INTRODUCTION TO MARKETING MANAGEMENT

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Introduction

Marketing occupies an important position in the organization of business unit. Any business is likely to be successful when a strong marketing viewpoint or philosophy permeates the thinking and guides the decision and actions of everyone in the business. A business exists only to serve people, and marketing is the function that primarily determines -

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Introduction

What the product or services shall be How it shall be presented, promoted and distributed How it shall be priced.

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What is Marketing?
Classical Definitions ( Product Oriented View) “ The performance of business activities that directs the flow of goods and services from producer to consumer or user”

“ Marketing consists of those efforts which affect transfers in the ownership of goods and services and provide for their physical distribution”

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What is Marketing?
Modern Definitions ( Customer Oriented View) “ Marketing is a social and managerial
process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others”

According to American Marketing association“ Marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas and services to create exchanges that satisfy individual and organizational goals”

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What is Marketing Management?

Marketing Management is the art and science of choosing target market and getting, keeping and growing customers through creating, delivering and communicating superior customer value” Marketing Management concept in action” is the marketing

A brief history of marketing
3 Areas

Production
Economies of scale. Simple products

1945 Birth of the mass consumer market 1950 Evolving distribution channels 1960 Increasing diversity of media & technologies

Sales
Development of sales forces to distinguish products in competitive markets. Sold what companies wanted to sell.

Marketing
Rapidly increasing competition… the fight for customers.

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A brief history of marketing
1960s

The 4 Ps
   

Product (goods, services, knowledge) Price Promotion Place

The dominant marketing template for the last 40 years But...notice something curious…. Where is the customer mentioned?

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A brief history of marketing
1960s to present

     

Massive rise in customer expectations Increasing competition Massive growth in advertising Growth in ‘direct’ marketing Much easier for customers to switch business Proliferation of channels, dictated increasingly by customers

…a growing need for 2-way dialogue between business & customers

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Development of marketing approaches
Transactional to Relationship Marketing: Transactional Relationship

one-off investment in products market segmentation short-term profit

relationship-building investment in customers customer analysis long-term profit

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Evolution Of Marketing

Productio n Concept

Product Concept

Selling Concept

Marketing Concept

Societal MKTG concept

Late 1800

Early 1900

Early 1930

Mid 1950

1990

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prefer products that are widely available P P R pensive R O O of production – oreiented businesses D D ate on achieving high production efficiency, U U C ts, and mass distribution. C T T ction era can be divided into four phases II ce phase O O N phase rder N duction for market phase C C uction for market phase O O
N N C C E E P P T T

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P P R R O O D D U U C C T T C C O O N N C C E E P P T T

Consumers favor products that offer the most quality, performance, or innovative features.  Managers in product oriented organizations focus their energy on making superior products and improving them over time.  To improve quality and innovation companies gave importance to product engineering.  Some times the product concept leads to marketing myopia.

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S S E E L L L L I I N N G G C C O O N N C C E E P P T T

 The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizational products.  Consumers will buy products only if the company aggressively promotes/sells these products.  The selling concept is practiced most aggressively with unsought goods that buyers normally do not think of buying such as insurance, encyclopedias etc.  forms practice the selling concept when they have over capacity.  It gives more importance to seller needs

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Starting point
Factory

Focus
Existing products

Means
Selling and promotion

Ends
Profits through sales volume

The selling concept

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M M A A R R K K E E T T I I N N G G C C O O N N C C E E P P T T

 Focuses on needs/ wants of target markets & delivering value better than competitors.  The Marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating delivering and communicating superior customer value to its chosen target markets.  The Marketing concept rests on four pillars  Target Market  Customer needs Integrated marketing

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Starting point
Market

Focus
Customer Needs

Means
Integrated Marketing

Ends
Profits through Customer satisfaction

The Marketing concept

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Selling V/S Marketing Concept
Starting point
Factory

Focus
Existing products

Means
Selling and promotion

Ends
Profits through sales volume

(a) The selling concept
Market Customer needs Integrated marketing Profits through customer satisfaction

(b) The marketing concept

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Selling V/S Marketing Concept

Focuses on the needs of seller Profit through sales volume Planning is short term oriented Marketer first makes the product and then figures out how to sell it.

Focuses on the needs of buyer Profit through customer satisfaction Planning is long term oriented Marketer first determines the needs and wants of the customers and then delivers the product to satisfy those needs and wants.

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Selling V/S Marketing Concept

Importance to aggressive selling

Importance integrated marketing

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C C O O S S T T O O M M E E R R C C O O N N C C E E P P T T

 Under Customer concept companies are shaping separate offers, services and messages to individual customers.  Companies achieve profitable growth through capturing a larger share of each customers expenditures by building high customers loyalty and focusing on customer lifetime value
Starting point Focus
Customer Needs & Value

Means
One to one Marketing

Ends
Profits through Customer share, Loyalty

Individual Customers

The Customer Concept

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S S O O C C I I E E T T A A L L M M K K T T G G C C O O N N C C E E P P T T

 The Societal Marketing concept holds that organization’s task is to determine the needs , wants and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in way that preserve the customers and society’s well being.  It calls upon marketers to build social and ethical considerations into their marketing practices.  There should be balance between company profits, customer satisfaction, and public interest.

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Societal Marketing Concept
Society
(Human Welfare)

Societal Marketing Concept Consumers
(Want Satisfaction)

Company
(Profits)

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Core Concepts of Marketing
Core Concepts
 

Need
 

  

Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

State of felt deprivation Example: Need food The form of needs as shaped by culture and the individual Wants which are backed by buying power

Wants

Demands

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Core concepts of Marketing
Core Concepts
 

Marketing offer

  

Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Combination of products, services, information or experiences that satisfy a need or want Offer may include services, activities, people, places, information or ideas

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Core concepts of Marketing
Core Concepts
 

Value

  

Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Customers form expectations regarding value Marketers must deliver value to consumers A satisfied customer will buy again and tell others about their good experience

Satisfaction

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Core Concepts of Marketing
Core Concepts
 

Exchange

  

Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

The act of obtaining a desired object from someone by offering something in return One exchange is not the goal, relationships with several exchanges are the goal Relationships are built through delivering value and satisfaction

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Core concepts of Marketing
Core Concepts
 

Market

  

Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets

Set of actual and potential buyers of a product Marketers seek buyers that are profitable

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Core Concepts of Marketing
Core Concepts
    

Target Market Marketing place, Marketing Space and Meta Market Segmentation Marketers Prospects Relationship Marketing and Networks

Distinctive category of market which includes market for company’s products and services

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Core concepts of Marketing
Core Concepts
    

Market place

Target Market Market Place, Market Space and Meta Market Segmentation Marketers Prospects Relationship Marketing and Networks

Market place is physical. As one goes shopping in a store Market space is digital. As one goes shopping on internet Meta market is a cluster of complementary product and services that are closely related in the minds of consumers but are spread across a a diverse set of industries.

Market Space

Meta Market

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Core concepts of Marketing
Core Concepts
    

Segmentation

Needs, wants, and demands Market place, Market space and Meta market Segmentation Marketers Prospects Relationship Marketing and Networks

Grouping of consumers according to such characteristics as income, age, degree of urbanization, race, or education

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Core Concepts of Marketing
Core Concepts
    

Marketer

Target Market Market Place, market Space and Meta Market Segmentation Marketers and Prospects Relationship marketing and Network

Marketer is someone seeking response. Prospect is someone giving response.

Prospect

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Core concepts of Marketing
Core Concepts
    

Relationship Marketing

Target Market Market Place, market Space and Meta Market Segmentation Marketers and Prospects Relationship Marketing and Network

Building mutually satisfying long-term relations with key parties- customers, supplies, distributors in order to earn and retain their business Marketing network consists of the company and its supporting stakeholders with whom it has built mutually profitable business relationship

Marketing Network

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Core Concepts of Marketing
Core Concepts
   

Marketing Channels Supply Chain Marketing Mix Competition

Sets of Inter dependent organizations involved in the process of making a product or service available for use or consumption

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Core concepts of Marketing
Core Concepts
   

Supply Chain

Marketing Channel Supply Chain Marketing Mix Competition

Longer channel stretching from raw materials to components to final products that are carried to final buyers

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Core concepts of Marketing
Core Concepts
   

Marketing Mix

Marketing Channels Supply Chain Marketing Mix Competition

MM is the set of marketing tools, the firm uses to pursue its marketing objectives in the target market. Product Promotion

Price

Place (Distribution)

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Core Concepts of Marketing
Core Concepts
    

Competition

Marketing Channels Supply Chain Marketing Mix Competition

Rivalry to attract customers discretionary income Generic Competition Brand Competition Form Competition Industry Competition

It includes
   

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Strategic Marketing Planning

The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan

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Strategic-Planning Implementation and Control Process
Planning
Corporate Planning Division Planning Business Planning Product Planning

Implementing

Controlling
Measuring Results

Organizing Implementing

Diagnosing results Taking Corrective Action

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Corporate and Division Strategic Planning
Defining the Corporate Mission

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Corporate and Division Strategic Planning
Defining the Corporate Mission
Establishing Strategic Business Unit

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Corporate and Division Strategic Planning
Defining the Corporate Mission
Establishing Strategic Business Unit Planning new businesses, downsizing older Business

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Defining the Corporate Mission

Mission statements define which competitive scopes the company will operate in
Industry scope  Products and applications scope  Competence scope  Market-segment scope  Geographical scope

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Establishing Strategic Business Units (SBUs)

Three characteristics of SBUs

 

Single business or collection of related businesses that can be planned for separately Has its own set of competitors Has a manager who is responsible for strategic planning and profit

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Establishing Strategic Business Units (SBUs)

Each SBU is depending on its parent company's decisions regarding the allocation of financial resources. There are two best known techniques of portfolio analysis namely Boston Consulting Group Matrix [Growth share matrix] General Electric Model

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Boston Consulting Group’s Growth-Share Matrix
High
Product-Market Growth (%)

Low High
Relative Market Share

Low

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Boston Consulting Group’s Growth-Share Matrix
High
Product-Market Growth (%)
STARS

Low High
Relative Market Share

Low

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Boston Consulting Group’s Growth-Share Matrix
High
Product-Market Growth (%)
STARS Question Mark

Low High
Relative Market Share

Low

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Boston Consulting Group’s Growth-Share Matrix
High
Product-Market Growth (%)
STARS Question Mark

CASH COWS

Low High
Relative Market Share

Low

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Boston Consulting Group’s Growth-Share Matrix
High
Product-Market Growth (%)
STARS Question Mark

CASH COWS

DOGS

Low High
Relative Market Share

Low

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Boston Consulting Group’s Growth-Share Matrix

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Boston Consulting Group portfolio analysis for Kodak,

Kodak digital camera

Kodak digital photo printer

Kodak film sales: US, Canada, & W. Europe

Kodak selfservice kiosk

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Planning New Businesses, Downsizing older Businesses
   

Intensive growth Integrative growth Diversification growth Downsizing older businesses

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Intensive Growth Strategies
PRODUCT

Present
MARKET

New

Present

New

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Intensive Growth Strategies
PRODUCT

Present
MARKET

New

Present

Market Penetration

New

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Intensive Growth Strategies
PRODUCT

Present
MARKET

New Product Development

Present

Market Penetration

New

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Intensive Growth Strategies
PRODUCT

Present
MARKET

New Product Development

Present

Market Penetration Market Development

New

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Intensive Growth Strategies
PRODUCT

Present
MARKET

New Product Development

Present

Market Penetration Market Development

New

Diversification

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Integrative Growth Strategy

Identifying opportunities to build or acquire businesses that are related to current business.

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Diversification Growth Strategy

Identifying opportunities to add attractive business that are unrelated to current businesses.

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Downsizing Older Business

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Business Unit Strategic Planning
Internal Environment analysis Business Mission External Environment Analysis Goal Formulation Strategy Formulation Programme Formulation Imlement-ation

Feedback And Control

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Marketing Planning Process
“ The marketing plan is a set of marketing guide lines prepared by the top management of a business firm. It spells out the goods or objectives that company wants to reach with in a certain period of time and the methods by which the company intends to reach these goals” “ Marketing planning process consists of analyzing marketing opportunities, researching and selecting target markets, designing strategies, planning marketing programmes, and organizing, implementing and controlling the marketing effort.”

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Marketing Planning Process
Analyzing Marketing Opportunities

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Marketing Planning Process
Analyzing Marketing Opportunities Developing Marketing Strategies

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Marketing Planning Process
Analyzing Marketing Opportunities Developing Marketing Strategies Planning Marketing Programmes

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Marketing Planning Process
Analyzing Marketing Opportunities Developing Marketing Strategies Planning Marketing Programmes Managing The Marketing Effort

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Contents Of The Marketing Plan
            

I. Table of contents II. Executive summary III. Introduction IV. Situational analysis-Internal and external V. Problems and opportunities VI. Marketing objectives and goals VII. Marketing strategies, tactics and programs VIII. Budgets IX. Implementation and control Evaluation Schedules of completion X. Contingencies of completion XI. Updating plans

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Marketing Organization
“ The Marketing Organization provides
the vehicle for making decisions on products, marketing channels, physical distribution, promotion and prices”

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Marketing Organization Structures

 

Function Oriented – Marketing Organization Product Oriented-Marketing Organization Customer Oriented – Marketing Organization Geographical oriented – Marketing Organization Combined base

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Function Oriented – Marketing Organization
Marketing Manager

Advertising Dept

Marketing Research Dept.

Sales Department

Sales Promotion Dept

Sales Supervisor

Sales Supervisor

Salesman

Salesman

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Product Oriented-Marketing Organization
Marketing Manager

Sales Manager Product A

Sales Manager Product B

Sales Manager Product C

Sales Manager Product D

Sales Supervisor

Sales Supervisor

Salesman

Salesman

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Customer Oriented – Marketing Organization
Marketing Manager

Sales Manager Direct Customer

Sales Manager Wholesale Customer

Sales Manager Industrial Customer

Sales Manager Overseas Customer

Sales Supervisor

Sales Supervisor

Salesman

Salesman

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Geographical Oriented – Marketing Organization
Marketing Manager

Regional Sales Manager (East)

Regional Sales Manager (West)

Regional Sales Manager (South)

Regional Sales Manager North)

Sales Supervisor

Sales Supervisor

Salesman

Salesman

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Combined Marketing Organization
Marketing Manager

Advertising Dept

Marketing Research Dept.

Sales Department

Sales Promotion Dept

Sales Manager Product A

Deputy Regional Sales Manger ( Industrial Sector) Sales Supervisor

Sales Manager Product B

Regional Sales Manger South

Regional Sales Manger South

Salesman

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Marketing Environment

ME refers to external and internal factors and forces that affect the company’s ability to develop and maintain successful relationships with its target customers”

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Factors Affecting Marketing Environment

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Importance of Marketing Management

 

 

Helps to develop and maintain successful transactions with the target customers. Helps to identify the opportunities and treats. Helps to identify the strengths and weaknesses of the organization. Helpful to be alert in the market Helps to develop strategies that are helpful to cope up with environmental changes.

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Major Drivers of the Modern Marketing
 

Digitization and Connectivity Disintermediation and Reintermediation Customization and Customerization Industry Convergence

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How Business Practices are Changing

Organize by product units to organize by customer segments Shift focus from profitable transactions to customer lifetime value Shift focus from financial scorecard to also focusing on the marketing scorecard Shift focus from shareholders to stakeholders

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How Business Practices are Changing
 

Everyone does the marketing Build brands through performance, not just advertising Customer retention rather than customer acquisition From none to in-depth customer satisfaction measurement From over-promise, under-deliver to under-promise, over-deliver

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Emerging Trends in Indian Market
 

The world of today is changing fast, India is no exception. Specially after the opening up of the economy, the pace of change that India and its people are experiencing in their socio-cultural aspects is really surprising. India, with its wide diversity, offers a fascinating scope to study the host of changes which have brought significant changes in Indian Market

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1. The Demographic Picture
Year 1951 1961 1971 1981 1991 2001 Population (In Million) 361 439 548 684 844 1000

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2. The Growing Size of the Urban Market
Year 1951 1961 1971 1981 1991 2001 Urbanization ( %) 17.3 18.3 19.9 23.7 25.7

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3. More Literate Buyers
Literacy Rate in India ( 1951-2001)

Year 1951 1961 1971 1981 1991 2001

Total (%) 17.33 28.31 34.45 45.56 52.11

Male (%) 27.16 40.40 45.95 56.37 63.86

Female (%) 8.86 15.34 21.97 27.75 39.42

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4. The Market opportunity by Conventional Measure of Income Distribution
Changing pattern of income distribution (% of Population

Income Group Lower Middle Higher

1985-86 65 25 10

1987-88 61 28 11

1990-91 56 31 13

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5. Marketing Opportunity of the New Segments
       

The Housewife Segment New Generation Segment The Single and Independent Working Women The working Couple The Teenagers The Kid The Baby Segment The Senior Citizen

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6. Growing Markets for popular and Premium Products

It is well Known that the middle income and high income category have grown at a phenomenal rate in the last decade. The market has witnessed all round growth especially the demand for the popular and prestigious products. The rising affluence among the upper middle and high income people in India has created a vast opportunity for premium brands.

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7. Retail Boom

Beginning with 5,88,000 retail outlets in the urban areas in early 1980, the figure has grown to 8,90,000 in 1996.

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8. Packaging Revolution 9. Explosion of the Media 10. Direct Mail and Home shopping 11. Tendency to buy on Credit 12. Growing Interest on Rural Market 13. The Emergence of the Service Sector

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