity. Therefore, India became one of the most effective growing economies all around the worlds. As 12 months 2015, India purchasing vitality is predicted will be the 3rd largest on the globe which after China and United State (Sheth, 2011). From your economy belief view, India was a great market for Volkswagen in long term as the growing of the market is rapidly time to year. Therefore, the household spending vitality is also along growing and has roughly doubled year over year, which means the majority of the Indian have the ability to purchase the blissful luxury product (Marketing Plan For Volkswagen India, 2011)

Volkswagen had moved into into India market in yr 2007, the reason why that Volkswagen steps into India is basically because the growing potential of the auto market, In November 2009, they launched a built-in advertising campaign to building up the brand image. The project advertising campaign ends with conversations on the expansion prospects of the business future. They are targeting the wealthy of Indian rural area because that they had identified that they huge market are present in the rural sector in India and they be capable of buy an extravagance brand vehicles. (Masanta, 2011) A surging economy and vehicle sales in India growth in 2010 2010, India acquired ahead many of the expanding country like Japan, Brazil and UK, and they're lagging only to China (Sheth, 2011).

Other than that, the large population growth greater than 20 million per annum and the rising living criteria are two important signals that logically lead to a growing demand for automotives in India. Therefore, the increasing in the living standard and population were the best reasons that attract Volkswagen steps into India to grab the sales of luxury brand vehicles from the clients with different living standard from high quality classes to lower classes because when the living standard is increasing, the automobile is the position symbol for everyone, therefore, everyone is demand an improved position of car like Volkswagen rather than Honda that is too common for everyone. The another reasons Volkswagen steps into is the amounts of motorists increasing as living standard increase, number of women drivers increase, therefore, the better car technology is demanded like Volkswagen (Vogg, 2012).


India is now one of the larger market segments in the automotive industry and had been one of the speediest growing in terms of economy on earth. Major big companies such as Honda, Mercedes Benz, BMW, and Mitsubishi possessed already broadened their businesses into the Indian vehicle market. Volkswagen Communities had founded the Volkswagen Group Sales India Private Limited in India in the entire year 2007 to develop their businesses in to the Indian market.

Advantages of going into India market:

Lower Cost of Production

In India, the price tag on selecting labor is relatively lower compared to other countries. Average wages in India are the lowest wages in developed countries. (KHADRIA, 2006) That is credited to millions of men and women in India who are residing in poverty in India. Most of the people in India are prepared to take the work at lower wages so long as they are used. Because of that, it reduces down the price of development of vehicles in India. Volkswagen Group will take the advantage of the lower production cost to market their vehicles in India at a lower and affordable price when compared with other motor vehicle companies. This increases the demands for Volkswagen vehicles in India and additional escalates the income and income produced from the increasing demands.

Generate High Income

Studies have discovered that there are millions of individuals in India who are surviving in poverty. (Kumar, 2010) However, there's also a huge and growing amount of people in India that are categorized as middle class people. These middle income members command line salaries between five and ten times the nationwide average. A lot of they work in the health industry which is one of the central industries in India and are benefitted from pay boosts per 12 months. The India federal government estimates that some 300 million peoples make up the center category people. (Caste and School, N. D) By entering into this market section, Volkswagen Communities can generate high income and further increases its earnings as Volkswagen may offer low price vehicles which these middle income people can afford.

Promote Welfare of Society

The unemployment rate in India is very high. Volkswagen Groupings market expansion to India has contributed to cutting down the unemployment rate in India. (Pitchetsrieder, 2011) Job opportunities for blue n white collar workers receive to the population. The wages for these personnel are also lower in comparison to other fast developing countries which lead to lessen cost of creation and hazards. With less expensive of production and risks, the business can make high income and this will attract overseas and local shareholders to invest in the business. Thus the market expansion gives the company a win-win situation where in fact the company benefits from the income generated and the culture benefits from the job opportunity given.

Competitive Advantage

Volkswagen Group has competitive benefits in India over other automobile companies. It is because Volkswagen Group can take advantage of the low cost production in India. (volkswagenag, 2011) Lower labor wages and lower priced resources added to the low production cost. Besides that, Volkswagen Group has a manufacturing facility in India which is capable of producing in a huge scale. Allowing Volkswagen Group to market their car in a lower price as compared to other automobile companies. The business has registered a sales growth of over 1000% in the entire year 2010. (Desai, 2013) This means that Volkswagen is highly demanded in India and has become popular amonst the Indian consumers and therefore, presenting Volkswagen a competitive benefits to contend with other vehicle companies in India

Disadvantages of entering India market:

Cultural incompatibility

Cultural incompatibility is one of the troubles can be found in the India market as the culture that they methods will vary from others. They could still practice their traditional ethnical principles and desire to maintain the unique relationship with it so that it makes it a barrier for other country to adjust to their ways. Cultural incompatibility comes in the way to do business and their idea (U. S Commercial Service, 2012). Differing people have their own means of doing business so it helps it be hard for other folks to follow and adapt to them so drawback will occur. For example, India might still use the traditional way of conducting businesses and the other countries already adapting to the modern era therefore the cultural incompatibility is seen. The Indians expectation of work quality is very different so there's a challenge to utilize them. Besides that, they have got their own opinion which are different in one another and when one bring their own notion to communicate or practice the norm then misinterpretation or issue might happen.


Language is also another shortcoming to enter India although almost all of them can converse in English vocabulary but there is still a barrier whenever travelling in foreign countries like the way of communication, the dialect dialect which makes people hard to comprehend although they are using proper terminology and gleam myth that Indians do not connect fluently in English so it relatively becomes the downside to enter into India market. As the dialect barrier occurs, difficulty of conquering the language hurdle will happen so to employ a translation service might be expensive as well and it creates it even hard to execute the business between each other.

In addition, down sides might occur whenever there are myths or perception from individuals who Indians are not time conscious and does not stick to deadlines that are the most important key to do business and it will indirectly converts people from working together. There is also a myth they are not good at project management which means they cannot control the work well so to cooperate with them is a real hard issue.

Customer Service

A customer support is one of the important factor that provide huge impact on a organization and the image. In case a company provides poor customer support, it has many disgruntled customers. Many companies have gone out of business because of poor customer support. More than ever, customers desire to be treated with admiration (Richardson, N. D). A poor customer service such as frame of mind of employees toward to customer will create dissatisfaction on customer to go to to the service centre again. Service middle that inefficient and frustrating even to resolve simple problem will generate a bad image for the business and cognitive dissonance for owner of Volkswagen. This matter will affect the client buying decision and move to other car brand if indeed they need it another vehicle. Customer who experience poor service will tell their good friend about their feeling which is negative person to person (The Jay H. Baker Retailing Initiative, 2006). Recently Volkswagen customer service receives a great deal of bad review and complaint from customer. This issue should be solved in a nutshell time even the impact remain less. It will become worse every once in awhile if Volkswagen did not have the ability to solve the condition and might wrap up decreasing in sales in future.


In competitive and hard economical times like these, less concern is placed on retention for most companies because they are more concentrate on more-immediate business concerns. There's a increase in the amount of employees leaving their companies when the marketplace conditions improve and even more job opportunities are start. It is very important for a business to get seriously interested in retention now by giving employees opportunities to defend myself against heavier responsibility, broaden their skills and cultivate a network of connections.

Volkswagen, the German vehicle company should place a solid focus on the similar opportunities. All personnel hope to be treated rather. They have to know that if they work hard they will be rewarded by the organization. It is very important to stimulate your staff, because if it is not she or he would feel that even if they put in your time and effort they might be overlooked because of discrimination. Differences in ideas, perceptions, and attitudes that in the global economy of today is vital to generating innovative ideas. To be able the company to stay competitive or the other words agile enough to change, different approaches to problems and situations need to be created. Thus dissimilarities should be embraced to the companys benefits.

Moreover, to producing their leadership skills, employees want to increase their value by acquiring knowledge of the businesses outside their areas of expertise. Volkswagen will come out with a special training to identify and strengthen strategic key competencies. By applying working out, Volkswagen can follow its goal of obtaining transparency in conditions of requirements and future-oriented skills acquisition. New employees who show potential might be accepted into this elite group where they'll be given a great deal of exposure to different departments and levels of hierarchy.

Tuition reimbursement techniques should be provided by Volkswagen. These plans are designed to encourage employees new and old to upgrade themselves. The company wants employees to be better skilled, more professional and they are willing to aid them to do that. While using tuition reimbursement after graduation employees who are better educated will want to get back to these businesses willingly because they'll believe that the business values them. This sort of motivation becomes a solid bond that ties the employees to the company. And with better ties one can be reassured that productivity will definitely improve.

Furthermore, Volkswagen can also come out with an investment and savings plan as well. When the company shows such matter for even the financial health of its employees, staff will feel even more indebted to their management again spurring them to work harder. Finally, cultivates romance. Networking is important to employees for few reasons. It establishes the relationships that are helpful in looking a new position. Networking does help a company, not simply by enhancing retention but also by boosting the understanding and collaboration among the many business units.

The one obvious competitive gain that Volkswagen has compared to their opponents is low priced production and the ultimate way to maintain this competitive benefit is always to adapt to technology changes on the market. Each day there are new solutions out there that can help improve the creation with their vehicles. By adapting to them, not only they are able to reduce their cost of production, they are also able to boost the efficiency of their production process. This may eventually provide them with another competitive gain over their rival and stay before their competitors on the market.

Volkswagen have a good competitive advantages through this season but there is also a bad aspect of Volkswagen which customer that purchased does not feels satisfied with Volkswagen after sales service and quality of the automobile. Among the goals approaches for Volkswagen is to deploy clever innovation and solutions to become world head in quality of product and client satisfaction (Volkswagen, 2011). However there may be some bad review that might be found easily which is complaining about inferior part using their vehicle compared to Europe market. It really is known as Volkswagen Hate Golf club which illustrates some complaint through owner of Volkswagen. Furthermore there is an article regarding customer support index on calendar year 2012 and the article show that Volkswagen placed in important thing (J. D Electric power, 2012). Volkswagen should enhance their customer support and their quality of the vehicle in India. That is important to hold on to customer from moving over to competitor brand. Satisfied customer mainly will repurchase their brand when there exists new model released since when they feel customer support is good, they comfortable and tend to be loyal. Customer service that do not solve problem come across by vehicle owner will distributed negative person to person and certainly would have an effect on the brand which impact other consumer not to buy Volkswagen.

Volkswagen own a manufacturing facility in India and could produce their vehicle with lower cost therefore they should not lower their vehicle price, as a minimal price vehicle typically give consumer a notion of low quality. Volkswagen should set a typical of price that does not go too low beyond and begin to improve quality of the automobile. Beside, on the good side there is certainly Volkswagen Fans Club that provides information and distributed among Volkswagen vehicle owner. A lot of the owner could be referrer when they are satisfied with Volkswagen. There would be negative and positive information about Volkswagen could be on the admirer site. Therefore Volkswagen could improve customer satisfaction by open up a forum for customer and assist them if customers face some slight or significant problem. Through forum, customer could post picture almost and get better view compared to on phone customer support which operator could not see the condition well by hearing customer complaint.


In conclude, Volkswagen got came into India in yr 2007 and possessed a good effect for Volkswagen in India plus they had achieved a good sales, it shows a rise for Volkswagen in India since season 2007 and got a steady growth and they be match in durability with others luxury vehicle brand. Besides that, the client purchasing power provides a good illustration of the expansion associated with an India, and it appear to be the most effective growth on earth, which means it's the right time for Volkswagen to steps into India.

Besides that, monthly of passenger cars in India has risen 12 months to year due to the increasing of living standard and this implies that it is an chance of Volkswagen. In 12 months 2007, India was on developing and counted as on growing country, thus, the reach of Volkswagen in India experienced provided the job opportunities for the rural. Volkswagen release Volkswagen training academy, own a manufacturing plant and many others new initiatives, this purposely is to strengthening the Volkswagen in India. Volkswagen keep changing and launching new make of vehicles to fulfill and keep their customer in India.

There are some suggestion that we possessed designed to against social incompatible, languages, costing, and characteristics of Volkswagen in India, therefore, they should take serious about the existing problem, issue from customers and make a better improvement for an improved future for Volkswagen in India. Finally, Volkswagen experienced made the right decision to enter India at the right time and experienced chosen the right place.

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