| |
|
| |
|
|
|
| Marketing and Distribution Channels |
| India has a well-established distribution network in most parts of the country, especially for non-perishable products. The network consists of C & F agents, stockist/ warehouses, regional distributors, wholesalers, and retail sellers. It is common to find many companies in unrelated/non conflicting product lines sharing the network in a territory. The retail network consists of more than 3.5 million outlets all over India. |
| Registered Importer |
| 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. |
| Organized Retail |
| Organised retail accounts for less than Rs 10 billion (Euro 170 million) at present, with less than 0.5 million square metres retailing space all over India. However, more than 7 million square metres are under construction in the top metro cities. Business regulations do not allow foreign investment in general retail trade. However, recently, foreign investment has been allowed up to 100% in cash and carry wholesale activities and up to 51% in single-brand retail outlets, as a result of which, major international brands can set up exclusive outlets for their brands, with a 51% ownership in the retail operations. |
| Direct Marketing |
| Direct Marketing including multi-level marketing has emerged as a sizeable alternative marketing channel in India, led by companies like Amway, Oriflame, 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. Direct marketing is estimated to be a Rs 12 billion (Euro 205 million) industry, in less than six years of its foray in India. However, there have been some controversies on the business conduct of direct marketing companies, especially with regard to the pricing, quality of products, and the business acquisition model itself. With the absence of any specific regulations, several fly-by-night operators are suspected to have entered this sector in recent times. |
| Tele Marketing |
| Tele marketing through popular television channels is the latest entrant to the marketing and distribution scene in India. At least three national channels have established their tele-shopping networks in major Indian cities. |
| E-commerce |
| The web is becoming an interesting medium for sale of products to Internet users. India has more than 80 million Internet connections, and over 30 million credit card users. This provides a large audience for e-commerce. Major credit card companies have launched online transaction cards, which limit the risk while providing consumers the opportunity to trade on the web. However, the legal and regulatory framework for e-commerce requires further strengthening. |
| Advertising Promotions |
| All leading international advertising agencies and leading market research companies have joint ventures or subsidiaries in India. Media spends range from 5 to 15% in consumer products, personal and lifestyle products having the highest spends. |
| Media costs: |
| Advertising rates, newspapers |
: |
Rs 2-6,000 (Euro 34-102) per column cm |
| National TV prime time rates |
: |
Rs 100,000 (Euro 1711) per 10 second spot |
| Satellite TV News prime time rates |
: |
Rs. 25-75,000 (Euro 428 -1283) per 10 second spot |
| Satellite TV Soap prime time rates |
: |
Rs. 50,000-125,000 (855-2138) per 10 second spot |
|
| There are some interesting aspects of the Indian market: |
 |
In many products, the rural market is bigger than the urban market in volumes. |
| |
India is a very price-sensitive market, and market leadership strategies tend to be price-based, leveraging market shares and spreading overheads over a larger customer base. |
|
Peer consciousness is prominent in the Indian middle class, especially in the southern markets. |
|
Incumbency factors are strong, and consumers do not switch over very easily. Therefore, new products and concepts will go through an initial phase of scepticism, referrals and approval seeking, before they become popular with the target consumer classes. |
|
Foreign brands require to add an Indian touch to gain wide acceptance |
|
Consumer Relationship is becoming a differentiator in providing brand satisfaction, and manifests through loyalty programmes, after-sale support, complaints handling and other tools. |
|
| |
|
|
| |
|
|
|
|
|
|
|
|
ICREON