Sales in India: Practical tips for selling capital goods in mechanical and plant engineering in India.
European, especially German, manufacturers of machines and systems often find it difficult to assert themselves against the numerous competitors from Asia in India. It is often said: The Indian market for high-quality premium products is far too small and is still decades behind in terms of technology and therefore not ready for “Made in Germany”. In addition, customers in India are extremely price-sensitive and don't really appreciate good quality.
Even if these reasons are often true, there is still no reason to “write off” India and simply blame “the market” for your own sales failure. After all, the decision was made years ago to enter the Indian market. And since withdrawing is usually out of the question, it is better to think intensively and professionally about how to set up successful sales in India and really win customers.
Price is usually not the problem when selling in India!
Engineering
It is not uncommon for a German product - for example a special machine or an industrial plant - to be two to three times more expensive to purchase than a competing product from the Far East. At first glance, the European provider doesn't have a chance in the extremely price-sensitive Indian market.
But now compare them Total costs of both products over their lifespan and not just the acquisition costs When you look at it, the glaring price difference is usually put into perspective in favor of the German machine or system.
European systems are generally much more durable and often only cost a fraction of the costs of the substitute product when it comes to operation and maintenance. If you then also include output and productivity over the years in the calculation, the machine “Made in Germany / Austria or Switzerland” may even be the cheaper option, relatively speaking.
Nevertheless, this will often be of no use: Even if you can objectively calculate and present the long-term savings to your Indian customer, that is still no reason for the Indian buyer to choose the higher-quality product. Unfortunately, in India the following often applies: “It’s better to save 10% today than earn 20% more tomorrow (under certain circumstances).”
... but the problem often lies with the Indian users themselves
But you should also know what could be behind such an attitude:
Long-term price advantages for Indian customers are actually rarely realised. This is often due to its workforce or the fundamental lack of well-trained specialists in India. Because unskilled and perhaps not even properly trained workers handle the machines incorrectly, the savings promised by the manufacturer through low maintenance costs and high reliability are often not realized in India. But high-tech machines are susceptible to incorrect operation.
Unfortunately, it is actually the case that modern machines “Made in Europe” in India often require more maintenance than cheaper products from Asian producers. This is more than annoying for the manufacturer, because it has nothing to do with poor quality of their own products, but rather with the fact that the Indian environment is often overwhelmed with European quality workmanship.
Selling successfully: How you can still win over Indian customers – and prevail against your competitors
The following tips apply not only to asserting yourself against competitors from China or Korea, who are very aggressively and successfully gaining market share in India, but also to sales in India in general.
Collect important information about your leads through informal channels!
Information gathering
“Who are the real decision-makers?” is one of the central questions. Ultimately, important sourcing decisions in India are often made by the owners of the companies themselves or their representatives. However, you may never see them, but only the – frequently changing – management.
To learn the real reasons why you lost certain projects, you need to use informal information. The official reasons are often just excuses.
However, you can only obtain such internal information about your customers informally. Therefore, build up personal networks locally and ensure that these channels work for you before, during and after the sales process and provide you with ongoing information. Even more true than usual in India: knowledge is power!
Also use your networks in Europe!
As a rule, many of your partners, customers, suppliers and other stakeholders from your industry are also active in India. Benefit from their experience and their “market intelligence”. This way you can find out which projects are really hot and which projects you should stay away from. Also take advantage of synergies that may arise in sales - this way you can wisely expand your strengths and possibilities. Spin your own informal networks – just like the Indians do.
Create real trust and move to the personal level (if necessary)!
It's no big secret that the only way to do business successfully in India is through personal relationships. This does not just include regular formal exchanges and mutual visits in an official setting. Get to know people outside of their role in the company and develop friendships. By consciously creating informal situations, you can - if necessary - switch to a personal level without any problems and speak plainly - away from company policy protocol, among friends, so to speak.
Focus on important lighthouse projects: opinion leaders & industry leaders as reference customers!
In India, people like to trust testimonials and base their own behavior on leading figures, often with a certain tendency towards herd instinct. Take advantage of this phenomenon and initially focus primarily on leads that enjoy status and recognition in the market. When you gain such “lead customers,” the spell is often already broken. A good reference customer is worth more than any certification in India!
Product demonstrations and demos work wonders!
Indian customers hardly trust the benefits presented by a supplier. This has to do with the fact that sales in India traditionally always promise a lot, but in the end there is a problem in keeping such promises. Indian customers are quite used to being “led” to do something. Accordingly, people are skeptical “by nature”.
Therefore, the benefits of your own product must be proven in practice and not just promised.
So you can experience your product as well and intensively as possible: directly with your reference customers, in your company (in India or at your local headquarters) and – if possible – even at a trade fair. In this way, you create an opportunity to show and communicate the technical superiority of your product.
Create added value and put together attractive packages!
The price will still always remain a major (negotiation) topic in India. In order to enforce your own price expectations, you have to think about what additional benefits you can offer your customers instead of discounts. This could be, for example, training, service or other services. But be careful with discounts, because there are no secrets in India! The discounted price from your first customer will definitely become the basis for negotiation with the next customer. The informal networks ensure…
Don’t be afraid of business model innovations and focus on service!
It may make sense for your business to sell a related service in India instead of your actual product. It may happen that the market really doesn't allow it any other way and you have to rely on new ideas. For example, there are several German mechanical engineers who are successfully engaged in contract manufacturing in India (and only there!).
Since Indian customers have repeatedly had massive problems with the operation of German machines - incorrect handling resulted in defects and, in turn, high maintenance costs (see above), numerous European machine builders have also started offering corresponding training services. The decisive factor for success is ensuring quality and the ongoing training and further education of machine operators and operators.
A German manufacturer of concrete pumps also set up its own academy in India to train employees and other trainees there. The customer no longer just buys the pump, but also gets a well-trained operator.
More on this topic: Differentiation through service.
Consider “Frugal Innovation”
You might also be able to offer your customers less high-tech products that they aren't willing to pay for anyway. This not only makes your products cheaper, but above all makes them less susceptible to errors in operation. See also articles on the topic “Frugal Innovation” (Indian Economy)
Use local added value!
Think about which components and work steps you can buy in India or set up there yourself. If you start to integrate local Indian value creation into your offering, you will become more flexible in meeting the specific requirements of your Indian customers and of course you can also offer much more cost-effectively.
A German mechanical or plant manufacturer with a certain amount of local added value is often significantly more competitive in India than a Chinese importer!
WB market solutions® enables sustainably successful market entry and strategic sales development for German and European companies in India. Existing sales strategies and sales structures are also put to the test and optimized.
