Contemporary Trends in

Marketing : The Road Ahead

By: Dr. Subhojit Banerjee

Institute of Business Management
VBS Purvanchal University, Jaunpur (UP)
India-222010
India : An Ocean of
Opportunities and Challenges
• The Indian economy is the fourth largest
economy of the world on the basis of
Purchasing Power Parity (PPP).
• From low growth rate of 2.7 per cent in 2001-
02, the industry sector grew at a rate of 7.1 per
cent in 2002-03 and further to 9.8 per cent in
2004-05.
• Projected to grow at 8% in 2007-08
• Despite the world wide recession, Karnatakas
IT export plan size grew from Rs 12000 crore to
Rs 29,000 crore, showing the robustness of the
country's economy.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Global Competence
• Most oil-exporting
economies have
seen rising terms of
trade in recent years.
But some oil-
importing economies
have weathered the
worsening terms of
trade by rapidly
expanding
manufactured goods
exports (China) or
services (India).

Dr. S.Banerjee, VBSPU.... created March 10,2009

India’s Foreign Trade

• India's total external trade (exports plus imports including

re-exports) in the year 1950-51 stood at Rs. 1214 crores.
• Exponentially growing reached reached Rs. 1384368
crore in 2006-07
{Ytot-trd = 55993.375e.2403x (MulR=.98964, adj R2
= .97251, F value is 142.50 with P=.013)}
Dr. S.Banerjee, VBSPU.... created March 10,2009
India’s FDI’s
• In 2006-07, the proportion stood at 33.5
per cent of the total Capital invested,
while it rose to 43.4 per cent in the first
half of 2007-08.
• FDI inflows were broad-based and
spread across a range of economic
activities like financial services,
manufacturing, banking services,
information technology services and
construction.
Dr. S.Banerjee, VBSPU.... created March 10,2009
India’s Industrial Sector
• The growth achieved, during April-
November 2007, by the industrial
sectors has been 9.2 per cent.
• With more than 270 million
connections, India's
telecommunication network is the
third largest in the world and the
second largest among the
emerging economies of Asia.

Dr. S.Banerjee, VBSPU.... created March 10,2009

India’s Infrastructure
• During April-December 2007-08, six
core-infrastructure industries
registered a growth of 5.7 per cent
• Coal production grew by 4.9 per
cent and electricity generation grew
by 6.6 per cent during the same
period.

Dr. S.Banerjee, VBSPU.... created March 10,2009

 India feeds 1/6 of the world
• From negative
growth rate of -7.2
percent in 2002-
03, the agriculture
sector grew at a
rate of 10.0 per
cent in 2003-04
and at a rate of
6.0 per cent in
2005-06.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Agricultural Sector
• Agricultural production in the
country end-March 2006 was
serviced through 7,566 regulated
agricultural markets.
• There were 21,780 rural
primary/periodic agricultural
markets, out of which about 15 per
cent functioned under the ambit of
regulation.

Dr. S.Banerjee, VBSPU.... created March 10,2009

CPI- All India trends
• The index
measures the
overall changes in
the level of
average retail
prices of fixed
goods and
services
consumed by the
target population.
Dr. S.Banerjee, VBSPU.... created March 10,2009
The Great ‘ human resource-
Pool’
• The well-known ‘demographic
dividend’ will manifest in the
proportion of population in the
working age group of 15-64years
increasing steadily from 62.9 per
cent in 2006 to 68.4 per cent in
2026.

Dr. S.Banerjee, VBSPU.... created March 10,2009

India- the Knowledge based
Economy
• We are the worlds second largest
education network.
• India accounts for 54% of IT services
and 37% of IT enabled services globally.
• In 2007-08, India’s total export of IT
services and IT enabled services was
$40.4 billion, about 5.5% of its GDP.
• The IT directly employs about 2 million
people and about 6-8 million people are
employed with supporting industry.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Marketing Strategies for
• Rural Sector
• Services Sector
• Retail Sector
• Export Sector

Dr. S.Banerjee, VBSPU.... created March 10,2009

Rural Marketing: Gold at
the bottom of the Pyramid
• Untapped rural
potential
- 6,27,000 villages
across the country
- account for 70% of
population
- 60% of National
demand for various
product categories

Dr. S.Banerjee, VBSPU.... created March 10,2009

Growing Demand
• -According to NCAER study, there
are as many 'middle’ income and
above' households in the rural
areas as there are in the urban
areas.
• -There are almost twice as many
'lower middle income' households
in rural areas as in the urban areas.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Strategies
• Strive to reach at least 13,113 villages
with a population of more than 5,000
• Trade off the distribution cost with
incremental market penetration.
• Affordable products
• Use information Technology to increase
the ‘reach-factor’.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Case-Studies
• Hindustan Lever, to serve remote village,use
autorickshaws, bullock-carts and even boats in
the backwaters of Kerala.

• Coca-Cola, has evolved a hub and spoke

distribution model to reach the villages. To
ensure full loads, the company depot supplies,
twice a week, large distributors which who act
as hubs. These distributors appoint and supply,
once a week, smaller distributors in adjoining
areas.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Case-Studies.. (Contd)
Godrej introduced three brands of Cinthol, Fair
Glow and Godrej in 50-gm packs, priced at
Rs 4-5 meant specifically for Madhya
Pradesh, Bihar and Uttar Pradesh — the so-
called `Bimaru' States.
HDFC tied up with non-governmental
organisations and offered reasonably-priced
policies in the nature of group insurance
covers

Dr. S.Banerjee, VBSPU.... created March 10,2009

Case-Studies.. (Contd)
• Use the e-Choupal to order seed,
fertilizer, and other productsAt harvest
time,

• ITC offers to buy the crop directly from

any farmer at the previous days closing
price

Dr. S.Banerjee, VBSPU.... created March 10,2009

Services Marketing: India's ‘Star’
• The services sector has been
growing at an annual growth rate of
about 28% during the last 5 years.
• The exports of services have grown
up from US $ 19.1 billion to US $
73 billion in 2006.

Dr. S.Banerjee, VBSPU.... created March 10,2009

 Services Marketing.. (Contd)

Export of Services shows a

quadratic growth exhibiting immense
potential in the years to come.

Dr. S.Banerjee, VBSPU.... created March 10,2009

Retailing: Going Global
• India shows US$330 billion retail
market that is expected to grow
10% a year, with modern retailing
just beginning.
• Strategy suggested: Identifying
weak segments, maintaining
investment level selectively

Dr. S.Banerjee, VBSPU.... created March 10,2009

PRESENT INDIAN
SCENARIO
* Unorganized market: Rs. 583,000 crores
* Organized market: Rs.5, 000 crores
* 5X growth in organized retailing between
2000-2005
* Over 4,000 new modern Outlets in the last 3
years
* Over 5,000,000 sq. ft. of mall space under
development
* The top 3 modern retailers control over
750,000 sq. ft. of retail space
* Over 400,000 shoppers walk through their
doors every week

Dr. S.Banerjee, VBSPU.... created March 10,2009

Growth drivers in India for
retail sector
• Increase in spending Percapita Income.
• Advent of dual income families also helps in the growth of retail sector.
• Shift in consumer demand to foreign brands like McDonalds, Sony,
Panasonic, etc
• Consumer preference for shopping in new environs
• The Internet revolution is making the Indian consumer more accessible
to the growing influences of domestic and foreign retail chains. Reach of
satellite T.V. channels is helping in creating awareness about global
products for local markets.
• About 47% of India's population is under the age of 20; and this will
increase to 55% by 2015. This young population, which is technology-
savvy, watch more than 50 TV satellite channels, and display the
highest propensity to spend, will immensely contribute to the growth of
the retail sector in the country.
• Availability of quality real estate and mall management practices
• Foreign companies' attraction to India is the billion-plus population.

Dr. S.Banerjee, VBSPU.... created March 10,2009

International Marketing:
Reaching Out
• Shri Murasoli Maran, Union Minister of
Commerce and Industry, has announced
the Medium Term Export Strategy for a
5-year period from 2002-2007.
• The strategy makes an opportunity
assessment after examining the import
basket of major importing economies of
the world and identifying potential items
of exports in which India is competitive
vis-à-vis some of the major exporting
countries of these products at present.
Dr. S.Banerjee, VBSPU.... created March 10,2009
Strategies for export
• Engineering and Manufacturing Sector strategy
includes support for SMEs to modernise,
accreditation of testing laboratories in India by
overseas agencies, R&D, other measures to
effectively counter NTBs in the form of TBT
conditions, brand promotion, providing
warehousing facilities in overseas markets, etc.
• Textile sector strategy includes investment in
key areas, infrastructure development, by
setting up 'Apparel Parks' and Textiles Centres
Infrastructure Development Schemes, Brand
Promotion and market assistance schemes, etc

Dr. S.Banerjee, VBSPU.... created March 10,2009

Strategies for export.. (contd)
• Expansion of Market Assistance
Programmes
• Developing SSI export industry
• Export credit strategy
• Capitalize the opportunities in the
services sector
• Significant expansion of Market
Assistance Programmes
Dr. S.Banerjee, VBSPU.... created March 10,2009
Summing Up
• The one thing that is common
amongst these estimates is that
Indian organized retail market will
be very big in 2010.
• IT sector to grow and will be the
main source of Forex
• Agriculture sector will remain the
biggest sector with percapita
incomes increasing significantly.
Dr. S.Banerjee, VBSPU.... created March 10,2009
Summing Up
• Services are the chief source of
economic growth, accounting for more
than half of India's output with less than
one third of its labour force.
• India's chief strength comes from its
large numbers of well-educated, skilled
people, adept in the English language,
helping India to become a major exporter
of software services and software
workers.
Dr. S.Banerjee, VBSPU.... created March 10,2009
• A Prosperous Dawn
awaits us all…….

….THANK YOU
Dr. S.Banerjee, VBSPU.... created March 10,2009