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Geographic Environment International Marketing Environment

Geographic, Demographic, Economic, Political, Legal, Socio-cultural environments; Their nature and effect on international marketing operations

Also called Natural Environment. Geographical & Ecological Factors:

i. ii. iii. iv. v. Natural Resource Endowments Weather & Climatic Conditions Topographical Factors Locational Aspects in Global Context Ports, etc.

Associate Professor, Nitin Kumar 2014

Associate Professor, Nitin Kumar 2014

Assignment
a) Identify the top 10 natural endowments in the world that are considered important for business. b) For each such resource, identify the top 5 countries in the world. c) For each resource, indicate Indias status as below:
i. Surplus, ii. Self-sufficient, iii. Deficient.
Associate Professor, Nitin Kumar 2014 3

Demographic Environment
Demographic basis of market segmentation: i. Age ii. Gender iii. Income iv. Family size v. Family life cycle (e.g., young, single, young married, no children, young married with children, etc.) vi. Occupation vii. Education viii. Social Class ix. Religion x. Race, xi. Nationality
Associate Professor, Nitin Kumar 2014 4

Demographic Environment
Demographic factors, as mentioned below, have very significant implications for business: i. Size of the population ii. Population growth rate iii. Age composition iv. Ethnic composition v. Density of population vi. Rural-urban distribution vii. Family size viii. Nature of family ix. Income levels, etc.
Associate Professor, Nitin Kumar 2014 5

Assignment
a) Find out the values of following Demographic factors for India and b) Indicate Indias relative position for each (in the world in descending order): i. Size of the population ii. Population growth rate iii. Age composition iv. Ethnic composition v. Density of population vi. Rural-urban distribution vii. Family size viii. Nature of family ix. Income levels, etc.
Associate Professor, Nitin Kumar 2014 6

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China India

Large Population

Economic Environment
USA

Brazil Pakistan Russia Low Income Japan Germany France UK South Africa Small Population Sweden
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High Income

i. Nature & Level of Development of the Economy ii. Economic Resources iii. Size of the Economy iv. Economic System & Policies v. Economic Conditions vi. Trends in GNP growth rate and per capita income, vii. Nature of and trends in foreign trade viii.Domestic supply and demand conditions
Associate Professor, Nitin Kumar 2014 8

GDP versus GNP

GDP (or Gross Domestic Product) and GNP (Gross National Product) both measure the size and strength of the economy but their definition, calculation and applications are different from each other. Comparison chart Differences Similarities </> Embed this chart GDP GNP Stands forGross Domestic ProductGross National ProductDefinitionAn estimated value of the total worth of a countrys production and services, within its boundary, by its nationals and foreigners, calculated over the course on one year.An estimated value of the total worth of production and services, by citizens of a country, on its land or on foreign land, calculated over the course on one year.Formula for CalculationGDP = consumption + investment + (government spending) + (exports imports).GNP = GDP + NR (Net income inflow from assets abroad or Net Income Receipts) - NP (Net payment outflow to foreign assets).UsesBusiness, Economic Forecasting.Business, Economic Forecasting.Application (Context in which these terms are used) To see the strength of a countrys local economy.To see how the nationals of a country are doing economically.Layman UsageTotal value of products & Services produced within the territorial boundary of a country.Total value of Goods and Services produced by all nationals of a country (whether within or outside the country).Country with Highest Per Capita (US$)Luxembourg ($87,400).Luxembourg ($45,360).Country with Lowest Per Capita (US$) Liberia ($16).Mozambique ($80).Country with Highest (Cumulative)USA ($13.06 Trillion in 2006).USA (~ $11.5 Trillion in 2005).

Economic Environment
i. Nature & Level of Development of the Economy Affects: Nature & Size of Demand Measured by: per capita income Countries are broadly classified as:
a. Low Income (Third World) b. Middle Income or c. High Income
9 Associate Professor, Nitin Kumar 2014 10

Associate Professor, Nitin Kumar 2014