For example, the selling price of cigarettes, alcohol and even sugary drinks are higher in India due to the “sin taxes” levied on them. Though the soft drink companies are working hard to get the 30% tax reduced to about half the amount, the political policies are not giving in. IF however, the policies change then the soft drinks will become a lot cheaper and open up a huge market segment that will be able to afford the drink at lower prices!
E.g. Jio comprehended the vast addressable market of the lower middle class and rural area. They designed, priced and marketed the Jio phones to reach out to them. To make sure that it reaches them, they first sold it to urban population to ensure that a “cheap” tag portrayed into an “economically sensible” image! This is a market the other service providers overlooked. They did not think of the economic environment of India is majorly dictated by this segment. While the higher middle class and the rich are quite a huge population in numbers, they form a minuscule portion in percentage.
Having said that I also need to mention that Chotukool by Godrej, the cheaper fridge for the same segment did not have a strong GTM strategy or budget and relied on word to mouth and failed in the same ECONOMIC ENVIRONMENT. So as every factor discussed, nothing can work in a silo but only in a combination!
Taking the example of Chotukool further, the Positioning of the product was done for the rural and the economically backwards without taking into consideration their newly found Aspirational mindset. Every rural youngster was looking at migrating to urban to make it big! The influence of the youngsters on the decision making was getting increasingly higher in the close-knit Indian families! Age and cultural perceptions that had shifted were overlooked by Godrej.
After the advent of eCommerce, setting up a grocery shop without online payment and doorstep delivery would be suicidal. In a world flooded with innovations on almost an hourly basis, the product or service RELEVANCE is to be ascertained periodically. The onslaught of TV channels like Star and Zee along with OTT players, each of them struggling- put together they effectively killed the cable TV.
Ola Electric Bikes were presold at a record time and without much advertising. The reason is not just the economic pricing but the fact that it was electric and easy on the environment. The fact that it cost lesser to maintain and is free from fuel inflation didn’t hurt either.
Any organization to survive sustainably and thrive need to abide by the legal norms of the land. There are no two ways about it. Many times developing nations, infested with corruption might give an impression of “sab kuch chalta hai” but in long run, any deviation will come back to bite!
Similarly, Ignorance of the law is no excuse either. It is imperative that the organization gathers all know-how and weaves them into the company policies.
The PESTLE format covers the context setting of the organization that needs to be studied forming the 4th C of the Marketing