Categories IGNOUIGNOU ASSIGNMENTSM.Com Year 2MCO-06: Marketing Management


Question 1. What do you understand by marketing environment? Discuss the impact of demonetization (ban of Rs. 500 and Rs. 1000 notes) in November, 2016 on the marketing environment in India in the short term and long term.


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Having on his soul, the passion to be the Virtuoso of the enumerated aspects of commerce, Dipesh Aggarwal is indulged in the constant process of absorbing the maximum from the infinite knowledge pool available. Mentoring the youth has proved to be his successful manoeuvre in contemplating, analysing and executing his understanding of varying and crucial aspects.


  1. Please share answer Q2 b of MCO-06 .
    Your solutions are very helpful for preparation for exam and assignments as well.

  2. Marketing Environment:
    In today’s world of marketing, everywhere you go you are being marketed to in one form
    or another. Marketing is with you each second of your walking life. From morning to
    night you are exposed to thousands of marketing messages everyday. Marketing is
    something that affects you even though you may not necessarily be conscious of it.
    Definition of Marketing
    According to American Marketing Association (2004) – “Marketing is an
    organizational function and set of processes for creating, communicating and delivering
    value to customers and for managing relationships in a way that benefits both the
    organization and the stakeholder.”
    According to Kotler (2000) – “A societal process by which individuals and groups obtain
    what they need and want through creating, offering, and freely exchanging products and
    services of value with others.”
    Marketing Environment
    The term Marketing Environment refers to the forces and factors that affects the
    organization ability to build and maintain good relationship with its customers. Marketing
    environment surrounds the organization and it impacts upon the organization. Marketers
    have to interact with internal and external people at micro and macro level and builds
    internal and external relationships. The key elements of marketing environment are as
    follows :-
    1. Internal Environment,
    2. Micro Environment, and
    3. Macro EnvironmeDemonetization: The demonetization effort being led by PM Modi in India is appreciable
    to an extent but follows positive as well as negative aspects. The aim is to wash the stock of
    ―black money‖ out of the economy and get it into the banked and taxable part of the economy.
    ―Cleaning of the black money is a very positive step. However, certain things will happen as a
    result of this. Transactions will now begin to move to white economy through the banking
    system which means there will be surge in bank deposits. Even savings in terms of deposits will
    go up.‖
    Many renowned personalities like politicians, businessman, and so on have huge reserves of
    black money either in India or abroad. All the notes of are in high – value denominations. Now
    with the news of demonetization they will be forced to deposit their black money into the banks,
    after submitting their PAN or Adhar or Passport number, to get new currencies. This will help
    the government to catch the culprits and keep an eye on all the fraud people who are helping
    them in converting their black money into white money.
    Though this move causes some difficulties for the common people because banks and post
    offices do not have sufficient amount of cash. People are facing lot of problems with the old
    currencies. They have to make long queues either to deposit their money or to exchange them.
    Moreover the ATMs are not updated yet. The shopkeepers and the others are refusing to take
    2000 rupee note because they don‘t have sufficient amount of small denomination currencies.
    The government is taking necessary steps to upgrade the ATMs and printing new currencies at a
    very high speed so that it reach the people without making any more chaos in the market.
    The sudden stop in the availability of currency has led to a liquidity shock to the people in the
    nation. Lack in currency of Rs.500 and Rs.1000 has disturbed economic activities such as
    consumption, investment, production, employment etc. In this context, a number of short term
    and long terms impacts can be seen on the Indian economy.
    Short-term impacts
     GDP formation will be effected with the reduction in consumption demand. Consumption ↓→
    Production ↓→ Employment ↓→ Growth ↓→ Tax revenue ↓
     Certain sections of the society namely agriculture sector, small traders, households, SME’s, daily
    wage earners etc. will face short term disruptions due to absence of liquid cash.
     Money supply will reduce in the short-run until the new 500Rs. & 2000Rs. gets widely circulated
    in the market.
     Negative impact on disposable income and the consumption patterns of the people is expected.
     Less currency circulation will reduce inflation.
     Short term recession in sectors like real-estate, construction material, textile, handicrafts etc.
     Its impact will be seen on farmers as this is the harvest time and farmers generally deal in cash.
     Rate of capital formation growth will go down as no investments will take place.
    Long-term impacts
     Government revenue will boost up as more earnings would be declared. The unbanked people
    will move to banking like Jan-dhan contributing towards government’s efforts of financial
     Demonetization will set accountability in motion as service/sales tax is not paid by people like
    local photographers, tailors etc. and thus their income goes unaccounted.
     Collection of higher taxes will help in nation building like development of roads, infrastructure,
    transportation and many others.
     Increase in nation developmental projects will demand more labor and other skilled manpower
    which will give rise to employment opportunities.
     It will bring more business in taxation i.e. GST benefits.
     Cash in system will boost educational loans and business loans thus bringing more
     It will lead to better business environment, less corruption and transparency.
     Substantial increase in the demand of Digital transactions system, E-wallets, usage of plastic
    money, online transactions using E-banking etc.
     Gold imports will be reduced because of the investments in gold by people as an alternative to
    cash deposit in the bank.
    To conclude the decision of demonetization will prove excellent in long run and our tax
    consultant will earn a huge profit because now the people will appoint them for the returns and
    filling and the government can earn huge economic benefit.

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