- Evaluate the market size and growth potential for EACH product category/industry
The worldwide energy drinks market accounts 8-9% of the global soft drinks industry and in India, the energy drinks market was estimated at $154.5 million and its expected growth rate is 28-30%, supported by Red Bull or Gatorade brands. Overall, the energy drinks market accounted &4.1 billion in 2011, having a growth rate of 14-15% (Technopak Food Team, n.d.).
Globally, the pain relief market valued around $20 billion in 2008 (Nanotech Inc., 2010) and it is expected to reach $34.6 billion by 2015 (Global Analgesics Market, 2010). Indian analgesic market increases at a growing rate of 9.50% annually, being valued at $325.7 million in 2009, estimated to reach $430.3 million by the end of 2014 (“Analgesics Market in India to 2014”, 2011).
The sleeping pills market reached $56 million in 2008, registering a 54% increase from the previous year, at global level (Nanotech Inc., 2010) and it is estimated to reach $9.0 billion by 2015, as more and more people suffer from insomnia caused by stress or other sleep disorders (“Global Sleeping Pills Market”, 2010). In a recent study, Mukherjee (2013) identifies that there are over 70 million Indians affected by sleep disorders and the sleep pills market is estimated at Rs 16.000 crore (one hundred million Indian Rupees are equivalent with 10 crore).
The overall anti-aging market is expected to reach $291.9 billion by 2015, as this market is resilient to economic cycles, because people permanently desire to look younger (“Global Anti-Aging Products Market”, 2009). In India, the anti-aging market is based on classical anti-aging methods (lotions/creams, Botox, cosmetic surgery, etc. (Nanotech Inc., 2010)), but also on traditional treatment such as Ayurveda, performed by through Indian medical anti-aging methods (“A Questionnaire on Wellness Industry”).
Globally, the weight loss industry is approximated at $265 billion globally, expecting to reach a level of $361 billion by 2017, increasing the consumption of weight loss food, beverages and supplements, as well as it will tend to focus on green herbs provided by the Asian medicine, especially from Chinese medicine (“Weight Loss/Obesity Management Market”). Studies indicate that the global weight loss market is growing at a fast speed, of 11.5% between 2010 and 2015 (“Global Weight Loss & Diet Management Products”, 2011). Similar to the anti-aging market, the weight loss market is also permanently on an ascending curve, as people are constantly interested in losing weight and also similar to anti-aging treatment in India, the weight loss treatment also doubles the western methods with the Auyrveda treatment (“Health and Wellness Trends in India”, 2010). Although there are not available clear information about the value of weight loss market in India and about its growth rate trends, there are indications that the traditional methods, based on Ayurveda and Chinese tea or plants are much more popular in India, among the population who want to lose weight, because they consider taking pills unhealthy and risky methods for gaining the desired silhouette (Chillibreeze & Sandhu, 2008).
- Evaluate relevant economic, political-legal, socio-cultural and technological considerations pertaining to product acceptability, marketability and distribution system
In developing the PEST analysis for evaluating the potential success of Nanotech Inc.’s on the Indian market, there should be applied a country analysis and an examination of the company’s marketing, distribution and supply chain management, for identifying how the company’s business strategies fit the political, economic, social and technological environment of India.
India is a Federal Republic, based on presidential democracy, being governed as a parliamentary republic, wherein the President has no legislative power and the Prime Minister is head of the government; the country faces a great deal of corruption and the political system also intervenes in the industry, generating tax evasion (McIntosh, 2013). The country’s legal system is based on Common Law, respecting the large diversity that exists in Indian society, but there is weak law enforcement caused by the various interests among the government bodies that impede the proper law enforcement (McIntosh, 2013).
This political-legal environment might impose serious challenges to Nanotech Inc. to enter the Indian market, because it might disrupt the country’s specific distribution model because of the corruption and tax evasion generated by the government and the law is not strong and accurate enough to protect a business based on network marketing distribution.
The economic aspects of the country are supportive for Nanotech Inc.’s entrance on this market, mostly because the controls are reduced. This would allow the company to sell its products based on its network marketing distribution model, encouraging the local population to enter as business partners into the business.
The diverse population is a favorable condition for Nanotech to enter the Indian market, because there are various needs that the company could accommodate. A significant challenge is the fact that most Indians are still traditionally enrooted and prefer the Indian medicine and remedies for their problems (including sleep disorders, anti-aging and weight loss) to the western medicine and technology. This answers the company’s concerns regarding the market’s incapability to absorb its products because it does not understand them.
Technology in India has advanced mostly to its service industry, but in the last 10 years the country is confronting with a stagnation period, and only 10% of its population have access to internet, despite the large penetration of the mobile phone technology in the country, which is expected to have a social media entrance of 88 million in 2013 (McIntosh, 2013).
Much of Nanotech Inc.’s sells are performed in the online environment and since only 10% of Indians have internet access this might be a serious problem for selling Nanotech’s products through this channel.
Therefore, from an economic and social point of view, Nanotech Inc.’s entrance on the Indian market would be favorable, but still, considering that many Indians are still traditional and reluctant to western remedies and that they do not yet have the technological development to absorb the company’s products promoted through internet, the company would need to customize its promotional and distribution strategies to the Indian market, promoting its products as aligned to the traditional remedies, since no chemicals enter the body and no risk can harm the organism and it needs to distribute its products through direct sells mostly. The political aspects still need to be tackled but the company should pursue a foreign direct investment entry strategy, since the controls are reduced on foreign trades.
Works Cited
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