Selecting Indian Cities for Market Entry a scoring model approach

The management tool introduced by Integro Infotech & Consulting supports country heads of small and medium sized companies to plan their market entry in India. The decision where to offer the products first is crucial for go-to-marketstrategies since the final launch is the most expensive step in the product development process.

Integro Infotech & Consulting, 904, 6th Block Koramangala Extension, Bangalore 560034, India consulting@integro.co.in

Jose Jacob Kalayil Founder & CEO INTEGRO Infotech & Consulting Bangalore, INDIA

Christopher Beisecker WHU Otto Beisheim School of Management Vallendar, GERMANY

Philippa-Luisa Harhoff WHU Otto Beisheim School of Management Vallendar, GERMANY

Integro Infotech & Consulting (2012). All rights reserved.

Executive Summary
India with its population of 1.2 billion is the third largest economy in terms of GDP(PPP) in the world and the second fastest growing economy among the BRIC nations behind China. While many international companies are constantly evaluating and considering a market entry into India, the Indian market is mostly dominated by the unique, flexible, agile and complex companies in the world. With the opportunities and challenges in mind, Integro Infotech & Consulting has created a management tool, based on a scoring model, to evaluate the quality of Indian cities for market entry. The model is especially suited for small and medium sized foreign enterprises, facing the decision of where to offer their products within India. This issue is crucial for go-to-marketstrategies since the final launch is the most expensive step in the product development process. The scoring model includes five categories with fifteen sub-criteria to characterize the economic potential of the population-wise 20 largest Indian cities for individual business models. The rationale behind the selection of cities lies in the assumption that a possible market size is positively influenced by the number of inhabitants. Besides, those cities are geographically well-spread all over the country and represent different Indian states. The categories included cover the fields of economics, demographics, infrastructure, education and mobile/IT. Raw data were collected for each sub-criteria of the above named categories (e.g. the sub-criteria literacy rate, number of top universities under the category education) and rebased to a scale from zero to ten, meaning that the city with the highest score receives ten points in this category and the city with the lowest score receives zero points. The values in between are linearly distributed. This way, the comparability among the different sub-criteria and categories is provided. In order to aggregate the rebased raw data, the importance of the different sub-categories is evaluated using an ordinal scale from zero to five. The final city ranking results from the sum of the rebased raw-data multiplied with their individual importance weights.
Our Business Value Proposition Effective and efficient decision making is one of the fundamental steps to success it is even more critical during the entry phase. Small and medium sized firms that are planning their India entry can use this research tool to identify the right cities and follow a focused approach. To purchase the full version of the research or obtain a specific extract based on your firms selection of importance weights. Email us at: consulting@integro.co.in
Integro Infotech & Consulting (2012). All rights reserved.

Specific case of a software company To assist a software services firm, that was planning an India entry - the table of importance weights was set after a discussion with the country manager, based on his understanding of the target segment of customers for his product.

The values were entered into the corresponding program which revealed the city ranking as shown below. The country manager can now decide if he would launch the India Entry efforts in the top city as per the ranking or in a cluster of the top cites.