HAL excels at manufacturing, but it needs to up the ante in marketing

Hindustan Aeronautics Limited (HAL), established on 23 December 1940, is one of the oldest and largest aerospace and defence manufacturers in the world. Currently involved in the design and manufacturing of fighter jets, helicopters, jet engines, marine gas turbine engines, avionics, software development, and spare supplies, HAL has the responsibility for the modernization of Indian military hardware. Further, engaged in India’s ambitious AMCA (Advanced Medium Combat Aircraft) and Tejas fighter jet production, HAL is also going global.

However, there is a big difference between producing for the country and selling products in the global market. One’s own country would only require quality as per the world’s standards but to sell in the market, HAL would be required to excel in the marketing of its military hardware.

Korean FA-50 Winning The Race?

Media reports in Korea are stating that the Royal Malaysian Air Force (RMAF) has ‘almost confirmed’ buyout of the FA-50 Block 20 for the tender of 18 Trainer-Light Combat Aircraft program.

Quoting from a representative of Korean Aerospace Industries (KAI), SBS News reported that the negotiation for exporting 18 FA-50s worth 1 trillion won to Malaysia are also about to start.

The report also stated that the combined export volume of FA-50s to Poland and Malaysia would exceed the total exports in the past. The Korean Aerospace Industries (KAI) has also received a request for 48 FA-50s from Poland. Combining 48 from Poland and 18 from Malaysia, it would be one of the biggest orders for Korea.

Although neither Malaysian Air Force nor Indian officials have confirmed the reports. Recently, it was stated in the news that the Royal Malaysian Air Force (RMAF) had declared the FA-50 winner for its tender of 18 LCAs. But due to the high cost of jets, the Malaysian Ministry of Finance has objected to the deal.

LCA Tejas In Race To Win The Bid

It is pertinent to note that Malaysia had issued a Request for Proposal (RFP) to buy a mix of 36 light combat fighter jets under its “Capability 55” plan.

Among those competing with India to sell light combat aircraft to Malaysia were Turkey, China & Pakistan, Russia and South Korea. Among them, Koreans offered 18 FA-50 at RM 4.2 billion, Chinese JF-17 at RM 3.4 billion, Indians LCA Tejas Mk-1 at RM 3.75 billion in response to the budget of 3.5 billion Ringgit Malaysia.

Malaysia is not buying the fighter jets offered by China and Pakistan, who have collectively offered the JF-17 Thunder aircraft to Kuala Lumpur. Russia’s MiG-35 offerings are also not affordable for the Royal Malaysian Air Force. South Korea’s FA-50 Golden Eagle is also costly than India’s Tejas.

Other than world’s lightest supersonic fighter LCA Tejas, India is ready to provide maintenance support to Malaysian Su-30 MKM’s fleet in order to keep it in flight-worthy conditions. Further, India is also ready to replace Israeli Advanced Electronically Scanning Array (AESA) radar with indigenously developed Uttam AESA radar. Malaysia being a Muslim majority country have traditional hostilities towards Israel. So, Malyasian officials were showing reservations about Israeli radars in Tejas jets.

HAL needs to learn Marketing

Considering added benefits, Tejas is still in the race of Malaysian buyouts. Despite developing such great military hardwares like Tejas, HAL is not able to make significant progress in terms of sales to foreign entities.

The problem is, HAL is not doing enough to sell its products other than manufacturing. There are four foundational pillars – Product, Price, Place, and Promotion, to sell any product in the market. Quality, competitive price, placement and promotion of products are the prospects which ensure the sale-ability of any product.

HAL has manufactured top notch products like Tejas. It has also kept the price in range of affordability and it has also targeted its consumer base. But, in all of these, promotion of the product is missing. They have not developed a coordinated and aggressive marketing strategy to sell HAL products.

Also Read: Indian defence forces to get emergency powers to acquire critical weapon systems through fast-track route

Other manufacturers of defence products like Lockheed Martin, Boeing, Saab and Dassault Aviation have aggressive promotion policies for their respective products. They send their fighter jets in regular military exercises to showcase their capabilities. Target the public of the possible buyer countries to popularise the products in a particular country. Provide high quality photographs and videos to showcase the qualities. Lobby with government officials, journalists, media and defence research organisations to create a debate in their product’s favour. Further, these global private companies also partner with targeted countries to sell their products.

But, Indian Defense Public Sector Unit, Hindustan Aeronautics Limited (HAL) has not taken a single step in promotion of its product. Despite making state of the art weapon systems, HAL did not develop marketing strategies to enhance its business. It is true that all the funding of the unit is borne by the government. But, as other PSUs are taking steps forward in marketing of its product, HAL should also take it.

The Indian Space Research Organisation (ISRO) has also incorporated a private company – Antrix Corporation Limited, for marketing, promotion and commercialization of space services, technical consultancy services and transfer of technologies. Like Antrix, HAL should also establish its marketing organisation to promote its products. Until and unless, HAL is not adopting the aggressive business marketing strategy, developing state of the art weapons would not convert into a profitable business model.

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