High Volatility in Market – Indian market has become highly volatile. Though over last five years there has been an exponential growth in demand for all products and services, the latter part of 2008 suddenly saw demand for products and services declining. Volatility in prices was also one of the visible phenomena of 2008. Market forecasting therefore has increasingly become a challenge for the marketer. The definitions of long and short term seem to have also undergone a change. In such a situation, marketing planning becomes more complex and difficult. Managing inventories in the distribution channels in short term is yet another significant of volatile markets.
Indian market is a highly diverse one. This diversity is created by the demography of Indian population. Young and old, tech and non tech savvy, regional disparities as also religion today makes the market interesting and highly challenging. But there is also a convergence among all segments of the market. This convergence is on account of consumption values. For example the value of convenience, clarity of voice and no call drop are values that all customers seek in a cell phone connection. But price and features of the handset and services change according to segment. The implication of this diversity is that the marketer has to now necessarily enhance the depth of his product mix and distribution. Any large retail store will show the depth of product mix carried by any company be it consumer durables, non-durables or services. Not only this, the marketer has to now make his offer available with multiple price options thereby giving the customer choice. All this certainly creates more complexity in planning, strategy, and execution.
There is now a growing segment of affluent customers. Catering to this segment requires creating an aspirational, emotional and experiential platform. Not only this it requires the marketer to continuously innovate on product design and upgrade the product. Consider an example, from the colour television, market. From the conventional television offered at a low end price of Rupees 6000 the leading manufacturers like Sony, Samsung, LG, Videocon, and Onida offer LCD (liquid crystal displays) televisions priced at the high of Rupees 1,50,000. The same is true for refrigerators, cell phones, hotels and holiday resorts and even health care. New symbols of affluence today are common in any city and its shopping areas. Exhibitionism of wealth is rampant through indulgence in platinum and diamond jewelry, diamond studded watches, Mont Blanc pens and other accessories etc. Each of these are marketed through aspirational and experiential marketing plan.
Poor markets also need marketing – the poor is a very important market segment, which today no marketer can ignore. The poor customer does not exist in rural areas alone. There are urban poor too. Hence, while evolving a marketing plan to penetrate this market one should not ignore urban poverty. The poor, according to the most commonly accepted definition, are all those whose spend up to Rupees 50 on the basis of PPP – i.e. purchasing power parity – per person, per day on consumption expenditure. Accordingly, 35 per cent of Indian population fell in this group..
The challenges therefore lies in not only adapting the marketing programme to this segment but also in innovation for this market. Several companies like Amul, ITC’s e-chaupal and low price budget airlines offering air travel at low base prices less than Rupees 100 are just some commonly known examples. So are cell phones and prepaid sim cards. Indian railways recently introduced air- conditioned trains for this market where the fare was almost half of the normal fare. Branded as Garib Rath (vehicle for the poor) it today runs on all major routes having almost the same running time as that of the regular train. Likewise Tatas and all other auto majors including Nissan are all set to launch a car at a price band of Rupees 1 lakh (Rupees One hundred thousand) to Rs 1.20 lakhs (Rupees One hundred and twenty thousand).
Another challenge in the market is to create means for consumption. Funding for this consumption is being arranged through self-help groups and micro finance in this segment.
Engaging Customer 24X7 – As was mentioned earlier technology to day makes it possible to engage the customer 24X7. This is important challenge keeping in view the fact that the average attention span of a customer has decreased. This is especially so because of competition. The noise in the media and distribution outlets is loud and often it is difficult to decipher what the marketer is seeking to communicate. Just visit the nearest mall and observe what and how loud is the sound. Not to forget the plethora of communication through television, radio channels, outdoor advertising and print media. Engaging customer attention through all possible channels is required today. Creativity respecting customer’s right to privacy and creating an emotional experience are fundamental to customer acquisition and retention.