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The Indian Marketing Environment

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.
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Suggested Readings

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

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

The Indian Marketing Environment

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.

The Indian Marketing Environment

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.

The Indian Marketing Environment

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.

The Indian Marketing Environment

1. Product Product mix/lines

Quality, models, size

Packaging Merchandising Service, presale and aftersale.

The Indian Marketing Environment

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.
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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.
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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

The Indian Marketing Environment


1. Customer Variables
Number and location of customers Purchasing Power, Buying Behaviour

Lifestyles Brand awareness and loyalty

The Indian Marketing Environment


2. Competition Variables


Structure of the Industry Nature and intensity of competition. Buyers market or sellers market. Strengths and weakness. Substitute products

The Indian Marketing Environment


3. Trade variables

Types of intermediaries, number, strength

Trade practices Motives and attitudes of the intermediaries. Extent of sophistication

The Indian Marketing Environment


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

The Indian Marketing Environment


Environmental Customer Marketing Product Price Trade

Promotion Mix Competition Variables


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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.

The Indian Marketing Environment


b. Economic Scene Top ten economies of the world. Our GDP is growing at 5.5% per annum. Agriculture 16% Industry Services 24% 60%

Slow growth rates till 70s. Average 3% p.a. Last two decades have seen massive growth in the industry and services sector. In 90s spectacular growth after liberalization One of the fastest growing economies of the The Indian Marketing Environment world

c. Agricultural Scene

Predominance is there. Dependence has reduced


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.
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d. Industrial scene

Contribution to GDP growth increasing More than this, there are qualitative change Rapid foreign investment and competition from multinational companies.

The Indian Marketing Environment


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.

The Indian Marketing Environment


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.

The Indian Marketing Environment


f. Rural marketing scenario

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

The Indian Marketing Environment


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.

The Indian Marketing Environment


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
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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.

The Indian Marketing Environment


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
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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.

The Indian Marketing Environment


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)
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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

The Indian Marketing Environment


2. The challenge of MNC Dominance Majority equity lends MNCs a new strategic edge.

The Indian Marketing Environment


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. The Indian Marketing Environment

4. The demands of a buyers 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 BUYERS MARKET

The Indian Marketing Environment


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.

The Indian Marketing Environment