FEATURE ARTICLE 1

How Indian
Pharmaceutical
Companies Are Building
Global Brands: The
Case of the Himalaya
Herbal Brand
By
Rajesh Srivastava

This study aims to understand how Indian brands are built globally. The study also gives insight
on understanding the mode of entry adopted by Indian companies with special reference to the
Himalaya Drug Company. The study takes a multistage approach through secondary data analysis,
an interpretative approach, and interviews of 15 pharmaceutical personnel and 30 consumers from
the United States through focus interviews. The interviews were recorded. It is qualitative descriptive
research. Our research shows that Himalaya has used a franchising model to build their herbal brands
through retail franchisees, and a problem-solution approach strategy in communication. Emphasis on
customer experience has created good word-of-mouth and generated good revenue for its herbal
brands. Quality, effectiveness, price, and availability are the key factors for herbal brand building. The

Correspondence to: R. K. Srivastava, 2/9/12, Bluemoon, Bhwaninagar, Marol, Mumbai-400059, India, 91-9819836861, srivastava@vsnl.net, rks_pmc@yahoo.com

Published online in Wiley Online Library (wileyonlinelibrary.com)

© 2016 Wiley Periodicals, Inc., A Wiley Company. • DOI: 10.1002/tie.21827
2 FEATURE ARTICLE

product mix is selected based on the country’s culture and consumers’ needs. They also capitalized
on newfound Indian pride and confidence due to faster gross domestic product (GDP) growth. This
article contributes to a better understanding of the opportunities and challenges associated with
brands from emerging markets, in particular, India, as well as the development of brands from emerg-
ing markets, which is becoming more important at the economic and political level. It also helps to
better understand mode of entry, especially for small companies. © 2016 Wiley Periodicals, Inc.

Introduction Mode of Entry Adopted by Indian Companies

Seeking partnerships in the form of mergers, acquisi-

I
ndian multinational corporations have recently
begun to go global in their operations. The growth
of the Indian multinational is becoming a subject of
discussion in corporate boardrooms in the United States
and Europe (Khanna & Palepu, 2006). Academics and
analysts are also taking notice. Leveraging the nation’s
comparative advantage of knowledge, Indian companies
have grown through acquisitions, built best-in-class com-
petency, and become large-scale players. The Tata, Info-
sys, and Reliance success stories are known. A little less
known is that Indian outbound deals, or global mergers
and acquisitions, valued at $4.3 billion in 2005, crossed
the $15 billion mark in 2006 and in 2012 crossed the
$35 billion mark (IBF Report, 2014). Bharat Forge is the
world’s second-largest forging company; Ranbaxy–Sun is
among the world’s top 10 generic pharmaceutical players;
and Jain Irrigation, which hardly figures in the headlines,
will soon be the world’s number one irrigation equip-
ment company because of a spate of acquisitions in the
United States and Europe.
Today, to be successful multinational organizations
must be able to adapt international products to local
cultures (often referred to as being glocal). This adap-
tation is indisputably important for managers, leaders,
and entrepreneurs with respect to business operations
(Sharma, 2009). Dabur India Ltd., for example, builds
on skills in product engineering and localization in
its overseas markets (Fernandes, 2013). Dabur Herbal
Toothpaste and Dabur Herbal Fresh Gel were manufac-
tured for the African consumer care market (Fernandes,
2013). Emerging markets also may be attractive to Indian
companies because they provide access to consumer mar-
kets that are often overlooked by Western firms (Shankar
& Reddy, 2014). Mode of entry is important for global
companies. Indian companies have adopted different
methods of entry strategy depending on the country
score based on pestel-dc (political, economic, social,
technological, legal, demographic, culture) parameters
(Srivastava, 2014).
tions, joint ventures, and strategic alliances with foreign
partners, Videocon, a leading company from India in the
white goods sector, now has access to research and devel-
opment (R&D) facilities of the companies it acquired
across the globe. Such acquisitions have also enabled the
company to have direct access in the local markets to dis-
tribution channels and brand equity of the acquired com-
panies. Similarly, India’s EsselGroup, after merging with
Propack Industries, has become a world leader in packag-
ing. When the Tata Group acquired Tetley, it became one
of the leading players in the global tea market. Merger
and acquisition is one of the common methods used to
build brands globally for large companies from emerging
markets.
Many service companies from India are moving
up the value chain to offer other high-end solutions by
getting into products and business process outsourc-
ing (BPO) services and knowledge process outsourcing
(KPO) services. Some Indian information technology
(IT) service firms are getting into consultancy to offer
end-to-end solutions that provide greater value to the
client. Such add-ons in the service provided also facili-
tate higher operating margins. Some of the IT business
majors have also concentrated on the lower end of the
value chain like business process outsourcing to expand
operations across the globe. Most of the Indian compa-
nies from India have adopted a franchising mode of entry
followed by merger acquisition.
The Global Herbal Products Market
Herbal and organic companies have come a long way in
the past few years. This is because many herbal products
are now recognized globally as having curative effects
for many diseases, without side effects or the need for
surgeries.
Herbal products are marketed across the globe
and have become a lucrative trade. In their search for
novelty and market advantage, herbal companies strive

Thunderbird International Business Review DOI: 10.1002/tie

 How Indian Pharmaceutical Companies Are Building Global Brands: The Case of the Himalaya Herbal Brand
for innovations through constituent chemistry and new
production techniques, international advertising and
marketing, and transfer pricing. The industry constantly
strives for modern science and technological specialism
whose research and development is strongly led by the
needs of industry and markets.
The use of herbs in the treatment of various diseases
is almost universal among nonindustrialized societies
and is more affordable than purchasing expensive mod-
ern pharmaceuticals. The World Health Organization
(WHO) estimates that 80% of the population of some
Asian and African countries presently uses herbal medi-
cine for some aspect of primary health care. Studies in
the United States and Europe have shown that the effec-
tiveness of herbal medicine has a strong scientific backing
and has become more widely available. However, the use
of herbs in clinics is still rare.
The global herbal industry is forecast to exceed
$105 billion by 2017, according to research from the
Global Industry Analysts report (2014). This growth is a
result of the world’s aging population, increased general
awareness related to health issues, and comparatively
lower rates of growth for what we call allopathy (tradi-
tional Western medicine). This is one industry that has
recorded tremendous growth globally unaffected by the
economic recession over the period of the last ten years.
Other elements that have had a positive impact on the
market include a trend toward using herbs to prevent and
treat illness, greater acceptance of functional foods, the
Food and Drug Administration’s (FDA) Current Good
Manufacturing Practices publication concerning dietary
supplements, and supplier innovation. Other reasons
are related to health insurance penetration, increasing
disease burden, lifestyle diseases, awareness of health care
and preventive care, employer-provided health care, and
community-based health plans. Women, in particular,
represent the largest worldwide consumer group in the
herbal market as they are increasingly becoming aware
of health issues and the role of herbal medicine in health
and well-being.
The annual turnover of the Indian herbal phar-
maceutical industry is about Rs. 23,000 million ($383
million) with a growth rate of about 10% annually (Sriv-
astava, 2014). Despite India’s well-recorded and well-
practiced knowledge of traditional medicines, the export
of medicinal plants and herbs from India has increased
in the last few years, but not as significantly as in the Chi-
nese herbal industry and in other developing countries.
There may be several factors behind this such as a lack of
well-documented traditional use, single-plant medicines,
medicinal plants free from pesticides, heavy metals,
DOI: 10.1002/tie
3
standardization based on chemical and activity profile
and well-framed regulatory aspects. But still there is an
enormous scope for India to emerge as a major player in
the global herbal product–based medicine arena.
Herbal Products’ Acceptance
According to the report on Guidelines on Safety Monitor-
ing of Herbal Medicines in Pharmacovigilance Systems by
WHO in 2004, there has been a tremendous increase in
the number of people resorting to herbal products for
treatment of various health challenges. Complementary
and alternative medicines (CAM) are becoming main-
stream in the United Kingdom, and in the rest of Europe,
North America, and Australia, the use of herbal medi-
cines is widely embraced.
A new market research report on herbal supplements
and remedies states that Europe, with around 45% mar-
ket share, is the largest region for herbal supplements
and remedies (Srivastava, 2014). The other important
markets for herbal supplements on a global basis are Asia-
Pacific and Japan. China and India are set to pave the
way in terms of growth rate with the highest compound
annual growth rate (CAGR) of 10.5% through 2017 (Sriv-
astava, 2014). Multiherbs dominate as the largest product
segment and are forecast to race ahead of the other
markets at a compounded growth rate of 9.15% over
the analysis period (GIA Report, 2014). Herbs are also
expected to display strong growth potential in the future.
Himalaya Drug Company
Himalaya Herbals are branded under the name Hima-
laya. The logo of Himalaya is a visual representation of
the brand identity. The leaf that forms the crossbar of the
letter “H” evokes their focus on herbal health care. The
teal green of their logotype represents their proximity to
nature, while the orange is evocative of warmth, vibrancy,
and their commitment to caring. Thus, the brand has
positioned itself to represent “Purity of Nature” (quality
of product) and “Promise of Good Health” (benefit).
Himalaya Herbals is positioned as a middle-of-the-
road brand globally. In spite of this, it is considered to be
among the top five herbal brands by value both in India
and overseas.
The Himalaya Herbal brand has honed and built its
brand value through its strong problem solutions where
Himalaya offers comprehensive natural solutions, be it
skin care, oral care, or hair care. Their strategy is to iden-
tify the consumer problem, build an insight around it and
provide comprehensive solutions in a very innovative way.
The main emphasis of their marketing is to focus on how
to communicate the solution to their target market in the
Thunderbird International Business Review
4 FEATURE ARTICLE
15- to 24-year age group. In India, Himalaya was a first
mover in face washes in 2006 and the category now con-
stitutes half of its personal care portfolio. They are now
putting a lot of effort and investment into creating aware-
ness for the face wash category and into brand building
through television and digital media.
Approach to Reach Audiences by Himalaya Drug
Company
Himalaya, a wellness brand backed by deep research,
initially avoided television advertising since it was not pos-
sible to explain the research that goes with the brand in a
30-second time slot. Hence, the company started setting
up stand-alone stores. Trained representatives and a wide
range of stock in 200- to 300-square-foot shops to lower
costs were a part of their retail strategy.
As for pricing, Himalaya’s products are typically
benchmarked against a popular product in the category.
If the less expensive variant of Pears face wash costs
around INR 50 ($1), then Himalaya Herbal face wash
will be priced around 10% less. That also explains why
Himalaya Herbals has a 25% volume share in face washes
in the modern trade format, but a 23% value share in
India (IMS Report, 2014). This is true for overseas offer-
ings as well. Himalaya has a country-specific pricing policy
and product mix. Therefore, this study aims to study the
process of brand building in developed economies by
taking a brand from emerging markets as a case study.
Many studies have reported their work on global brands,
but there is a paucity of similar studies from emerging
markets (Srivastava, 2014).
Need to Study
India was a traditionally managed, protected economy
for many years after independence. Indian companies
started going global seriously in the 1990s after liberaliza-
tion, which was due in part to higher economic growth
coupled with government motivation. The momentum
has increased enormously in the past decade. Today,
Indian companies are all over the world, some succeed-
ing tremendously, and some faltering at the outset,
mainly because of a lack of cultural insights. For these
reasons, there is a need to study the entry mode of Indian
companies that are poised to become global. This study
will help other emerging-market companies better under-
stand how to gain access to developed markets.
While practitioner literature on Asian brands is
beginning to emerge (Aitchison, 2002; Temporal, 2001;
Williamson, 2005), the academic literature on the way
Asian brands compete in the international arena is still
Thunderbird International Business Review
limited. This study helps to bridge that gap by linking the
development of Asian brands to international marketing
theory. We have taken Himalaya as a model brand for this
research. The brand Himalaya, the leader of herbal prod-
ucts in India, has not yet been able to tap a major share
in the European and the US markets. However, Himalaya
has made a fairly successful entry into the United States.
Therefore, the study of problems and issues of mode of
entry and the brand-building process will be of great help
in understanding international business and developing
global brands originating from emerging markets.
Literature Review
Companies from Emerging Markets and Their
Approach to Building Brands
Asia is fast becoming a major economic center. The suc-
cess of brands such as Giordano, Banyan Tree, and Acer
all testify to the dynamism of brands in the Asian region
(Julien & Eckhardt, 2007). Some emerging giants com-
pete in several countries through merger and acquisition
strategy—for instance, Brazil’s AmBev (which in 2004
merged with Belgium’s Interbrew to form InBev); Chile’s
S.A.C.I. Falabella; China’s Baosteel, Galanz, and Lenovo
groups and Huawei Technologies; India’s Dr. Reddy’s
Laboratories, Infosys, NIIT, Ranbaxy, Satyam, Tata Group,
and Wipro; Israel’s Teva Pharmaceuticals; Mexico’s
Cemex; the Philippines’ Jollibee Foods; and South Afri-
ca’s SABMiller. Others operate mainly at home—for
example, China’s Wahaha Group; India’s Bharti Tele-
Ventures and ITC Limited; and Turkey’s Koç and Doğus˛
business groups (Khanna & Palepu, 2006). Globalization
and economic reform across the globe are enabling com-
panies to expand the base for growth (Srivastava, 2015).
Mode of Entry by Herbal Companies
In the past two decades, international activity has become
a crucial dimension in the growth of retailers who have
been aggressively expanding to foreign markets (Wigley
& Moore, 2007). Wrona and Trapczynski (2012) reported
that entry mode decisions in the pharmaceutical market
result from a changing trade-off between specific market
potential and risk factors.
In regard to the entry-mode selection process, some
studies have illustrated that the majority of small-scale
companies have a passive behavior (Mencarini, 2003).
In most cases, importers and local distributors enter into
agreements with foreign partners for the fulfillment of an
unsolicited order. Thus, there is no real choice and the
adopted entry mode is the result of a passive response
DOI: 10.1002/tie
 How Indian Pharmaceutical Companies Are Building Global Brands: The Case of the Himalaya Herbal Brand
to an external stimulus. With regard to the active entry-
mode strategy (EMS), several theoretical perspectives
have been used to explain companies’ choice of foreign
operation methods (Welch, Benito, & Petersen, 2007).
Among the most commonly adopted theories are transac-
tion cost analysis (TCA), the resource-based view, institu-
tional theory, and Dunning’s eclectic theory (Brouthers
& Hennart, 2007). However, there is a paucity of research
on entry mode of herbal companies.
Dabur used the manufacturing rout to enter the
market by setting up five manufacturing units overseas
with its products exported to more than 50 countries
that were serviced locally by the company’s offices and
representatives (Management Paradise, 2011). Because
of Dabur’s technology for adapting to suit local needs, the
local manufacturing units were also set up for the portfo-
lios of the Asian markets (Pakistan, Nepal, Bangladesh,
Sri Lanka, and Malaysia). Thus, understanding the local
Diaspora was the prime concern for the company at large.
In Nigeria (customers beyond the Indian Diaspora),
under the product portfolio of skin care, Dabur launched
an herbal soap using localized ingredients as the Nigerian
market preferred oral care and home care over the hair
oil segment where Dabur was prominent (Fernandes,
2013). Himalaya adopted a franchising mode of entry
with exclusive retail outlets. The product mix of the same
company varied depending on the country and consum-
er’s expectations. Country of origin and image also play a
role in brand acceptance.
Lu, Karpova, and Fiore (2011) identify three groups
of factors that influence entry-mode choice in the fash-
ion retail market: firm-specific factors of asset specificity,
brand equity, financial capacity, and international experi-
ence; country-specific factors of country risk, cultural dis-
tance, and government restrictions; and market-specific
factors of market potential and market competition.
Though it was related more to the retail industry not
to the pharmaceutical herbal market, the concepts are
generalizable.
Country-of-Origin Perceptions
Globalization leads to more openness and interdepen-
dence among societies and economies. Consumers across
the globe increasingly share similar tastes in clothing,
music, food, and lifestyles. As globalization—the process
of opening up societies and country markets—acceler-
ates, consumers around the world increasingly have
available to them a large number of brands, both global
and local (Srivastava, 2014). Global brands are defined as
brands that adopt standards from environments around
the world to achieve a highly uniform product (Medina
DOI: 10.1002/tie
5
& Duffy, 1998). Global brands were viewed as extremely
overpriced in a health Thai study (Dogerlioglu-Demir
& Tansuhaj, 2011). Most consumers can recognize the
brand origin correctly, but the power of recognition
decreases when the brand has a long history of localiza-
tion (Zhongqi, Chansarkar, & Kondap, 2006).
Country of origin (CO) effect was recognized as
an important phenomenon in international trade at
least one hundred years ago (Peris, Newman, Bigne, &
Chansarkar, 1993). It has been found that CO influences
consumer perceptions in at least three dimensions: as a
purchasing cue for quality indication, as a symbolic and
emotional attachment to consumers, and as a match with
consumers’ social and personal norms (Ahmed, Johnson,
Ling, Fang, & Hui, 2002). People tend to associate brand
origin with certain characteristics of the brand such as
quality, price, and value. This can be partly explained by
social identity theory (Hogg, 1992). In other words, there
is a tendency to use extrinsic cues (such as countries or
places) to replace intrinsic features (such as price or per-
formance), which is compounded by other factors such as
familiarity of the consumers with the brands or countries
(Han, 1989).
So far studies on international branding have focused
on global brands, explaining how these brands are
perceived (Holt, Quelch, & Taylor, 2004; Johansson &
Ronkainen, 2005), and how they adapt to local contexts
outside their home markets (Watson, 1997); or on local
branding, explaining how they can compete against
global brands (Eckhardt, 2005). In contrast, this study
focused on the development of Indian brands built glob-
ally by using a case study of Himalaya herbal products
from India.
Identification of Variables for Study
Based on the literature review, the variables identified for
this study are entry mode adopted by herbal companies
to build brands, perception of herbal brands and factors
on effectiveness, results, side effects, quality, availability,
country of origin, and packaging affecting globalization
of a brand in the herbal segment. Variables are limited as
the study is exploratory in nature. There are no hypoth-
eses proposed due to the nature of the study.
Methodology
The research was designed to gain both depth and
breadth of understanding based on the study suggested
by Hirschman (1989). The study incorporates both
secondary and primary research. The manuscript is
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6 FEATURE ARTICLE
divided into research design, sample design, question-
naire design, and tools used to analyze the data.
Research Design
This study is based on secondary data analysis and follows
a case study approach. Himalaya used as a case study for
understanding the mode of entry and the brand building
process as a global brand.
In our first phase, secondary data on Himalaya
brands were collected to understand the company and
their approach. Data collection, specifically secondary
data from various conference papers, e-databases, arti-
cles, and journals pertaining to the information. Second-
ary sources such as corporate web pages, annual reports,
press articles, historical research, and information about
the industry were analyzed as per recommendations in
Golder (2000). This helped us to identify the problems
and issues related to building a brand globally, especially
a neutraceutical or herbal brand in a developed market.
The second phase was a qualitative exploratory study
based on selected interviews of pharmaceutical personnel
(N = 15), with focus interviews based on a semistructured
questionnaire. These product managers have experience
with pharmaceutical herbal products for their global
operation. Product managers from Dabur, Vilco, Emami,
Lupin, Zandu, Himalaya, Vaidyanath, and Charak Phar-
maceuticals, all Indian herbal companies, participated in
the study. To gain breadth of understanding, we relied
on additional in-depth interviews with executives work-
ing on a wide variety of Indian branding campaigns in a
wide variety of positions and companies with reference
to Himalaya brands. All respondents who participated in
this study were connected with herbal brands. The third
phase was a primary exploratory study. It involved 30
respondents from the United States who use herbal prod-
ucts. The study is based on earlier studies by Hirschman
(1989). We used a structured questionnaire as research
for the study. Research was conducted from January 2015
to February 2015. Thus, it can be summarized as shown
in Figure 1.
FIGURE 1 Summary of research methodology
Research Design
1.Secondary data 2.Qualitative 3. Primary research
analysis exploratory research among American
consumers
Thunderbird International Business Review
Sample Design
The sample size, seen in Table 1, consists of product
managers (N = 15) who have experience managing
herbal brands globally and 30 consumers who have used
herbal brands, in focus interviews and in-depth study. The
convenience sampling technique was used to sample the
respondents.
Questionnaire Design
Questionnaires were used to collect data from the consum-
ers of herbal products. A questionnaire was sent to more
than 100 respondents from the United States, with 30 fully
completed questionnaires returned. Each respondent was
asked the reasons and factors that affect their purchase
decision of an herbal brand. The questionnaire was based
on an earlier study by Srivastava (2014). Variables like
perception of herbal brands and factors on effectiveness,
results, side effects, quality, availability, country of origin,
and packaging affecting globalization were incorporated
into the questionnaire. The respondents from the United
States were American Indians (people whose country of
origin is India but who reside in the United States) who
are familiar with herbal products from India. The focus
interview was held with product managers working in
herbal companies related to herbal brands and noted
their opinion and perception of the barriers to the devel-
opment of their brands. The primary source of data was
semistructured in-depth interviews with the respondents.
Each interview was semistructured and guided by a set of
open-ended questions, with a focus on what respondents
perceived as barriers to the development of herbal brands
globally. Average interview time with each respondent
was one to two hours. As was suggested by Yin (1994), the
open-ended interviews were used to expand the depth of
data gathering and to increase the number of sources of
information. In case study research, reliability is measured
by the ability of a different researcher to arrive at the same
conclusion if they replicated the case study. Case studies
are particularly good at enabling the researcher to get
a detailed understanding of a topic (Saunders & Lewis,
2012). Additionally, exploratory methods such as case
studies have been recognized as being particularly useful
for examining strategies in emerging markets (Hoskisson,
TABLE 1 Sample Size
Product
No Managers Company Consumers Total
15 6 30 (United States) 45
Total 15 30 45
DOI: 10.1002/tie
 How Indian Pharmaceutical Companies Are Building Global Brands: The Case of the Himalaya Herbal Brand 7

Eden, Lau, & Wright, 2000). Interviews provided a rich that were made in Japan, even as they acknowledge the
description from the respondents regarding their expe- superiority of those brands to local ones (Klein, Ettenson,
rience and perception of herbal brand marketing glob- & Morris, 1998). These negative CO perceptions were also
ally and on their experience as US consumers of herbal due to a history of poor quality in the past. For example,
brands. “Made in Vietnam,” or “Made in Cambodia” tend to sym-
bolize low-quality products to residents of other Asian
Data Analysis countries (Eckhardt & Hahn, 2006). People tend to associ-
Analytical tools used include descriptive statistics and ate brand origin with certain characteristics of the brand
correlation. such as quality, price, and values (Ahmed et  al., 2002;
Dogerlioglu-Demir & Tansuhaj, 2011; Srivastava, 2014).
Results However, country of origin is not an important factor for
consumption of herbal products by consumers according
There are many factors that affect the intake of herbal to the results of our study. Effectiveness, side effects, avail-
brands. The results, presented below, are divided into ability, quality and response time are important factors
descriptive and inferential analysis. for consumers. However, according to product manag-
ers, effectiveness, response time and packaging are three
Descriptive Analysis important factors for consumption of herbal products.
Brand acceptance by consumers in herbal segments Packaging is a silent salesman. For consumers, packaging
depends on many parameters. People tend to associate is not an important factor for consumption.
brand origin to certain characteristics of the brand such Statistically, side effects and availability are given
as quality, price, and values (Ahmed et al., 2002; Dogerlio- more emphasis by consumers as compared to product
glu-Demir & Tansuhaj, 2011; Srivastava, 2014). This can managers as shown by Z cal = 2 > Z tab of 1.96. Price,
be partly explained by social identity theory (Hogg, 1992; country of origin and packaging are given more emphasis
Srivastava, 2014). by product managers than by consumers as shown by Z
Parameters for herbal brands’ health acceptance cal = 2.3 > Z tab of 1.96. Effectiveness, response time and
based on product managers’ interviews appear in Table 2. quality are similar for consumers and product managers
as Z cal = 1.1 < Z tab of 1.96.
Inferential Analysis In marketing, communications and advertisements
The managers (N = 15) we interviewed outlined negative should promote the product’s quality, value, perfor-
country of origin perceptions as a major challenge for mance, and other features. Highlighting this awareness
Asian brands that want to achieve a market presence. Per- will bring a greater response to herbal brands as more
ceptions of certain Asian countries and products made in people seek out natural medical solutions. Theories on
those countries can be quite negative. This is due in part to consumer behavior state that the behavior of people
the history of the region. For example, because northern is influenced by external factors like word of mouth,
parts of China were subjugated by Japan during the second trends, listening and reading in addition to individual
world war, consumers there are reluctant to buy products state of mind including feeling and cognition (Srivastava,
2014). Understanding the buying behavior of the target
TABLE 2 Factors Affecting Herbal Brand Intake consumer is an essential concept in marketing goods and
services. Creating product differentiation will increase
Parameters Affecting Intake Consumers Product Managers marketing challenges for companies who rely on qual-
of Herbal Brands ity and innovation as key to their identity (Davis, 2010).
(Rating on Score of 1–5) N = 30 N = 15 Similarly, Indian brand Himalaya has a low rating as seen
Effectiveness 4.9 5.0 in Table 2. Product managers perceive price as an impor-
Response time 4.7 4.8 tant factor for acceptance of herbal brands, but the US
Side effect 4.9 4.1 consumer is willing to pay a higher price if the product
Quality 4.3 4.2 is effective and has fewer side effects, according to our
results. Availability is also a key factor as far US consum-
Availability 4.9 4.5
ers are concerned compared to the opinion of product
Price 3.5 4.5
managers. Packaging plays a role for both product
Country of origin 3.7 4.6 managers and US consumers. Because of increased con-
Packaging 4.1 4.8 sumer awareness, personal preference, and limitations

DOI: 10.1002/tie Thunderbird International Business Review

8 FEATURE ARTICLE

of conventional medicine, many individuals are turn-
ing to complementary and alternative medicine (Santa
Ana, 2001). As the US population becomes increasingly
diverse, however, the use of more culturally sensitive alter-
native therapies will increase.
Our next question analyzed the Himalaya brand
using the same parameters. Table 3 gives the factors that
affect herbal product use by consumers from the United
States and product managers from herbal companies.
The analysis is divided into two sections, one relates
to US consumers and the other relates to product manag-
ers of herbal products.
Factors Affecting Consumption by Consumers of Herbal and
Himalaya Brands
Several factors emerged as influencing factors for accep-
tance of herbal products from our perception study of
consumers. The first factor rates effectiveness of the product.
With Z cal = 2.1 > Z tab of 1.96 shows that the consumer
rating for herbal products in general is higher than for
Himalaya’s brands. Himalaya’s brands ranked low in con-
sumer perception. One would have expected the Hima-
laya brand to have ranked higher due to the company’s
brand building activity. Similarly, the response time with
Z cal = 2 > Z tab of 1.96 shows that the consumer rating is
higher for general herbal products than for Himalaya’s
brands. This may be because Himalaya’s brand equity
is not very high. Similarly, Z cal = 2.2 > Z tab of 1.96 for
side effects shows that consumers rate general herbal
products higher than Himalaya brands. Also, quality with
Z cal = 2.3 > Z tab of 1.96 is rated higher by consumers
for non-Himalaya herbal brands. Availability factor with
Z  cal = 2.4 > Z tab of 1.96 shows that the rating is higher
for other herbal brands than for Himalaya brands, as
per analysis for consumers. Himalaya brand availability is
better compared to herbal products in general. On price
as a factor with Z cal = 1.1 < Z tab of 1.96 there is no sig-
nificant difference between the ratings for other herbal
brands and Himalaya’s brands, for consumers. Country
of origin with Z cal = 1.2 < Z tab of 1.96 shows that there is
no significant difference between the ratings for herbal
brands and Himalaya brands, for consumers. Nor is coun-
try of origin an important factor for consumers for selec-
tion of a brand. Z cal = 2.3 > Z tab of 1.96 for packaging
shows that the rating is greater for other herbal brands as
compared to Himalaya’s brands, for consumers.
These results indicate that, from the point of view of
consumers, Himalaya brands need to improve in these
areas: effectiveness of the product, response time, quality,
availability, and packaging.
Product Managers’ View on Factors Affecting Consumption by
Consumers of Herbal and Himalaya Brands
For product managers and the effectiveness factor, the
response with Z cal = 1.2 and Z cal = 1.1 shows that there is
no significant difference between general herbal brands
and the Himalaya brand. Z cal = 2; Z cal = 2.1 shows that
product managers rate side effects and quality higher for
Himalaya brands than for herbal brands. This is due to
higher brand equity among product managers. The same
holds true for country of origin (Z = 2.1) and packaging
(Z = 2.1). At the same time, according to product manag-
ers availability (Z cal = 2.4) and price (Z cal = 2.2 ) are more
important for herbal products in general as compared to
Himalaya products.
Thus, from the point of view of product manag-
ers, Himalaya brands need to improve their image with
regard to side effects, availability, and price.
Growing scientific evidence links diseases to nutri-
tional, emotional, and lifestyle factors (Pelletier, Marie,

TABLE 3 Factors Affecting Himalaya Herbal Brand Intake

Parameters Affecting Intake Consumers Consumers Product Managers Product Managers

of Herbal Brands N = 30 N = 30 N = 15 N = 15
(Rating on Score of 1–5) For Herbal Brands (United States) For Himalaya Brands (United States) For Herbal Brands For Himalaya Brands
Effectiveness 4.9 4.4 5.0 4.8
Response time 4.7 4.3 4.8 4.8
Side effect 4.9 4.5 4.1 5.0
Quality 4.3 3.2 4.2 5.0
Availability 4.9 2.9 4.5 4.3
Price 3.5 3.5 4.5 3.2
Country of origin 3.7 3.6 4.6 5.0
Packaging 4.1 3.8 4.8 5.0

Thunderbird International Business Review DOI: 10.1002/tie

 How Indian Pharmaceutical Companies Are Building Global Brands: The Case of the Himalaya Herbal Brand
Krasner, & Haskell, 1997). An attractive feature of herbal
products is their ability to reduce personal health care
costs. A majority of physicians have positive attitudes
toward herbal products (Santa Ana, 2001). Alternative
therapies appear to be cost effective because they can
be used in conjunction with treatments for arthritis,
ear infections, and high blood pressure (Pelletier et  al.,
1997). At the same time, Riefler (2012) found that con-
sumers’ attitudes toward economic globalization affected
their attitude through perceived product quality. Grow-
ing awareness about the side effects of allopathic drugs
has resulted a drift toward herbal products in chronic
cases where there is a need to take medicine over a long
period of time (Srivastava & Kumar, 2014).
Customer Experience and Expectation from Himalaya
and Herbal Products
The next part of the study maps and compares consum-
ers’ experience of Himalaya brands when compared to
herbal products in general. This is shown in Table 4.
The Differences between Herbal Category Products
and the Himalaya Brand with Respect to Parameters
Assessing Their Experience Level
Consumers will recommend products to others when
they help to solve problems. With Z cal = 2.1 > Z tab value
of 1.96, there is a significant difference between the
herbal products category in general and the Himalaya
brand with respect to the experience level parameter. A
consumer will purchase a product repeatedly as shown by
a Z cal = 3.2 > Z tab value of 1.96. The influence of sales
personnel on purchase behavior has helped the Himalaya
brands to sell better compared to the general herbal cat-
egory. The Z cal = 3.4 > Z tab shows significant difference
in sales in this regard. An earlier study on the role of sales
personnel on influencing purchase behavior was pub-
lished by Srivastava (2014). Sales personnel may provide
suggestions or influence consumers’ purchase decisions,
especially when there are multiple choices with little dif-
ferentiation between them (Srivastava, 2008, 2013). The
TABLE 4 Customer Experience and Expectation from Himalaya and Herbal Products
Herbal Category
Customer Experience Level
Customer satisfaction
Will recommend to others as it helps to solve my problems
Will purchase again
Like the sales personnel explaining about product
Influence of web research on purchase decision
DOI: 10.1002/tie
9
influence of cognitive and emotional satisfaction in the
relationship between a salesperson’s presentation skills
and customer loyalty through intention to promote by
word-of-mouth is vital (Darian et al., 2001; Maznah Wan
Omar, 2009). Low involvement products may not be
dependent on rational thinking and are the least likely
to be influenced by sales personnel (Belvaux, 2005; Van-
heems et  al., 2013). Herbal products, however, require
thoughtful consideration as they are health related. With
respect to other parameters, there is no significant dif-
ference between the herbal product category and the
Himalaya brand.
General herbal products and Himalaya brands differ
from each other with respect to the following parameters:
• Recommend to others as it helps to solve problems.
• Will purchase again.
• Prefer that the sales personnel explain the product.
In the case of Himalaya brands, people prefer recom-
mending to others and want to purchase again, while in
the case of general herbal products, people want the sales
personnel to explain the product.
Theoretical Explanations
Himalaya brand scored higher in acceptance among US
users because they were more familiar with the brand,
whereas the respondents in the exploratory study were
of Asian origin or had visited Asian countries. There-
fore, the explanation for the above results can be better
understood by applying the theory of familiarity as pro-
pounded by Gestalt theory (Qiu & von der Heydt, 2005).
Familiarity gives customers the ability to avoid products
that fail to meet their criteria (Lin, Marshall, & Dawson,
2009; Nguyen, Choudhary, & Melewar, 2015). Familiarity
brings attention followed by a response like recognition
or positive feeling, and action (ARA) such as a purchase
intention. The theory of ARA is a simple adaptation of
the AIDA (attention, interest, desire, and action) prin-
ciple in advertising. Therefore, the above results can be
Himalaya Brand
N = 30 Percentage N = 30 Percentage
24 80 27 90
25 83 29 97
20 67 25 83
30 100 25 83
27 90 29 97
Thunderbird International Business Review
10 FEATURE ARTICLE
explained theoretically by adaptation of the following
mathematical model:
Familiarity ∝∑ Attention (A) + Response (R)
+ Action (A)
However, the sample size needs to be expanded to
add more Americans not of Asian origin to get a better
perspective.
From the categorization theory perspective, knowl-
edge about a brand and its critical attributes is funda-
mental in enabling consumers to classify the brand as
belonging to a particular country, while knowledge of
the country to which a brand belongs is crucial for the
transfer of country of origin (CO) image to brand image
(Martín & Cerviño, 2011). India and China are known for
herbal products across the world. Therefore, herbal prod-
ucts associated with these countries are likely to connect
well with consumers according to the category theory.
Thus, the process by which consumers learn to identify
brands with specific countries is an issue of major interest.
To make sense of brands in the marketplace, consumers
create and use categorical representations to classify,
interpret and understand any brand information they
obtain (Loken et al., 2008). According to Julien and Eck-
hardt (2007) consumers store information about sets of
brands in their cognitive systems and later use this infor-
mation to understand these sets. Consumers remember
the Himalaya brand because of familiarity combined with
categorization leading to action (A) and response (R). Criti-
cal use of this information occurs in the categorization
process, when consumers employ it to assign a particular
brand to a set, so they can understand and draw infer-
ences about that brand (Martín & Cerviño, 2011). The
CO is an extrinsic cue that is stored in the consumers’
cognitive system and used during categorization, first, to
assign a brand to a country and, later, to infer or evaluate
unknown attributes of the brand or characteristics such
as the quality of the product (Kinra, 2006; Hamzaoui,
Essoussi, & Merunka, 2007; Cerviño, 2011).
Conclusions
This study suggests that for herbal brand acceptance
marketing these products with an emphasis on results,
response time, and lower side effects with improved qual-
ity of life is the right approach. The Himalaya brand has
used a retail franchising approach as a mode of entry with
technical training given to sales personnel to build its
brands. Specialized stores employing product specialists
as sales personnel will help the herbal brands to establish
better themselves. A total customer experience based
strategy helped the Himalaya brand to establish itself
Thunderbird International Business Review
as a global brand. Satisfied consumers recommend the
brand to others when, as shown in our study, the product
helps to solve health problems (Z cal = 2.1). Brand image
and country of origin also have a role to play in building
brands. Familiarity based on past experience enhances
early adaptability for global brands. Global brand build-
ing depends on financial positioning, market charac-
teristics, and leadership and the aspiration level of the
organization. Globalization has given the Himalaya brand
more equity in the domestic India market too with better
awareness on quality (Z-2.1), availability (Z-2.5) through
exclusive company managed retail outlets and consumer-
focused strategy.
Limitations of the Study
This study is an exploratory study to understand the brand
building process by an Indian organization by focusing
on the case of a niche player, Himalaya Drug Company.
The study is qualitative in nature as the objective of the
research is to understand the process of building a global
brand and not to explain the process theoretically. This
will help Indian organizations to develop better strate-
gies. More primary research is needed by involving more
respondents from the United States and especially from
Europe (Germany, United Kingdom, and France), which
have more widely accepted alternative medicine com-
pared to the United States.
Managerial Implications
The findings in the present study will help herbal medi-
cine marketing efforts in Indian pharmaceutical com-
panies to improve their brand building process in the
alternative medicine niche. The analysis of the Himalaya
brand based on secondary data can be used to guide
other pharmaceutical and neutraceutical companies on
how best to market their products globally. The results
will also help Himalaya company to improve their perfor-
mance. Understanding of consumer perceptions overall
will help to improve the brand-building process. Unique
customer perceptions about the brand derived through
focus interviews will help marketing managers better
understand the market. An adaptation of Himalaya’s
strategy to have exclusive franchise stores with trained
personnel will expand marketers’ understanding of con-
cept-selling products.
This article contributes to a better understanding
by international business managers of the opportunities
and challenges associated with marketing a brand from
emerging markets. It also helps in better understanding
mode of entry, especially for small companies. Managers
can increase their knowledge on how brand image and
DOI: 10.1002/tie
 How Indian Pharmaceutical Companies Are Building Global Brands: The Case of the Himalaya Herbal Brand 11

country of origin play a role in enhancing their brands’ markets by adopting a globalization strategy that, as the
image. Finally, international business managers can also present study shows, has given Himalaya’s brand greater
work to develop equity in domestic and developed brand equity overseas.

Rajesh Srivastava, PhD, is professor and head of the Department of Marketing at the gov-
ernment of Maharashtra’s Sydenham Institute of Management Studies for Research and
Entrepreneurship Education, University of Mumbai. He represented ROWA as a country
head in India. He has over 30 years of managerial experience in the industry. He was rated
by DNA Newspaper and Star as Innovative Professor of the Year for 2013. He lectured at
California State University and Wisconsin University in 2013. He has also lectured in South
Africa, Denmark, Sri Lanka, Thailand, and Nepal. Dr. Srivastava has published over 195
research articles in international and national refereed journals. He has chaired sessions
at international conferences in Canada, Malaysia, Korea, the United States, and India, and
written five books in the areas of product management and sales management, negotiation,
international business culture, and retail case study. He has been a dissertation advisor and
research guide since 2005.

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