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Faculty Member JIM, Noida
Sizing up Opportunities- An example
BATA India Ltd.- The Indian arm of the Toronto-based BATA Shoe Organisation
* Has five footwear manufacturing units across India with a combined capacity of 40 million pairs annually since 1931. * Is foraying into real estate development. (Source- Business Line, Dec-06, 2004) * Idea: Usage of excess land (264 acres) at its factory in Batanagar near Kolkata * Options under consideration: Setting up of an integrated township with housing and commercial facilities and an industrial park * Entered into 50:50 JV with the Calcutta Metropolitan Group and the KMDA. 1st phase to be ready by 2011-12. * This is in addition to its process of restructuring of its retail business and refurbishing of its 1600 stores around the country
Sizing up the Indian Youth
Source: Ernst & Young Pvt Ltd.
Dabblers (13-21 age group)
Aware and tech- and info-savvy. Biggest influencers in family for goods & services (especially technical goods like LCD, TV, cars, etc.); Has biggest influence on retail as they like to hang around retail shops Around 80% of this group is either single or recently married as a result of Indian cultural forces. Have a huge appetite for new products and good experiences. Most distinct group; has strong cultural bonds
Well-to-do (India)- 25 m Well-to-do (Metros)- 7 m Monthly dis. Income (I)- Rs 3800 Monthly dis. Income (M)-Rs 4500 Top Exp. Pdt. CategoryWell-to-do (India)- 18 m lifestyle Well-to-do (Metros)- 6 m 1% Self-owned residences- < Monthly dis. Income (I)- Rs 5200 Monthly dis. Income (M)-Rs 6000 Top Exp. Pdt. CategoryWell-to-do (India)- 15 m lifestyle Well-to-do (Metros)-57 m Self –owned residences- 19% Monthly dis. Income (I)- Rs 5800 Monthly dis. Income (M)-Rs 7500 Top exp Pdt. Cat.- Household Self-owned residences- 35%
Aspirers (22-28 age group)
Thrivers (29-35 age group)
Types of Markets
Consumer markets, Business markets, Non-profit and Government markets To understand a consumer market, we need to examine the following 3 aspects •The consumer’s ability to buy • Consumer needs
- China spends over 50% of income on food, France & US less than 20% - In developing countries, consumers may deprive themselves of food in order to buy refrigerators to establish their social status - Japanese purchase about 40% of world’s high-quality leather goods & account for half of all sales of cos. Like Gucci & Louis Vuitton
• Consumer behaviour
- Blue is either the first or second favourable colour in many countries - Black & red signify happiness to Chinese & commonly chosen for wedding cards - It is difficult to sell insurance in Muslim countries, it is akin to gambling - Mothers in Brazil don’t like processed baby food, because they think they can best prepare it
Sizing up Marketing Opportunities: An example of Electric Goods Supplier
Less Develope d Early Developin g
Primarily agrarian &/or extractive economies, high birth rates, limited infrastructure, low capita income. Implies low usage of electricity. Initial dev. of infrastructure, infant industries especially mining & cottage mfg. Target economic sectors may enjoy high growth rates. Modest per capita income. Modest consumption of electricity Accelerated expansion of infrastructure & wide industrial diversification. Per capita income & electricity consumption is growing rapidly. Expanding middle class Well developed infrastructures, High per capita income & electricity consumption and large scale industrial diversification. Low rates of population & economic growth
Electrification will be limited to main population centers. Basic electrical equipment is imported Progressively more sophisticated electrical equipment will be imported often for forward integration of extractive industries. Greater ownership of auto and electrical appliances. Large quantities of high-tech equipment imported. Shift from manufacturing to service industriestransportation, communication & info. sys.
A country making an effort to change and improve its economy with the goal of raising its performance to that of the world’s more advanced nations
* China, India, Brazil, Argentina & Indonesia are the Big Emerging Markets * Characteristics: Favourable consumer demographics, rising household incomes, increasing availability of credit, increasing productivity
* The number of people with eq. of $10000 in annual income will double (to 2 billion) by 2015 and 900 m will be from the emerging markets. GE is looking at 60% of revenue growth from these markets.
There could be risks also: political risk – government’s interference in entry
* Russian government’s blockage of Siemens on antitrust grounds. * In Brazil it took a Dutch telecommunications co six months and 8 govt. agency approvals before obtaining a temporary business license.
The markets differ from each other in substantial ways and appropriate strategies have to be developed for each.
* Dell’s strategy to go via retailing operations in China
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