The Indian Marketing Environment :

Indian Marketing Environment

For Global marketers India is not just a single country, it is further divided into tow different countries. India and Bharat. India is looked and appreciated by the whole world. It is growing at the second fastest rate, Its a outsourcing hub, skilled workforce, Nuclear and space power and everything to become a world power. On the other hand, Bharat invovles poverty, Illetracy at high levels, Corruption, Mismanagement, Violnce between releigions and like that. So in this way whosoever desires to enter in the indian market must realize both the faces of this country. They should realize the serious challenges of doing business here like segmenting the market properly, Understanding country's social and cultural issues, getting through government beaurocracy and understading economic and political situation.

Marekting Environment consist of factors and forces outside or inside the organzation that affect its business in the market. The marketing environment is divided into tow different environments. 1) Micro Environment: It consist of factors lose to the company that have a direct impact on the organization strategy. This includes company's suppliers, distributors, customers and competitors. 2) Macro Environment: It consists of larger societal forces. An\d these are beyond the control of the organization. These shape the characteristics of the opportunities and threats facing a company. For example, Economic, Cultural, Political, Demographic and Technological.

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.

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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 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. Product mix/lines Quality, models, size Packaging Merchandising Service, presale and aftersale.

Assembling and managing the marketing mix is the main job in the whole marketing task.
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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. 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 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. Buyers market or sellers market. Strengths and weakness. Substitute products

3. Trade variables Types of intermediaries, number, strength

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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

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 I. II. Top ten economies of the world. Our GDP is growing at 5.5% per annum. Agriculture 16% Industry Services III. IV. 24% 60%

Slow growth rates till 70s. Average 3% p.a. Last two decades have seen massive growth in the industry and services sector.

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V.

In 90s spectacular growth after liberalization

One of the fastest growing economies of the world c. Agricultural Scene 1) 2) 3) 4) 5) 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 1) Contribution to GDP growth increasing 2) More than this, there are qualitative change 3) Rapid foreign investment and competition from multinational companies. e. Social scenario: The middle class explosion 1) Estimate of 25 crores in size 2) Rapid industrial growth seen emergence of professionals in many spheres. 3) Target group for most of the companies. Social scenario: The middle class explosion 1) 2) 3) 4) 5) 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 o o o o o o o 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.

g. Legal scenario Has direct impact on the marketing environment.

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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.

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 countrys economy with the global economy.

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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.

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Import liberalisation adds to the competition. Access to technology adds to the competition.

Competition is now global in character.

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 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.

Suggested Readings: 1. Marketing Management by Philip Kotler, 12th edition Chapter 3 2. Marketing Management by Ramaswamy & Namkumari, Chapter 2 and 3

By ( Raja sekhar . V )

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