The Marketing Challenge In India By Arvind Singhal, Technopak
India has been having a wonderful journey in the last 15 years. With Goldman Sachs now predicting that India could sustain over 8% GDP growth rate through 2020, this journey promises more excitement for many more years to come. However, for many marketers of consumer products in India, 2007 could be one of the most memorable one. Consumer demand for most goods and services continues to rise unabated, and as a result, most consumer goods manufacturing and marketing companies have posted superb financial results in the last 4 quarters. Some of them have regained the confidence in their brands and their pricing power and a result, many of them have begun to raise prices (straddling many product categories) by 5% to 20%. The official justification for doing so is that inflation has lead to increases in the cost of various inputs though the reality could be a belief that with the upsurge in incomes, consumer demand is higher and that could support these price hikes. As marketers, we would not be so bullish about the price insensitivity of the average Indian consumer. Let us start by putting in perspective the environment in which the Indian consumer product businesses are currently operating in and the impending impact of changes in this environment. These changes can be broadly segmented in four dimensions. The first dimension is to do with changing demographics wherein the fact that the majority of India is very young (Over 50% or just over
550 Million individuals are younger than 25 years) implies that most of the current and near-future new customers are going to be first time consumers for most goods and services. There would be no “history” or “legacy” of a similar consumption in their households since their parents may not have ever been consumers of such products or services. This holds true for goods as diverse as automobiles, telecommunication products, consumer durables, and even personal...
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