Going Global

 

Godrej Locks have been the undisputed leader in the domestic market for over a hundred years, and the Godrej Locks Division has mostly concentrated its efforts in this market. Post-liberalisation, the Locks Division felt the need to  make its presence felt in the international market as well. Since the product requirement for each international  market is different, it meant that the Division would have to expand its product range. MINOO S. PANTHAKI, Senior  Manager (Exports), Locks Division, shares his experiences on the exporting of Godrej Locks.
 

Godrej Locks, Overseas


Initial Efforts/Experiences

The Godrej Locks Division started its focused approach in exports from April 2000. In June 2000, V. Mathew, Marketing Manager, A. Kamat, Channel Manager, and I travelled to Durban, South Africa, for our first international participation in an exhibition held by the Confederation of Indian Industry. The main lesson we learnt from the exhibition was that internationally, lever-type padlocks are not well accepted and we needed a range in pin cylinder padlocks. Also, the prices of our locks were found to be too high and were almost at par with the European brands available. Globally, there is a perception that Indian goods are of similar quality to Chinese products, and therefore the expectation is that the prices should also be similar.

Murtuza Amthaniwala of Shama Traders, the Godrej locks dealer in Dubai, with Minoo S. Panthaki, Senior Manager (Exports), Locks Division, at INDEX 2004, held in Dubai on 26 September, 2004.

Our Strategy
With this feedback in mind, our strategy was to target markets where hardware dealers were of Indian origin, as they would be aware of the Godrej brand of locks. They would also be aware of the quality of our products and would be able to push our products against competition. At the same time, we also approached the existing overseas dealers to include Godrej locks in their current Godrej product portfolio. This option was not readily accepted, as the existing overseas dealers had neither the market nor the product knowledge for locks.

Combing the Export Market
After drafting an introductory letter, we contacted over a hundred Indian embassies abroad, requesting them to furnish us with a list of hardware traders in their respective countries. The response from the embassies was overwhelming and we then started the painstaking process of sending letters, e-mails and faxes to each of the traders. We contacted over 500 hardware traders, globally. The response we
received was very poor, and the few traders who responded once again complained about our high prices. We were disappointed.

The major barriers we faced were:

High prices.
High duty structure in some countries.
Under-invoicing of consignments imported.
Unethical trade practices.

Since all this feedback was received by correspondence, market visits were essential and were quickly planned to get first-hand information about the quality and prices of competitors?locks available in the international markets.

A few early morning international departures took me to unknown markets of Sri Lanka, Dubai, Bangladesh and Nepal. After the market survey it was very clear that to enter into the competitive market, price was the major factor. We then reduced our prices to match those of similar quality products, to enter into the international markets. This strategy, though low in revenue earnings, has been successful and we now have some foothold globally. The export sales before the focused approach were almost zero and in the first year itself we achieved sales of Rs. 13.26 lakhs. Over the past three years, we have been steadily growing at the rate of 85 per cent and our sales figures last year touched Rs. 85.70 lakhs. We have set a target of Rs. 150.00 lakhs for this year.

Distribution Channel
Largely, our exports are to distributors, who in turn distribute to retailers.

However, we also cater to institutional sales and export locks according to customer specifications and under their brand names. By using the distributor-retailer channel, our products get wider area coverage. Visibility and availability of the product also helps us to get customers.

Competition/Product Range
Ever since we entered the international market, we have become familiar with the competitors?products, prices and the range of locks available globally. These have helped us to identify a few products, which when made for the international market, can also be launched as new products in the domestic market. Certain products had to be modified to be accepted by the international market, thereby enhancing the quality.

International brand leaders like Union, Cisa, Viro, Master, etc. have a presence in most of the markets. Since they are manufactured in Europe or the USA, the quality is perceived to be of the highest standard and hence is well accepted, even at a higher price.

During a recent market visit to the Middle East, it was evident that as with other international markets, even here, there is severe price competition among brands. Every shop we entered had a different price to offer. Depending on the quantity, the prices would vary. We realised that to enter any new market, we had to have a good penetration price, which would be on par with competing brands.

INDEX 2004 (Dubai)
After a hectic tour of Sri Lanka, our participation in Index 2004 at Dubai was quite taxing. A typical day began at 6 in the morning. The exhibition doors would open at 9 a.m. sharp. The steady stream of visitors kept us on our toes attending to all sorts of queries. At 1 p.m. the exhibition would close. However, with a few customers loitering about, we would close our stall at about 1.15 p.m. All of us would then have lunch and return to the hotel by 3.30 p.m. After a short rest, we would leave by 4.30 p.m. The exhibition would reopen from 5 p.m. to 9.15 p.m. By the time we had our dinner, made daily notes and called it a day, it would be 11.30 p.m.

Life on a Foreign Tour
After a sleepless night and with a heavy head, one disembarks in the unknown territory of a foreign land. In most countries, the airport staff speak only their local language, which is obviously Greek and Latin to us. A few try to converse in broken or heavily accented English. I have found that the best way to get around is by using sign language. Once the immigration officer stamps your passport, you heave a sigh of relief that you have entered the country. But be careful, in some countries such as the UAE, you cannot exit without the stamped visa copy. This has to be surrendered on exit. So keep all the documents until you get back home to India.

Entering the country is only half the battle won. To survive, you have to eat. You have to be very careful here, too. Vegetarians have a lot of trouble finding vegetarian food. It is always advisable to ask for a waiter who speaks and understands English. This way, you can assure that you get what you ordered.

In the Middle East, especially Saudi Arabia, meetings are interrupted for namaz (prayers). Also, Saudis work in two shifts, from 8.30 a.m. to noon and from 5 p.m. to 9 p.m. The timing sometimes extends to 11 p.m.

Due to different cultures, dress codes of all countries are strikingly different. In the Middle East, locals seldom wear a tie and a suit, since they wear robes and their distinctive headgear. In Sri Lanka, local upcountry shop owners wear a sarong and loose shirt. Our dress code for a formal meeting is always a shirt, trouser and tie, and for an exhibition, it is always a suit.

Visits to Distributors and Their Feedback
The distributor always greets you very warmly. Whether his shop is big or small, he always makes you sit down and offers a cup of tea. Here, again, globally, black tea is offered so you have to specifically ask for tea with milk and sugar. During the first visit, both parties are quite reserved and conservative. Only products and policies are discussed. However, during the second visit and thereafter, anything and everything gets discussed. Of course, business communication is done formally but, in the evenings, over an informal dinner, a lot of personal things are discussed.

Since we’ve had a lot of meetings with most of our customers and they now have the confidence in selling our locks, the feedback that we get is that though our prices are a bit high, the customers are pleased with the products. However, they hastily add that were the prices lower, the volume of sales would have been higher since more of the population would have been able to afford our locks. Overall, we have received a good feedback so far. Some have even gone to the extent of saying that they were not aware that such good quality locks for specialised applications were available from India, manufactured by Godrej.

Special Efforts
In order to expand our sales, we also make locks to order. We have been supplying Mortise locks under the “NOORCO?logo in Qatar and safe locks under the “ALPHA?logo in Sri Lanka for the past two years. Since last year, we have been supplying locks for all the products made at our overseas plant in Oman.

To support our distributors in Sri Lanka, we had a dealer conference-cum-launch of Godrej Locks, jointly done by us and our distributor, Farook Trading (Pvt.) Ltd. We have also offered to train two of his men in our Vikhroli factory for servicing, installation and sales of our locks.

The Future
We are confident that Godrej Locks, in the long run, will create a niche in most of the international markets.

 

Business Prospects From Europe

ike Columbus and Vasco Da Gama, V.S. Ramesh, Senior Manager ?International and Original Equipment Manufacturing Business, Security Equipment Division, and I set sail for uncharted territory. The dawn of 4 October saw us in Essen, Germany, where the Godrej Security Equipment Division (SED) took part in Security Essen 2004, one of the leading exhibitions for security equipment worldwide. This was the first time that the SED participated in an exhibition in a European country with the sole aim of developing business prospects for our security equipment in the European market.

At the Godrej stall in Security Essen 2004. From left: Percy B. Master, Head (Sales and Service), SED, Andreas Ehrlich, Sales Director, TESCON Security Systems GmbH & Co. KG and V.S. Ramesh, Senior Manager, SED.

The exhibition, held from 5th to 8th October, attracted over 100,000 visitors. Although there were hundreds of stalls, we were the only company representing India. We had displayed the Defender Plus Safe, Matrix Safe, Dataline Data Safe and Fire Resisting Filing Cabinet. In addition, we had display panels for the rest of our range.

Our products evoked an excellent response not only from German organisations, but also from organisations from Bulgaria, the Netherlands, Sweden and Ireland. Apart from traders, some manufacturers also evinced keen interest in our range, with an eye on Original Equipment Manufacturing supply tie-ups. At the same time, we were able to gather a lot of information on products and equipment that could have potential in India.

With the number of inquiries now coming in, it won’t be long before we see good business flowing in from Europe.
 

Percy B. Master
Security Equipment Division
Mumbai Branch

 

 

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