Shabnam Saidalavi, School of Legal Studies, Cochin
Editor’s note: A volatile market is one fraught with great price instability. It is highly risky. This paper examines the volatility in the market before and after 2008, and the challenges it faces. It also examines the diversity of Indian markets and the convergence between them. It also makes the case that while firms may cater to the affluent, there must be a market for the poor as well. It also addresses concerns that emerging markets need to face.
High Volatility in Market
- Volatile Market: – It is a market with great deal of price instability.
– Highly risky.
- Before 2008: higher demand for products and services.
- After 2008: demand declined due to volatility.
- The definition of long and short term market has undergone a change.
Ultimate challenges :Manage inventories in the distribution channels in short term, more complex and difficult marketing planning and more difficulty in market forecasting.
Diversity and Convergence
- Indian market: highly diverse due to the demography of Indian population.
- Diversity: young and old, tech and non-tech savvy, regional disparities, religion.
- Convergence among different markets.
- Example: value of convenience, clarity of voice and no call drop- all seek in a cell phone connection. Price and services of handset and services change according to the segment.
- Depth of the product mix is shown by large retail stores.
- Marketer makes his offer available with multiple price options- gives the customer, choice.
Catering to the affluent
- Growing segment of affluent customers.
- Hindustan Times organised the first ever conference on luxury– attended by Cartier, Jimmy Choo, Gucci, Villa Moda, Taj Hotels…
- Luxury goes beyond materialistic aspect – aspirational, emotional and experiential platform has to be created.
- Marketer has to continuously innovate on product design and upgrade.
Poor markets also need marketing
- Poor customer exists in both rural and urban areas.
- Poor may be: “All those who spend up to US $ 1 on the basis of PPP “( purchasing power parity) – per person per day on consumption expenditure.
- 35% of Indian population fell in the group.
- Challenges: Adapting marketing programme to this segment, innovation for this market, create means for consumption and funding for this consumption is arranged through self help groups and micro finance in this segment.
Engaging customer 24×7
- Average attention of customer has decreased over years. Reason- competition.
- The noise in the media and distribution outlets is loud.
- Through television, radio channels, outdoor advertising and print media.
- Fundamentals to customer acquisition and retention:
Creativity, respecting customer’s right to privacy.
Creating an emotional experience.
- Growing trend of consumers coming together to form communities.
- Offer significant inputs in consumer psychology and consumption behaviour.
- Internet has facilitated this growth.
- Blogs, web, chat rooms- most commonly used tools for creation of these communities.
- Consumers come together to share their experiences about the products and brands + discuss their personal and professional life.
Gang of Girls – gangofgirls.com – It is promoted by Sunsilk.
www.pagalguy.com – It is an MBA students and aspirants website where any student/aspirant can post their entry.
- Social networking sites- facebook.com, myspace.com- users present a structured profile of the self to the world.
– The information from these sites are used by the marketers for customising the marketing mix.
Save Mumbai, Jessica Lal case are examples of social causes.
Pepsi and Coke- ecological issues in case of impurities.
- Access to products and services restricted due to:
2. Lack of distribution network.
- Access enabled through:
Improvement in information and communication technology.
Price and value major determinants in consumption behaviour
- Value in the offer, far important than price in then consumer decision.
- Better service and lower price always attracts the consumer.
- Value of service depends on convenient location of the store, ready availability of the product, immediate installation and commissioning.
- Marketer has to continuously examine how to create value and retain competitive advantage.
- In order to manage their credibility on an ongoing basis.
- Past earned laurels do not stop the brands from working on their image.
- Any adverse news about them in the media can have an impact on their image.
- New icons need not be celebrities.
- Need to be credible.
- An Indian idol today is young with a carefree attitude, assertive, confident, adventurous, and unconventional and a highly performance-centric individual.
Indian global brands
- Arcelor Mittal (L.N. Mittal group), Tata Corus, Infosys, Bharat Forage, Ranbaxy, Wipro Barista, Taj, Haldiram, Kitchens Of India, IITs, IIMs – globally recognised Indian brands.
- Still they have a long way to go to be Coca Cola or Microsoft.
- In their movement, they are redefining the marketing rules in their product category in foreign markets.
- Challenge is to make the Indian global brands stonger.
- It meant all about ‘Going green’.
- Delhi’s public transport
- Samsung refrigerators marketed has environmentally safe.
- Hotels like Leela, Orchid and Taj claim that they provide services which are environmentally safe.
- Implications for product design and communication.
Word of mouth
- Social channels help in product diffusion and adoption.
- Biotique products are the best examples for product which sell significantly through word of mouth.
- The product is placed in the customer’s hands through presentations in five star hotel guest rooms – this is frequented by the opinion leaders and affluent customers.
- Best known websites in the target market segments: buyandselloldbooks.com, mouthshut.com
- Challenge was to identify the right opinion leaders and get them to try the product.
Edited by Neerja Gurnani