unit1- indian marketing environment

7/21/2019 Unit1- Indian Marketing Environment

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Session 3

Analysing The Marketing Environment


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The Companys Macroenvironment


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The Companys Macroenvironment

Demography is the study of human populations in

terms of:

oSize, growth rate and life expectancy

oGender

oRace/religion

oLocation

oAge distribution

oLiteracy levels

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Global Demographics

Global population around 7.18 billion.The five largest countries by population are:

o China 19.4%

o India 17.5%

o USA 4.5%

o Indonesia 3.4%

o Brazil 2,8%

Growth rate 1.14%; expected to reach 9 billion by 2050;

most population growth only in developing countries

Developed countries are graying due to rising longevity

and falling fertility

Migration to developed countries is slowing down


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India - Basics

Unit 2001 2011

Population Million 1029 1210.2

Density Per sq. Km. 313 382

Decadal Growth Rate % 21.5 17.6

Persons per Household Nos. 5.35 4.72

Females per 000 males No. 934 940

Life Expectancy Years 62.5 66.1

Literacy Rate % 64.8 74.0

Urban to Rural % 27.8 31.2

Towns Nos. 5161 7935

Villages Nos. 6,38,588 6,40,867

Growth rate drops to lowest level

since independence

Increasing literacy rates

Growing urbanisation

Top three states on basis of urban

population:

oMaharashtra

oUttar Pradesh

o Tamil Nadu

Top three states on basis of rural

population:

oUttar Pradesh

oBihar

oWest Bengal

Source : Census 2011 and 2001

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Household Distribution - India

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Number

per HH

Urban Rural Total

Millions % Millions % Millions %

1 2.85 3.6 6.19 3.7 9.04 3.7

2 7.53 9.5 16.45 9.8 23.98 9.7

3 12.55 15.9 21.11 12.6 33.66 13.64 20.80 26.4 35.18 21.0 55.98 22.7

5 14.59 18.5 31.68 18.9 46.26 18.8

6-8 16.25 20.6 45.15 26.9 61.40 24.9

9+ 4.30 5.4 12.06 7.2 16.36 6.6

TOTAL 78.87 100.0 167.83 100.0 246.69 100.0

Source : Census 2011

o Number of joint families around 18% all India

o Highest in Uttar Pradesh at 27% followed by Rajasthan at 25%

o Lowest in Andhra Pradesh at 10.7% with Tamil Nadu at 11.2%


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Urban India

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Town Nos.Pop. in

mns%

5 million plus 8 85.19 22.6

One million plus 38 64.69 17.2

5 lakhs to 1 million 45 36.04 9.6

2 lakhs to 5 lakhs 139 49.77 13.2

1 lakh to 2 lakhs 267 40.96 10.9

Less than 1 Lakh 7438 100.46 26.6

TOTAL 7935 377.11 100.0

Urban Population Growth

due to:o Natural growth

o Migration from rural

o Addition of census towns

Top 46 towns contribute tonearly 50% of the buying

power in urban

Towns with population of

less than 1 lakh treated as

peri-urban since they arecloser to the rural psyche.

Source : Census 2011


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IndiaBy Age

Class/Age Group 2010 2015 2020 % growthInfants (0 to 2) 73,520 72,751 69,887 -4.9

Kids (3 to 8) 146,893 144,442 142,123 -3.2

Tweenagers (9 to 13) 96,728 97,013 95,598 -1.2

Teenagers (14 to 19) 166,105 168,045 168,611 1.5

Twenties 210,948 225,744 234,422 11.1Thirties 169,949 188,582 205,548 20.9

Middle Aged (40 to 64) 262,485 297,996 333,405 27.0

Older people (65+) 58,215 68,053 84,282 44.8

Infants Baby skin care, toilet care and foods

Kids Toys and games, malted drinks

Tweens Pocket money, pester power,low ticket items

Teens Personal grooming products, music, mobiles, fast food, social networking

Twenties Clothing, footwear, smartphones, fine dining, motor cycles, cars, credit cards

Thirties Family orientation, leisure travel, housing, electronics and electrical appliances

Middle aged Move to social travel, health and nutrition, air travel

Older people Low disposable income, necessities, doting on grandchildren, medication, oral

care

Source: National Statistics and Euromonitor International

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IndiaLiteracy

Class TOTAL Urban Rural

Illiterate 26.0% 15.0% 31.0%

Up to Primary 17.6% 10.2% 20.8%

Middle 16.0% 12.7% 17.9%

High School 17.2% 20.3% 16.0%

Higher Secondary 9.9% 14.8% 7.7%

Graduate + 13.3% 27.0% 6.6%

TOTAL 100.0 100.0 100.0

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o Literacy rate for men is 82.1% while the same for women is 65.5%

o Kerala has the highest literacy rate (93.9%) Bihar lowest (63.8%)

o There are more places of worship in India than schools/colleges

Source: Census 2011


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SEC Classification - Urban

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Occupation

Education

Illiterate

Schooling Collegebut not

grad

Grad/PG

Upto 4

yrs5-9 yrs

HSC/SS

C Gen Prof

Unskilled Workers E2 E2 E1 D D D D

Skilled Workers E2 E1 D C C B2 B2

Petty Traders E2 D D C C B2 B2

Shop Owners D D C B2 B1 A2 A2

Businessmen/Industrialist

None D C B2 B1 A2 A2 A1

1 to 9 C B2 B2 B1 A2 A1 A1

10+ B1 B1 A2 A2 A1 A1 A1

Self Employed

Professional D D D B2 B1 A2 A1

Clerical/Salesman D D D C B2 B1 B1

Supervisory Level D D C C B2 B1 A2

Officers/ExecutivesJr. C C C B2 B1 A2 A2

Sr. B1 B1 B1 B1 A2 A1 A1


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SEC Classification - Rural

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EducationType of House

Pucca Semi Pucca Kucha

Illiterate R4A R4A R4B

Below SSC R3A R3B R4ASSC/HSC R2 R3A R3B

Some College Not Graduate R1 R2 R3B

Graduate/PG (General) R1 R2 R3A

Graduate/PG (Professional) R1 R2 R3A


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New SEC System

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Launched in May 2011 based on two variables:oEducation of Chief Wage Earner

oNumber of consumer durables owned from a list of

11 items. The items are electricity connection, ceiling

fan, LPG stove, two wheeler, colour television,refrigerator, washing machine, personal

computer/laptop, car/jeep/van, air conditioner and

agricultural land.

The new system has 12 grades ranging from A1 to E3and does not distinguish between urban and rural.

o What could be the advantages and disadvantages of the new system?


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New SEC System

14Source: MRUC Hansa


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Household DistributionNew SEC

15

9.6

15.819.5

15.1

11.4

7.2

7.0

5.1

4.0

3.0

1.8

0.5

0.0 5.0 10.0 15.0 20.0 25.0

E 3

E 2E 1

D 2

D 1

C 2

C 1

B 2

B 1

A 3

A 2

A 1 Punjab has the highestpercentage population of SEC A

(A1+A2+A3) followed by

Maharashtra, Kerala and Goa.

Gujarat, Tamil Nadu and

Uttarakhand are average.The states with the lowest

percentage of SEC A are Bihar,

Madhya Pradesh and West

Bengal

Source: MRUC Hansa


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The Economic Environment

Global economy still to recover from the global financial crisisof 2008.

GDP growth recovered to 4% in 2010 but has dropped to 2.7%

in 2011 and 2.2% in 2012 with hopes of some recovery to 2.4%

in 2013. Impact of US government shutdown

Growth in developed countries slows down to 1.1% with

economies in transition at 3.5% and developing economies at

4.7%.

Europe is the worst hit with China and India slowing down

considerably.Low growth is leading to fiscal austerity and sovereign debt

risk leading to high unemployment

Multinational trade blocs becoming important.


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Economic Indicators - India

017

FY 08 FY 09 FY 10 FY 11 FY 12 FY 13

GDP (2004-05 prices) 38.97 41.59 45.16 49.37 52.44 55.03

Real GDP Growth (%) 9.32 6.72 8.59 9.32 6.21 4.96

Consumption (% of GDP) 67.4 68.6 69.1 67.2 68.0 67.1

Per Capita Income (Rs.) 35,430 40,605 46,492 54,151 61,564 68,757

Gross Domestic Savings (%) 36.8 32.0 33.7 34.0 30.8 31.8

Inflation Rate (%) - WS 4.8 8.0 3.6 8.6 8.8 7.8

Inflation Rate (%) - CPI 6.2 9.1 13.0 9.5 9.0 8.0

o Share of agriculture reduced from 16.81% in FY 08 to 13.68% in FY 13

o Share of manufacturing reduced from 28.74% in FY 08 to 27.03 in FY 13

o Share of services went up from 54.45% in FY 08 to 59.29% in FY 13

Source: MOSPI


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Income Distribution - India

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TotalHouseholds

in millions

TotalPopulation

in millions

HouseholdAnnual Income

(Rs.)

HouseholdAnnual

Savings (Rs.)

HouseholdAnnual

Expenditure (Rs.)

Rural 167.8 833.09 114,458 30,663 83,375

Peri-urban 21.2 100.46 240,625 63,889 176,376

Urban 57.7 276.65 287,548 80,488 206,675

TOTAL 246.7 1210.20 177,228 48,405 128,419

HH Earning

Rs.1,000,000

Rural 58% 24% 11% 4% 2% 1%

Peri-urban 32% 27% 21% 10% 7% 3%

Urban 30% 26% 21% 10% 8% 5%

TOTAL 47% 25% 15% 6% 4% 2%

Source: Census 2011 and Indicus Analytics


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Income Distribution

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Assam, Bihar, Madhya Pradesh, Meghalaya,Orissa, Rajasthan, Uttar Pradesh, Chhatisgarh,Uttaranchal and Jharkhand

Low IncomeStates

Andhra Pradesh, Himachal Pradesh, Karnataka,Kerala, Tamil Nadu, and West BengalMiddleIncome States

Goa, Gujarat, Haryana, Maharashtra, Punjab,Pondicherry, Chandigarh and Delhi

High Income

States

40% live in low income states, 30.6% in middle income

and 29.4% in high income


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Economic Indicators - India

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Urban Rural TotalMillions % Millions % Millions %

Electricity 73.09 92.7 92.81 55.3 165.90 67.2

Radio/Transistor 19.96 25.3 19.06 17.3 49.02 19.9

Television 60.49 76.7 56.00 33.4 116.49 47.2

Computer/laptop with Internet 6.52 8.3 1.19 0.7 7.71 3.1

Computer/laptop w/o Internet 8.20 10.4 7.45 4.4 15.65 6.3

Telephone Land Line 4.67 5.9 5.25 4.0 9.92 4.0

Mobile 50.74 64.3 80.46 53.2 131.20 53.2

Telephone Land Line + Mobile 9.26 11.7 5.50 6.0 14.76 6.0

Bicycle 33.08 41.9 77.49 44.8 110.57 44.8

Scooter/Motorcycle/Moped 27.79 35.2 24.07 21.0 51.86 21.0

Car/Jeep/Van 7.69 9.7 3.78 4.7 11.47 4.7

None of above (excl Electricity) 5.54 7.0 38.41 17.8 43.95 17.8

TOTAL 78.87 167.83 246.69

Sourc e : Census 2011


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The Socio-Cultural Environment

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Culture involves shared meanings, beliefs, morals,values and customs

This is shaped by family, education and friends

Marketers need to understand culture at two levels:

oCountry

oRegional


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The Socio-Cultural Environment - India

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Karmic transformation through:oActivation of ones destiny

oThe new currency of extrinsic values

oThe criticality of the last lap

oFinding extraordinarinessoMaking use of tradition

Marketers need to understand these changes in the

mindset of the consuming class


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Activation of Ones Destiny

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Age for owning a homeWorking women and impact on different areas of

apparel, professional institutes

The changing face of the Indian Idol

Metamorphosis into a world-class butterfly


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The New Currency

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From classical to popularAcademics to talent

JNU to IIM

Importance of looking good and the X factor not only

for oneself but the house and the automobile

From depth of knowledge to employment potential

From the interiors to the exteriors

Brahmin to Kshatriya

Lakhpati to Crorepati and beyond

From cash to credit cards


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The Criticality of the Last Lap

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Value of hanging in and seeing things through to theend

Chak De India

Growth of the Indian MNCs

The transformation of Tata from scale and trust to

also incorporate dynamism and innovation


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Finding Extraordinariness

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From being a collective to individualismFrom white to colour

From hidden wealth to flaunting it

Bunty Aur Babli

India Premier League

Changing approach to careers

Professionals to entrepreneurs


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Making Use of Tradition

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Expanding market for AyurvedaVedic Mathematics

Numerology

Divine intervention

Building ones own space in the house

The power of the middle class merit


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Natural Environment

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Deforestation and effect on mining

Water pollution

Noise pollution

Diesel to CNG

Hybrid cars

Organic foods

Green office buildings

Recycling


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Technology Environment

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From IT and CT to ICT to ICEDigital cameras and E-cinema

PC to laptop to mobile devices

From shopping to e-commerce to m-commerce

Business firms need to look at:oAccelerating pace of change

oUnlimited opportunities for innovation

o To spend on research or development

o Increased regulation of technological change


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March of the Knowledge Economy

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Knowledge handling the new mantraIntangible assets more important than tangible ones

Licensing fees and patents becoming a big source of

profits

Individuals sharing knowledge in groups changing

the rules of the game


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Politico Legal Environment

POLITICAL LEGAL

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Economics is a by product of

politics

Forms of government and

stability

From socialism to liberalisation

to pseudo-socialism

Pressure groups and lobbies

Corporate affairs

Consumer protection

Employee protection

Price and packaging laws

Controls on trade practices

FDI laws

Codes of practice in

advertising - ASCI


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The Companys Microenvironment

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Microenvironment consists of the actors close to thecompany that affect its ability to serve its customers


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The Companys Microenvironment

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All other functional groups who should also thinkconsumer

The Company

Timely supply of the right material of the right quality atthe right price

Suppliers

Channels, logistics, financial and marketingintermediariesMarketingIntermediaries

Gaining sustainable competitive advantage overcompetition

Competitors

Financial, media, government, citizen action, local,general and internalPublics

Consumer, Business, Government, InternationalCustomers


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Next Session

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Consumer Behaviour Concepts

Deliverables

o Consumer Behaviour Assignment by eachstudent

o Study of Chapter 5 with all caselets

o Review of handout by Jagdish Seth

unit1- indian marketing environment

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