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McKinsey believes that macroeconomic factors, will shape the business in the coming years
Population migrations- from rural and less developed countries Countries with higher birth rates could be future markets Low birth rate countries will depend on migrations- lead to global work force markets Labour intensive industry have been shifting to developing nations Now labour intensive parts of IT is shifting Asia shall become manufacturing & IT hub Internet- more informed & Interactive customers Deregulations and internet leading to borderless nations shifts in centers of economic activity- globally, within region and within country13% of world GDP is in Asia (minus Japan), 30% in Europe By 2025 both will be equal Bangalore is new business hub. Gujarat & Andhra picking up Metro suburbs are future consumer markets
Business could prosper only by following Needs and Trends Fad Fashion Trend Megatrend
Trend- is a direction or sequence of events with momentum, durability and predictability. Like fast food, mega stores, multiplexes, jeans, fitness gyms, higher education
Competition
Place
Consumer
Legal
Geography
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Tell me some recent environmental changes going to affect market structures?
Environmental Forces- Within the rapidly changing global picture, marketers must monitor six major environmental forces: Demographic Political-Legal Economic
Technological Natural
Socio-Cultural
Environments and its changes are non controllable, companies need to monitor and adjust Environment affect customers so markets, and so companies and these interact amongst themselves to create complex forces
http://business.gov.in for any information related to business, banking, economy, and all types of statistics http://business.gov.in/indian_economy/studies for economic surveys http://business.gov.in/outerwin.htm?id=http://m for all types of statistics
In the demographic environment, marketers must monitor worldwide population patternsbecause people make up markets Marketers remain interested in Size and growth rate of populations in cities, regions, and nations. Age distribution ethnic mix. Educational levels. Household patterns. Regional characteristics & Geographical shifts
worlds population- 6.1 billion in 2000 and will exceed 7.9 billion by 2025. explosion has been a major concern. Population growths directly enhance number of customers. Demographic trends are reliable yardsticks Marketers need to watch places- regions and patterns of growth A growing population does not mean growing markets unless these have purchasing powers
Most important deterrent to population control is cultural attitudes to large families Most growth is in poor areas. Less developed countries account for 76% of world population and grow @2%. 58% of worlds population is in Asia
developed countries house 24% and grow @ 0.6% Areas which could afford population growth have negative growth- Career in woman big reason Developed countries are major consumer markets due to higher per capita and expendable incomes
Under developed countries and Asia are future markets One child rules, six pocket syndrome and little emperors have strengthened children product markets of china
South Asia is 3.8% of world by area but house about 25% of world population India is 2.4% of world by area but house about 16.7% of world population US is about 3.5 times to India in area but house about 28% of Indian population
Renewed immigrant pressure may persuade Britishers to consider demography in their planning, In 1940s projections showed just 35m people living in Britain by 2000. no one could assume baby boompost war.
immigration flows depend heavily on economic circumstances, political conditions and migration law. could change any time. So demography is hard to predict. 2008 meltdown have caused change in immigrations
1593
china
1441
1392
Non-Hispanic whites now represent nearly two-thirds of America's population of 305m. By 2042- Non-Hispanic whites will represent less than half of the 440m total. The Asian and Hispanic populations will rise to 9% and 30%, America will look like present-day Texas, Hawaii, New Mexico and California
America is most popular destination, taking 1.3m migrants out of total 4m China provides the biggest share of legal immigrants to OECD countries (Britain and Ireland do not monitor nationalities of immigrants). Chinese migrants made up the biggest group in South Korea, Japan and Canada, and the second largest in America after Mexicans.
In Indian population 15% less than 6 yrs 34%- 12 to 25 yrs 24%- 25 to 34 yrs 14%- above 54 yrs
demographic environment- 2
(contd.)
Population age mix The biggest age group population shape the market Better nutrition and medical care enhancing aged population ratio. disabilities and aged populations- market for home delivery products This century will be silver century- more grey haired people. Career consciousness in women & low fertility in reducing toddlers ratio India & south Asia still could lead in young population Cohorts are groups of individuals- born during the same time period, travel life together Young people differ in attitude, aspiration and so in consumption- mobiles, cold drinks
Secondary Commercial Data Sources- two page assignment- study any 4- what they do and what is their latest report
AC Nielsen ORG MARG CMIE TAM Media Research Euromonitor International Gallup Pakistan
NCAER
Ethnic groups have certain distinct wants and buying habits- could cause a new mega trend Religions in India, increase in Hispanics in US, immigrants in UK, working class in Punjab, Mumbai, Bangalore, to cause major shift in the market structure. Marketers to be careful not to over generalize consumers could be different within ethnic group
Educational groups
Size and growth rate of populations in cities, regions, and nations. Age distribution ethnic mix. Educational levels. Household patterns. Regional characteristics & Geographical shifts five groups- illiterates, sub matric, below graduates, graduates and professionals Literates- vary to gender, area country- easy to communicate (based on 2001 census) 90% or more- kerala 80% or more- UTs and Goa 70% or more- North east states (except Arunanchal) plus Maharastra, Gujarat, Haryana, Punjab Less than 50%- Bihar (47%) 50-68%- all other states
Household Patterns
Size and growth rate of populations in cities, regions, and nations. Age distribution ethnic mix. Educational levels. Household patterns. Regional characteristics & Geographical shifts
conventional household consists of husband, wife, and children In US, one out of eight households is "diverse or nontraditional. Catching in India too. It includes:
Childless married couples Singles with children Unmarried couples gays/lesbians, indian court accept them
Household Patterns
Household patterns
Conventional patterns have been joint families with conservative expenditure even in affluent societies and business families Trend is of Nucleus families specially in salary earners- with western life style and liberal spending Higher education and better job opportunities causing movements and nucleus families. About a million working in middle east with families behind liberal spending
MobilinkDisney D 100 Mobile Phonehelps working couples to keep in touch with kids
Household patterns
Rural men working in distant cities living single- minimum spending Career conscious men and women living single or in groups- conservatives. Do not need status, decorated houses Working parents- resulting in sending school goers to boarding. Reducedbuying for children, entertainment, partying and spending
Geographical
Trend is to opt- metros, cities, developed countries making urban markets & developed countriesstronger markets Real estate costs in big cities directing population to suburban more residential, shopping and schools required in suburban Higher education and better jobs causing movements inter and intra country Real estate costs, environmental regulations forcing industry to rural areas around big cities. This industrial relocation enhancing standards in surroundings
Geographical (contd.)
Needs of hills, plains, coastal areas, rural areas, urban areas have different requirements of clothing People living in metros and flats require less furniture, out door equipments, cars but more of luxuries, air-conditioning, decorations, home theaters People in expensive cities like Mumbai and Delhi settle with smaller flats and office spaces People in cities have more avenues to spend on entertainment and quality outside dining
Economic environment
Income levels more important than population. Spending habits more important than income levels credit availability enhance spending & consumption of high value items, appliances Savings and debt levels direct spending on entertainment, appliances, high value purchases cities have more power compared to rural.
Willingness to spend and income levels more important than population (source-UN Stasticial report)
country Populati GNP per Consumi Food % Clothing Housing furnishin medical transport on in Mn capita in ng index % % g usd
US Japan Germany France UK Brazil India Belgium Mexico Phil 270 126 82 59 59 166 980 10 96 75 29340 32380 25850 24940 21400 4570 430 25380 3970 1050 7921800 4079880 2119700 1471460 1262600 0758620 0421400 0253800 0381120 0078750 53.5 19.7 37.4 60 13.1 6.8 8.2 5.3 11.1 17.7 12.6 3.1 4.9 10.7 12.4 13.5 2.4 10.6 4 7.5 13.1 9.1 2.3 13.3 20.8 23.6 19.4 21.1 7.7 6.1 8.6 6.2 6.7 17.4 18.6 19.8 17.8 18.4 6.3 6.3 9.7 8.2 7.2 12.4 10.4 3.1 10.5 1.3 16.4 10.7 16.4 6.8 18.3
Nations and regions in a country could be divided in four types of economies Subsistence Raw material based Industrializing & Industrial economies
World Energy Consumption- oil gas basedindustrialisation and appliance markets Insert Exhibit 3.3
Social-Cultural Environment- topography, language, culture, religion, values, food habits High Persistence of Core Cultural Values The people living in a particular society hold many core beliefs and values that tend to persist.
Core beliefs and values are passed on from parents to children and are reinforced by major social institutions. Secondary beliefs and values are more open to change. Marketers have some chance of changing secondary values but little chance of changing core values.
Social-Cultural Environment
Existence of Subcultures
Each society contains subcultures, groups with shared values emerging from their special life experiences or circumstances. Members of subcultures share common beliefs, preferences, and behaviors. To the extent that sub cultural groups exhibit different wants and consumption behavior, marketers can choose particular subcultures as target markets. Marketers sometimes reap unexpected rewards in targeting subcultures.
Cartoon Networks New Generation Survey of children aged 7-14 & their moms
Achieving good grades at school all respondents Looking good 90% of respondents Being religious/traditional 84% of respondents Having boyfriend/girlfriend 40% of respondents Career aspirations One-third wanted to be doctor, 21% of wanted to be engineer Children influence purchase of appliances All children play a decisive role in purchase of their own items
New technologies also creates major long-run consequences that are not always foreseeable- New
Natural Environment
The deterioration of the environment is a major global concern. In many world cities, air and water pollution have reached dangerous levels. There is great concern about greenhouse gases. New regulations have hit certain industries very hard. Consumers often appear conflicted about the natural environment. Corporate environmentalism is the recognition of the importance of environmental issues facing the firm and integration of those issues into the firms strategic plans specially related to 4 major trends
Natural Environment
Shortage of raw materials Increased energy costs Anti-pollution pressures Governmental protections
Natural Environment
Shortage of Raw Materials The earths raw materials consist of the infinite, the finite renewable, and the finite nonrenewable.
Infinite resources, such as air and water. Finite renewable resources, such as forests and foods. Finite nonrenewable resources, such as oil and minerals- iron, zinc. Coal- pose real problem. Many reaching stage of depletion. R&D must search alternatives
Apathetic (18%)
indifferent
Political-Legal Environment- law, government, political parties, pressure groups- limit and also provide opportunities
Increase in business legislationcompetition, consumer, society,