the indian marketing_environment

The Indian Marketing Environment 1

The Indian Marketing Environment


The Indian Marketing Environment

At the end of this module the learning outcomes are

1. What are the various components of the marketing environment?

2. How the Indian marketing environment is changing as times change?

3. How are the new economic policies impacting the marketing environment?

4. What are the marketing challenges in the new environment.


Suggested Readings

1. Marketing Management by Philip Kotler, 12th edition Chapter 3

2. Marketing Management by Ramaswamy & Namkumari, Chapter 2 and 3


Marketing Mix

We have said Marketing is the delivery of a total offer to the consumer in such a manner that.

a. The offer fulfils the needs of the consumer.

b. Terms and attributes of the offer are acceptable

c. All the organisational goals including profits are achieved in the process.


Marketing Mix

How does a firm make such offer to the consumer.

1.A product that would meet the identified needs of the chosen consumer group.

2. Performs distribution / placement functions like transportation, warehousing channel management etc.


3. Carries out a number of promotion measure like personal selling, advertising, sales promotional programmes with a view to communicating with the consumer.

4.The pricing mechanism to achieve consummation of the marketing process.

Four elements – Products, Pricing, Placement and Promotion constitute MARKETING MIX.


1. Product

• Product mix/lines

• Quality, models, size

• Packaging

• Merchandising

• Service, presale and aftersale.


2. Price

Policies, level of prices, level of margins, discounts.

Terms of delivery, payment terms.

3. Placements

Channels of distribution types of intermediaries. Location of outlets, channel remuneration.

4. Promotion

•Personal selling, quality of sales force

•Advertising: Media mix, budgets allocations and programmes.

•Sales promotional efforts, contests

•Publicity and Public relations.


Assembling and managing the marketing mix is the main job in the whole marketing task.

1. Interaction between marketing mix and the environmental variables is the substance of the marketing process.

2. Marketing mix has to be juggled constantly in order to meet the changing requirements.

3. As environmental valuables keep changing alterations in the marketing mix become necessary.

4. Changes in customer preferences necessitate alterations in the mix.

5. Changes taking place within the firm too necessitate changes in the marketing mix.


Can a Marketing mix be created in vacuum.

No, it has to reckon with variables that make up the environment. These are called environment variables. These are

1. Customer

2. Competition

3. Trade

4. Environmental


1. Customer Variables

• Number and location of customers

• Purchasing Power, Buying Behaviour

• Habits

• Lifestyles

• Brand awareness and loyalty


2. Competition Variables

• Structure of the Industry

• Nature and intensity of competition. Buyer’s market or seller’s market.

• Strengths and weakness.

• Substitute products

.


3. Trade variables

•Types of intermediaries, number, strength

•Trade practices

•Motives and attitudes of the intermediaries.

•Extent of sophistication


4. Environmental Variables

•Govt regulation on products, prices, distribution.

•Control on trade practices.

•Economic conditions – Impact of Kargil war

•Culture and traditions

•Law and politics

•Level of technology


Environmental

Customer

Marketing

Competition

Variables

TradePrice

Place

Product

Promotion Mix

Environm

ent

Environm

ental Var

iabl

es


Indian Marketing Environment

a. Demographic Scene

• Close to one billion population• Growth rate over 2% per annum• Life expectancy from 48 years in 1947 to 70

years in 2001• National literacy rate is over 50% (2001 census) .• Diverse religions and languages• Dialects in few hundreds.


b. Economic Scene

Top ten economies of the world.

Our GDP is growing at 5.5% per annum.

•Agriculture 16%

•Industry 24%

•Services 60%

Slow growth rates till 70’s. Average 3% p.a.

Last two decades have seen massive growth in the industry and services sector.

In 90’s spectacular growth after liberalization

One of the fastest growing economies of the world


c. Agricultural Scene

Predominance is there. Dependence has reduced

2/3 rd population dependent directly/indirectly on agriculture.

Rural markets development at a faster rate.

Impressive achievements. Self dependent. Rare foodgrain imports.

Main cause of development of other sectors.


d. Industrial scene

Contribution to GDP growth increasing

More than this, there are qualitative change

Rapid foreign investment and competition from multinational companies.


e. Social scenario: The middle class explosion

Estimate of 25 crores in size

Rapid industrial growth seen emergence of professionals in many spheres.

Target group for most of the companies.


Social scenario: The middle class explosion

Emerged as the consumption community of the country.

Better education, higher aspirations.

Consumption of non –food items on the increase

Joint families giving in. Concept of nuclear families. Higher disposable incomes.

Demand for lifestyle products is on the rise.


f. Rural marketing scenario

Shown impressive growth-television, mobile penetration.

Earthenware yielded place to a variety of new kitchenware.

Becoming increasingly urbanized.


Rural marketing scenario

•Tapping these markets continues to bewilder most companies.

•Future growth lies in this market.

Videocon tapping all towns upto 50,000 population for increasing television sales.

•Huge, untapped market.


g. Legal scenario

Has direct impact on the marketing environment.

E.g.: The introduction of Consumer Protection Act and Consumer Courts.

Pace of legal reforms slow. Organizations exploiting these weaknesses

• ITC versus excise department for 800 crores (last ten years)

About one lac litigations pending Average time of ten years to resolve litigations.

Grim scenario


h. What do we observe

•Indian marketing environment acquiring greater dynamism and robustness

•Evolution of Middle class

•Growing rural markets

•Lifestyles undergoing rapid changes.

•Demand for lifestyle products.


New Economic policies

1. New Industrial Policy

• Delicensing of industries.

• Fera relaxation

• MRTP relaxation

• Curtailment of the role of the public sector.

2.New Trade Policy

• Freer Trade

• Linking of imports to exports


•Relying more on exchange rates and tariffs.

•Lowering of tariffs

•Convertibility of rupee and the new exchange rate system.

•Encouragement to exports.

•Open door to foreign investment.

•Integrating the country’s economy with the global economy.


3. Economic reforms and structural adjustment

•Fiscal and monetary reforms

•Banking sector reforms

•Capital market reforms

•Red Carpet to Foreign institutional investors.

•Insurance sector reforms

•Phasing out of subsidies

•Dismantling of price controls and introduction of market driven price environment.

•Public sector restructure

•Privatization of PSUs (Public Sector Units)

•New Policy on PSUs

•Exit Policy (closing of business)


Marketing challenges in the liberalised economy

1. Delicensing implies a degree of destablisation for existing players.

Umbrella of protection disppears

New entrants can alter economies of scale, put up global size plants and pose a threat to existing players.

E.g.. Samsung, Hyundai


2. The challenge of MNC Dominance

Majority equity lends MNCs a new strategic edge.


3.The fierce competition

•Competition from fresh Indian Players

•Competition from MNCs

•Indian companies are not giving up

•BPL leader in televisions

•Asian paints in paints.•Import liberalisation adds to the competition.•Access to technology adds to the competition.

•Competition is now global in character.


4. The demands of a buyer’s market

•Graduating from shortages to surplus.

•The challenge of competitive pricing.

•Graduating from shoddy products to products of excellence.

•The consumer calls the tune.

IT IS A BUYER’S MARKET


5. Indian companies are now compelled to export and go global.

•Indian companies taking initiative

•Going global

• Ranbaxy, Dr Reddy, Infosys

• Strong names in the international market.