Influences of economics and marketing on relationships in the global Essay - 1

Influences of economics and marketing on relationships in the global food supply chain - Essay Example The economic policies of the government have opened the economy to foreign direct investment with favorable regulatory structures being laid down for the investors. The government also aimed at integrating the agricultural sector in the global food supply chain with an initiative to support domestic markets. At the same time it encourages the productivity in a buyer driven market. The economic policies developed by the governments provide opportunities for the business houses and supermarkets to increase the supply of food by taking the benefits of the incentives offered by the favorable economic policies. Appropriate marketing strategies were also adopted in order to fight the obstacles of the pressure groups and the roadblocks due to negative publicity. The transition of global food supply chain has occurred as an effect of the increased demand and the economic policies of the government and the marketing strategies of the business houses in order to tap the emerging demand (Lindgr een,  Hingley and  Vanhamme, 2009, p.38). These factors have led to the change of food habits and change in lifestyle of the consumers. Thus the relationships of the global food supply chain have been influenced by the economic role and marketing role of the government and the business houses respectively. Critical review of key literature The relationship of the food supply chain has become an important area of discussion. The underlying forces of economics and marketing have been playing a key role in influencing the relationships between the government, business houses and the consumers or the people. The agricultural sector is the core of food production in any country. The farmers harvest their land to cultivate the crops that are sold in the market. This cultivation of the crops and the marketing distribution channels supply the food required by the consumers. The process of demand and supply of food is now spread all over the world with the rapid functioning of retail sup ermarket chains that cater to customers all over the globe (Clapp, 2013, p.59). In the age of liberalization, the food supply chain has become a global phenomenon and it is not confined to the domestic market. The change in economic policies and economic reforms adopted by the economies towards an open market economy has allowed foreign direct investments in the global food supply chain industry. Thus the agricultural sector and the domestic markets have been exposed to foreign competition which has raised the benchmark of food quality. The consumers or the people have transformed the standards and quality of food demand at par with the standard of exports. Several factors like the rise in population, change in diet and food habits, increase in market competition, rise of prices in the local markets and improvement in food quality have raised the aggregate demand of global food supply chain. The human population is estimated to grow by 35% from 6.85 billion in 2010 to 9.15 billion i n 2050. The spiraling rate of increase in human population and the increase in average income level of the middle class and lower middle class society have led to the increase in global demand of food. In order to contain inflation as a result of the increased global demand of