Indian Marketing Environment

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. There have been bunch of examples of companies who have tried to enter in Indian markets without taking care of these issu es and have failed badly. Now before understanding Indian Marketing Environment, it is important to understand what is Marketing Environment. 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. And 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. Demographics EnvironmentIt is the study of the peoplein terms of their age, gender, race, ethnicity, and location. Demographic characteristics strongly affect buying behaviour. The current po pulation of India is 1. 18 billion and it is the seond most populous country in the world next to China. And it is being projected that by 2010, it will overtake china with 1. 53 billion. Obviously that's not a good news but for marketers there lies lots of opportunities. Fast growth of population accompanied with rising income means expanidng markets. And among this 1. 18 billion population, more than 50% are below 25 years of age. and hat is the reason why why tere is tough ompetition in the area of soft drinks, networking sites, stylish mobile handsets, job portals and all. Estimated in 2008, around 71% population lives in rural areas even after so much migration to urban cities and that is the reason why low cost brands have started targeting rural cummunityites. They put Camps, Haat in melas to promote their products. Literacy rate, as estimated in 2009, for men it was 76. 9% and for women it was 54. 5%, thoug there is still wide gender disparity, but it has been observed that growth in women literacy rate is more than men's.So women is another big target for marketers. Specially for home based products, as we know women is the chief person to select them for her home. Now, In India diffrent behaviour of diffrent age group has been observed which is mentioned below. Adolescents: The new-age teens are marketers delight. They do no earn but they are fond of spending. They spend lavishly on clothes, eating out, latest gadgets and are very keen t keep up with their friends in terms of possessions and lifestyles. They do not feel guilty of spending their parents money and put pressure on their parents to shell out money for them.They feel they need to have a life of their own, and it should not be denied to them just because they are not earning. Youth: The current youngsters are growing in a more media-influenced, brand conscious world thn their parents. Companies have to take their messages to the places where these youngsters frequent, whether on the intern et, in a cricket stadium, or television. They do not mind information reaching them but they will reserve their right to make their choices. They know what they want from their lives and the product or servies they buy.They hate to be persuaded and influenced. therefore companies would do well to leave them alone to make thier choices. They create their own website, make movie with their own webcam, post their thoughts, pictures and writing online. Since they are sure about what they want, they prefer customized products and services. Companies are realizing that they have to provide something unique and deeply personal to in thier loyalty. People between 35 to 45: People in this age group are settled in their professions and have toddlers and growing children in thier home.The exert themselves in their profession because they realize that their career is likely to take off at this stage. They put in long hours at office and they have to juggle endlessly between their responsibiliti es as spouses and parents and growing responsibilities at work. Parents may be staying with them or they may be living in different city. Income of the people rises at a good rate and they are good spenders. Some of them may be buying their nfirst car while most of them thinking of upgrading their cars. They are also open to new gadgets for themselves and for households.People in this age group want to live a good life and are constantly on a buying spree to improve their lifestyles. They dress well, dine out frequently, and look for opportunities to go on holidays. These days they are also keen to buy new houses very early in thier lives. They also plan to retire early, and they plan thier finances accrodingly. People Between 45 to 60: Some people in this age group are at the peak of their careers while some others are struggling to keep thier jobs. Children beome major priority for people in this age group.They spend less as they save resources to fund the higher education of thei r children. They are also worried about their own future and make a last-ditch efforts to put a retirement plan in place. People above 60: People in this age group live on a steady income. Some of them live with thier grown-up children and are part of their household. They do not spend much on themselves. Their family looks after their requirements. Most of their money spent on buying gifts for their children and grand children. They have to spend a substantial part of their earnings on health-related issues and domestic help.Political Environment The political-Legal environment of a country is influenced by political structures and organizations, political stability, government's interventions, constitutional provisions, government's attitude, foreign policy. Businesses feel helpless in countries where contracts cannot be enforced by the judiciary of the land or it takes excessive timein the judicial proceedings. Governments will need to provide an environment in which businesses c an flourish. In turn, government needs businesses because the marketplace generates taxes. In this way government and businesses need each other.Also every aspect of marketing mix is subject to laws and restrictions. As in any part of the world, political influence is highly essential to start a business in India. Especially if you are planning to start a multi billion business, some sort of political patronage is an absolute necessity. Not only for safeguarding the interest of the company but even to begin the process of getting the required sanctions, one requires hold in the high echelons of politics and administrative circles. Indian society is highly plural. It is the biggest democracy in the world with multi party political system.During the last couple of decades, India has opened its market to world. It has absolutely become an open global market. Banking sector, Insurance sector and all fields of industrial and business are now open for multi national investment. Of course there are many obstructions to cross. And mostly all issues can overcome and establish business if you have the political patronage. India has a plural political system. With numerous political parties, national level and state level, it is very difficult to get a consensus among all parties for starting any business.Also these political parties have patronage of many factors, caste, creed and ideologies. There are political parties with left centric communist ideologies; they are totally against direct foreign investments. But other parties, who are main ruling coalition partners, have right centric ideologies and open for foreign investments. In most of the states, mostly local political parties are ruling. Political parties require financial patronage from big business establishments. Many constituent states have realized the need for foreign investments in their state for a growth oriented economic situation.Hence the climate has changed a lot in India. So many privileges are of fered to entrepreneurs to start business. With all these facilities, still political patronage is a must to start a business in India. Even after establishing the business, for a proper running of the business, political help is essential. It is mainly to sort out issues related to local taxes, labor problems and many such issues affecting the normal working of the companies. Some exapmles in which the government interfere has changed the way people did business †¢ India food items need to put Green dot for all vegetarian items and a Red dot for all non-vegetarian items. All the packaged products need to have MRP(Maximum Retail price) on their package. †¢ Auto industries had to introduce expensive emission control in thier car-Euro II compliance †¢ Public transport in delhi like autorickshaws and buses have to use only CNG in place of Petrol or Diesel. †¢ Introduction of VAT in Delhi †¢ RBI various guidelines to credit cards companies †¢ Introduction of 3G technology †¢ And very recently, India has asked RIM (Research in Motion), maker of Blackberry, to install its server in India for tracking its messenger & enterprise mail services. nd if they don't do so, there services will be banned, which will affect their business in India. Social-Cultural Factors Social factors influence the products people buy, the prices they are willing to pay, the effectivness of speific promotions and how, when and where people purchase products. They change gradually and some changes will be imperceptible if not watched closely. That is the reason why it is most difficult variable for marketing managers to forecast, influence and integrate into marketing plans.One thing India faces no competition is its varied culture and heritage. It has great diversity in cultural practices, languages, customs and traditions. In india people before starting a new business consult astrologers. Supersition are a part of life like they avoid eating non-vegetarian on Tuesdays due to some releigious reasons. People here consider cows a holy animal and it is worshipped and this is the reason behind failure of KFC in India in 1997 when they inroduced Beef items in their Menu. Values: A value is a strongly held and enduring belief.In India a person's values are key determinants of what is important and not important to him, how he reacts in a particular situation and how he behaves in a social situations. Today educated Indian consumer do not tolerate ineffective products and sloppy behaviour of marketers. He has become more inquisitive, discriminating and demanding. Comapnies should learn to expect tough customers. Time Starved Customers: Today many customers place value of non-material accomplishments, such as having control over their lives, and being able to take a day off when they want.As work life gets longer andstressful, people are spending their leisure time recuperating. Casual Frdiays and Home offices are further blurring the boundar ies between work and leisure. People will increasinly place more value on time than money. Multiple Lifestyles: Today People lead multiple lifestyles. They choose products and services that meet diverse needs and interests rather than conform to traditional streotypes. A person can be a teacher and also a a gourmet, fitness enthusiast and so many other things. Each of these lifestyles is associated with different products and services and is a otential customer for companies. This has increased the complexities of consumer's buying habits. A person may go on holidays to exotic holiday locations and may spend a fortune to travel, but may dine in very ordinary restaurants. Changing structures of Families: The growth in the number of working women means an increase in dual-income families. These families have greter household income but less time for family activities. More working women has meant an inreasing demand for time-savng devices and products, particularly for th kitchen.It i s being discovered that cost is more prominent in deisions made by women, whereas quality is relativly more important to men. This will have important influence when comapnies design marketing mixes for products where the women is prime decision maker. Some examples hwo this factor has affected the market: †¢ Hindustan Unilever limited markets different blends of tea under the same brand name to address the regional preferences of consumers. †¢ Gits India specialized in supplying gourmet mixes to housewives, knows the taste well of North & South India. MTV facebook, CNN, Discovery has completly changed the values of Indian consumers. †¢ Automobiles & Insurance companies potrays themselves as a family product in their advertisements. Natural Environment Natural environment includes factors such as seasonal variations, climatic differences, soil conditions and natural terrain. In consumer markets, the natural environment affects companies because of the differences in t he nature of products bought by consumers due to variations in seasons and climate. In difficult terrains like hilly areas, it is difficult and expensive to get products to the customers..It becomes more expensive to build distribution channels for companies whose target markets are geographically disperse. There are so many environmental issues in India for example Extinction of Tigers, Pollution in urban cities, Water shortages, Deforestation etc. So a company raising even a single issue could do well here. How can we forget to mention Idea's initiative to save paper by usine mobile phones. Its outstanding advertisements & promotional campaigns has really catched our attention. Government also doing thier best to save our environment like PUC(Pollution under control) is must for all the ehicles, soap industry must have to increase its biodegrability, strict laws against killing tigers, encouraging use of solar energy in big government head offices. Technological Environment Techno logy is practically everywhere today-it has changed the way we prepare food, we buy our clothes, and we build our homes. It has changed the way we send our posts, we take our exams, we fill up our forms and the way we resort to comfort and entertainment. Computers, the most visible impact of technology have come a long way from being huge machines locked up in a room to tiny palmtops with more features added everyday.It has all the functions of a calculator, a music player, a home theatre, a video camera and practically a better tool than a pen and a sheet of paper. With more features and functions, computers have led to loss of jobs for millions. In this context, we can look at the impact of technology, especially computers, in the Indian context. Cloud computing, Voice over internet, online social involvement, 3G technology, E-banking are some of the remarkable technological improvements that has changed the lifestyles of Indian consumers. Today companies offering outdated or obso lete technology couldn't survive.People are demanding up-to-date gadgets and gizmos. And this is something learned very well by Nokia in India, which introduces new and innovative handsets every month. In case of banking transactions, Earleir people used to go to banks for each transactions. Then they start doing it over the internet at home or offices and today they are demanding banking on the move i. e. on thier mobile phones. Also IT sector has made india one the biggest outsourcing hub in the world. So basically if a company wants to survive and stay ahead in India market, it needs to keep developing new products through its R.Econmic Environment The economic environment can have a major impact on businesses by affecting patters of Demand and Supply. Companies need to monitor these indicators to survive in the market. Income of Indian consumer has increased and now they are more and more high standard of living products. That is the reason why Harley Davidson, Porshe has set up thier showrooms here. After inflation next issue is Infation which is rising at constant speed increase in prices of fuel, Food items has really impacted producers here.