Indian markets transformation
Identify and examine the key social-cultural trends, including demographic and lifestyle developments that have taken place within your chosen country over the past decade. The country chosen for this discussion is India. A number of aspects which have resulted in the Indian market’s transformation over the last decade are analyzed below. Demographics: The Indian population presents a vastly different mix than what it used to be a decade back. Though the population has continued to grow at a high rate of about 12. 5% like in the previous decades and this stays a cause of concern but what has changed is the composition of this population.
Urban areas are leading the ‘population explosion’ with more and more people moving from the villages to the cities. This is both a cause and effect of the declining contribution of agriculture in the country’s economy. The family is becoming smaller – though the concept of ‘nuclear family’ is not new to India. Divorces are on the rise and so are single parent families. More people are getting educated due to the burgeoning number of education institutes even though the education quality of some of these institutes is questionable. Lifestyle: Indians are adopting a western way of living.
A large number of Indians are travelling overseas extensively and when back, are expecting to lead a similar lifestyle full of everyday comforts like Dishwashers, Vacuum Cleaners, LCD TV’s etc. The way Indians shop is also changing. The small shops specialising in products like clothes, electronics and even foodstuff are slowly being replaced by chains of supermarkets and departmental stores. Even these supermarkets are not restricted to the upper class – chains like Reliance, Vishal Megamart etc. serve the lower and medium classes also. Another change which can be seen in Indians is their acceptance of restaurant food including fast food.
More families can now be seen enjoying a meal in a restaurant than a decade before. This includes not only weekend but weekdays – something not very common previously. Indian weddings are perhaps the biggest indicator of the changing lifestyle. All aspects of the Indian wedding have been affected. The guest list is bigger, the venues are more exotic, the decoration is more detailed, the entertainment is more versatile, and the food served presents a bigger choice. Culture: As with lifestyle, Indians are adopting a westernised culture and that is affecting their thought process also.
Indians are becoming more self-centric than what they were a decade back. The focus is moving from family values to the possession of comforts. This is also reflected in the advertising industry. While a decade back the advertisers were trying to sell a product by appealing to the consumers’ emotions, now they try to appeal to the consumers’ ego by projecting their goods as items to be proud of and as steps towards self-fulfilment. Indians, off-late, have started becoming more aware of the physical environment around them. A lot of effort is being put in making the environment safe for living.
This includes steps like tightening the vehicle emission standards, moving industries out of urban areas etc. Economy: For long Indians have been known to be ‘big savers’ – but now the society is moving towards becoming ‘big spenders’. Some of the factors mentioned above like expenditure on food, lifestyle, weddings etc. are responsible for this change. This is a cause of concern because much of this spending comes from income earned overseas. Though India itself showed resilience towards the recent economic downturn, much of the western world is struggling.
This has resulted in reduced number of jobs and salary reductions, thus affecting the money flowing into India to support this spending phenomenon. In summary, the Indian market for both goods and services has gone through a sea-change which has challenged a number of companies to re-think their marketing model and product mix. Some examples of these would be discussed in the next question within this part. (2) Consider (a) a manufacturer and (b) a service organisation. From your answer to (1) above, choose one example of ‘change’ for each provider and examine:
(i) How this change has affected demand for the existing product / service. (ii) How the provider has reacted to this change in demand (for example, adapting its marketing mix for existing products / services, developing new product / service offerings, moving into new markets, etc. ) (35%) Manufacturer – Bajaj Auto Ltd. Bajaj Auto Ltd. is a leading Indian manufacturer of two wheeler and three wheeler automotive products. It was among the first few companies to introduce two wheeler scooters in India with Bajaj Chetak being the flagship product.
For a long time Bajaj Chetak was mentioned synonymously with the word ‘Scooter’ similar to Xerox becoming a synonym for photocopying. Over the years as the Indian society went through a change in lifestyle and affordability, the interest in scooters went down and it was replaced by an interest in high performance motorcycles like Yamaha, Rajdoot, Yezdi, Enfield Bullet etc. The market was also changed by entrants like Kinetic Engineering Ltd. who along with Honda introduced the first electronic ignition scooter, Kinetic Honda, which became a hit with the female population attracted also by its stylish design.
These factors resulted in the demand of Bajaj scooters to reduce significantly. Bajaj’s first move to react to the changing market was to tie up with Kawasaki to expand its product offering by introducing Kawasaki Bajaj motorcycles. This was followed by introduction of other motorcycles and electronic ignition start scooters. Throughout this process of new product introduction, Bajaj has maintained its core values of affordability and reliability. It has also come up with technical innovations (like the introduction of Digital Twin Spark Plug Ignition).
Another measure taken by Bajaj was to expand the market by reaching out to the rural market – identifying that the rural market would soon become a high growth segment – this did turn out to be correct. Considering the trend in the two wheeler market and its own product mix, Bajaj decided in 2009 to entirely stop the production of scooters like Bajaj Chetak. Currently Bajaj has a product mix which appeals to all demographics, be it female vs. male rural vs. urban, young vs. old, first time owner vs. repeat buyers etc. Service Organization – Apollo Hospitals
Apollo Hospitals has been a player in the healthcare industry for the last 27 years. What started as a 150 bed hospital in 1983 is today a healthcare enterprise which consists of 8500 beds across 49 hospitals and other healthcare related services. The first hospital was setup to provide quality healthcare to the general public at a time where private enterprise in the Indian healthcare industry was virtually unknown. The growth of Apollo Hospitals since then has been due in part to a good understanding of the healthcare market. The healthcare market in India has evolved in the last decade or so.
The standards of healthcare and the expectations from the healthcare providers have increased. There is a greater awareness in the government and the public about the responsibilities of a healthcare provider. The changing demographics as discussed above have played a part in this change. The change in the urban – rural population ratio has put a pressure on the healthcare industry to adopt efficient practice. Higher education has increased awareness about diseases and their treatment. People, while travelling overseas, have been exposed to the advances made in medical science.
Another significant factor contributing to the changing Indian healthcare market is the phenomenon of ‘Medical Tourism’, which is resulting in a large number of foreigners coming to India to get treated for various medical conditions while paying only a fraction of what they would pay in their home country. These factors have resulted in a number of private enterprises coming into the healthcare industry. Due to the nature of the healthcare business it is sometimes difficult for the people to differentiate between various providers. Additional measures need to be taken to get the market share.
Apollo Hospitals has shown a good understanding of the market. They have focussed on providing a one-stop shop for the people to make their life simpler. This has resulted in Apollo Hospitals getting into businesses like Diagnostic clinics, pharmacies, clinical research etc. Of late they’ve also entered the medical BPO market thus diversifying their product portfolio. Health insurance is another product they’ve added to their portfolio in response to the changing market conditions where the affordability can’t catch-up with healthcare requirements.
To meet the requirements of the Medical Tourism industry Apollo Hospitals have setup ‘five-star’ hospital facilities in metropolitan cities. These hospitals have also been working towards getting global industry certifications like Joint Commission International (JCI) and National Accreditation Board of Hospitals (NABH). Today Apollo Hospitals is seen as a reliable healthcare provider. It has adapted itself in the last decade to meet the requirements of new consumer categories like the upper Indian middle class and the overseas medical tourist.