PRODUCT AND BRAND MANAGEMENT ASSIGNMENT Flowing Society Drivers and Trends in Indian Context 2012 Submitted By: Group 5 Apoorva Sharma Chandni Goel Deepika Misra Garima Dhamija Neha Bhutani INFINITY BUSINESS SCHOOL
IntroductionThe current scenario witnesses the world in a constant state of flux. This givesrise to a macro force that defines our society in a distinct characteristicfashion.It is evident that there is a peculiar movement of capital, information, people,technology, images, symbols etc. This has lead to integration of technologicaland communication platforms. Thus, creating a coliseum for free exchange ofsocial, cultural and economic ideas and beliefs between people from variousparts of the world. This sharing helps in creating a global community and a‘Flowing Society’.As a result, there is transformation of old institutions thereby paving the wayfor evolving common standards, preferences, patterns and codes.Brands use this opportunity to leverage their respective competences in orderto earn a greater share of consumers by offering innovative products andservices that are more suited for a global culture.Since, this society of flows creates a global consumer market hence, theaggregate basket of goods and services converts itself in the form of ahomogeneous mixture of offerings.This report critically examines the crucial relationship between the variousdrivers operating in a flowing society and the trends that are created as aproduct of these drivers.This critical analysis of the drivers and trends at work is done keeping anIndian context in mind therefore, understanding the macro force that definesthe current state of the Indian society.
Drivers and TrendsTrend 1: New Global EliteDriver: De-territorialisation of the identitiesThis trend is characterised by an emerging class of new global elite who is a productof the society of flows. The new global elite possess a peculiar characteristic ofincreased mobility. This increase in mobility has caused a free flow of capital and itsowners beyond the previously limiting geographical boundaries.Cases in Indian ContextIndia has witnessed the emergence of this trend in the recent past. Cellulartechnologies like 3G connections and mobile applications have provided the newurban Indian with excessive mobility and multitasking abilities.1. Mobile Apps 1.1. The value of the Indian value added services industry, which includes mobile apps, was estimated at $3.4bn (£2.2bn) in 2011. Source:Deloitte. 1.2. The mobile application industry in India alone is predicted to top $4bn by the year 2015. Source:Asia Pacific Research Group (APRG). 1.3. One in three of the countrys urban internet users have accessed a mobile phone application. Source:IMRBExamples: • Zomato.com has an app if you are looking to dine out.
• Amity university was one of the first universities to come out with a dedicated app for its students. • Booking movie tickets has never been easier because of the bookmyshow.com app. • Various leading banks have apps for mobile banking.2. Integrated Technology Integrated technological platforms like mobile banking and mobile commerce facilities have enabled the new global elite to conduct business on the go.Examples: • Airtel Money: M-commerce • Vodafone Mobile MoneyCritical AnalysisIncreasing integration of technological platforms have caused De - territorialisation ofidentities. This has provided the new global elite with an increased mobility. Facilitieslike mobile banking, M-commerce offer an opportunity for business on the go. Thisfacilitates increased mobility of capital and its owners.Mobile applications like pay your bills, book tickets etc. help carry out the daily tasksfrom a remote location. Consequently, the new trend has seen decreasinggeographical limitations and the capital is not bound by territorial boundaries.As a result, there is dissociation of everyday tasks like work, shopping, leisure,education etc. from the spatial proximity to centers where such tasks wereconventionally carried out.
Trend 2: Worldwide Availability of Goods and InformationDriver: Accessibility to Communication Channels and Expansion ofInformation NetworksThis trend is characterized by an increasingly global consumers’ market anddecreasing geographical limitations in procuring goods and services. The basket ofgoods and services has become fairly homogenous across regions and nations.Cases in Indian ContextIndia saw the emergence of this trend with the entrance of multinational brandsoffering products and services previously unavailable to Indian consumers. On onehand there is availability of international brands in India while on the other hand aboost in online retail has created a platform for acquiring products from othercountries.1. Online Retail 1.1. Online shopping in India has touched a growth rate of 18 per cent and is only likely to grow further. Source:comScore Inc 1.2. Nearly 60 per cent of netizens in India visit a retail site monthly and the number of online shoppers has grown by 18 per cent over the previous year. Source:comScore IncExamples: • Amazon.com • Ebay.comTwo of the major global online retailers recently started shipping products to India.2. International Brands 2.1. Ever since the Government permitted FDI in single brand retail, India has seen a plethora of international brands entering the market. However, the trend accelerated in the last 5 years.
2.2. The luxury retail market in India is growing currently at a compounded annual growth of 25%. Source: AT KearnyExamples: • Fashion brands: Louis Vuitton, Gucci, Salvatore Ferragamo, Diesel, Chicco, Zara, etc. • Cosmetics: Mac, Lancôme, L’Oreal, Colour Bar, etc. • Automobile: Porsche, Audi, BMW, Jaguar, etc. • Food & Beverage: International liquors, chocolates, etc.3. International Product Launch This trend witnesses multinational companies launching new products with simultaneous world roll outs.Examples: • Apple i-pad 3: Apple launched its third generation i-pad in March 2012 with a simultaneous international launch in key markets and a world roll out within days of the launch.Critical AnalysisThis trend manifests itself in two ways. First, there is increasing entrance ofinternational brands in the Indian market. This makes the physical availability ofgoods and services possible in the domestic market.Second, the emergence of online retail enables customers to purchase productsproduced in other countries. This enables the development of a global consumermarket extending beyond the geographical proximity.As a result, creating a more or less homogenous mix of goods and services acrossnations thus, reducing differences between the local markets.
Trend 3: People FlowsDriver: Movements and NetworksA Flowing Society is peculiarly characterized with a trend of People Flows. There isincreased movement of people across countries. This results in a growing number ofpeople with friends and family in different parts of the world. This greatly enablesinformation and cultural exchange.Cases in Indian ContextIn the last couple of years, India has seen a growing number of outbound tourists. Inaddition, the country has also experienced a rising number of visitors in the form oftourists and NRIs. This has created a platform for exchange of social and culturalideas thus exposing the Indian population to western lifestyles.1. Travelers 1.1. 12.5 million Indians travelled abroad in 2010. Source: PATA 1.2. India will account for 50-million outbound travelers by 2020. Source: World Tourism Organization 1.3. Foreign tourist arrivals (FTAs) in India in 2011 are pegged at 6.29 million. Source: Ministry of Tourism, Government of IndiaExamples: • American Express: Introduced travelers’ cheques by leveraging their expertise in cash management to take advantage of increased travelling. • Visa and Master Cards: Offer global shopping convenience. • Matrix: Introduced calling cards for inexpensive international roaming and Matrix Forex cards for a cashless travelling.2. Transnational Lifestyles 2.1. People flows cause information exchange thereby exposing people to cultures and lifestyles of other countries. 2.2. This results in changing demands of the customers and creating a more global culture.
Examples: • Barista and Costa Coffee: The rising café culture in India has been borrowed from the western trend of cafes serving freshly brewed coffees around street corners. • L’Opera Patisserie:The concept has been borrowed from the French culture. • Geoffery’s: Based on the concept of English pubs.Critical AnalysisMovements and Networks drives a trend characterized by constant movements. Theflow of people facilitates exchange of cultural, social and organizational ideas andinformation. This translates into export of transnational lifestyles.As a result, there is a growing demand for products and services relevant to theselifestyle experiences. Exposure to foreign cultures also makes consumers moreaccepting towards goods and services that lend such western lifestyles.In addition, movement of people across nations creates a bridge for transfer ofknowledge that may be used for various business purposes.Trend 4: More Energy NeededDriver: Movements and NetworksA flowing society is a dynamically changing society with constant movements. Hencethere is a pressing need for greater energy to fuel the capacity of working andkeeping pace with a rapidly changing society. This trend manifests itself in two ways– firstly, individuals in a flowing society require more energy to perform multiple tasksand cope with rapid changes. Secondly, the macro-energy needs of the societywitness a rapid increase.Cases in Indian ContextOver the last few years India has been evolving at a rather accelerated pace. Thisimmensely dynamic society and increased mobility demands greater energy in orderfor people to be able to maintain pace with life in the fast lane.
1. Food On The Go 1.1. Sales at fast food chains in India are growing at approximately 28 per cent per annum. Source: PricewaterhouseCoopers (PWC) 1.2. Consumer expenditure on fast food is pegged at $400 million. Source: EuromonitorExamples: • McDonalds • KFC • SubwayFast food chains offer an opportunity for quick satisfaction of hunger on the go andsnacking in between meals. This ensures an increased consumption of food to meetthe growing energy requirements of people.2. Energy Supplements 2.1. In order to keep pace with the rapid multi dimensional lifestyle consumers take the aid of energy drinks and bars for instant energy. 2.2. 78% urban youth in India consume energy supplements on a daily basis. Source: ASSOCHAM 2.3. Energy drinks consumption is projected at 20-22 million cans in India in 2012. Source: rediff.com (http://www.rediff.com/money/2006/may/24drink.htm)Examples: • Red Bull: Its consumption is marked at approximately 5 lakh cans a month and it has a 95% market share in India. • Gatorade • Cloud 9 • Burn • Power Horse • Horlicks Nutribar • Rite Bite Nutritional bar
3. Macro Energy Needs 3.1. 2009, India was the fourth largest energy consumer in the world. 3.2. Oil/Fuel Consumption: India consumes 3.2 million barrels per day (bbl/d) in 2010. Source: Oil & Gas Journal 3.3. India’s oil imports exceed 2.2 million barrels per day. Source: Ministry of Petroleum & Natural Gas, Govt. of India 3.4. India imported 280 million tons of crude oil in 2011. 3.5. Growth trend of Fuel Consumption in India at CAGR 6%. Source: Ministry of Petroleum & Natural Gas, Govt. of India 3.6. High speed Diesel accounted for 41% (max) share of total domestic production of petroleum products. 3.7. Power Consumption: Overall energy consumption is increasing at CAGR 6.98% 3.8. The increase in electricity consumption from 2010 to 2011 has been 13.34% 3.9. Domestic consumption of electricity is growing at CAGR 9.67% Source: Ministry of Power, Govt. of India
Examples: • Automobile Companies: Increasingly launching diesel and CNG/LPG variants to meet consumer demand generated due to high petrol prices. Hyundai Verna Diesel variant. • Larsen & Toubro: Offers technology and infrastructure for electrical power generation and oil refineries. • Inverters: Luminous, Su-kam, Microtek etc. • Autonomous Bodies: Organizations like Bureau of Energy Efficiency and Energy Star provide energy ratings to electrical appliances to certify their energy utilization efficiency. • Electrical Appliances: LG, Samsung, Whirlpool etc. launched 5 star rated appliances like air conditioners, refrigerators etc. offering higher energy efficiency. • Phillips: Offers CFL lighting which is power efficient. • Power Saving devices: For instance companies like Power Saver India, ES Electronics India Pvt. Ltd. etc. have developed energy saving devices.Critical AnalysisA flowing society causes increased mobility and constant motion. This results in agrowing demand for more energy in order to sustain the dynamic pace of a rapidlychanging society. This has implications in both biological need for energy as well asmacro energy needs. As a result, Fast food chains and energy supplement brandsfind this opportunity to leverage their expertise to provide consumers a chance ofenhancing their performance at work. At the same time brands develop energy orfuel efficient variants of their products.Trend 5: Transnational FamiliesDriver: Movements and NetworksThis trend is characterized with an increased migration of people abroad in search ofbetter opportunities. While on one hand there is excessive relocation of talent and
workforce, their families are left behind creating a paradoxical unity fueled by theincreased geographical distance between family members.Cases in Indian ContextIndia has been a victim to excessive brain drain over the last decade. Lack ofopportunities and uncontrollably rising population has caused growing migration ofthe Indian talent pool to foreign countries.1. Courier Services 1.1. Currently stands at INR 71 billion and growing at approximately 20% per annum. 1.2. Contributes more that INR 10 billion towards Government revenues per year. 1.3. International express cargo holds 6% of the express cargo industry, but is forecasted to reach 40% by 2017. Source: Euromonitor Examples: • DHL • UPS • FedEx • TNT2. Money Transfer Services 2.1. Indians living and working abroad usually send money back home. 2.2. Over 20 million Indian immigrants send home approx. over $ 20 Billion per annum. Source: Aite Group, Research and advisory bodyExamples: • Western Union Money Transfer: Market leader • Money Gram
Critical AnalysisA flowing society offers excessive mobilisation to its inhabitants. Lack ofopportunities in the native country and a desire to increase their income motivatesthe citizens to migrate to foreign countries for jobs.While on one hand it results in depletion of talent pool and productive work force inthe native country, on the other hand it also becomes a source or foreign exchangerevenues in the form of worker remittances received from abroad because theseimmigrants send home money and consignments to their families.Due to this transfer of currency and gifts, the families find a binding unity eventhough there is a huge geographical distance. This creates the phenomenon oftenknown as Transnational Families.Trend 6: Massive MigrationsDriver: Economic, Cultural and Social InterdependenceIn addition to migration abroad, a flowing society also witnesses the migration ofrural population to urban areas. This trend is characterised by ever expanding cityboundaries and intercultural segregation.Cases in Indian ContextIndia has been witness to an ever increasing relocation of rural population to urbanareas. The cities of India are bursting with diverse populations thus resulting inexpansion of suburban areas on the outskirts of theses urban cities.1. Migration 1.1. From 2001 to 2011, 22 million people migrated from rural areas to urban cities. Source: Census of India, 2011
Examples: • Construction companies: DLF, Jaypee Greens, Arihant Superstructures Ltd. etc. These builders and developers take this opportunity of ever expanding urban population to develop the suburbs and offer residential properties. • FMCG brands: Clinic plus, Colgate, Parle G biscuits, etc. Keeping in mind the diverse populations that are now residing the urban regions due to migration from villages, FMCG brands are increasingly attempting to make smaller and more economical SKUs available to these consumers. For instance, introduction of Shampoo sachets.Critical AnalysisThe increased mobility in a flowing society manifests itself not only in the form ofcitizens migrating abroad but, also in the form of rural populations migrating to urbanareas in search of better opportunities.This causes a high degree of pressure on cities as there is a lack of space andresources to satisfy the exploding urban population. This trend creates a multiculturaldiversity thus making the cities a melting pot for diverse cultural and social ideologiesleading to complex multi ethnicity exchanges.Trend 7: MultilanguageDriver: Blurring World and Movements & NetworksA society of flows is characterized by multiplicity of languages. Both the society andthe languages used in the society are dynamic in nature and constantly keepevolving from generation to generation.Cases in Indian ContextIndia is a unique nation with its diversity distinctly reflected through its variouslanguages. However, recently, India has also been a hub for various foreignlanguages with a number of training institutes opening up to offer their academicservices.
1. Diverse Languages 1.1. India has 22 official languages and 398 living languages and dialects. Source: Ministry of Culture and Tourism, Government of India 1.2. In addition foreign languages such as French, Spanish, Mandarin etc are also becoming popular in India. 1.3. India requires close to 1.6 lakh foreign language professionals as the market for language sensitive work stands at about $14.4 billion. Source: Nasscom-McKinsey reportExamples: • Alliance Francaise: French is the most popular foreign language in India. Alliance Francaise is the market leader in certified French courses and currently operates more than 15 centers at various locations. • School of Language, Jawaharlal Nehru University, Delhi: Offers multiple degree programs in foreign languages and is one of the premier academic institutions for higher studies in foreign languages.2. Media Content 2.1. The content of Indian media has also been affected by this multiplicity of languages. 2.2. 53% of newspapers and magazines publications in India are in regional languages, 34% in Hindi and 13% in English. Source: HT MintExamples:Print Media: • Big brands like Times of India and Hindustan Times are using this multiplicity of languages to their advantage by publishing newspapers in regional languages. • Navbharat Times • Dainik Jagran • Punjab Kesari
Television Channels: • Discovery Channel: offers its content in English, Hindi and some regional languages. • NDTV: offers news channels in both Hindi and English. • Star or Zee Network: Regional language channels are now available all over the country contrary to the scenario a few years back when they were available in specific regions.Advertising: • Garnier: airs advertisements dubbed in both Hindi and English. • L’Oreal: makes advertisements in both Hindi and English.3. Use of Slangs and Symbols from Other Cultures 3.1. Brand in India have increasingly been using slangs, mixtures of languages and references from western cultures. 3.2. Hinglish has become the lingua franca of the new Indian youth.Examples: • Dominos: The tag line, “Hungry Kya?” makes use of a mixture of English and Hindi to appeal to conventional youth audiences. • Dominos 3 Cheese Pizza advertisement: In its advertisement “Signs”, Dominos uses a western reference for to portray God.Refer: http://www.youtube.com/watch?v=1clPGZJSXa0Critical AnalysisA society of flows has a peculiar feature of multiplicity of languages. Since, a flowingsociety offers excessive mobility and multiple communication platforms hence, thepeople of such a society observe dynamically changing languages.Due to increased exposure to other cultures and free exchange of transnationalsocio-cultural ideas, the people in such a society are exposed to idioms, symbolsand slangs from other parts of the world.
ConclusionThe Indian society in its current state demonstrates all the trends thatcharacterize a Flowing Society. There is an increased mobility of capital,people, information, technology etc. in the Indian society.This has given rise to a new class of people who are not limited by thegeographical boundaries and are participating in the daily national life of arapidly changing country.There is growing exposure to cultures from other parts of the world whichmanifests itself in a rising demand for products and services that offer atransnational lifestyle to the modern Indian.Therefore, India is a society of flows in its true glory, waiting to completelyblend in the global culture yet retain its unique identity.