Management Consulting/Marketing management
Hello sir help me with the questions below
1.Many marketers have tried and failed with "green marketing" programs. Identify and describe the main problems with such campaigns. Recommend suitable remedies to overcome the problems
2.describe"The evolution of retail in india" in your words, highlighting the latest trends in Indian retail. critically examine the future of India retailing if global players are allowed to enter India.
1. Describe “The evolution of retail in India' in your words, highlighting the latest
trends in Indian retail. Critically examine the future of Indian retailing if global
players are allowed to enter India.
Retailing in India came with evolutionary patterns from Kirana store to Super market. This sector was un-organized in the initial stage, and after that it carried forward by the textiles industries through the dealer model. Now it is growing as supermarket and hypermarket. The main drivers of the retail evolution in India are buying behavior of the customer, increase in disposable income of middle class, infrastructure development and changing customer choice. The target segments of retailers are the younger middle class earners which belong to more than 20% of total population.
The growth in retail sector also comes through innovative ideas. As retailers are providing the innovative buying options at different store like as cash & Carry, lowest price day (Sabse Sasta din) which help to increase the customer base. Initially organize retail was involve in the apparels and footwear. Now retail has included the food chains, book & CD store (landmark) and electronics (CROMA store a Tata retail chain). These all changes occurred at a passage of time so; it is an evolution rather than revolution..
Evolution of Retail in India:
The journey of retail started long back through the Kirana store in India. This is first effort by local shopkeeper. The shopping centre concept comes into the existence in year 1869, with Mumbai Crawford market and Kolkata’s New Market in year1874. The underground shopping complex Palika Bazaar in New Delhi was established in the late 1970s and mini malls on the Banglore’s Brigade Road come into existence in 1980s.
Government of India entered into the rural India by franchisees called Khadi Bhandar. These stores serve as outlets for products made by village industry i.e. Khadi, matchsticks, incense sticks, decorative items made from wood and earth, ahinsak (non-violent) honey, ahinsak leather items etc.
The industries came in the retailing in 1980s through dealer network. In 1980s, the big group of textile industry i.e. Raymond, S.Kumar, Bombay dyeing and Grasim came with this concept of retailing. In the manufacturing sector, the pioneers were DCM group & Bata. Titan came with an organized retail concept and establishes number of showroom for premium watches.
All the above effort for retailing came by the manufacturer. But the pure retailer approach came in the existence in 1999s with the establishment of “Ansal's Plaza” in Delhi and Crossroads in Mumbai. After the 2003, many other organizations either planning to come into the retail market through the retail store or initiated the establishment work. Currently some popular groups which are operating the organized retail in different formats are following.
Table-1: India’s leading retailers and their format
RPG Retail Hyper market(Spencer's),Specialty Store(Health & Glow)
Piramal's Discount store(Trumart)
Pantaloon Retail Super Market(Food Bazaar), Hyper market(Big bazaar),Mall(Central)
K Raheja Group Supermarket(TBA), Hyber market(TBA)
Tata/Trent Hyper market(star Bazaar India)
Landmark Group Hyper market(TBA)
Reliance Group Super market
Others Discount store(Subhiksha, Margin free, Apna Bazaar),Super market(Nilgiri's), Specialty Electronics(Vivek's, Vijay sales)
From the above long journey shows that organized retailing in India came through a long path and many changes. It means it is an evolution rather than sudden, revolutionary change.
Drivers of Evolution:
Accelerating Household Income in India:
After the 1991, the income of the educated middle class houses is increasing at the rate of 3.6%. It is expected that this rate will be 5.3% in future. The rate of growth in the urban middle class is 4.6% as compare to the growth rate in the rural middle class households. It is also expected that average real household disposable income (income minus taxes, adjusted for inflation) will reach $6,977. Following graph is showing the estimated growth in disposable income of Indian middle class.
Average household disposable Income
(thousands, Indian rupees)
Change in Population Structure and Choice:
The Indian population structure is changing now. It consists more than 60% of people who are below the 30 years. The people (20-30 year age group) who affect the buying pattern of the family are more than 20% of whole population. After the 1991, the income of younger middle class is increase at higher rate because of open of Indian economy. The choice of this new young middle class earning people is also changing and they now shifted from local brand to global brand, Dhaba to Macdonald, bread to burger and most important is from money saving to money enjoying. This younger middle class is the main target segment of the retail industry.
Table-2: Population pattern of India
After 2003, India is recognized for all round development in the important infrastructure sectors. The government is investing hugely on the road, port, aviation and basic need. All these factors attract the foreign investor to invest in retail sector. Now, the reach of information has easier than previous years because of the development in infrastructure i.e. Telecommunication, IT, Internet and satellite TV. Now customer is more aware of the product and their features because of the Internet accessibility. The
reach of satellite TV channels is helping in creating awareness about global products for local markets. So, rapid development in the infrastructure sector is one of the important factors to accelerate the retail in India.
Future growth in Retail:
The retail business in India is still highly fragmented. Nevertheless, with global biggies like Wal-Mart, Carrefour, Marks & Spencer, Gap etc. raiding the Indian retail space, coupled with domestic biggies like Ambanis and Mittals giving tough competition.
As till 2006, the India’s total retail market was US$ 202.6 billion which was expected to grow at a compounded 30 per cent over the next five years. But in year 2008, due to recession in Indian economic growth its pace slow down. The organized retail segment is growing at the rate of 25-30 per cent per annum. The revenues from the this sector are expected to triple from the current US$ 7.7 billion to US$ 24 billion by 2010.The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade.
Table-3: Growth in Indian retail
Source: Economist intelligence unit and A.T.Kearney report
Some new mega projects of the big retailer are in pipeline stage i.e. Wal-Mart, Tesco; while some foreign retailer has already establish their retail store in India and now are in expansion phase. Some major upcoming retail houses are following.
Wal-Mart’s is about to enter India in a tie up with Bharti group and plans to open "hundreds of stores" all around in wholesale sector. The financial details haven’t been released yet as India still don’t allow FDI in retail sector.
Mukesh Ambani has established a separate company, Reliance Retail Limited, which is 100 percent owned and would invest Rs.25, 000 crore in the retail business over the years. Stores are be set up in phases, and around 1,600 stores will be in place.
The New York-based fashion retailer Saks Fifth Avenue has tied up with realty major DLF Properties to set up shop in a mall in New Delhi.
Hong Kong-registered Tommy Hilfiger has entered into a tie-up with Arvind Brands, among India's largest integrated mills and a leading menswear manufacturer. Tommy Hilfiger has recently set up shop in the country.
Madura Garments, a division of the Aditya Birla Nuvo Group, has distribution licensing arrangement with Hong Kong Based Esprit. It currently operates 12 stores in India and has put plans in place to set up over 100 stores in the coming three years.
Tesco, the UK’s largest retailer is entering India with a wholesale cash-and-carry business. At the same time, Tesco is also partnering with giant Indian conglomerate Tata Group for retail business in India. Its new wholesale business will supply merchandise to Tata's retail arm, Trent, for its Star Bazaar hypermarkets.
ITC's is planning to expansion of its Wills and John Player's retail stores to 300 in the next couple of years.
The retailing is growing at a tremendous pace in India but many environmental factors are creating barriers to it. Therefore, the industry is also fearing and trying to overcome these problems. The retail sector growth can be faster than the current growth rate if retail organization crosses following hurdles:
The organized retail industry in India is faced with stiff competition from the unorganized sector. The local shopkeepers are making cartel for wholesale buying which help them to reduce the cost of inventory. Small traders also oppose to Foreign Direct Investment in retail industry. So, government is prohibiting foreign investment in real estate business. Another factor which is hampering the retail sector most is; high price of quality real estate and infrastructure. It is high because of very high stamp duty on transfer of property. Shortage of retail space in central and downtown locations also hinders the growth of retail industry. Land-use conversion is time consuming and becoming complex. For settling property disputes, it consumes lot of time and rigid building laws makes procurement of retail space difficult. The entry barriers are also high as non residents are not allowed to own property except they are of Indian origin and customs duties are levied on import of goods in India.
The Indian retail sector came with evolutionary patterns from Kirana store to Super market. This sector was un-organized in the initial stage, and then it moved through the franchise model. As with the change in the regulation it transformed in pure retail market. so, we can say that retail come from evolution rather than a revolution.
What is green marketing?
Green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect and contradict each other; an example of this will be the existence of varying social, environmental and retail definitions attached to this term.] Other similar terms used are Environmental Marketing and Ecological Marketing.
Green, environmental and eco-marketing are part of the new marketing approaches which do not just refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those approaches and provide a substantially different perspective. In more detail green, environmental and eco-marketing belong to the group of approaches which seek to address the lack of fit between marketing as it is currently practiced and the ecological and social realities of the wider marketing environment.\
The Green Marketing Mix
A model of a green marketing mix should, of course, contain all 4P’s:
• Product: A producer should offer ecological products which not only must not contaminate the environment but should protect it and even liquidate existing environmental damages.
• Price: Prices for such products may be a little higher than conventional alternatives. But target groups like for example LOHAS are willing to pay extra for green products.
• Place: A distribution logistics is of crucial importance; main focus is on ecological packaging. Marketing local and seasonal products e.g. vegetables from regional farms is more easy to be marketed “green” than products imported.
• Promotion: A communication with the market should put stress on environmental aspects, for example that the company possesses a CP certificate or is ISO 14000 certified. This may be publicized to improve a firm’s image. Furthermore, the fact that a company spends expenditures on environmental protection should be advertised. Third, sponsoring the natural environment is also very important. And last but not least, ecological products will probably require special sales promotions.
Additional Social Marketing "P's" that are used in this process are as followed:
• Publics-- Effective Social Marketing knows its audience, and can appeal to multiple groups of people. "Public" is the external and internal groups involved in the program. External publics include the target audience, secondary audiences, policymakers, and gatekeepers, while the internal publics are those who are involved in some way with either approval or implementation of the program.
• Partnership-- Most social change issues, including "green" initiatives, are too complex for one person or group to handle. Associating with other groups and initiatives to team up strengthens the chance of efficacy.
• Policy--Social marketing programs can do well in motivating individual behavior change, but that is difficult to sustain unless the environment they're in supports that change for the long run. Often, policy change is needed, and media advocacy programs can be an effective complement to a social marketing program.
• Purse Strings-- How much will this strategic effort cost? Who is funding the effort?
EXAMPLES OF GREEN MARKETING
± INDIAN CONTEXT
1. TATA GROUP OF COMPANIES:
Tata motors ltd. is setting up an eco-friendly showroom using natural material for itsflooring and energy efficient lights.
The taj chain, is in the process of creating eco-rooms which have energy efficient mini bars, organic bed linen and napkins made up of recycled papers. The rooms will haveCFL¶s or Led¶s.
Launched a low cost water purifier made up of natural ingredients.
Developing indica EV, an electric car that would run on polymer lithium ion batteries.2. Recently launched Samsung solar mobile guru.3. Battery operated L.G TV.4. Introduction of C.N.G in
Delhi.5. Badarpur Thermal Power station of NTPC in
Delhi is devising ways to utilize coal-ash thathas been a major source of air and water pollution.6. Barauni refinery of IOC is taken steps for restricting air and water pollutants.
Philips Light's "Marathon"
Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was Earth Light, at $15 each versus 75 cents for incandescent bulbs. The product had difficulty climbing out of its deep green niche. The company re-launched the product as "Marathon, "underscoring its new "super long life" positioning and promise of saving $26 in energy costs over its five-year lifetime. Finally, with the U.S. EPA's Energy Star label to add credibility as well as new sensitivity to rising utility costs and electricity shortages, sales climbed 12 percent in an otherwise flat market.
Car sharing services
Car-sharing services address the longer-term solutions to consumer needs for better fuel saving sand fewer traffic tie-ups and parking nightmares, to complement the environmental benefit of more open space and reduction of greenhouse gases. They may be thought of as a "time-sharing" system for cars. Consumers who drive less than 7,500 miles a year and do not need a car for work can save thousands of dollars annually by joining one of the many services springing up, including Zip Car (East Coast), I-GO Car (Chicago), Flex Car (Washington State), and Hour Car (Twin Cities).
The consumer electronics sector provides room for using green marketing to attract new customers. One example of this is HP¶s promise to cut its global energy use 20 percent by the year 2010. To accomplish this reduction below 2005 levels, The Hewlett-Packard Company announced plans to deliver energy-efficient products and services and institute energy-efficient operating practices in its facilities world wide.
(b) What values underline green marketing?
VALUES OF GREEN MARKETING
Eliminate the concept of waste.
Reinvent the concept of product.
Make prices reflect actual and environmental costs.
Make environmentalism profitable.
Bringing out product modifications.
Changing in production processes.
It ensures sustained long term growth along with profitability.
It saves money in the long run, though initially the cost is more.
It helps the companies market their products and services keeping theenvironment aspects in mind.
It helps in accessing the new markets and enjoying the competitiveadvantage.
Most of the employees also feel proud and responsible to be workingfor an environmentally responsible company.