Wednesday, March 26, 2014

Inflation Indexed Bonds (IIBs)

Inflation Indexed Bonds (IIBs)

IIBs will provide inflation protection to both principal and interest payments. Inflation component on principal will not be paid with interest but the same would be adjusted in the principal by multiplying principal with index ratio (IR). At the time of redemption, adjusted principal or the face, whichever is higher, would be paid. Interest rate will be provided protection against inflation by paying fixed coupon rate on the principal adjusted against inflation.
capital protection will be provided by paying higher of the adjusted principal and face value (FV) at redemption. If adjusted principal goes below FV due to deflation, the FV would be paid at redemption and thus, capital will get protected. The consumer price index (CPI) reflects the inflation people at large face and therefore, globally CPI or Retail Price Index (RPI) is used for inflation target by the Central Banks as well as for providing inflation protection in IIBs.WPI series is being revised after every 10 or more years.WPI series is being revised after every 10 or more years Extant tax provisions will be applicable on interest payment and capital gains on IIBs. There will be no special tax treatment for these bonds. IIBs would be Government securities (G-Sec) and the different classes of investors eligible to invest in G-Secs would also be eligible to invest in IIBs. FIIs would be eligible to invest in the forthcoming IIBs but subject to the overall cap for their investment in G-Secs (currently USD 25 billion). As IIBs are G-Sec, they can be tradable in the secondary market like other G-Secs. Investors will be able to trade them in NDS-OM, NDS-OM (web-based), OTC market, and stock exchanges.

Latest updates on the bonds

The Reserve Bank of India (), in consultation with the government, has decided to increase the maximum limit for investment in  Indexed National Saving Securities-Cumulative (IINSS-C) to Rs 10 lakh per annum from Rs 5 lakh earlier for eligible individual investors and Rs 25 lakh per annum from Rs 5 lakh per annum earlier for institutions such as Hindu undivided families, charitable trusts, education endowments and similar institutions which are not pro-profit in nature.

The subscription will close on March 31, RBI said.

The RBI in consultation with government had launched the bond in December. Earlier, the bond was open for subscription during December 23-31, but was later extended to March 31.

 on the bonds are linked to Consumer Price Index ().

These securities will be issued in the form of Bonds Ledger Account (BLA).



Market segmentation is defined as “the process of taking the total, heterogeneous market for a product and dividing it into several submarkets or segments, each of which tends to be homogeneous in all significance. The markets could be segmented in different ways. For instance, instead of mentioning a single market for ‘shoes’, it may be segmented into several sub-markets, e.g., shoes for executives, bankers, college students or school students etc. Geographical segmentation on the very similar lines is also possible for certain products.
Requirements for markets segmentation
For market segmentation to become effective and result oriented, the following principles are to be observed: (1) Measurability of segments, (2) Accessibility of the segments, and (3) Represent ability of the segments. The main purpose of market segmentation is to measure the changing behaviour patterns of consumers. It should also be remembered that variation in consumer behaviour are both numerous and complex. Therefore, the segments should be capable of giving accurate measurements. But this is often a difficult task and the segments are to be under constant review. The second condition, accessibility, is comparatively easier because of distribution, advertising media, salesmen, etc. Newspaper and magazines also offer some help in this direction. For examples, there are magazines meant exclusively for the youth, for the professional people, etc. The third condition in the represent ability of each segment. The segments should be large and profitable enough to be considered as separate markets. Such segments must have individuality of their own. The segment is usually small in case of industrial markets and comparatively larger in respect of consumer products.
Benefits of segmentation
1. The manufacturer is in a better position to find out and compare the marketing potentialities of his products. He is able to judge product acceptance or to assess the resistance to his product.
2. The result obtained from market segmentation is an indicator to adjust the production, using man, materials and other resources in the most profitable manner. In other words, the organization can allocate and appropriate its efforts in a most useful manner.
3. Change required may be studied and implemented without losing markets. As such, as product line could be diversified or even discontinued.
4. It helps in determining the kinds of promotional devices that are more effective and also their results.
5. Appropriate timing for the introduction of new products, advertising etc., could be easily determined.
Aggregation and segmentation
Market aggregation is just the opposite of segmentation. Aggregation implies the policy of lumping together into one mass all the markets for the products. Production oriented firms usually adopt the method of aggregation instead of segmentation. Under this concept, management having only one product considers the entire buyers as one group. Market aggregation enables an organization to maximize its economies of scale of production, pricing, physical distribution and promotion. However, the applicability of this concept in consumer oriented market is doubtful. The ‘total market’ concept as envisaged by market aggregation may not be realistic in the present-day marketing when consumers fall under heterogeneous groups.
Basis for segmenting markets
As explained above, market segmentation consists in identifying a sufficient number of common buyer characteristics to permit sub division of the total demand for a product into economically viable segments. These segments fall between two extremes of total homogeneity and total heterogeneity. The various segments that are in vogue are as follows:
1. Geographic segmentation: Chronologically this kind of segmentation appeared first, for planning and administrative purposes. The marketer often find it convenient to sub-divide the country into areas in a systematic way. The great advantages of adopting this scheme are that standard regions are widely used by Government and it facilitates collection of statistics. Most of the national manufacturers split up their sales areas into sales territories either state-wise or district-wise.
2. Demographic segmentation: Under this method, the consumers are grouped into homogeneous groups in terms of demographic similarities such as age, sex, education, income level, etc. This is considered to be more purposeful since the emphasis ultimately rests on customers. The variables are easy to recognize and measure than in the case of the first type, as persons of the same group may exhibit more or less similar characteristics. For example, in the case of shoes, the needs and preferences of each group could be measured with maximum accuracy.
(a) Age groups: Usually age groups are considered by manufacturers of certain special products. For example, toys. Even in the purchases made by parents, children exert a profound influence. The market segmented on the basis of the age groups is as follows: (I) children, (ii) teenagers, (iii) adults, (IV) grown-ups.
(b) Family life-cycle: This is yet another method falling under demographic segmentation. The concept of a family life cycle refers to the important stages in the life of an ordinary family. These stages are called ‘decision-making units’ (Dumps). A widely accepted system distinguishes the following eight stages:
(I) Young, single, (ii) Young, married, no children, (iii) Young, married, youngest child under six, (iv) Young, married, youngest child over six, (v) Older, married with children, (vi) Older, married, no children under eighteen, (vii) Older single, (viii) Others. Although the distinction between the young and the old is not explicit the concept provides a useful basis for breaking down the total population into sub-group for a more detailed analysis.
(c) Sex: Sex influences buying motives in consumer market, e.g. in the case of many products women demand special styles. Bicycle is an example. This kind of segmentation is useful in
many respects. The recent studies, however, show that traditional differences are being fast broken down and this kind of segmentation doesn’t hold much water. One reason for this is that women are going in for jobs. This is a blessing in disguise as a number of new products are now being demanded, e.g. frozen food, household appliances, etc. Successful attempts to remove barriers of discrimination against women have generated many market opportunities. Interestingly enough, however, it has not been so easy to get males to accept products traditionally considered feminine. A decade age driving motor vehicles by women was seldom seen but today it has become a common sight. The distinction in dress traditionally maintained by girls and boys has also been considerably reduced. These changes have tremendous marketing implications.
3. Socio-psychological segmentation: The segmentation here is done on the basis of social class, viz., working class, middle income groups, etc. Since marketing potentially is intimately connected with the “ability to buy”, this segmentation is meaningful in deciding buying patterns of a particular class.
4. Product segmentation: When the segmentation of markets is done on the basis of product characteristics that are capable of satisfying certain special needs of customers, such a method is known as product segmentation. The products, on this basis, are classified into:
1. Prestige products, e.g. automobiles, clothing.
2. Maturity products, e.g. cigarettes, blades.
3. Status products, e.g. most luxuries.
4. Anxiety products, e.g. medicines, soaps.
5. Functional products, e.g. fruits, vegetables.
The argument in favor of this type of product segmentation is that it is directed towards differences among the products which comprise markets. Where the products involved show great differences, this method is called a rational approach.
5. Benefit segmentation: Russell Hally introduced the concept of benefit segmentation. Under this method, the buyers form the basis of segmentation but not on the demographic principles mentioned above. Here consumers are interviewed to learn the importance of different benefits they may be expecting from a product. These benefits or utilities may be classified into generic or primary utilities and secondary or evolved utilities.
6. Volume segmentation: Another way of segmenting the market is on the basis of volume of purchases. Under this method the buyers are purchasers, and single unit purchasers. This analysis is also capable of showing the buying behaviour of different groups.
7. Marketing-factor segmentation: The responsiveness of buyers to different marketing activities is the basis for these types of segmentation. The price, quality, advertising, promotional devices, etc., are some of the activities involved under this method. This is explained by R.S. Frank as follows: “If a manufacturer knew that one identifiable group of his customers was more responsive to changes in advertising expenditures than others, he might find it advantageous to increase the amount of advertising aimed at them. The same sort of tailoring would also be appropriate if it was found that customers reacted differently to changes in pricing, packaging, product, quality etc. It is pertinent here to ask how these consideration influence marketing. The answer is simple as the present day marketing is consumer-oriented and consumers’ psychology, their social and economic characteristic form the corner stone of marketing decisions. It is this recognition accorded to consumers that has given rise to the concept of market segmentation.
Markets on the basis of segmentation
It is now certain that any market could be segmented to a considerable extent because buyers’ characteristics are never similar. This, however, does not mean that manufacturers may always try to segment their market. On the basis of the intensity of segmentation, marketing strategies to be adopted may be classified into:
1. Undifferentiated marketing: When the economies of organization do not permit the division of market into segments, they conceive of the total market concept. In the case of fully standardized products and where substitutes are not available, differentiation need not be undertaken. Under such circumstances firms may adopt mass advertising and other mass methods in marketing, e.g., Coca Cola.
2. Differentiated marketing: A firm may decide to operate in several or all segments of the market and devise separate product-marketing programmes. This also helps in developing intimacy between the producer and the consumer. In recent years most firms have preferred a strategy of differentiated marketing, mainly because consumer demand is quite diversified. For example, cigarettes are now manufactured in a variety of lengths and filter types. This provides the customer an opportunity to select his or her choice from filtered, unfiltered, long or short cigarettes. Each kind offers a basis for segmentation also. Though the differentiated marketing is sales-oriented, it should also be borne in mind that it is a costly affair for the organization.
3. Concentrated marketing: Both the concepts explained above imply the approach of total market either with segmentation or without it. Yet another option is to have concentrated efforts in a few markets capable of affording opportunities. Put in another way, ‘instead of spreading itself thin in many parts of the market, it concentrates its forces to gain a good market position in a few areas. Then new products are introduced and test marketing is conducted, and this method is adopted. For a consumer product ‘Boost’ produced by the manufacturers of Horlicks, this method was adopted. The principle involved here is ‘specialization’ in markets which have real potential. Another notable feature of this method is the advantage of one segment is never offset by the other. But in the case of the first two types, good and poor segments are averaged.
Market segmentation reveals the market-segment opportunities facing the firm. The firm now has to evaluate the various segments and decide how many and which ones to serve.
Evaluating the market segments
In evaluation different market segments, the firm must look at three factors, namely segment size and growth, segment structural attractiveness and company objectives and resources.
(a) Segment size and growth: The first question that a company should ask is whether a potential segment has the right size and growth characteristics. Large companies prefer segments with large sales volumes and overlook small segments. Small companies in turn avoid large segments because they would require too many resources. Segment growth is a desirable characteristic since companies generally want growing sales and profits.
(b) Segment structural attractiveness: A segment might have desirable size and growth and still not be attractive from a profitability point of view. The five threats that a company might face are:
(i) Threat from industry competitors: A segment is unattractive if it already contains numerous and aggressive competitors. This condition may lead to frequent price wars.
(ii) Threats from potential entrants: i.e. from new competitors who, if enter the segment at a later stage, bring in new capacity, substantial resources and would soon steal a part of the market share.
(iii) Threat of substitute products: A segment is unattractive if there exists too many substitutive products because it would result in brand switching, price wars, low profits etc.
(iv) Threat of growing bargaining power of buyers: A segment is unattractive if the buyers possess strong bargaining power. Buyers will try to force price down, demand more quality or services, all at the expense of the seller’s profitability.
(v) Threat of growing bargaining power of suppliers: A segment is unattractive if the company’s suppliers of raw materials, equipment, finance etc., are able to raise prices or reduce the quality or quantity of ordered goods.
(c) Company objectives and resources: Even if a segment has positive size and growth and is structurally attractive, the company needs to consider its own objectives and resources in relation to that segment. Some attractive segments could be dismissed because they do not match with the company’s long-run objectives. Even if the segment fits the company’s objectives, the company has to consider whether it possesses the requisite skills and resources to succeed in that segment. The segment should be dismissed if the company lacks one or more necessary competences needed to develop superior competitive advantages.
Selecting the market segments
As a result of evaluating different segments, the company hopes to find one or more market segments worth entering. The company must decide which and how many segments to serve. This is the problem of target market selection. A target market consists of a set of buyers sharing common needs or characteristics that the company decides to serve. The company can consider five patterns of target market selection.
1. Single segment concentration: In the simplest case, the company selects a single segment. This company may have limited funds and may want to operate only in one segment, it might be a segment with no competitor, and it might be a segment that is a logical launching pad for further segment expansion.
2. Selective specialization: Here a firm selects a number of segments, each of which is attractive and matches the firm’s objectives and resources. This strategy of ‘multi-segment coverage’ has the advantage over ‘single-segment coverage’ in terms of diversifying the firm’s risk i.e. even if one segment becomes unattractive, the firm can continue to earn money in other
3. Product specialization: Here the firm concentrates on marketing a certain product that it sells to several segments. Through this strategy, the firm builds a strong reputation in the specific product area.
4. Market specialization: Here the firm concentrates on serving many needs of a particular customer group. The firm gains a strong reputation for specializing in serving this customer grou and becomes a channel agent for all new products that this customer group could feasibly use.
5. Full market coverage: Here the firm attempts to serve all customer groups with all the products that they might need. Only large firms can undertake a full market coverage strategy. e.g. Philips (Electronics), HLL (Consumer non-durables). Large firms going in for whole market can do so in two broad ways— through undifferentiated marketing or differentiated Marketing.

Marketing Mix

Marketing Mix

Till now we have learnt that marketing identifies consumers’ needs and supplies various goods and services to satisfy those needs most effectively. So the businessman needs to: (i) produce or manufacture the product according to consumers’ need; (ii) make available it at a price that the consumers’ find reasonable; (iii) supply the product to the consumers at different shops they can conveniently purchase it from; and (iv) inform the consumers about the product and its characteristics through the media (advertising and promotions) they have access to. So the marketing manager concentrates on four major decision areas while planning the marketing activities, namely, (i) products, (ii) price, (iii) place (distribution) and (iv) promotion. These 4 ‘P’s are called as elements of marketing and together they constitute the marketing mix. All these are inter-related because a decision in one area affects decisions in other areas. In this lesson you will learn about the basic aspects relating to these 4‘P’s viz., product, price, place and promotion.
Marketing involves a number of activities that revolve around the product. To start with, an organisation may decide on its target group of customers to be served. Once the target group is decided, the product is to be placed in the market by providing the appropriate product, price, distribution and promotional efforts. These are to be combined or mixed in an appropriate proportion so as to achieve the marketing goal. Such mix of product, price, distribution and promotional efforts is known as ‘Marketing Mix’.

Product : Product refers to the goods and services offered by the organisation. A pair of shoes, a plate of burger, a jeans, all are products. All these are purchased by the customers because they satisfy one or more of our needs. We are paying not for the tangible product but for the benefit it will provide. So, in simple words, product can be described as a bundle of benefits which a marketer offers to the consumer for a price. While buying a pair of shoes, we are actually buying comfort for our feet, local shoe will give you less satisfaction and costly shoe will give you more satisfaction. Product can also take the form of a service like an internet connection, telecommunication, etc. Thus, the term product refers to goods and services offered by the organisation for sale.
Price: Price is the amount charged for a product or service. It is the most important element in the marketing mix. Fixing the price of the product is a difficult job. Many factors like demand for a product, cost involved, consumer’s ability to pay, prices charged by competitors for similar products, government restrictions etc. have to be kept in mind while fixing the price. In fact, pricing is a very crucial decision area as it has its effect on demand for the product and also on the profitability of the firm.

Place: Goods are produced to be sold to the consumers. They must be made available to the consumers at a place where they want and can conveniently make purchase and easily available to the customer. Electronics are manufactured on a large scale in japan or china and you purchase them at a store from the nearby market in your town. So, it is necessary that the product is available at shops in your town. This involves a chain of individuals and institutions like distributors, wholesalers and retailers who constitute firm’s distribution network (also called a channel of distribution). The organisation has to decide whether to sell directly to the retailer or through the distributors/wholesaler etc. It can even plan to sell it directly to consumers.
Promotion: If the product is manufactured keeping the consumer needs in mind, is rightly priced and made available at outlets convenient to them but the consumer is not made aware about its price, features, availability etc, its marketing effort may not be successful. Therefore promotion is an important ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer to make choice of the product to be bought. Promotion is done through means of personal selling, advertising, publicity and sales promotion. It is done mainly with a view to provide information to prospective consumers about the availability, characteristics and uses of a product. It arouses potential consumer’s interest in the product, compare it with competitors’ product and make his choice. The proliferation of print and electronic media has immensely helped the process of promotion.
So, The marketers delivers value to the customer basically through his market offer. He takes care to see that the offer fulfils the needs of the customer. He also ensures that the customer perceives the terms and conditions of the offer as more attractive vis-à-vis other competing offers. Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. It is the sole vehicle for creating and delivering customer value.
Marketing mix or 4 Ps of marketing is the combination of a product, its price, distribution and promotion. It must be designed by marketers in such a manner that these four elements together must satisfy the needs of the organisation’s target market, and at the same time, achieve its marketing objectives.

Concept of marketing, marketer and marketing management

Concept of marketing, marketer and marketing     management

Market is the place where customer exchange goods and services against money and market bring the full circle of concepts, which are generated due to market and closely related to the market or we can say these concept help us to understand the market effectively.
Marketing is a human activities taking place in relation to markets. Marketing help a manufacturer to understand the actual potential of the market, it help to analysis what customer want, which product satisfy their needs, and what could be the possible changes that will improve the product.
Marketer is a person who design marketing activities for the product and company .but marketer doesn’t means someone who is selling goods to the customer. Someone who is in the market to buy something is also known as marketer. So marketer is a person who analysis market either to buy something or to sell something. In a current scenario marketer is a intermediary it could be a company or group of people who play a intermediary role between customer and buyer. But this is not a full definition of the marketer. Marketer is someone who is in the market to analysis the product either to buy or sell.
Marketer helps to achieve the goal of the company by evaluating the actual potential of the market and accordingly design the product for the market.
Marketing Management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. Marketing management means a process that involve analysing customer needs and accordingly satisfy the need of the customer.
There are no universal definitions for the marketing management because it differ product to product and market to market. So there are different concepts of marketing:-
Production concept – the production concept prevail from time of industrial revolution until the early 1920’s. The production concept  was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of the supply of low cost product would in and it create demand for the product. Key concept is firm should focus on low cost production and only produce goods and it will automatically create its demand. 
Product concept – this concept favour the customer. According to this concept company should focus on the product and provide the quality to the customer. These managers assume that buyers admire well-made product and can appraise product quality and performance. These managers are caught
up in a love affair with their product and fail to appreciate that the market may be less “turned on” and may even be moving in different direction.

Selling concept- The selling concept holds that consumers, if left alone, will ordinarily not
buy enough of the organization’s products. The organization must therefore an aggressive selling and promotion effort. This concept focus on only aggressive sale to the customer at any cost. These concepts hold very importance to understand the marketing management.

Marketing definition

Marketing definition

There are as many definitions of the marketing but there is no one definitions which is acceptable universally all over the world. every writer and every scholar have its own opinion with respect to the marketing but according to me ”Marketing is a business process that help to promote the product in the market and build a relationship with customer so that customer again demand the product.”
Marketing define two thing first is positioning product or build relationship with the customer. All the activities revolve around these to points. It is impressive to understand that marketing is not free. There is a cost involve in it. So marketing should be done according to the need, want and demand of the product and cost involve in it.
Need wants and demands are interrelated to each others and have close relationship with each other. Marketing starts with the human needs and wants. People need food, air, water, clothing and shelter to survive. They also have a strong desire for recreation, health, education, and other services. They have strong performances for particular versions and brands of basic goods and services. A human need is a state of felt deprivation of some basic satisfaction. People require food, clothing, shelter, safety, belonging, esteem and a few other things for survival. These needs are not created by their society or by marketers; they exist in the very texture of human biology and the human condition.
Wants are created by the social pressure in the society. Wants means what customer want to achieve in the near future. For example, one needs food and wants a burger , needs clothing and wants a jeans shirt. These needs are satisfied in different manners in different societies. While people needs are few, their wants are unlimited.Human wants are continually shaped and reshaped by social forces and institutions. Wants are created by the society and unlimited. when one eat burger now he/she want something more like burger with cheese  or extra cream. so wants are unlimited and will not complete.
Demand is the last step in the series of need want and demand. Demand means customer want to purchase the product of avail the services if customer is able to pay for that. simply we can say demands are wants for specific products that are backed up by an ability and willingness to buy them. For example, many people want to buy a luxury phone but they lack in purchasing power. Companies must therefore measure not only how many people want their products, but, how many would actually be willing to buy and finally able to buy it. so demand means customer is ready and able to pay for the goods and services. and in case of wants customer is not able to pay for the goods and services.
Marketers do not create need, they simply influence wants with the help of marketing tools like promotion advertising and etc. They suggest to consumers that a this particular product or brand would satisfy a person’s need for social status they want in the society. for example there are two friends living in the society. one of the friend just purchase the big car now second friend also want to purchase big car so marketers will help him to suggest the car which would satisfy the social status need. They do not create the need for social status but try to point out that a particular product would satisfy that need. They try to influence demand by making the product attractive, affordable, and easily available.

Marketing overview

Marketing overview

A person who is looking for a product that can fulfill its needs is known as customer and customer always have unfulfulled needs so organisations use marketing as a tool to bridge the gap between customer and product. Marketing is so basic activity to promote any product and it cannot be considered as separate function.Marketing is indeed an ancient art; it has been practiced in one form or the other but these days it has become the most vital function in the world of business. Marketing is the business function that identifies unfulfilled needs and wants, define and measures their magnitude, determines which target market the organization can best serve, which is the best product that can best serve the need of the customer unfulfilled needs and decides on appropriate products, services and programmers to serve these markets, and calls upon everyone in the organization to think and serve the customer. Marketing is the force that harnesses a nation’s industrial capacity to meet the society’s material wants. It uplifts the standard of living of people in society.
Marketing must not be seen narrowly marketing is itself is a wider term and it is very difficult to explain the marketing in a appropriate way but marketing can be seen as the task of finding clever ways to sell the company’s products. Many people confuse marketing with some of its sub functions, such as advertising and selling. Advertising and selling are the tools by which product is made available to the customer but shouldn’t be seen as equal to the marketing. marketing is a broader terms and advertising and selling are the tools of marketing. Authentic marketing is not the art of selling what you make but knowing what to make. It is the art of identifying and understanding customer needs and creating solutions that deliver satisfaction to the customers, profit to the producers, and benefits for the stakeholders. this is the best way to serve the customer because if you are selling what u have produce than customer can purchase it for the first time but will not purchase it for the next time but on the other have if you are selling customer need to the customer than you are creating a relationship with the customer. and in future customer will come back and purchase the product. marketing helps to lead the market.

Tuesday, March 25, 2014

top to bottom and bottom to top approach

Top-down research starts by thinking about the big image of the economy. Top-down investor invest time in analyzing  at macroeconomic variables e.g. GDP growth rate, interest rates, inflation, flows, market valuations etc, as the state of the overall economy & valuations play a big role in the investment decision. The investor then tries to identify sectors that will perform better than others, and looks for opportunities in these sectors first. For example, if an investor believes that interest rates are going to come down in the coming months, he would like to identify sectors which will be positively impacted by the rise in interest rates, e.g. real estate, auto. He would then pick out the best performing stocks in that sector and add them to his portfolio.

Bottom up investing is all about the detail, or the small image of the economy. The stocks are chosen based on their valuations and the growth potential, profitability, growth and image of the company, instead of looking whether the company is in the right sector or not. A bottom up investors looks at company specific factors: market size, competitive position of the company, sales, earnings, expected future earnings and balance sheet of the company before deciding whether or not to invest. A bottom investor would study variables like price to earnings   ratio, any debt or net cash the company has and its dividend yield. A bottom up investor would be unlikely to be swayed by economic conditions, instead focusing on whether a particular company offers good value and can potentially generate good returns over a period of time.

Like with all investing, it’s important to diversify. You can use whichever approach appeals to you the most, or a combination of the two. For instance you could use the top down approach to focus on a particular industry which interests you and which you believe is likely to outperform. Once you’ve decided on a sector, you can use the bottom up approach to decide which company is likely to give you the best value for your money. This is a great way to seek out a company which may not be well known, but which is performing well in its industry.

Monday, March 24, 2014

india forex reserves rise

Investors out side india finding india is a good place to invest and investing in indian markets. As result India's foreign exchange reserves continued upward trend for the third straight week, expanding by $1.838 billion to $297.28 billion in the week ended March 7 on a rise in the currency assets. India's foreign exchange reserves rose $1.838 billion in a single week to March 14 as overseas investors poured in funds to buy stocks and bonds in local marketson hopes that a stable government. The forex reserves stood at $297.287 billion at the end of that week, Reserve Bank of India said in its weekly statistical report. Net purchases in stocks and bonds have amounted to over $3.5 billion in March alone. The BSE Sensex scaled 22,020 earlier this week and the rupee gained on positive dollar flow.Foreign currency assets for the week rose $1.842 billion to $269.814 billion. Foreign currency assets expressed in dollar terms include the effect of appreciation or depreciation of non-US currencies such as euro, pound and yen held in the reserves, the central bank said.Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund (IMF).

credit information report (CIR)

Credit Information Report (CIR)
Introduction to CIBIL (Credit Information Bureau India Limited)
India's first credit information bureau is a repository of information, which contains the credit history of commercial and consumer borrowers. CIBIL provides this information to its members (companies) in the form of credit information reports. It collects commercial and consumer credit-related data from its members and other sources and collates such data to create and distribute credit reports to members so that they can make better and more informed lending decisions.
Your credit information report (CIR) contains details of your credit history and track record in taking and repaying loans from banks and finance companies. A loan applicant with a good credit record will find access to loans easier, faster and on favourable terms.
The Credit Information Bureau of India Ltd (Cibil) consolidates the information on individual borrowers' credit history, sourced from different member credit institutions such as banks, credit card companies and NBFCs, into a single report called the CIR. This is then made available to its members (banks, finance companies) to facilitate their lending decisions.
Credit Information Report (CIR)
It is the report prepared by CIBIL which contains following information about you (the borrower):
Basic borrower information like:
  • Name
  • Address
  • Identification numbers
  • Passport ID
  • Voters ID
  • Date of birth
  • Records of all the credit facilities availed by the borrower
  • Past payment history
  • Amount overdue
  • Number of inquiries made on that borrower, by different Members
  • Suit-filed status
However the following information is not revealed:
  • Income/Revenue details
  • Amount(s) deposited with the bank
  • Details of borrowers' assets
  • Value of asset(s) mortgaged
  • Details of investment(s)

Customers should be given a free copy of their credit profile as it would help in promoting financial discipline among loan seekers, an RBI report says.
“The Committee has suggested that providing customers with a free copy of their Credit Information Reports (CIRs) would help create awareness about the need to have credit discipline, enable customers to correct their behaviour and improve their score well before they plan to avail fresh credit of any kind...,” the report said.
The move would also help detect identity theft at an early stage, it added.
Report of the ‘Committee to recommend Data Format for Furnishing of Credit Information to Credit Information Companies (CICs)’ has been put up on RBI’s website for comments.
The committee, which recently submitted its report to RBI, has made wide ranging recommendations on issues relating to credit information, such as, increasing its coverage, format of reports and best practices to be followed by credit institutions, credit information companies (CICs) and the RBI.
The panel, headed by Aditya Puri, Chairman of HDFC Bank, also recommended use of common data formats and a common data quality index that could assist credit institutions in determining the gaps in data.
Low usage of credit information by member institutions and other specified users needs to be addressed by requiring CICs to populate their databases with requisite credit information so that enquiries by specified users yield desired information.

Friday, March 21, 2014

Concept of entrepreneur

Concept of entrepreneur

The word “entrepreneur” is derived from the French word “entrepreneur” which means to initiate or undertake. In the early sixteenth century, the Frenchmen who organised and led military expeditions were referred to as “entrepreneurs”. By French economist Richard Cantillon, the term entrepreneur was applied to business in early 18th century. According to him, the entrepreneur buys the factor services at certain prices with a view to sell their products at uncertain prices in the future. Entrepreneurs, who willing to take risk have been the leaders that have produced our recent economic growth,

The concept entrepreneurship is based on the theory of economy and society. The term entrepreneur is also coined by Frenchman J.B. Say around 1800. He postulated that the major role of entrepreneur is to exploit change, not by doing things better but by doing something different. He viewed the entrepreneur as someone in society who upsets and disorganizes the status quo.

Joseph Schumpeter, in his 1911 publication of “The theories of Economic Dynamics” was perhaps the first economist to support Says concept. He said that the entrepreneur is an advanced economy-a method of production not yet tested by experience in the branch of manufacturer concerned, a product with which consumers are not yet familiar, a new source of raw material or of new market and the like. He viewed an entrepreneur is an innovator, who introduces something new in the economy. Innovation may be called as “an introduction of new product, an introduction of new methods of production, developing new markets and finding fresh sources of raw materials and making the changes in the organization and management.”

An entrepreneur, in the face of risk and uncertainty, combines resources in new and different ways to create value, often accomplished via the formation and development of new business ventures. Entrepreneurship is also very much alive in existing companies. It can be found in all sectors of society, not just in business. Although the concept entrepreneurship was developed and popularized in the context of a business environment.

16.3.2 Advantages to becoming an entrepreneur

Before starting a new venture, the potential entrepreneur should carefully review the advantages and disadvantages of a business, since success in never guaranteed. Most entrepreneurs invest their lives in starting and managing their business.

1.                 Opportunity to gain control over one’s own destiny.

2.                 Opportunity to reach one’s full potential.
3.                  Opportunity to benefit financially.

4.                  Opportunity to contribute to society and be recognized for one’s efforts.

Potential drawbacks to be an entrepreneur

Owning a business has many benefits and provides many opportunities. Nevertheless, anyone planning to enter the world of entrepreneur should be aware of the potential drawbacks.

1.                  Uncertainty of income.

2.                  Risk of losing your entire invested capital.

3.                  Long hours and hard work.

4.                  Lower quality of life until the business gets established.

5.                  Complete responsibility.

Characteristics of successful entrepreneurs

1.                  Commitment and determination

These attitudes are perhaps the most important personality traits in determining the relative success of an entrepreneur’s venture. Most new ventures require entrepreneurs to immerse themselves totally in their business. Without this level of commitment, an entrepreneur has much larger margins for mistakes.

2.                  Desire for responsibility

Entrepreneurs feel a personal responsibility for the outcome of ventures in which they are associated. This willingness to accept the responsibility for the outcome of the entrepreneurial venture is closely related to the deep desire of entrepreneurs to maintain an internal locus of control.

3.                 Opportunity obsession

Successful entrepreneurs are obsessed with goal achievement. To them, an established goal comes from the recognition of opportunity out of chaos.

4.                  Tolerance for risk, ambiguity and uncertainty
          Successful entrepreneurs are not gamblers. They do not take wild risks. Rather, they are risk managers. Entrepreneurs have to show patience while facing uncertain situation.

5.                 Self-confidence

Successful entrepreneurs have substantial confidence in them selves. They firmly believe that what they accomplish is with in their over control. They tend to optimist.

6.                  Creativity and flexibility

A creative entrepreneurial mind is required to deal with the changing demand of their customers and their businesses. The ability to respond in a flexible manner to constant change requires a high degree of creativity.

7.                  Desire for immediate feedback

Successful entrepreneurs have a strong desire to improve their performance. They are always ready to learn from mistakes.

8.                  High level of energy

They are more energetic with full of new creative ideas. They are ready to work for long hours and hard work.

9.                  Motivation to excel

Successful entrepreneurs are highly motivated and self-starters and appear driven internally to compete against their own benchmarks.

10.             Orientation to future

Research has indicated that entrepreneurs who created high growth ventures exhibited a far greater concern for the future than did those who headed row and medium growth ventures.

11.              Leadership ability

Successful entrepreneurs have an ability to exert influence without power. This tactics requires that the entrepreneurs be more of a mediator or negotiator than dictator is. He is visionary leader, not dreamer.