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.
Suggested Readings
1. Marketing Management by Philip Kotler, 12th edition

Chapter 3
2. Marketing Management by Ramaswamy &

Namkumari, Chapter 2 and 3
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.
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.
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
Product mix/lines
Quality, models, size
Packaging
Merchandising
Service, presale and aftersale.
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.
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.
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
10
1. Customer Variables
Number and location of customers
Purchasing Power, Buying Behaviour
Habits
Lifestyles
Brand awareness and loyalty
11
2. Competition Variables
Structure of the Industry
Nature and intensity of competition. Buyers

market or sellers market.
Strengths and weakness.
Substitute products
12
3. Trade variables
Types of intermediaries, number, strength
Trade practices
Motives and attitudes of the intermediaries.
Extent of sophistication
13
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
14
Environmental
Customer
Product
Price
Promotion
Mix
Trade
Variables
Environment
Environmental
Marketing
Place
Competition
Variables
15
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.
16
b. Economic Scene
Top ten economies of the world.
Our GDP is growing at 5.5% per annum.
Agriculture 16%
Industry
24%
Services
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
17
c. Agricultural Scene
Predominance is there. Dependence has reduced

/3 rd population dependent directly/indirectly on
agriculture.
2
Rural markets development at a faster rate.

Impressive achievements. Self dependent. Rare
foodgrain imports.
Main cause of development of other sectors.
18
d. Industrial scene
Contribution to GDP growth increasing
More than this, there are qualitative change
Rapid foreign investment and competition from
multinational companies.
19
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.
20
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.
21
f. Rural marketing scenario
Shown impressive growth-television, mobile penetration.

Earthenware yielded place to a variety of new
kitchenware.
Becoming increasingly urbanized.
22
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.
23
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
24
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.
25
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

26
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.
27
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)
28
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
29
2. The challenge of MNC Dominance

Majority equity lends MNCs a new strategic
edge.
30
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
global
in character.
The now
Indian Marketing
Environment
31
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
32
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.
33

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