The Indian Marketing Environment

Prepared by:
Syed Mohd Abbas Rizvi

(52)
Gaurav Pandey (10) Abhishek Sharma (02) MBA IB, 4th Sem UPES, 2010-12

Marketing
Marketing is a process whereby a customer need is identified and an offering is made by the firm satisfying the following three conditions:

The offer fulfils the customer need, Terms and attributes of the offer are acceptable, Organizational goals including profit are met. This involves rolling out a product on the basis of the target customer needs. Pricing, distributing and promoting the product to result into its consumption satisfying the consumer and making profit for the firm.

Marketing Mix
Product, place, price and promotion are the four marketing mix. 1. Product a. Product mix/lines b. Quality, models and size c. Packaging d. Presale and after sale services 2. Price Policies, price level, margin, discount, payment and delivery terms.

Marketing Mix Contd.

3.

4.

Place Distribution channel, intermediary, outlet location etc. Promotion Personal selling, advertising, sales promotion and publicity

Marketing Mix and Environment

A firm is required to have a marketing mix in tandem with the environmental variables i.e customer, competition, trade and environment to be a success.

1.

Customer Variables a. Number & location of customers b. Purchasing power, buying behavior c. Habits d. Lifestyle e. Brand awareness and loyalty

Contd.
2.

3.

Competition Variables a. Structure of the industry b. Nature and intensity of competition c. Strengths and weakness d. Substitute products Trade Variables a. Types of intermediaries, number and strength b. Trade practices c. Motives and attitudes of intermediaries d. Sophistication extent

Contd.
4. Environmental Variables a. Govt. regulation on product, prices and regulation b. Control on trade practices c. Economic conditions d. Culture and traditions e. Laws and politics f. Level of technology

Indian Marketing Environment

a. Demographic Scene One billion population Growth rate over 7% per annum Life expectancy from 48 years in 1947 to 70 years i National literacy rate is over 74% . Diverse religions and languages Dialects in few hundreds.

Contd.
b. Economic Scene Top ten economies of the world. Our GDP is growing at 7% per annum. Spectacular growth after liberalization One of the fastest growing economies of the world c. Industrial scene Contribution to GDP growth increasing More than this, there are qualitative change Rapid foreign investment and competition from multinational companies.

Contd.
d. Social Scene Indias middle class (30% of the population) is the driving force for the MNCs Rapid industrial growth seen emergence of professionals in many spheres. 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.

Contd.
e. Rural marketing scenario Shown impressive growth-television, mobile penetration. Earthenware yielded place to a variety of new kitchenware. Becoming increasingly urbanized. 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.

Contd.
f. 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.

Observation
Indian marketing environment acquiring greater dynamism and robustness Evolution of Middle class Growing rural markets Lifestyles undergoing rapid changes. Demand for lifestyle products.

New policies impacting environment

1. New Industrial Policy Delicensing of industries. FERA substituted by FEMA TRCCI Curtailment of the role of the public sector.

2. New Trade Policy Freer Trade Linking of imports to exports

Contd.
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 countrys economy with the global economy.

Contd.
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

Contd.
Dismantling of price controls and

introduction
environment.

of

market

driven

price

Public sector restructure Privatization of PSUs (Public Sector Units) New Policy on PSUs

Exit Policy (closing of business)

Remember
India is a diverse country having different terrains, climate and people. It is home to different cultures and religions, with differences in habits and preferences, thereby requiring product adaptation.

Indians need value for money.

The new policies and opened economy has increased competition giving power to customers.