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The Globalization of Magazines in India: A case study
Unformatted Document Text:  13 However compared to their international editions both cover prices and advertising rates are low. Entry modes for the Indian market Unlike China where the only entry mode permitted is a cooperative one, publishing firms in India have the freedom to choose their mode of entry. The most popular mode of market entry continues to be a licensing agreement. In this mode the publisher is more interested in getting its product into a new market than expanding the firm. This choice allows these publishers to participate in new markets without making a significant investment (Doyle, 2006). In the first phase of deregulation this was the least complicated means of gaining access to the Indian market. Even after the second phase of deregulation that allowed 100% foreign ownership in non-news publications, licensing remains the preferred market entry mode over joint ventures and wholly-owned subsidiaries because of the low investment and accompanying risk. In exchange for licensing the brand the international publisher earns a royalty fee with a minimum guarantee that is said to vary between 6 to 15 % of the turnover (Bansal, 2007). Another aspect of the agreement is control both editorial and operational. The licensing agreement also stipulates the standards and norms the licensee needs to follow with regard to layout and design in order to preserve brand identity. The licensee offers an understanding of the local market and an awareness of local tastes and preferences, both of which are critical to success in the market (Doyle, 2006). Working with a local licensee can often help with establishing distribution while possibly reducing the political risks that come with developing a presence in a new market (Deresky, 2006).

Authors: Shrikhande, Seema.
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13 
 
However compared to their international editions both cover prices and advertising 
rates are low.   
Entry modes for the Indian market 
Unlike China where the only entry mode permitted is a cooperative one, publishing 
firms in India have the freedom to choose their mode of entry. The most popular mode 
of market entry continues to be a licensing agreement.  In this mode the publisher is 
more interested in getting its product into a new market than expanding the firm.  
This choice allows these publishers to participate in new markets without making a 
significant investment (Doyle, 2006).   
In the first phase of deregulation this was the least complicated means of 
gaining access to the Indian market.  Even after the second phase of deregulation that 
allowed 100% foreign ownership in non-news publications, licensing remains the 
preferred market entry mode over joint ventures and wholly-owned subsidiaries 
because of the low investment and accompanying risk.  In exchange for licensing the 
brand the international publisher earns a royalty fee with a minimum guarantee that is 
said to vary between 6 to 15 % of the turnover (Bansal, 2007).  Another aspect of the 
agreement is control both editorial and operational. The licensing agreement also 
stipulates the standards and norms the licensee needs to follow with regard to layout 
and design in order to preserve brand identity.  The licensee offers an understanding 
of the local market and an awareness of local tastes and preferences, both of which are 
critical to success in the market (Doyle, 2006). Working with a local licensee can often 
help with establishing distribution while possibly reducing the political risks that 
come with developing a presence in a new market (Deresky, 2006).  


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