India and China-Recession

India and China-Recession

India and China both are growing at faster rate even in the age of recession. In today’s time, the whole Europe and America have been experiencing recession but the Asian countries are marking not only growth but also becoming global superpower. Growth of the Asian countries is due to increase in the purchasing power of people and new investment project. In present scenario, India and China is basically a youth driven market because the majority of the population is in the category of youth segment. They have excess money to spend on the luxury items for their pleasure and entertainment.

Characteristic of market

Westernization –

Now the Asian market is more open to adopt the modern lifestyle and product of the western market. They prefer the products like Starbuck Coffee, Cappuccino, Coca Cola, Pepsi, Dominos Pizza, and McDonald Burger. The luxury items such as ROLEX, Mercedes, and Sport bikes are in great demand in the emerging markets of India and China.

Openness-

Now the Indian and other parts of Asian market are more open in terms of rules and regulations. The government is increasing the effort to invite various foreign multinational companies to invest in these countries. Different multinational companies are also finding the most profitable market because these countries have huge population, which presents the large untapped market.

Markets are fragmented- 

Developing market are highly fragmented in nature and no company is able to capture the whole market. The local companies are restricted to region wise only so it gives enough opportunities to multinational companies to tap the large untapped market in these countries.

Population is young and growing-

At the time when Japan, Europe and US are worried about pension and other problems of rapid aging of their population, the economies of India and China have a lot of young population. A young population creates market for education, games, entertainment, apparel, fast food, cafes, fashion, magazines, books, beauty products, music and other products

Micro and Macro environment:

Micro environment in India consists of union trade and man relation, employee- management relation. Macro environment consists of the political situations, economical situation and social structure of the company

Strategies to follow by western companies

Price penetration-  

The western companies should follow the policy of price penetration to capture the market of Indian and China. The generation is much concerned about the price, and they could be called the most price sensitive consumer of the world. These western companies, to be successful in this market, should adopt the policy of penetration, in which company offers lower price in starting a larger base and increases the price later on.

Discount- 

The method of giving discount on the retail price is much useful in the developing nations because the consumer are more price sensitive and bargain on the retail price.

Branding- 

The company should focus on branding of the products to create locus on the mind of the potential customer. Advertising should be such that it gives knowledge and information about the product and could be able to attract the masses.

Freebies-

Buy one get one- such type of offer is more popular in India where the people are more concerned about the quantity, in comparison with quality.

References

Kirkby, R. J. (1985). Urbanisation in China: town and country in a developing economy, 1949-2000 AD. London: Croom Helm.

Sathye, M. (2003). Efficiency of banks in a developing economy: the case of India. European Journal of Operational Research, 148(3), 662-671.

Mathieson, D. J. (1980). Financial reform and stabilization policy in a developing economy. Journal of development economics, 7(3), 359-395.

Mehmet, O. (2002). Westernizing the Third World: The Euro centricity of economic development theories. Routledge.