NEW DELHI, Aug 11: Samir Verma of Ammiratis Puris Lintas thinks Reebok International must be mad to try selling its shoes in the country at global prices. "This company must be crazy. I'd wear Rs 4,000 shoes only on my head," the general manager says.

A good pair of Indian sneakers could cost as little as Rs 500, and Verma is not the only one in shock: so are marketing officials at foreign consumer goods firms, whose mouths once watered at the thought of grabbing a chunk of one of the world's largest markets. "We never thought it would be so complicated," a marketing official at a multinational firm said. "The Indian consumer is a difficult creature to understand." Advertising agencies, waiting to catch rushing multinationals, say most ignore the pitfalls of selling in a nation as large as much of Europe - and a great deal poorer. The fundamental mistake most firms make is to treat pricing like a sacred cow, Rediffusion-Dentsu, Young and Rubicam executive vice-president Sandeep Goyal said.

"The sort of classic mistake that people make is to say: I won't sell it for less than my world price," Goyal said. "When you come in with a dollar-denominated price, you will only get dollar-denominated volumes."

"You shouldn't be wonderstruck and say `but we didn't get the volumes'. You won't get the volumes. There are only so many volumes at that price." Part of the problem is that local consumers are extraordinarily price-sensitive, Verma said. "In terms of price-value equations, Indians are willing to pay less for quality than other markets and other countries," he said. "People are not willing to pay more than five or 10 per cent extra for excellent quality and service."

Goyal said companies like Coca-Cola Co and Pepsico Inc had caught on fast, pricing their soft drinks at just Rs 7 a bottle compared to the dollar equivalent of about Rs 35 abroad. "The soft drink guys are one example -- they're looking at genuinely expanding the market, they're getting people to switch from traditional drinks," he said.

"The guys who are making substantial progress are those who have come in and figured out - you want to sell in India, you've got to sell at local prices." Goyal said many foreign firms take the consumer for granted. "Just the fact that you're General Motors or Ford is not enough reason to buy your product," he said. He said another mistake many firms make is trying to sell globally unpopular goods, thinking that they will be absorbed by a market.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.