Marketing in India

Marketing in India:
The relative emphasis of business functions ebbs and flows with changes in the business cycle and economic development. In less developed economies like India, fiscal policy and employment take center stage, and marketing receives relatively less attention. Nevertheless, issues related to the distribution of goods and services, a sub-area of marketing, are very important in such economies.
As economies mature, marketing becomes indispensable. Yet economic conditions shape the relative importance of marketing and all business functions.

In this context, we may refer to seven features of marketing in India. These are: 

1. Large Size and Vast Potentiality: The size of the market in India is very large. It has a vast potentiality on the simple ground that it is the second most populous country in the world. India’s population in 1997-98 was 952 million. By 2001, it will be 1 billion interestingly enough; the biggest consumption boom is taking place in rural areas.Furthermore, even low and middle-income households are significant purchasers of manufactured goods. India now has a consuming class of 540 million two-thirds of all households. That should make the marketing men of the world feels excited. Nowadays villagers are willing to pay a premium for packaged and branded goods, because they promise better quality. And the rural rich increasingly buy cars and VCRs. Some 10% of rural households (having on an average five members) are potential buyers of reasonably sophisticated manufactured goods. So the poten¬tial market size is very large. And as India’s economic reforms bear fruit the market potential should be converted into reality in the 21st century.
2. Predominance of the Urban Sector: No doubt 70% of Indian people live in rural areas. But the market for most consumer goods and virtually all industrial products is predominantly urban. However, India’s rural market has grown rapidly in recent years due to increase in income of the farmers, largely due to the Green Revolution. Moreover, agricultural prices have also risen due to general inflationary trends in the economy. But that has created additional purchasing power in rural areas and this, in its turn, has created demand for manufactured goods.
3. Near-Monopoly Situation: On the supply Side of the market, for most mass consumption goods there prevail in India near-monopolistic conditions. This is largely due to fact that industries have been unduly-protected for a long period of time (through high tariffs). This has made them less and less competitive in the domestic market. Monopoly has arisen in Indian industries due to the limited size of the domestic market for industrial goods and the general scarcity of industrial enterprise.
4. Sellers’ Market: For most goods and services India’s vast market is largely, if not entirely, a sellers’ market. This is due to very large demand and restricted supplies. Virtually what is produced is sold out easily and quickly. Almost every commodity has a ready market. This is more so in case of mass consumption goods. In other words, almost any product, so long as there is need for it, is sold with little or virtually no effort. There is not much promotional activity in case of most goods.
5. Large Number of Intermediaries:There are numerous channels of distribution in private trade sole selling agents, distributors, wholesalers, stockiest, semi-wholesalers, retailers and so on. Due to such a large chain of intermediaries the consumer has to pay high prices-unnecessarily.
6. Poor Quality of Products: There is hardly any guarantee of the quality of products sold by different retail outlets. We often read newspaper reports on adulterated food articles and even life-saving drugs (medicines).
7. Dual System: There is some sort of dichotomy in India as is exemplified by rural and urban marketing. But this is not the whole truth. There is a dual system of marketing. The foreign firms operating in India, called the multinational corporations, have pro¬gressive outlook and they follow consumer-oriented policies. They engage in mar¬keting research, product planning and development. Although they operate in a narrow urban market they charge reasonable prices for their products to be able to remain competitive in the long run. They also try their best to maintain quality of their products. Their basic objective is to provide maximum consumer satisfaction with reasonable amount of profit.