Download Global financial crisis of 2008 and its effect on India and more Essays (university) Marketing in PDF only on Docsity!
INDIAN
MARKETING
ENVIRONMENT
BY:-
Siddhant
INDIAN ECONOMIC GROWTH
YEAR INFLATION(CPI
PER CAPITA INCOME (INR) GDP(INR)
CRORE
7.7% 8 %
7.9%
6.4% 7.3% 6.6%
5.4% 5.7% 4.3% 5.4%
1.4% 4 %
3.8%
91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02- 03-
7.7% 8 %
7.9%
6.4% 7.3% 6.6%
5.4% 5.7% 4.3% 5.4%
1.4% 4 %
3.8%
91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02- 03-
THE DECLINE IN THE GROWTH STORY (2008-12)
- (^) GDP growth rate went down to 6.5% in FY 2012 from the high of 9.6%in FY 2007.
- (^) Industrial output declined, between 2010-11 and 2011-12 the decline was 5.3%.
- Agricultural production was languishing. (the share of agriculture in the rural economy dropped from 74% in 1970 to 41% in 1993 to 40 % in 2007-08)
- (^) Centre’s fiscal deficit kept going up; it reached the high point of 6.4% of GDP in FY 2010.
- (^) Inflation shut up, reached double digit in FY 2010.Food inflation went disturbingly high.WPI based inflation was 9.6% in FY 2011.
- (^) Household savings fell from 25.4% of GDP in 2009-10 to 22.8% in 2010-
- Current account deficit (CAD)-excess of Import over Export- as a proportion of GDP rose to the highest ever level of 5.4% during Q2 of 2012- from 4.2 % of Q2 2011-12.(CAD- $22.3 Billion in 2012-13 from $18.9 Billion in 2011-12)
- The rupee depreciated, reaching a low of Rs.56 to US $ by 2011.capital flows, commodity prices, petroleum prices, trade deficit, all impacted the currency depreciation.
- (^) India’s investment attractiveness declined; foreign investment took the reverse flow .FII’s were on selling spree, FDI was uncertain to enter.
- (^) IT exports was in trouble as overseas customers cut IT spending.
- Job market became dull due to contraction in industrial and business activity.
The global crisis since 2007-08 led to risk aversion by investors.
INDIA No.3 In Purchasing
Power
2011 GDP in purchasing power parity ($ trillion)
INDIA No.3 In Purchasing
Power
2011 GDP in purchasing power parity ($ trillion)
Clearing of FDI in multi-brand retail, the partial control of
petroleum products subsidy, and the banking reforms measures are
cases in point. Reforms measures on pension, public distribution
,contract act,labour reforms, and sales tax plus FDI in other sectors
like insurance are on its initial stage. Government decided to
concentrate on coal ,power plants ,roadways ,ports, refineries, and
optic fiber. It seems that even if the country is in no position to
immediately revisit the boom period of 2004-08,but it can at least exit
the decline of 2008-12 period and get back to higher growth track.
15.1$ 11.3$ 4.5$ 4.4$ USA CHINA INDIA JAPAN
Government Initiatives By End Of 2012 Give Hopes On Further Reforms
Government Initiatives By End Of 2012 Give Hopes On Further Reforms
KEY FEATURES OF INDIAN
MARKETING ENVIRONMENT
KEY FEATURES OF INDIAN
MARKETING ENVIRONMENT
- (^) The consumer market is expanding and getting more dynamic.
- Quantum jump in “consuming class household”.
- Per capita annual income of Indian’s reached $1000 in 2010.(Rs.49,402)
- (^) Favorable shift in consumption pattern.
- (^) Continuing growth of the middle class.
- (^) Midnight’s children (today’s senior citizens) form a new market.
- The young India expand into a major segment.
- Another powerful segment, I-pad generation in the making.
- (^) Dominance of service continue.
- (^) Growth of IT/e-commerce.
- Rural market becomes game changer.
- Retail grows, organized retail spreads,kiranas too grow.
- (^) Marketing communication scene, back in action mode.
- (^) Social media expands in size ,role and importance.
- (^) Huge mobile connectivity sets up the tone and pace.
- A consumer aggression never before seen ,is emerging.
- The midnight’s children's have also become senior citizens. Unlike their predecessors, this new senior generation refuses to retire from life! They remain active spenders, suiting their old-cum-new life style, accounting for a generational shift in consumption pattern in certain categories of products and services.
- The youth segment has expanded into a much bigger segment, they want more growth ,more income ,more luxuries, they are also ready to work more. As a result, the youth market, whatever be the product/services, is on the upswing, garments, personal care, restaurants, mobile phones, tablets, PCs, music, gaming, holidaying have become big businesses.
- (^) Credit is becoming a way of life with a large segment of Indian consumers. According to credit Suisse Emerging consumer survey 2011,the credit appetite of the Indian consumer keeps growing. In earlier years, for purchase of house 60% was paid on cash , and the balance on credit ,today the ratio is reversed, for cars 65% was spent as cash and the balance on credit ,today 60% is on credit. It seems for
CHANGING PROFILE OF THE INDIAN MIDDLE
CLASS
CHANGING PROFILE OF THE INDIAN MIDDLE
CLASS
- (^) A class growing in confidence
- (^) Acquires a new political power
- (^) Becomes India’s consumption community
- (^) Acquires new values, new orientation
- (^) Goes through a pattern of shift in outlook on consumption
- (^) Spending pattern undergoes a major shift
- (^) Moves from functional living to lifestyle living.
- (^) Moves from family need based spending to spending for luxurious
products.
- (^) Goes after lifestyle product /activities.
- (^) Votes for premium products and international brands.
- (^) Goes for faster replacement of appliances/gadgets.
- (^) Seeks world class shopping experience.
- (^) Goes for modern apartments and gadgets.
- (^) Settle into the fast food culture.
- (^) Patronizes (to make oneself regular customer)the new generation coffee
cafes.
- (^) Goes for beauty products.
- (^) Looking good becomes important.
- (^) A class growing in confidence
- (^) Acquires a new political power
- (^) Becomes India’s consumption community
- (^) Acquires new values, new orientation
- (^) Goes through a pattern of shift in outlook on consumption
- (^) Spending pattern undergoes a major shift
- (^) Moves from functional living to lifestyle living.
- (^) Moves from family need based spending to spending for luxurious
products.
- (^) Goes after lifestyle product /activities.
- (^) Votes for premium products and international brands.
- (^) Goes for faster replacement of appliances/gadgets.
- (^) Seeks world class shopping experience.
- (^) Goes for modern apartments and gadgets.
- (^) Settle into the fast food culture.
- (^) Patronizes (to make oneself regular customer)the new generation coffee
cafes.
- (^) Goes for beauty products.
- (^) Looking good becomes important.
SIZE OF PRIVATE CONSUMPTION IN INDIASIZE OF PRIVATE CONSUMPTION IN INDIA
GDP US $1400 Billion^ GDP US $1400 Billion
Public spending &
investment US $
Billion-44%
Public spending &
investment US $
Billion-44%
Private consumption US $ 784 billion-56%
Private consumption US $ 784 billion-56%
NON RETAIL
US $ 314 BILLION-40%
NON RETAIL
US $ 314 BILLION-40%
RETAIL
US $470 BILLION-60%
RETAIL
US $470 BILLION-60%
RURAL
US $254 BILLION -54%
RURAL
US $254 BILLION -54%
URBAN
US $216 BILLION-46%
URBAN
US $216 BILLION-46%
RURAL URBAN
Latrine facility in
house Latrine facility in
- 1990-91 13.88 % 6,270 5,31, CRORE
- 1991-92 11.88 % 7,000 6,13,
- 1992-93 6.31 % 7,899 7,03,
- 1993-94 10.24 % 8,928 8,17,
- 1994-95 10.22 % 10,283 9,55,
- 1995-96 8.98 % 11,861 11,18,
- 1996-97 7.25 % 13,492 13,01,
- 1997-98 13.17 % 14,646 14,47,
- 1998-99 4.84 % 16,528 16,68,
- 1999-00 4.02 % 18,194 18,58,
- 2000-01 3.77 % 19,115 20,00,
- 2001-02 4.31 % 20,259 21,75,
- 2002-03 3.81 % 21,529 23,43,
- REVIVAL SIGNS SINCE 2013REVIVAL SIGNS SINCE
- Foreign investment – seems to be returning to the country.FII inflow exceeded $7.16 billion in first 11 months of FY
- One-room households 39.
- Tap water 17.
- Electricity 55.
- of which piped sewer system 2.
- 63.2 18. of which no drainage
- Firewood for cooking 62.
- LPG gas for cooking 11.
- Availing Banking Services 54.
- Television 33.
- One-room households 39. RURAL URBAN
- Tap water 17.
- Electricity 55.
- of which piped sewer system 2.
- 63.2 18. of which no drainage
- Firewood for cooking 62.
- LPG gas for cooking 11.
- Availing Banking Services 54.
- Television 33.
GROWTHGROWTH ININ FMCGFMCG
- Growth in consumer spending and growth in FMCG industry have close relation.
- (^) According to a study by the CII (confederation of Indian industry),FMCG industry has a growth in the last decade to Rs. 1300 Billion.
- (^) Growing middle class has been a major driver of this growth.
- (^) (BUSINESS TODAY, 2015) India's economic growth has been driven by domestic
consumption.
Consumer Spending Category Wise 2011 Vs 16 (F) In $ Billion
Food and grocery
Apparel
Jewellery and watches
Consumer electronics and IT
Pharmacy
Furniture
Restaurants and food joints
Footwear
Beauty services
Health/fittness
Others
Total
Food and grocery
Apparel
Jewellery and watches
Consumer electronics and IT
Pharmacy
Furniture
Restaurants and food joints
Footwear
Beauty services
Health/fittness
Others
Total
CATEGORY
GROWTH IN RETAIL SECTOR,ESPECIALLY MODERN FORMAT STORES(MFSs)
GROWTH IN RETAIL SECTOR,ESPECIALLY MODERN FORMAT
STORES(MFSs) According to the estimates of Citigroup Investment Research, the size of India's retail industry was around $214 billion in 2006 and $255 billion in 2010. Modern format retailing with modern format stores- supermarkets, hypermarkets and shopping malls- is one of the component of the transformation in retail sector in India. (^) Changing demographic, including the increasing purchasing power and the change in lifestyle, have been fuelling the growth and changes in this area.MFS accounts for only 12% of FMCG sales in 2012 and it is expected that 2017 will see 30% contribution by MFS to FMCG. According to Nielson’s shopper trends survey 2011,56% of modern trade shoppers are becoming modern trade loyalist, it is a group who will allocate most of their budget at modern trade though they might also shop at the other format to an extent.
(^) According to the estimates of Citigroup Investment Research, the size of India's retail industry was around $214 billion in 2006 and $255 billion in 2010. Modern format retailing with modern format stores- supermarkets, hypermarkets and shopping malls- is one of the component of the transformation in retail sector in India. (^) Changing demographic, including the increasing purchasing power and the change in lifestyle, have been fuelling the growth and changes in this area.MFS accounts for only 12% of FMCG sales in 2012 and it is expected that 2017 will see 30% contribution by MFS to FMCG. According to Nielson’s shopper trends survey 2011,56% of modern trade shoppers are becoming modern trade loyalist, it is a group who will allocate most of their budget at modern trade though they might also shop at the other format to an extent.
GROWTH IN SERVICE SECTOR^ GROWTH IN SERVICE SECTOR
(^) Service sector which has been the dominant contributor to India’s growth story is continuing the growth trend. The share of service sector in India's GDP ,currently 56% ,is projected to go up further , as industrial sector share currently at 25% is likely to remain static, agricultural sector currently at 19%, may further dip. There are several areas in service group like BFSI (Banking,Finance,Service,Insurance),housing,pharma& healthcare,education,hospitality,infrastructure, and organized retail are projected to experience four to five times growth over next decades.
(^) Service sector which has been the dominant contributor to India’s growth story is continuing the growth trend. The share of service sector in India's GDP ,currently 56% ,is projected to go up further , as industrial sector share currently at 25% is likely to remain static, agricultural sector currently at 19%, may further dip. There are several areas in service group like BFSI (Banking,Finance,Service,Insurance),housing,pharma& healthcare,education,hospitality,infrastructure, and organized retail are projected to experience four to five times growth over next decades.
(^) Rs. 11,800 crores advertisement revenues for the television industry in 2011. (^) It amounts to 10-12 % growth over previous year. (^) 13.8 crores homes with television. (^) 80% satellite penetration. (^) Indians spend Rs. 175 each month on paid television channels. (^) Growth of digital broadcasting.
(^) Small channels become viable as digitization reduces distribution cost. (^) Kids and regional channells are growing. (^) 30% increase in the number of channels watched in a home with digital TV. (^) Thirty-one million households had direct-to-home(DTH) service in India by 2011 end.
(^) Rs. 11,800 crores advertisement revenues for the television industry in 2011. (^) It amounts to 10-12 % growth over previous year. (^) 13.8 crores homes with television. (^) 80% satellite penetration. (^) Indians spend Rs. 175 each month on paid television channels. (^) Growth of digital broadcasting.
(^) Small channels become viable as digitization reduces distribution cost. (^) Kids and regional channells are growing. (^) 30% increase in the number of channels watched in a home with digital TV. (^) Thirty-one million households had direct-to-home(DTH) service in India by 2011 end.
GROWING TV AUDIENCE AND GROWING DIGITISATION^ GROWING TV AUDIENCE AND GROWING DIGITISATION