Global Media Perspectives

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A Global Media Perspectives“Increasingly India”

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India Today

What are top-tier media perceptions of India today?

India is at a crossroads in its development as the world’s largest democracy

For the most part, India has thrown off its “isolationist, self-sufficiency” mindset and is embracing globalization

No longer wary of Western influences

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Ten markets

• Europe: France, Germany, UK

• US: New York, Washington

• Asia: Hong Kong, Singapore, China

• India: Mumbai, Delhi

• Conducted by R&PMC:Edelman in September and October 2004

• 20-minute, in-depth telephone interviews with 65 journalists with top-tier media

2004 R&PMC:Edelman India Media Audit

Top-Tier Media, including:

Business Week Le Monde

CCTV Les Echos

China Daily PBS

Der Spiegel Reuters

Financial Times Star TV News

Forbes Wall Street Journal

Fox News Washington Post

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Section 1: Emerging Markets Compared

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India and China are the #1 and #2 emerging markets

Brazil, Russia, Poland and Mexico are not in the same class…

Brazil is beginning economic reforms

Russia’s economy still weak…government is autocratic

Poland and Mexico are far in the distance, even in Europe and US

India enjoys a very strong reputation among media

But in the U.S., China has 4-1 “share of voice” advantage over India

India is perceived as having stronger five-year plus prospects

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14%

6%

46%2%

14%

18%India

Brazil

ChinaPoland

Russia

Mexico

Country Share of Voice in Major U.S. Media

Sources: The New York Times, Wall Street Journal, Washington Post, Los Angeles Times, Chicago Tribune, Forbes, Fortune, BusinessWeek, Time, Newsweek and U.S. News & World Report

Time Frame: Jan. 1 2004 to Oct. 13, 2004

U.S.: India’s “Share of Voice” is Dwarfed by China

7

462

216

1555

70

483614

1210

630 5 7

0

200

400

600

800

1000

1200

1400

1600

1800

India Brazil China Poland Russia Mexico

Total

Outsourcing

1 in 4 U.S. news stories about India are centered on “outsourcing”

Pro: Encourages more U.S. businesses to outsource to India

Neg: Perceived as threat to U.S. jobs

U.S.: India is Largely Defined by “Outsourcing”

Sources: The New York Times, Wall Street Journal, Washington Post, Los Angeles Times, Chicago Tribune, Forbes, Fortune, BusinessWeek, Time, Newsweek and U.S. News & World Report

Time Frame: Jan. 1 2004 to Oct. 13, 2004

Total Number of Articles for Each Country

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76%

14%

63%

11%

42%

34%

24%

45%

22%

29%

18%

57%

0%

20%

40%

60%

80%

100%

Favorable Unfavorable

ChinaIndiaMexicoPoland

BrazilRussia

Mindshare Favorability Towards Country’s Business Environments

#2 “very favorable” view of business environmentLowest “unfavorable” rating

Now, I’d like you to rate how favorable you think the industrial and business environment is in each country.

Source: Edelman’s India Media Audit, 2004

Ch In Mx Pl Br Ru Ch In Mx Pl Br Ru

9

87%

4%

80%

9%

60%

5%

44%

28%27%

40%

14%

40%

0%

20%

40%

60%

80%

100%

Favorable Unfavorable

India

China

Brazil

Mexico

Poland

Russia

India Most “Favorable” Five-Year Business Environment

Now, I’d like you to rate how favorable you think the industrial and business environment will be five years from now?

Source: Edelman’s India Media Audit, 2004

Ch In Mx Pl Br RuCh In Mx Pl Br Ru

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  China Brazil Russia Poland India Mexico

Optimistic 30% 19% 4% 9% 31% 7%

Pessimistic 0% 0% 83% 17% 0% 0%

Are you generally optimistic or pessimistic about these countries’

current industrial vitality

Media are MORE Optimistic About India Than Any Other Country

Source: Edelman’s India Media Audit, 2004

11Source: Edelman’s India Media Audit, 2004

What Comes to Mind….

India China Mexico Brazil Russia Poland

Democracy Democracy (lack of)

Good Business

Environment

Economy Trade Democracy

English Language

Good Business

Environment

Economy Good Business

Environment

Economy Good Business

Environment

Innovation Growth Democracy

Good Business

Environment

Huge Population

Trade

When you think of these countries as an emerging market, what comes to mind?

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When you think of these countries what are the key industry sectors?

Source: Edelman’s India Media Audit, 2004

Key Industrial Sectors

India China Mexico Brazil Russia Poland

IT IT Tobacco/Alcohol

Coffee Oil/gas Shipbuilding

Manufact. Manufact. Textiles Agriculture Pharma. IT

Auto Consumer Goods

Auto Auto Aeronautics

Telecomm Agriculture Manufact. Aeronautics Shipbuilding

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Worth noting…

Additional emerging markets are closing in on the BPO market and enjoy other advantages

Philippines – lower cost structure

Mexico and Canada – proximity to the U.S

Ireland and South Africa – proximity to Europe and time zone advantages

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Section 2: Perspectives on India

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Business in India: Right Direction or Off Track?

Overall, thinking about the way most corporations do business in India, would you say

things are pretty much going in the right direction or have they somehow gotten off track?

Source: Edelman’s India Media Audit, 2004

Asia Europe US India

Right Direction 80% 83% 100% 95%

Off Track 13% 8% 0% 5%

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Why Are “Things” Going Well or Badly?What makes you think that things are

pretty much going in the right direction/have gotten off track?

Source: Edelman’s India Media Audit, 2004

Growth of Exports/Imports 48% Regional Disparities 10%

Foreign Company Performance 32% Weak Manufacturing 8%

Liberal/Reforms 24% Sees Labor as cheap, not resourceful

5%

Highly Educated, English- speaking Workforce

20% Overpopulated 4%

High Technology 8% Corrupted 4%

“On Track” “Off Track”

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India’s Key Advantages Over Other Emerging Markets

Educated, English-speaking populace of young workers

Democratic and business-friendly government (despite administration transition)

Low cost structure

Eager and savvy consumer market with growing buying potential

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India’s Advantages

Motivated and Qualified Workforce 82%

Low Cost Work 56%

English Speaking 48%

Growing Market 38%

Democratic Society 24%

Big Population 16%

International Business 16%

Large Domestic Market 16%

Legal/Accounting 12%

Industrial 8%

What would you say are the main advantages that India offers as an emerging industrial and business center

Source: Edelman’s India Media Audit, 2004

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Disadvantages (Key challenges)

Bureaucratic Delays 36%

Regulatory Issues 32%

Social Problems 32%

Standard of Living 28%

Need for Development 28%

Polarized Political Scene 28%

Rural/Urban divide 24%

Industrial Economies of Scale 20%

Physical Infrastructures 16%

Dependent on Outsourcing 12%

What would you say are the main disadvantages that India offers as an emerging industrial and business center

Source: Edelman’s India Media Audit, 2004

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High Tech 96%

Software 44%

Textile 40%

Pharmaceutical sector 32%

Call centers 17%

Automotive 16%

Consumer Products 16%

Computers 16%

Outsourcing 16%

Excels Lags

Infrastructure 35%

Transportation 35%

Financial Services 30%

Pharmaceuticals 20%

Manufacturing 20%

Automobiles 15%

Heavy Industry 15%

Poverty 14%

Consumer electronics 12%

What industrial sectors do you think India is excelling and lagging in?

Source: Edelman’s India Media Audit, 2004

Industrial Sectors

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Greatest Opportunities

Computer Services 30%

Financial Services 30%

Pharmaceuticals 25%

Automotive 20%

Labor Industries 15%

Consumer Goods 15%

Telecommunications 15%

What industrial sectors provide the greatest opportunities for India over the next 5 to 10 years?

Source: Edelman’s Indian Media Audit, 2004

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7%

29%

14%

85%

73%

18%

33%

18%

83%

50%

20%

0%

40%

85%

30%

60%

5%

20%

69%

93%

0%

20%

40%

60%

80%

100%

IT Pharma Auto ConsumerElectronics

Banking

Asia

Europe

US

India

How Successful is India by Sector?

Disconnect: The world’s media believes India is much more successful in pharmaceuticals, and a lot less successful in the Auto industry than Indian media

How successful is India in each of the following sectors?Source: Edelman’s India Media Audit, 2004

AS INUSEU AS INUSEU AS INUSEU AS INUS

EU AS INUSEU

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91%

38%

50%

60%

42%

55%

33%

17%

67%

53%

45%

60%

0%

20%

40%

60%

80%

100%

Indian corporations doing business inIndia are transparent in their businessconduct and adhere to high standards

of corporate governance

MNC doing business in India aretransparent in their business conduct

and adhere to high standards ofcorporate governance

India corporations doing businessoverseas are transparent in their

business conduct and adhere to highstandards of corporate governance

Asia

Europe

US

India

• US Media are concerned about Financial Transparency and Corporate Governance

• Asian Media have great confidence in conduct of Indian Companies operating in India

• More skepticism about the corporate governance of MNC’s doing business in India

Agrees with statementsSource: Edelman’s India Media Audit, 2004

AS INUSEU AS INUSEU AS INUSEU

Factors Driving Confidence in India

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31%

54%

25%

82%

67%

100%

45%

90%

0%

20%

40%

60%

80%

100%

India offers adequate international property rightsprotection for business operating within the country

India is increasingly emerging as a dominant globalecononmic player

Asia

Europe

US

India

• Asian media are skeptical of Indian property rights and their emergence as an economic power

• In comparison, U.S. Media are very bullish

Agrees with statementsSource: Edelman’s India Media Audit, 2004

AS INUSEU AS INUSEU

Factors Driving Confidence in India

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Characteristic India Rest of World

Financials 100% 64%

Executive Leaders 80% 65%

Role in Society 75% 38%

Employees 75% 42%

Quality 65% 52%

Relationship with Customers 50% 54%

The profile of Executive Leaders, Financial Results, and Transparency are the most important characteristics for companies operating in India

Drivers of Corporate Image for Firms in India

How important are each of these items on influencing your perceptions of corporations operating in India

Source: Edelman’s India Media Audit, 2004

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What India Media Think About India?

Economically China is currently #1 and India #2, but India will catch up in the coming years

“Reforms will continue to take place irrespective of differing ideologies of political forms in power.”

India is laying benchmarks to comply with international standards

Strong corporate governance and accountability

Strong market-driven competition

Key Advantages to India

Skilled labor force – English speaking, educated

Cost competitive

Eager and ready consumer base

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Section 3: Summary

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Key challenges

Policy bumps

Bureaucracy

Poor infrastructure

Nationalist sentiment

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Summing It Up

“India is not at the point where they are independent of outside market, monetary and trade forces. Maybe in 10-15 years I see them nearly as powerful as China. It depends on political developments and current

reforms.”

“India has a better technology infrastructure than any other developing country or emerging economy - - and they have the will and national push to succeed. But politically, there appears to be a push-and-pull between the desire to remain a secular Democratic state without marginalizing a significant Muslim population.”

Need more liberalization of joint venture rules to stimulate competition in domestic market and support manufacturing

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India Needs to Increase its “Share of Voice” By Communicating

Beyond “outsourcing,” “call centers” and “IT”

Strong management expertise – executive leadership with a vision for the future

Strong transparency and governance

Leadership role in corporate social responsibility

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India Needs to Increase its “Share of Voice” By Communicating

India beyond economic development by highlighting culture, fashion, architecture etc. -- not just a source of cheaper, albeit it educated, labor.

Humanize India – the people, the culture, the cities, development projects

Frame India as the “future”

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A Global Media Perspectives“Increasingly India”