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India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
India Market Study
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India Market Study

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  • 1. INDIA: MARKET STUDYInternational MarketingAnnie Smith-BovaKatie Meyer
  • 2. HISTORY3300 BC 17th Century§ Indus Valley Civilization § Mughal Empire§ One of the worlds oldest § Taj Mahal1500 BC § East India Company§ Vedic Period - the foundation of 19th Century Hinduism § British Raj - Great Britain is the500 BC dominant political power§ Development of 16 republics 20th Century§ Persian & Greek conquests § Gandhi’s non-violent resistance led to independence in 194716th Century § 1991 - Economic liberalization§ European explorers§ Trading Posts
  • 3. LANGUAGE & RELIGIONLanguage Religion§ According to the constitution, § A way of life India does not have a national § Hindu: 80.5% language §  Hindu is the most important cultural§ Official: Standard Hindi – 43% influence on business in India§ Secondary: English §  Dharma: Compassion or the moral §  English is the language of obligation to contribute to the international commerce greater good of society; linked closely to Karma §  Higher education is conducted entirely in English §  Hierarchical structure still remains even though the traditional casteLiteracy system has been eliminated§ Males: 82%, Females: 65% § Muslim: 13.5%
  • 4. CUSTOMS & TRADITIONSCustoms Clothing§  Highly value extended family §  Traditional§  Male lineage based society §  Stitched vs. Unstitched§  Tradition of elaborate weddings §  Westernized clothing is worn appropriate for§  Yellow, Green, & Red – lucky colors business (weather dependent)Polite Behavior Superstitions §  Taking photos reduces ones lifetime§  Cultural sensitivity to “no” §  Nothing should be started on a Tuesday §  Whistling – impolite §  Wednesday is the best day for important §  Winking – inappropriate ventures (as “good as gold”)§  Even-tempered §  It is a bad sign to place your hands behind yourFood head when relaxing (can signal the death of parents)§  Indicates status and aspirations §  Never touch someone else’s head§  Infrequent use of utensils §  It is not good to give money after sunset §  Guests, men served first (by women) §  Use right hand to eat Animals§  Fasting is common §  Owls & Black Cats are bad luck §  Horses have control over evil spirits
  • 5. CORE VALUES, NORMS & ATTITUDESEvolving Consumer Profile Branded Products•  Materialistic §  Brand preference is category•  Consumerist dependent•  Price-sensitive §  Shopping mall concept a growth trend•  Relationship Based Society §  Designer brand labels – advertise success •  Hiring/promotions §  Workplace displays of success areForeign product acceptance important§  Always valued foreign products Weddings§  Recent trend of “Indian-made” product preference §  Dowry – valuable (gold, precious gems)Human Development Index §  Gift Giving•  .547 (rank: 134) §  Always reciprocated•  Health .717, Education .450, Income .508 §  All stages of life (birth, death, marriage)
  • 6. SOCIAL INSTITUTIONSCaste System§  outlawed in 1950 (Indian Constitution) but discrimination still exists Education§  Traditional Caste System: § Federal & State Government- § Brahmins - Priestly sponsored, Private § Elementary Education § Kshatriyas – Warriors/Rulers §  free & compulsory for ages 6-14 § Vaishfas - Traders §  27% of students are privately § Sudras - Servants educated § Untouchables § Secondary Education 14-17Family Life §  Participation rate about 33%§  Cultural emphasis on family § 300 Universities & 15,600 life Colleges § 2.5 Mil students/year§  Shopping as a family activity §  Women make many purchases, § Tradition-bound, uniform children consult on tech items standards
  • 7. POPULATION2011 Census§ 1.2 Billion People§ 2nd largest population§ 52% Male, 48% FemaleGrowth Rate§ 1.212%Average Age§ 26.5Age Distribution§ 54% of population is under 25
  • 8. ECONOMYGDP Income§ Purchasing Power Parity: § $3,163 / person $4.5 Trillion (3rd)§ Nominal: $1.7 Trillion (11th) Freedoms§ Growth Rate: 7.2% § Economic: 55% (Med)Inflation § Corruption: 33% (High)§ 8.9% § Business: 35% (Low) § Trade: 64% (Med)Unemployment§ 9.8% Ease of doing business § 132 of 183Workforce§ 28M/397M workers employed in the organized sector
  • 9. TRADE RESTRICTIONSExports Imports§  17th Largest Market §  Tariffs §  Lack of TransparencyPermits §  Agriculture: 30-40%§  Construction – 227 Days – one §  Non-Ag: <15% of the worst in the world §  30% - Prepared ChocolatesTrade Agreements §  None on Plain Cocoa§  South Asia Free Trade Area §  Other Barriers§  Asia-Pacific Trade Agreement §  Quantitative restrictions §  Import licensingIntellectual Property §  Mandatory Testing§  Significant concerns regarding §  Certifications counterfeiting & piracy §  Lengthy customs processFood Import Regulatory §  Cocoa - 45% Imports Standards §  Inflation pressures on raw materials§  Meeting to understand the newest import guidelines and procedures
  • 10. FOREIGN DIRECT INVESTMENT POLICY§ Only country with a brand-based FDI policyStarted: 2006§ Allowed max 51% FDI in a retail enterpriseUpdated: 2012§ 100% FDI is allowed, with conditions § Single brand retail store § Products must be sold internationally under the same brand name § For companies with more than a 51% share, 30% of sourcing must be from small or medium scale enterprises (SMEs)
  • 11. HOFSTEDE’S CULTURAL DIMENSIONS India (orange) vs. US (blue) 91100 77 62 40 48 56 46 50 61 40 29 0 Power Distance Individualism Masculinity Uncertainty Avoidance Long-term Orientation
  • 12. BUSINESS CUSTOMSDoing Business §  Greet eldest person first§  English is used for conducting business, §  Business cards should be presented politics, & education immediately upon introduction§  Relationship-based business practices §  It is rude to talk about business immediately §  some payoffs expected for government §  first discuss family, interests, hobbies approvals §  Accept any gift offered, but do not open it in §  CPI ranking 95, score 3.1 front of the host. §  Reciprocal gift required§  Plan on several visits and refusals before getting anything accomplished/agreed upon §  Business is frequently discussed at dinner/ social functions with spousesWomen §  Give a gift to your host’s children as a thank§  Women may experience difficulty asserting you business power in this male-dominated society §  Reciprocate dinner invitations with a dinner of §  Western women sometimes able to negotiate comparable value directly with Indian men §  (Western) business dress is appropriate §  Handshake should be initiated by the man §  Try to meet with (& negotiate with) the highestCustoms ranking individual - they make the decision§  Shake hands/Namaste
  • 13. THE END

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