Written Assignment Format

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

Name (Of the faculty) Prof: A. kirpekar Signature: Date of Evaluation:

Remarks (By Faculty): ___________________ ___________________

Assignment no 1: international marketing The marketing environment which made up of micro-environment and macroenvironment surrounds and impacts upon the organization. Economical forces which affecting the global market. Macro-environment factors Political 1. EU enlargement. 2. The euro 3. International trade 4. Taxation policy Economical 1. Interest rate. 2. Exchange rates 3. National income 4. Inflation 5. Unemployment 6. Stock market Social 1. Attitude to work 2. Income distribution 3. Ageing population Technological 1. Innovations 2. Rate of technological obsolescence 3. New product development Environmental 1. Global warming 2. Environmental issue Legal 1. Completion law 2. Health and safety 3. Employment law. Micro-environment factors Industrial 1. Entry and exit firm. 2. Role of trade marks 3. Innovations Labor 1. Labor market dynamics 2. Employment 3. Wages

Public 1. Government tax and expenditure policy Political 1. Role of political institutions in determining policy outcome. Health economics 1. Organization of health care system. 2. Health care works force 3. Insurance policies Urban economics 1. Challenges faced in the cities on urban geography and sociology. Financial economics 1. Structure of portfolio 2. Rate of return of capital 3. Corporate financial behavior

Law and economics Economic 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

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 a competitive 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 marketing or 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.

External Microenvironment
1. 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 some industries. 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.

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. 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). Interest rates: Indias economic growth is constrained, however, by inadequate infrastructure, cumbersome bureaucratic procedures, and high real interest rates. Trade: Indias trade has increased significantly since reforms began in 1991, largely as a result of staged tariff reductions and elimination of nontariff 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. 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. 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. U.S. investors also have provided an estimated 11% of the $18 billion of foreign portfolio investment that has entered India since 1992. Proposals for direct foreign investment are considered by the Foreign Investment Promotion Board and generally receive government approval. Automatic approvals are available for investments involving up to 100% foreign equity, depending on the kind of industry. Foreign investment is particularly sought after in power generation, telecommunications, ports, roads, petroleum exploration and processing, and mining.

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