im asignment

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Written Assignment Format

Name (Of the faculty) Prof: A. kirpekar

Signature:

Date of Evaluation:

Remarks (By Faculty): ___________________

___________________

Name: swapnil s chaudhari.

Due Date / Day: 29/07/11

Class: marketing

Roll No: 2801156

Subject: IM

Assignment No: 01

Topic: micro and macro economical factors

Title of the Assignment: effect micro and macro economical factors on liberalization.

Signature: (Of the student)

Marks out of 15


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Assignment no 1: international marketing

The marketing environment which made up of micro-environment and macro-

environment surrounds and impacts upon the organization.

Economical forces which affecting the global market.

Macro-environment factors Micro-environment factorsPolitical

1. EU enlargement.2. The euro3. International trade4. Taxation policy

Industrial1. Entry and exit firm.2. Role of trade marks3. Innovations

Economical1. Interest rate.2. Exchange rates3. National income

4. Inflation5. Unemployment6. Stock market

Labor1. Labor market dynamics2. Employment3. Wages

Social1. Attitude to work2. Income distribution3. Ageing population

Public1. Government tax and expenditure

policy

Technological1. Innovations2. Rate of technological obsolescence3. New product development

Political1. Role of political institutions in

determining policy outcome.

Environmental1. Global warming2. Environmental issue

Health economics1. Organization of health care system.2. Health care works force3. Insurance policies

Legal1. Completion law2. Health and safety3. Employment law.

Urban economics1. Challenges faced in the cities on

urban geography and sociology.

Financial economics1. Structure of portfolio2. Rate of return of capital

3. Corporate financial behavior

Law and economicsEconomic history

Company must constantly watch and adapt to the marketing environment in order to

seek opportunities and ward off threats. Report from International Monetary Fund

(IMF, 2009) reported the global economy is in the midst of a deep downturn. Global


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growth is expected to fall when measured in terms of purchasing power parity and to

turn negative.

Economic factors that affect the business environment

Macro- economic external forces:

1. Economic Environment

The economic environment consists of factors that affect consumer purchasing

power and spending patterns. Economic factors include business cycles, inflation,

unemployment, interest rates, and income.2. Technological Environment

The technological environment refers to new technologies, which create new

product and market opportunities. Technological developments are the most

manageable uncontrollable force faced by marketers. Organizations need to be

aware of new technologies in order to turn these advances into opportunities and acompetitive edge.3. Political and Legal Environment

Organizations must operate within a framework of governmental regulation and

legislation. Government relationships with organizations encompass subsidies,

tariffs, import quotas, and deregulation of industries.

The political environment includes governmental and special interest groups that

influence and limit various organizations and individuals in a given society.4. Demographic Environment

Demographics tell marketers who current and potential customers are; where they

are; and how many are likely to buy what the marketer is selling. Demography is

the study of human populations in terms of size, density, location, age, sex, race,

occupation, and other statistics.

5. Social / Cultural Environment

Social/cultural forces are the most difficult uncontrollable variables to predict. It is

important for marketers to understand and appreciate the cultural values of the

environment in which they operate. The cultural environment is made up of forces

that affect society's basic values, perceptions, preferences, and behaviors.6. Ecosystem Environment

The ecosystem refers to natural systems and its resources that are needed as

inputs by marketers or that are affected by marketing activities. Green marketingor environmental concern about the physical environment has intensified in recent

years. To avoid shortages in raw materials, organizations can use renewable

resources (such as forests) and alternatives (such as solar and wind energy) for

nonrenewable resources (such as oil and coal). Organizations can limit their energy

usage by increasing efficiency. Goodwill can be built by voluntarily engaging in

pollution prevention activities and natural resource.


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External Microenvironment1. The Market

Organizations closely monitor their customer markets in order to adjust to changing

tastes and preferences. A market is people or organizations with wants to satisfy,money to spend, and the willingness to spend it.2. Suppliers

Suppliers are organizations and individuals that provide the resources needed to

produce goods and services. They are critical to an organization's marketing

success and an important link in its value delivery system.3. Marketing Intermediaries

Like suppliers, marketing intermediaries are an important part of the system used

to deliver value to customers. Marketing intermediaries are independent

organizations that aid in the flow of products from the marketing organization to its

markets.

a)Businesses may be doomed to be non starters due to restrictive business

environment which may take the form of rigid government laws ( no polluting

industry can ever be located in around 50 Km radius of the Taj) , state of

competition ( Car manufacturing capacity presently in the country is far in excess of

demand) etc.

b)The present and future viability of an enterprise is impacted by the environment

For e.g. no TV manufacturer can be expected to survive by making only B&W

television sets when consumer preference has clearly shifted to color television

sets.c) The cost of capital and the cost of borrowing - two key financial drivers of any

enterprise are impacted by the external environment. For e.g. the ability of a

business to fund its expansion plan by raising money from the stock markets

depends on the prevalent public mood towards investment in stock markets.

d) The availability of all key inputs like skilled labor , trained managers , raw

materials , electricity , transportation , fuel etc are a factor of the business

environment.

e) Increasing public awareness of the negative aspects of certain industries like

hand woven carpets, pesticides (damage to environment in the form of chemical

residues in groundwater), plastic bags have resulted in the slow decline of someindustries.

f) The environment offers the opportunities for growth and profits. For e.g. when

the insurance and aviation industry was thrown open to the private sector, the new

entrant could easily build on the expectations of the public.


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EFFECT OF MACRO AND MICRO ECONOMICS FORCES ON INDIAN

ECONOMY AFTER LIBERALIZATION.

y India embarked on a series of economic reforms in 1991 in reaction to a

severe foreign exchange crisis. Those reforms have included liberalized

foreign investment and exchange regimes, significant reductions in tariffs

and other trade barriers, reform and modernization of the financial sector,

and significant adjustments in government monetary and fiscal policies.y FDI: Foreign portfolio and direct investment flows have risen significantly

since reforms began in 1991 and have contributed to healthy foreign

currency reserves ($32 billion in February 2000) and a moderate current

account deficit of about 1% (1998-99).

y Interest rates: Indias economic growth is constrained, however, by

inadequate infrastructure, cumbersome bureaucratic procedures, and high

real interest rates.y Trade: Indias trade has increased significantly since reforms began in

1991, largely as a result of staged tariff reductions and elimination of non-

tariff barriers. The outlook for further trade liberalization is mixed. India has

agreed to eliminate quantitative restrictions on imports of about 1,420

consumer goods by April 2001 to meet its WTO commitments.

y On the other hand, the government has imposed "additional" import duties of

5% on most products plus a surcharge of 10% over the past 2 years. The

U.S. is India's largest trading partner; bilateral trade in 1998-99 was about

$10.9 billion.y Significant liberalization of its investment regime since 1991 has made India

an attractive place for foreign direct and portfolio investment. The U.S. is

India's largest investment partner, with total inflow of U.S. direct investment

estimated at $2 billion (market value) in 1999.

y U.S. investors also have provided an estimated 11% of the $18 billion of

foreign portfolio investment that has entered India since 1992.

y Proposals for direct foreign investment are considered by the Foreign

InvestmentP

romotion Board and generally receive government approval.Automatic approvals are available for investments involving up to 100%

foreign equity, depending on the kind of industry.

y Foreign investment is particularly sought after in power generation,

telecommunications, ports, roads, petroleum exploration and processing, and

mining.

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