Marketing and Distribution Channels

With market liberalization, increasing consumerism and the entry of more foreign players, Indian markets are exhibiting revolutionary changes. The Indian consumer is rapidly evolving and the market is exposing the consumer to a host of new choices by international brands selling their products at competitive prices. The 'recessionary mindset' is fast becoming a thing of the past and marketers are using advertising strategies to reinvigorate brands by strengthening their visibility in mainstream media resulting in accelerated growth in media spends.

After a turbulent 2009, the Indian advertising industry has gained momentum and bounced back with 22 per cent growth , largely owing to the gains made by conventional advertising media like print and television. In 2010, the Indian advertising expenditure stood at US$ 6.47 billion – the growth pace is expected to sustain in the next three years. While television garnered US$ 2.60 billion, the print medium—still the highest earner—made US$ 2.90 billion. On the other hand, a small but rapidly growing digital medium raked in US$ 256.3 million.

Retail

With an estimated market size of USD 410 billion in 2011 , India’s retail sector is at the peak of its appeal for international and Indian players. Being the second largest employer after agriculture, this sector is expected to grow to USD 674 billion in 2014 . The organised retail in India is expected to increase from 5 percent currently to 14 - 18 percent of the total retail market by 2015 . Foreign direct investment (FDI) inflows between April 2000 and October 2010, in single-brand retail trading, stood at US$ 197.04 million, according to the Department of Industrial Policy and Promotion (DIPP). Strong underlying economic growth, population expansion, increasing wealth of individuals and rapid construction of organised retail infrastructure are key factors behind the forecast growth. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities. Currently, foreign direct investment is not allowed in retail trading, and the government is considering some relaxation in these regulations.

Trading of Imported Goods in Pre Packed Retail formats

Foreign products imported into India in retail packing require an Indian importer(s) to be registered with the respective authorities (Ministry of Food Processing, Ministry of Civil Supplies and Consumer Affairs, etc). The most essential role of the importer is to comply with the import regulations dealing with packaged consumer goods, which involve labelling requirements and the declaration of the maximum retail price on each pack. Invariably, this is done physically after the consignments arrive into a customs-bonded area before clearance. Packs should also contain the name of the importer and any other mandatory information under Indian laws. For some products, it is mandatory for the foreign manufacturer to have specific approvals under Indian national standards.

Direct Marketing

The direct selling industry in India pegged at US$ 907.84 million is all set to exceed the US$ 1.54 billion mark by 2012-13. Direct Marketing including multi-level marketing has emerged as a sizeable alternative marketing channel in India, led by companies like Amway, Oriflame, Tupperware and Avon. This industry took off based on its potential to enable self-employment to millions of young Indians, bringing more respectability to the door-salesman through discipline, code of conduct and training. The hottest categories in the portfolio of most direct selling companies are: dietary supplements, home care and personal care products.

Digital Advertising

Increasingly, with the rapid proliferation of the Internet, marketing campaigns and advertising are shifting to digital domains. According to a survey conducted by the Internet and Mobile Association of India (IAMAI), the Indian online advertising market comprising text and display advertisements will grow to US$ 218.46 million in the financial year 2010-2011 from US$ 172.7 million in the financial year 2009-2010.

With over 49 million Internet users, India’s online advertising market is estimated to have risen to US$ 242 million in 2010 registering a growth rate of almost 50 per cent. The mobile advertising market in India currently stands at around $30 million and is growing by over 100% per annum.