ADAPTING MARKETING PRACTICES TO NEW

LIBERALIZED ECONOMY
Prof. Sunita Musafir1, Prof. Anu Moom2
1
P.G Dept Commerce Department, 2P.G Dept of Political Science,
Lyallpur Khalsa College Jalandhar (India)
ABSTRACT
Today’s company requires thinking how to operate and compete in the new economy. For example NTT, Do
Como is quickly gaining experience by providing superior services customer to customer. Now businesses have
to quickly anticipate as well as respond according to emerging customer needs and expectations.
The internet and other technologies used to satisfy those needs. Due to changes in the technologies, set of
beliefs, Shows the major business to adopt changes in believes in the old economy and turned these believes into
new economy. All companies need to retain skills and competencies gained in the past but also they need to add
new knowledge and competencies to grow and prosper.
Objectives: To study the concept of adapting marketing practices to new liberalized economy and how
these strategies help marketer to make its product compete in the market/ in the international market.
Keywords: Economy, marketing, internet, customer, competencies, liberalized.

I. INTRODUCTION
Indian firms want to compete they have to compete in Global Markets and has to equip themselves with core
competencies and technological strength. The challenge on the technology front for Indian firms is actually two
fold. First, they now have a compulsion to acquire parity with global firms. The second is that as the Indian
firms recommended a new development is compounding the task. In recent times, technology has started
changing very rapidly, becoming too intense and rapid to adjust with it. But, the firms have no escape; they have
to cope with the change in order to survive. And, this is the reality the crux of the new challenge they face on the
technology.

III. DIFFERENCE BETWEENOLD ECONOMYAND NEW ECONOMY

OLD ECONOMY EFFECTS NEW ECONOMY EFFECTS1.Influenced by
product units Influenced by customer segments
2.Focus on profitable transactions Focus on Lifetime customers
3.Secure financial scorecard Securemarketing scorecard
4.Looking towards shareholders Looking towards stakeholders
5.Marketing does marketing Everyone does marketing
6.Create brand through advertising Creates brand through performance
7.Acquire customers Consumer retention
8.No customer satisfaction measurement Measure customer satisfaction

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Today’s marketplace has two types of customers 1) Traditional consumers are those who don’t buy online and
2) Cyber consumers are those who mostly buy online 3) Hybrid consumers are the one who does both.
Examples
1) Mostly consumers are hybrid as they shop in grocery stores but occasionally order online from peapod.
2) They buy books and noble in bookstores but order books from bn.com.
Companies are required to adjust their marketing practices to meet these new conditions examined three
marketing practices in which companies and marketers are involved. For example: E-business Websites and
customer relationship management.

III. DRIVERS OF NEW LIBERALISED ECONOMY

Many forces play a vital role in reshaping the world economy.Among them,technology, globalization and
marketing deregulation.
3.1 Digitalisation And Connectivity
Much of the world’s business is now carried through networks that connecting people and companies. For
example :
Connect people within a company and another through intranet, extranet connects a company with its suppliers
and distributors and at last internet that connect user to the worldwide information repository. Company
interacts with supplier and consumer to buy and sell through internet.
Global connectivity is being further developed through wireless communication. Consumers and business in
Europe and Japan mainly involved in mobile commerce using such as NTT Do Como.
3.2 Disintermediation And Reintermediation
As a result of success of early online dot-coms like AOL,AMAZON, EBAY, SNAPDEAL, etc. and other,
struck terrors in the heart of many established manufacturers and retailers. Compaq sold its computers through
retailers, whereas Dell Computer sold directly to customers was able to grow faster by emplacing internet to sell
online. Many intermediaries like bookstores, music stores, travel agents and stock brokers- felt huge pressure on
online competitors emerged. Compaq, Barnes and Noble finally created their own Internet sales channels and
blend of off line and online operations to retain the loyalty of retailers, brokers and agents. But some off line
competitors such as online channels have become stronger and stronger than pure dot-coms because they had a
large pool of resources and have well established brand names.
3.3 Customization And Customerization
Customization means that the company’s ability to provide differentiated products, services, prices and delivery
channels for each customer by online companies that make consumer to become self-producing consumers who
can ultimately design their own goods.
Customerization may be difficult to implement for products like automobiles that can increase costs what
consumers are not willing to pay. It’s difficult to repair customized product on the other hand Customerization
well known for some products like Laptop, Computer and Skin Care products.
3.4 Industry Convergences
Pharmaceutical companies are now in a position to add biogenetic research capacities in order to formulate new
drugs, new cosmetics and new foods. Film company such as Kodak chemical company now moving into

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electronics to digitalize their image-making capabilities. All these companies are recognizing many new
opportunities lies in the environment.

IV. MAIN MARKETING PRACTICES IN NEW LIBERALISED ECONOMY.

4.1. E-Business
Today’s demand of business is e-business or computer. The internet helps companies to conduct business
faster, more accurate over a wider range of time and space at less cost and customize and personalize customer
offerings. Organizations are required to set up websites to distribute information and promote goods and
services. They use Intranet to provide internal communication among employees and Extranets to provide the
exchange of data, orders, and payments with suppliers and distributors. There is no need of paper flows because
everyone is on the computer screen.
4.2. E-Commerce Has Four Major Internet Domains
E-commerce is wider than e-business that means that in addition to providing information about the company’s
history, policies and job opportunities’. As a result e-commerce gives rise to e-purchasing and e-marketing.
Company uses the Intranet to purchase goods and services efficiently and information from suppliers through e-
purchasing. E-marketing helps company to inform, communicate, promote and sell its products and services
through the internet. Domains are as follows:
o Business to Consumer
o Business to Business
o Consumer to Consumer
o Consumer to Business
4.2.1business To Consumer
The internet is most significant for B2C products and services when the consumer seeks greater ordering
conveniences like books and music, like stock trading or news reading or information about product features
and prices like automobiles and computers. It is not useful for products that requires tobe touched or examined
in advance, although consumers can order major appliances, computers even flowers or wine without seeing or
trying these products in advance. As marketers enter the exchange process, customers indulge themselves with
the help of agents and intermediaries and define what information they need, offering what they are interested
in, and at what price they are willing to buy the product.
4.2.2 Business To Business
Business to Business sites makes markets more efficient and change the supplier-customer relationship in many
ways. Business buyers get good prices by using B2B auction sites, spot exchange and online product catalogues,
barter sites, and other online resources. Companies are also forming online buying alliances to getvolume of
discount from suppliers.
Advantages of business buyers to have information from
(1) Websites of suppliers
(2) Aggregate or collect information about alternatives
(3) Third party helps in creating market link between buyer and seller

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(4) Online groups help to customers to swap stories about supplier’s product and services that helps in making
price more transparent.
(5) Supplier of superior product will be able to see price transparency as a result supplier of undifferentiated
product will ultimately cut cost to Compete.
4.2.3 Consumer To Consumer
With C2C consumers create and join internet interest groups and chat rooms just to share information so that
‘word of web’ joined with ‘word of mouth’ has a buying influence.
TRADITIONAL STRUCTURE
Executives Executive
Marketing Merchandising
Systems Systems
Sales Buyers
FinanceFinance
Manufacturing Warehousing

NEW ECONOMY STRUCTURE

SUPPLIERS CUSTOMER
Executive Executive

Marketing Merchandising

Systems Systems

Sales Buyers

Finance Finance

Manufacturing Warehousing

THE SUPPLIER-CUSTOMER RELATIONSHIP TRADITIONAL/NEW ECONOMY

4.2.4 Onsumer To Business
Consumers find it easy to communicate with companies on the web. They invite their customers to e-mail
queries, suggestions, and complaints also. Some sites even have a ‘call-me’ button when a customer click on it,
call is transferred to company’s representatives who are ready to answer phone calls. Although many online
sellers respond very lazily to customer’s queries but smart on-line marketers responds quickly and send them
newsletters. Frustrated customers have the option to use sites like complaints’ and PlanetFeedback.com to
satisfy their selves.
4.3 Product Selection
Product selection is one of the important discussions as market selection. The firms try to somehow push the
products they already have into foreign markets. The products of consumer such as foods, soft drinks, cosmetics
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and personal care items require some degree of product adaptation. All aspects of the product such as its
constituents, features, brand names, packaging-package protection, package size, labeling, and usage
instructions, depending on the situation maybe need to be adopted.
4.4 Selection Of Distribution Channels
Choice of the right distribution channel next decision.________
 Setup marketing agency.
 Selecting importers instead of a sole importer.
 Operating one’s own branches in the other states as well as in foreign countries.
 Operating subsidiary companies.
As the producer and the consumer are separated by a vast distance so the efficiency of distribution channel
becomes essential in the marketing context. Efficient distribution alone can eliminate the effect of geographical
separation. So, selection of distribution channel becomes an important decision area in international marketing
as well as Indian marketing.
4.5 Pricing Policy
The principles and techniques of determining pricing are the same as in domestic and international marketing.
Firms having a short-term interest in the markets may adopt cost plus pricing strategy. But firms with long-term
interests cannot follow this strategy.They have to adopt market-oriented pricing policy. The firms have to take
into consideration the conditions in each country and in each distinct market segment and formulate appropriate
pricing policies. In some countries, government agencies function as sole buying and distribution agents.
4.6 COMMUNICATION
In domestic marketing, a marketer symbol attracts and appeals to people who are better known to him, using a
known language, known symbols and familiar media. But in outside domestic marketing, he has to face
unfamiliar people, strange languages and imagery, unfamiliar media and unfamiliar purchase motivations. He
used symbols and images that will be understood by them and will appeal to them.
4.7 MASTERING IN THE PROCEDURAL COMPLEXITIES
The businessman is required to have mastery in variety of procedural complexities covering a variety of areas
like export-import license, customs, and foreign exchange regulations relating to insuranceof quality and
packages.
4.8 ENTREPRENEURIAL FREEDOM
The entrepreneurial freedom result of liberalization released the blocked-up growth impulse of Indian industry
and business. De-licensing of industries results in entrepreneurial talents and facilitated the entry of a number of
new players into several industries. With the licensing hurdle pushed out of their way, they could readily enter
the industries of their choice. The three developments took place as result of the new entrepreneurial freedom
that is:-
 Entrepreneurs adjust in several industries.
 Mergers/acquisitions/takeover takes place.
 Go for diversification

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 4.8.1 RUSH OF ENTREPRENEURS
Entrepreneurs now can easily raise capital from domestic as well as foreign capital markets. Freedom of entry
and concessions motivate foreign investment. In case of
Mergers: Examples
1. Merger of Doom Dooma, Tea Estates, KGF and Kissan into Brooke Bond.
2. Merger of QIL with Pond’s.
3. Merger of Tomco with HLL merger of Brooke Bond and Lipton into BBLIL and merger of BBLIL into HLL.
Diversification
Putting all eggs in one basket is too risky so being present in many businesses not only minimize the risk but
also increased profit opportunities. The opportunity and threats prevailed in the environment form the rash nail
for diversification.
4.9 Fdi Influences Investment
The various measures have led to jump in the inflow of FDI into India. The inflow has influenced the
investment pattern in several industries. The passenger car industry, the soft drinks industry, and the cosmetic
and personal care product industry have all been influenced strongly by the FDI. Many experts feel that India
has the potential to attract foreign investments. Global companies usually consider market size, political stability
and regulatory environment, as the three factors for direct investments.
4.10 Multinationals Companies In The Indian Markets
The removal of FERA restrictions and the liberalization of FDI enabled MNCs, who were to operate in India, to
raise their equity in their Indian enterprises. MNCs already in operation in India have been consolidation their
position and many of them in alliances with an Indian partner and some fully-owned subsidiaries. For example:
 Whirlpool Corporation USA entered the Indian market by acquiring Kelvinator India Ltd (KIL).
 Major Cosmetics merge as L’Oreal, Avon, Amway, and Oriflamme, also Set Shops.
 Raise food chains like:
 McDonald’s
 Kentucky Fried Chicken (KFC)
 Wimpy
 Domino’s
 Kellogg
4.11 Banking Sector
i. By losing the controls on interest rates on deposits permits banks to make differentiated offers.
ii. Decrease multiplicity of rates.
iii. Enhance customer orientation.
iv. Automation
v. Play in the competitive game while continuing with the constraints of public sector existence.
vi. To adjust to new norms of capital adequacy
vii. To restructure organization, operations and system banking.
viii. To computerize and interconnect the branches without this.
ix. To improve productivity and profitability.

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4.12 Competition In Insurance Sector
IRDA has issued licenses for carrying on insurance business. Some of them are:-
HDFC Standard Life Insurance Company Ltd
Royal Sundaram Alliance Company Ltd
ICICI Prudential Life Insurance Company Ltd
Max New York Life Insurance Company Ltd
IFFCO Tokio General Insurance Company Ltd
SBI Life Insurance Company
Birla Sun Life Insurance company
4.13 Capital Market
Components of the financial sector as the capital markets and the banking sector have undergone far-reaching
changes. As a result of opening up of the capital markets to foreign institutional investors, foreign portfolio
investment in Indian companies caught up in a big way. For example:
 Unit Trust of India
 IDBI
 ICICI
 IFCI
 Credit capital Finance Corporation
4.14 Financial Services
A new crop of financial services emerged and financial services became an attractive new business proposition
for the firms. Services such as venture capital finance, corporate advisory service, forex advisory service,
international finance management advisory services to MNCs entering India and research and analysis support
to FIIs coming to India.
4.15 Private Sector Becomes The Dominant Components
Private sector in the economy of the country becomes major feature of the environmental change resulting from
the reforms. For example:-
a. Telecom
b. Reliance
4.16 Growth Of Private Mutual Fund
The rapid growth of private mutual fund has been another significant development due to liberalization. Earlier
mutual funds were in the hands of public sector does not mutual funds were operate in the country under public
sector. Private sector enters the mutual fund and portfolio management schemes shows the quick launch of
plethora of private mutual fund. A number of firms in the private sector such as Kothari group, Apple industries,
Tata Birla, Kodak Mahindra, CAT financial services, reliance capital etc. started their mutual funds.

V. MARKETING CHALLENGES OF LIBERALISED ECONOMY

5.1 Entrepreneur freedom
Indian industry and businesses would be having a comfortable and great timebut the entrepreneurial freedom
did help entrepreneurs enter industries of their choice but for some of the existing players, the new freedom
implied destabilization. Their markets, market shares and profits came under great pressure.
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Milk food Ltd: After almost strong position in the dairy industry in Northern India. Milk Food Ltd, found itself
in trouble, following the de-licensing of the industry. With the removal of the licensing barrier, many new firms
entered the industry in quick succession. Milk food Ltd suddenly found itself in great danger dueto a plethora of
new competitors. The very same people who were supplying milk to the company earlier now became its
competitors. Milk food Ltd, not only found itself surrounded by new competition, but also had to struggle to
obtain its daily supplies of raw material-milknow become producers. There was now a scarcity of the raw
material, resulting in a sharpen up in its prices. Milk food could not face the destabilization.
EXAMPLE
Passenger Car industry: De-licensing of the industry resulted in a difficult situation for existing players like
Hindustan Motors (HM) and Premier Auto Limited (PAL) and even Maruti. A host of new players like Telco,
Daewoo, Hyundai, Ford and Honda entered the industry as a result HM and PAL had to chalk out survival
strategies which included new foreign collaborations, fresh investment and expansions.
5.2 Noprotection For Existing Players
In short, while the entrepreneurial freedom helped the new entrants that it threw the existing players out of the
cocoon of protection, it means that unlike in the past, profits could no longer be secured by procuring a license
and setting up an industrial unit. It had to be earned by playing in the market game with full measure. Under the
licensing system, firms, that entered an industry through a license, enjoyed market and assured profits. The
licensing barrier served as a cocoon of protection. Under the new dispensation, as the licensing barriers were
lifted, new players could enter any given industry and seek a piece of the cake. It meant that existing players had
to compete for their share, profit and business.
5.3 Existing Notions On Economic Size Are Shaken
In the past, the governments licensing policy determined the economic size for industry. Enterprises had to be
content with smaller capacities, as licenses were just not available for larger capacities. Operating on a smaller
scale was a compulsion enjoined by the regulated economy. MRTP provisions too inhibited setting up of bigger
capacity.
5.4 The Family-Oriented Business System Too Contributed To Lowering Of Minimum Economic Size
India is also achieving economies of scale. The private corporate sector in the country was largely family
managed. Families generally tend to diversify excessively. This is so because the family is interested in hedging
its bets by being present in several industries. For example, Godrej makes soaps, refrigerators, almirahs, locks,
mosquito mats, and office furniture and so on. When a firm is present in so many businesses, naturally, it
reduces the scale in each of them.
5.5 Now, Going Big Became The Order Of The Day
Economic size means international size and even those companies, which were already big in the relative sense
in a given product, started re-defining their ideas of minimum economic size. Most companies now felt that if
they were to compete with the MNCs and larger Indian companies, they had to consolidate and become big.
Many of them preferred to get bigger in their business quickly through mergers and takeovers and acquisitions.
Reliance Industries Ltd.,(RIL) is one such company which has taken a lead in backward integration, expansion,
mergers, acquisitions and so on and believed in world class capacities.

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Examples:
HindustanLeverLtd.,(HLL)goesbigger
5.6 The Mncs Onslaught
It is not a case of a few foreign firms setting up shops or expanding their existing shops. It is a major
phenomenon of brand war in which the MNC brands squeezed the local brands. The takeover threat is another
major problem.
Acquisition of majority equity by the parent MNC equipped their Indian enterprises with a new strategic edge.
All the resources of the parent companies now became available to their enterprises in India. In some cases, a
new opening for exports also became available through the parent company’s expertise and connections.
Examples:
P & G, Cadbury.
Singer
Bull India, Bata
5.8 The Compulsion To Become Price Competitive
There was shortage every sector like consumer goods, industrial goods and services. It was basically a case of
production not being increased to meet the growing demand. There were reasons.
 Many companies were going on with old plants and unable to increase production.
 Many others could not increase production due to licensing restrictions.
 In many cases, price control by the government acted as an additional cause of production shortfall. Often,
price control served as a disincentive for production.
 Some manufacturers vested with interests in shortage, deliberately promoted the shortage, creating artificial
scarcities.
There was little emphasis on cost reduction, technology up gradation and improvement of quality and customer
convenience
5.9 From Rationing To Marketing
The government has removed the controls on capacity creation and capacity utilization. Industries have been
given total freedom for expansion and diversification. Decisions on investments have been left to the
entrepreneurs. Controls on prices of products have also been removed. Investments have now been taking place
in areas of demand as a result of removal of restrictions. Production automatically increased to meet demand.
The liberalization of imports and the reduction in import tariffs did the changeover to a buyer’s market by
instantly enhancing supplies.
The new buyer’s market faced major challenge to Indian industry and business.
In the new buyer’s market will no longer follow this cost escalations. This reality throws up new pressures on
margins and profits of the companies. Now they have to be price competitive.
The new super markets in the real sense like Big Bazaar contract with Importers or producers directly without
any middle men. The display of products in their stores is made on the state of the art shelves and the prices are
displayed giving a comparison with normal market prices. Buyers are also given incentives like buy 5 kg and get
5 kg free (Rice or sugar)

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5.10 Compulsion To Grow
Indian business firms are compelled to take to exportsToday’s world is based on technology that has emerged as
a crucial resource for business firms. With globalization, technology has emerged as a vital factor for Indian
firms too.Consumers perception regarding products is uncertain. In addition to the opportunity technology
encompasses a threat. Technological change makes products and business suddenly obsolete/out of fashion.
5.11 New Trade Policy And Globalization Of The Economy
The new trade policy give chance to Indian business firms to earn foreign exchange that is required for
importing whatever raw materials, spares, and components they needed of keeping their production lines going.
In the previous years they did not have to do so. Once an import license was obtained, foreign exchange was
made available from the Reserve Bank of India at the government-determines exchange rates. In the new
dispensation, imports had to be financed by foreign exchange bought from the markets at the market rate. Firm,
which are not spenders of foreign exchange, now suffered a big loss of their profits..
Once the new policy came into existence every company knocked at the export markets. Reliance Europe, Essar
World Trade, Ceat and Fairgrowth Exim were among the newcomers. Companies like Videocon, BFL, Eicher,
MRF, and SRF, which have entered the global market a little earlier.
5.12 Fire Of Competition At Home
Indian business firms having impression that they would never be required to go beyond their home market.
With the growth in entrepreneurial freedom capacity expansion by existing as well as new players became a
regular character in many industries. These developments led to an intensification of the competition in the
Indian market. The interesting point is that while capacity additions were envisaged as a tool for gaining a cost
advantage for fighting competition the very enlargement of capacity created new competition. With the heat of
competition in the domestic market enhanced, firms had to naturally turn to foreign marketer:
Reliance Ind, Reliance Info, MRF, DCM Data and WS Industries turned to exports due to the domestic
competition. MRF, the leader in tire industry, turn to exports as it could not sell its entire production within the
country. Its subsidiary, MRF International Ltd, has the specific mission of accelerating exports. DCM Data
Products too turned to exports on similar grounds. Industries, manufacturers of electrical equipment for power
transmission and distribution, also took seriously to exports for countering the heat of competition in the
domestic market.

VI. SUMMARY
The above foregoing page reveals the immensity of the change takes place in the business/marketing
environment of INDIA on account of liberalization. The massive change takes place in the environment has
thrown up a series of marketing challenges for business firms operating in INDIA.
Technology has the Competitive Advantage and Core Competence
For competing successfully, firms need competitive advantages and core competencies. The technology strength
can make firms enjoy sustainable competitive advantage and core competencies. MNC were scoring over the
Indian firms largely because of their product and brand .Behind their product and brand was their core
competence. Indian firms too have to acquire such core competence and that depends on technology strength.

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REFERENCES
Books-
1. Marketing by Gandhi
2. Marketing and sales management by D.C. Kapoor
3. Marketing management by Kotler
4. International marketing strategy by Dolle and Lowe
LINKS-
1. www.managementstudyguide.com/adapting-marketing-to-new-economy
2. https://en.wikipedia.org/wiki/Economic_liberalization
3. https://en.wikipedia.org/wiki/Economic_liberalisation_in_India
4. https://books.google.co.in/books?isbn=3319118455
5. https://books.google.co.in/books?isbn=1317996607
6. www.academia.edu/.../Adapting_to_market_liberalization_

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