In recent years there have been efforts to try and connect society with businesses. Talks of the roles that corporate and businesses can play in trying to change society and environments are becoming more and more. Corporate social responsibility (CSR) is becoming a trend with corporate, big and small, incorporating this activity in society. CSR comes in where businesses take on the responsibility of taking care of problems that particular societies are facing. These actions go to show that businesses are concerned about societies and what goes on in these particular societies. However, the relatively new concept of CSR has not always been the case. In the past few decades there has been a noticeable disconnect between businesses and society. This disconnect has been able to negatively impact societies in which businesses operate. However, there are proponents that argue that a business is a business is a business. These people believe that the incorporation of society needs into any particular business is in essence a recipe for disaster. Such arguments have in essence implied that there exists a disconnect between society and business and that to some this disconnect is justified.
There are different reasons that have been given to justify the disconnect between society and business. One of the main influences of this disconnect has been attributed to capitalism. It has been argued that capitalism has and is still the biggest hindrance to the achievement of businesses full potential as far as their meeting of their respective societal needs is concerned. The pressures in the societies are such that the businesses are under the pressure to produce short term results rather than examine and consider the repercussions that society is likely to face because of these decisions. Therefore, beneficial decisions such as cost-cutting as well as relocation of the businesses to low income areas might be advantageous to the businesses but are a bad idea for the society.
Society on the other hand is not taking these decisions lying down. Society in general as well as governments and institutions are fighting businesses back by creating legislations as well as policies that limit the actions that businesses can take. This in a way goes to show that society is aware of the fact that businesses have put profit ahead of societies needs and therefore there was need to punish these actions.
Currently, it can be argued that both society through government and both so concerned about emphasizing who was right and who was the source of conflict as well as who would come out victorious in the end that little if no effort is placed on the shared interests between the two parties. This has resulted in huge loss of potential opportunities that may be presented between the two parties that would have ended up benefiting both parties and the community at large.
If businesses would step up and find a way that would incorporate society and its functions into how they carry out their profit making systems, then there would be less conflict between the two parties and more benefit instead. This involves the incorporation of social benefits that include looking at society not only as a means of making profit, but also as a place that needs to be included in the business strategy, after all, a happy society is likely to give back more profit to the business than that of a less happy society.
It can be concluded that while capitalism played and still plays a very important role in the creation of a drift between the businesses and society, it can also be used for the exact opposite reason. Thus, instead of using capitalism as a tool for benefiting the business and its shareholders, it should be used to benefit society as a shareholder.
Business and the role it plays in society
Prosperity in any given society can only be created by business. Therefore, a healthy community will in turn create healthy businesses. Over the years, societal problems keep on growing, so much so that that governments as well as non-governmental societies are finding it hard to solve all these problems. Companies are being seen as prospering at the expense of the general community. Furthermore, businesses are now viewed as the major contributors to environmental, social and economic problems that face the community.
It has been found that more often than not businesses that neglect social responsibilities are more often than not likely to be attacked by society. Therefore, it is important that businesses work hard not to ignore social problems that societies face.
Examples can be found everywhere of the long-term business impact of social issues. These are increasing at a fast rate more so in the current century. In the pharmaceuticals sector for example, a tempest of social pressures over the last decade, emerging from issues such as public perceptions of excessive prices charged for HIV drugs in developing countries, are now translating into a general, and sometimes seemingly unsystematic, toughening in the regulatory atmosphere. In the food and restaurant sector, on the other hand, the long escalating debate about obesity is now resulting in calls for further controls on the marketing of unhealthy foods. More so, in the case of big financial institutions, concerns over conflicts of interest and mis-selling of products have recently led to changes in core business practices and industry structure. On the other hand, for some big retailers, public and planning resistance to new stores is constraining growth opportunities. And all this is to say nothing of how social and political pressures have reshaped and redefined the tobacco industry or the oil and mining industries over the decades. This just goes to show the fact that business and society are intertwined and that actions taken by any particular business are reflected in society and that society will hit back if it feels unhappy.
It has become important for companies to be able to incorporate a concept known as share value. This involves creation of corporate values and practices that not only enhance the company’s competitiveness but also enhances social and economic conditions in the society in which that particular company operates.
Businesses need to understand that there is a social contract between them and the society in which they exist. The creation of a drift between the two would lead to conflict and therefore great loss. On the other hand, businesses have to realize that they can only thrive if society thrives, and vice versa is also true; therefore it is of key importance that businesses take societal problems into consideration instead of leaving it to government and NGO’s only.
THE LINK BETWEEN CSR AND SUSTAINABLE DEVELOPMENT
Corporate Social Responsibility (CSR) is a relatively new term that been in existence for less than a century. This term involves that involves companies managing their business processes in a way that produces an overall positive effects on society, is a trend that has caught on in the business community. Currently, businesses of all nature, all over the world, have subscribed to this ideology and are positively giving back to society in all manner of projects. Corporate Social Responsibility has taken firm root in the global community. Presently, one can go as far as argue the fact that there is a ‘social contract’ between most if not all corporations and the particular societies in which they operate[1].
One of CSRs pioneers practitioners A.B. Carroll defines it as ‘The total corporate social responsibility of business entails the simultaneous fulfilment of the firm’s economic, legal, ethical and philanthropic responsibilities. Stated in more pragmatic and managerial terms, the CSR firm should strive to make a profit, obey the law, be ethical, and be a good corporate citizen’ (Carroll, 1991, p. 43). What is becoming more and more evident as days go by is the fact that the private sectors, i.e. the businesses are becoming a major contributor towards sustainable development in society. In fact, “implied in the debate is the idea that the private sector is the dominant engine of growth – the principle creator of value and managerial resources – and that it has an obligation to contribute to economic growth and opportunity – equitable and sustainable.” (Jamali & Mishak, 2007, p. 362)
Since the early 1990’s, corporate responsibility issues including the social obligations of corporations have attained prominence in political as well as business debates. This has been mainly in response to not only corporate scandals but also because of the realisation that development centred only on economic growth paradigms is unsustainable thus there is a need for a more pro-active role by companies, states, and communities in a development process aimed at balancing economic growth with environmental sustainability and social consistency.
Can it therefore be argued that there is a link between CSR and sustainable development?
For a better understanding of the concept, it would have to be broken down into two parts. The first involves CSR and how businesses adopt it. The second part would be sustainable development. More often than not, sustainability in a business context is used to define organizations activities, which are usually voluntary in nature, which usually demonstrate that organizations concern for both social as well as environmental concerns. On the other hand, CSR involves the incorporation or responsible practises in the day to day business operations[2].
In recent years there have been numerous efforts to focus CSR on social environment as well as sustainable growth. This has all been in an effort to conserve the earth’s resources[3]. It is now becoming a norm for companies to be asked to showcase their plans on how they aim to conduct their businesses in a manner that will ensure its prosperity on one hand while taking care of the environment and society in general. Currently, there is no limitation as to who can incorporate CSR for the purpose of sustainable development and who cannot[4].
Relationship between sustainable development and CSR
The duty and functioning of any good company or enterprise is divided into four major functions. These include corporate competitiveness, governance, sustainability and CSR.
The proper functioning of that particular organization will depend on how they are able to juggle any of the two if not all factors. What is however clear is the fact that a link has been established between these factors due to the duties they play in any given business[5].
There has been no clear definition as to the link between sustainable development SD and CSR. However, a rough sketch of this inter-relation would be as follows in this diagram below.
The incorporation of sustainability aspects into general functioning of the business management is what plays the contributory role in this scheme. The general idea is that it would help the business fulfil its duty to society while on the other hand maintaining the shareholder demands creating a win-win situation.
Therefore, whether businesses like it or not, there is a distinct interrelation between CSR and sustainable development not only of the business but also of the society in which the business operates such that they co-exist.
[1]An article titled ‘Social Responsibility Builds Long-Term Success: Opinion’ written by Michael Crooke, quoted “Until now, legal requirements for corporations focused on one goal: profits. Today, benefit corporations add the legal duty of companies to achieve profits while also focusing on socially responsible activities — also known as Corporate Social Responsibility (CSR). Start-up businesses and existing small businesses would be well-served to adopt a benefit corporation structure. Companies that seek to establish sustainable principles as part of their business and marketing strategy and, more importantly, their corporate DNA, are positioned for long-term success.” Accessed at http://www.cnbc.com/id/47599530 on August 30, 2013
[2] As an engine for social progress, CSR helps companies live up to their responsibilities as global citizens and local neighbours in a fast-changing world. And acting in a socially responsible manner is more than just an ethical duty for a company, but is something that actually has a bottom line pay-off.
[3] In 1987, the World Commission on Environment and Development published a landmark action plan for environmental sustainability. The commission, named after former Norwegian Prime Minister Gro Harlen Brundlandt, defined sustainability as "meeting the needs of the present without compromising the ability of future generations to meet their needs."
[4] A report carried out by one of the world’s largest law firms on request from The United Nations Environment Program Financial Initiative in 2005 concluded that "Integrating environment, social and governance considerations into an investment analysis so as to more reliably predict financial performance is clearly permissible and is arguably required in all jurisdictions,"
Corporate Competitiveness addressed by strategic management is a subject rarely discussed in the context of corporate responsibility. However, unless all strands of corporate responsibility are brought together under a common management framework, CSR and sustainability will remain peripheral activities and their impact is likely to remain well below required levels to achieve the Millennium and related goals.
Corporate Governance sets the legal framework to protect a company’s shareholders and stakeholders; the relative emphasis being dependent on national approaches.
CSR is aimed at extending the legal requirements promoting ethics, philanthropy and social reporting to satisfy stakeholder concerns.
Corporate sustainability focuses on long term economic and social stakeholder expectations both by optimising their sustainability performance and by participating in networks with governments, NGOs and other stakeholders that can provide the capacity for the world’s sustainable development.
The introduction of the report contains a brief explanation as to why it was necessary for this report to be written. It goes on further, introduces Wanelo as the company in general, and outlines what the company does to be able to bring out its significance to Green Golf Supplies if chosen. Finally, the introduction outlines how Wanelo as an ecommerce company works.
The second part of the essay points out the benefits that Fairways & Green Golf Supplies stand to benefit from if they incorporate Wanelo into their marketing strategy.
The next section involves examining of the negative parts of Wanelo, how they are likely to affect the company as well as what the company can likely do to be able to mitigate the negatives that may come with adopting the use of Wanelo.
The final section of the essay contains the conclusion as well as the recommendations available for the company. The conclusion includes a summary of all that was researched on Wanelo. The recommendation part includes the suggestions given to the company that will not only help it integrate with Wanelo but also come out successful in the end.
Introduction
This is the report on the benefits of incorporating Wanelo into the marketing strategy of Fairways & Green Golf Supplies, as per the company’s request. The importance of this study is to examine Wanelo as a potential strategy for our company outlining the pros as well as the cons that may be involved in this situation. If the marketing strategy is found suitable, the report outlines the steps needed in the incorporation of the new marketing strategy.
What is Wanelo?
Started in 2010 and based in San Francisco, USA, Wanelo is an e-commerce website like any other that specializes in the sell of almost anything. However, there is a special uniqueness about this site. Unlike other e-commerce websites, this one has a social aspect to it making it a social shopping website. People go to this site to browse for the products they need then buy that particular product. Thus, while it has a social website ring to it, people do not socialize with other people on this site. In lieu of this, the company’s name Wanelo was derived from a mash up of the words; want, need, love, which is the essence of the company (Clancy, 2013, p.1).
This site enables individuals to upload pictures for the items that they would wish to sell and unlike other sites like eBay, the process is free. Thus, the site has a hundred percent focus on the product and how to access the product if a buyer wanted it. The website not only allows the purchase of products but also allows the users to follow and keep up with trends while allowing them access to be able to purchase those specific trends.
By the month of may this year, the company boasted of up to eight million registered users up from the one million users that the site had had in November of last year. The CEO of the company, Varshavskaya is quoted to have said that the main aim of the company was to unite shoppers with products as well as stores on the same platform where they can interact. Having established exactly what Wanelo is it is important to know how the website functions.
How does Wanelo work?
The functioning of the website has been likened to that of a wish list that that includes a wider variety of products as well as a larger selection of retailers. Once a consumer signs on with the site they are presented with a number of trendy choices from which they can choose from, if what they want is not among the trends, they can directly search for it. Once, they find whatever they are looking for they can click on the item. Clicking on the item has a number of implications. The first is that the item will be directly traceable back to the retailer where then a purchase can be made. The users also get access to feeds on the site that inform them of what is currently trending. How this is established is that the site allows people to click on the things they like which translate to the creation of a list of things that an individual likes. The more people like a specific thing, the most likely the fact that that particular product is trending (Angulo, 2013,p.1).
Benefits of using Wanelo
Currently, Wanelo is among the most popular sites in America. The site is always active with an estimate engage analysis of sixty tweets per minute on an average day. This means that the target market for this marketing strategy is already engaged. The company has been able to use the internet as its major source of drive.
It is estimated that approximately over 200,000 stores, both big as well as small retailers, work with the site (Madden, 2013,p.1). This means that the site already has a big foundation from which our company would benefit from joining.
Once a product has been introduced into the site, the product company is able to monitor the popularity of their product by monitoring how many people have clicked on it. This is because clicking on the item translates to liking the item or at least showing an interest in the item. With information such as this, the company would be able to stock up as well as increase marketing on products that trending or which the customers are interested in buying.
The site has been created to maximize the expose of a particular product to the population in general. This is because, the site has a built-in facebook application that allows a persons friend to be aware of what that person clicks on or likes on the site. This maximizes exposure by allowing that particular persons friends and acquaintances to view this like, thus, creating room for the product to trend where possible.
The site has no restrictions to the kind of products that one is able to access on their site. Thus, a company like ours that deals with golf suppliers can also use the site as a marketing strategy.
The growth of the site itself is a testament in itself. This is because, since its inception, the company has experienced exponential growth. The company has been able to attract such loud crowds by linking itself with the most popular social media. Joining the site means that the more shoppers that the site attracts the more these people are likely to view the company’s products (Leahey, 2013, p.1). More exposure translates to more sales.
Finally, the site does not deal with commerce as far as the customers are concerned. Once the customer has been directed to the product and made a purchase, the company gets to deal with the products company where they get a commission from the sale. This is important for it eliminates companies having to pay to be able to post their products on the site then having to pay a commission of the product is sold. In essence, the site saves on the company’s finances.
Some of the negatives of using Wanelo
A number of hurdles that the company is likely to run into when dealing with Wanelo include the target market as well as interest. The firsts is target market. According to reports done not only Wanelo but also other companies, the largest target market interested in the website is the pre-teen as well as the teen market. These two groups are interested in so many things; however, golfing may not be one of their favorite or priority activities (Nick, 2013,p.1). This means that even is the company was to use the site; these two groups would not take an interest in the product. The best way to counter such a counter such an obstacle is to create a golfing product that is likely to capture the interest of these two groups. Once a product is out there and it is trending, then it is more likely that the brand name will remain on the top of the game. The second suggestion would be to focus on the men and women who form part of the smaller Wanelo market but who are in essence the people who provide the money for the company’s largest market segment.
The second hurdle that the company is likely to face in the site is with regards to the interest in the product. According to studies conducted on the site, the products that trend the most include those that involve clothing or footwear. In this case, if the company wants to succeed in this type of market then the company would have to come up with a strategy that involves the placing trending golfing wear. The key is to produce a product that is so remarkable that it instantly trends. Once the product has trended, meaning that it is popular with a section of the sites subscribers then the brand name will be established.
Finally, due to the trending nature of smart phones and app store, other companies are likely to invest in those mobile apps which may then pull the subscribers from the website. The threat of other businesses stealing one’s customers is always likely. In this case, the company should also be smart enough not to solely use the site but rather use it as a launching pad to develop a brand name and if possible create an app that s likely to attract customer from the site. This is also because of the fact that if most if not all individual product retailers is able to establish mobile apps for themselves, the function of Wanelo would cease to exist.
The initial implementation of Wanelo
The implementation of Wanelo is very important. If the company chooses to go ahead with the marketing strategy, the first step that needs to be taken is the selection of the items that the company feels would best describe the company. The items have to be able to capture an audience either because of their nature or because of their uniqueness. Once the items have been selected, the product will then be added onto the Wanelo website which automatically creates a store for our brand.
There will be the need to set up a personal account for the company. Once this is set up, then the product images are posted posting the URL of the product. Once posted, a buy now button is made available that is able to link a product purchase to the company’s ecommerce website. The only other relevant information needed for the set up of a successful Wanelo set is the price of the item as well as the category in which the products fit (Wortham, 2013, p.1). Currently, there are only six categories available which include; individual men and women fashion, home, kids, entertainment and technology. It is important to note that for this venture to be successful, there has to be an ecommerce website, belonging to the company, where the purchasers and go ahead and purchase the product.
In this case, the company can create sales via the site by being able to communicate with shoppers regarding different styles and collections as well as the analysis of the shoppers as to which tastes are preferable. This will enable the shoppers know what to sell. It is important to put the different shoppers’ styles into consideration by creating different collections.
Conclusion
Wanelo, as an ecommerce company has truly come a long way in such a long time. not only has the company been able to break and enter into a market that had for a long period been for a long period dominated by big companies such as eBay but in doing so they have been able to come out at the top. The company has ensured that it is able to fuse both the need to share socially along with the need to shop to create a product that has been able to attract a large number of people. Finally, by creating a platform where the buyer, product and retailers can freely meet and by removing hurdles presented by similar companies in such markets, Wanelo is the company to go to for any business needs due to their ability to provide versatility not only for the purchaser but also for the retailer under one ‘website’.
Recommendation
Wanelo is a good opportunity for the company to be able to sell our products. Currently, the largest market segment for the site is the tweens as well as the teens. However, there is a growing list of older women as well as men interested in the site. The first step to successfully internalizing Wanelo is to be able to create a brand on the market. The purchasers’ should be able to know that there is a brand, that specializes in golf supplies but which has created different styles to suite all market segments that visit the site including men, women and children of all ages and sizes. Once this is set up and established, it is important that the company engage in conversations with the customers to be able to identify with current golfing trends. This will create a happy and satisfied customer base as well creating more marketing for the brand.
Works cited
Leahey, Colleen. "Why Your Teen Loves Wanelo." Fortune 167.8 (2013): 52. Business Source Complete. Web. 31 Oct. 2013.
The baby care industry is among the fasted growing industries in the world. The industry caters for roughly four million babies in a yearly basis. This means that the industry rakes in a lot of money at the end of any fiscal year. In fact, Transparency Market Research found that in 2011, it was estimated that the total amount of money spent in this industry alone was 44.7 billion dollars. This number was estimated to reach USD 47.7 by the end of the year 2012 and to go further in the years that follow. In the global market, the Europe, Middle East and Africa region has and still dominates the baby care industry. This region enjoys 37.4% of the global baby care market revenue share and is expected to do so for a longer period. This dominant market is followed closely by the Asia-Pacific markets.
The growth of this particular market is largely fuelled by the growing baby population in most developing countries where the disposable incomes of the parents have also increased considerably. Moreover, the average age of parents has increased over the past few years. This means that people are now starting families at older ages making them more likely to be financially stable. Finally, the number of women entering the mainstream working has been on the increase in recent years making the market flourish.
The changes that keep on affecting this market have necessitated the need for industry players in this particular market to adopt not only to the demands but also to the growing competition. Only through the adaptation of market competitive strategy will the company be able to compete with key players in the industry such as Johnson and Johnson.
The importance of achieving strategic fit
Strategic fit is the level at which an organization matches its mission as well as strategies to its external structures as well as the opportunities in the external environment. A strategic fit allows a company to operate in its own competitive state with as much efficiency as possible. Furthermore, it examines the resource base of a company and explores how these can be utilized to achieve maximum benefit. One can therefore summarize strategic fit as the aligning of the company’s strategy with competitive strategy.
The existence of a strategy for any given company maintains the direction as well as the scope of that company more than long term goals. This is important in any changing business environment for it enables the company to remain grounded. A strategic fit is mostly expressed in a company’s strategy goals which are then developed or put in action in a strategic plan. This process of implementing strategy goals is referred to as strategic management. The planning as well as the implementation of a strategy is what is referred to as a strategic fit (Thompson, 2001, p. 56).
Aiming to achieve a strategic fit is important in that it enables the company recognize the customer as well as the supply chain improbability. It also helps highlight competitions as well as the supply chain strategies. This also will help the company recognize the perfect supply chain. Being able to recognize this will help map out the right strategy needed to be able to achieve maximum market penetration. Being able to analyze competition as well as the market will enable the company to be able to map up a strategy. In this we have to analyze Johnson and Jonson and the marketing strategy applied in their case that has made them successful in the market. This includes a complete analysis as to the strategy used by the competitors. It is imperative to examine the general baby product market, and trying to weed out what may be important and applicable to our case.
Having established the existence of a market and the competition it is important to consider the customers and their demands. A strategic fit concept allows the company to foresee such problems and thus address them. It is about building supply chain strategies that are able to face customer demands as well as uncertainties. Strategic fit also demands for responsiveness towards the customer demands for quality and quantity (Analoui, & Karami, 2003, p. 61). An example of this is to respond to a large product portfolio a company needs to increase the production and storage capacity which will in turn increase the cost. The increase in cost will have an inverse effect on the efficiency of the supply chain. In this case, a strategic decision to increase the responsiveness will have additional cost which will lower the efficiency of the company. Such a scenario creates a trade between responsiveness and efficiency.
It is therefore very important to understand the demand at each stage of supply chain and choose the appropriate level of responsiveness or efficiency for that particular level. To achieve strategic fit companies need to bring consistency between implied demand uncertainty and supply chain responsiveness. For a high implied demand uncertainty the company needs a responsive supply chain and for a low implied demand uncertainty we need an efficient supply chain.
Porter’s Five Forces framework as a tool of competitor analysis
Porter’s five forces is an analysis tool used to explore the environment in which a company or a product in which that company operates in order to gain a competitive advantage or strategy. This system examines five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.
These forces establish an industry structure and the competition level in that industry. In most cases, the stronger the competitive forces in the industry, the less profitable the industry is (Henry, 2008, p.35). Also, an industry with low barriers to enter, having few buyers and suppliers but many substitute products and competitors is seen as very competitive and is therefore not so attractive due to its low profitability.
Threat of new entrants: This determines the level of ease of a company’s entrance into a particular industry. In most cases profitable industries have less entry barriers. In this case the rivalry soon intensifies leading to competition for the market share. Most of these competitions lead to the fall of profits. In most cases, existing companies usually create high entrance barriers that will deter the new entrants. In most cases, the threat of new entrants is high when Low amount of capital is required to enter a market and existing companies can do little to retaliate. Also, when existing firms do not have patents, trademarks or do not have established brand reputation (Hill, & Jones, 2007, p.72). In most of these cases, there is no government regulation. Customer switching costs are very low and there is low customer loyalty. The products are nearly identical and economies of scale can be easily achieved.
Bargaining power of suppliers: In most cases Strong bargaining power allows suppliers to sell higher priced products or low quality raw materials to their buyers. This may be a great disadvantage to the company’s profit for they have to pay more for the material. This happens in most cases where there are many buyers but a few suppliers and these suppliers are large thus they can afford to threaten the buyers (Fleisher et.al, 2007, p.83). There are few substitute materials thus the buyers have no option but to stick to the available material. Finally, either the suppliers may have scarce resources or the cost of switching raw materials is very high.
Bargaining power of buyers: In this case, the buyer has the upper hand. They have the power to demand lower price or higher product quality from industry producers. This is not good for the producer for lower prices usually translate to lower revenues for the producer while higher quality demands raise the production cost. This happens when buying of the product is in large quantities or control many access points to the final customer but only few buyers exist. This may also be the case when the switching cost to other suppliers by the customers is low. In such a scenario, substitutes to the product are a lot and the buyers are price sensitive (Hill, & Jones, 2007, p.76).
Threat of substitutes: This happens when buyers can easily find substitute products with attractive prices or better quality to those with lesser qualities and when buyers can change from one product to the other with less cost.
Rivalry among existing competitors: This is usually the major determinant on how profitable and competitive an industry is. In a competitive industry, companies have to compete aggressively for a market share. This usually results in low profits. This happens in a situation where there are many competitors, exit barriers are high, the industry’s growth is slow, or there is low customer loyalty.
Adopting a revolutionary as opposed to an evolutionary approach to change
Change is never an easy feat for any company whether its bid or small. However, when any given company decides to adopt a new order or strategy, change has to be effected. This change may be effected either in a revolutionary approach, or in an evolutionary approach. In search a situation, an evolutionary approach may be classified under prolonged periods of growth where no major disruptions occur in the company’s routine. On the other hand, revolutionary approaches happen where turning points in the company’s existence that needs to be addressed quickly and swiftly. The adaptation of a revolutionary approach to change in the company is of a greater advantage due to a number of reasons (Hatch, & Schultz, 2008, p. 87).
Revolutionary change more often than not is orchestrates change from the top. In any organization that has adopted the revolutionary strategy, there are visible good signs. These include a workforce that is effective and competent, effective tool are put in place to be able to effect the duties delegated and above all, the leadership is effective. Employees are trained and the effectiveness of the training is measured. They have flat organizational structures and control people's actions through data and a transparent performance management system rather than position (Abrahamson, 2004, p.74). In this case, visible leading and lagging performance indicators that measure financial, customer, internal process and the learning and growth characteristics of the organization become evolved.
Change brought about by a revolutionary approach is seen as positive. In such a scenario, Competitors are seen as a prompt to innovation. Markets for one product are swallowed up by new ones opportunities and innovations. In this case, customer complaints are treated as an opportunity to learn and change processes to improve efficiency and effectiveness. In this case, risks are determined and managed consistent with the company’s vision, goals and values. Governance is not treated as a chore but something in which pride is taken. Finally, projects in this case are well managed and deadlines are adhered.
Effective revolutionary change takes place in three stages which are reengineering, reconstruction and innovation (Cerasale, & Stone, 2004, p. 25). All these stages contribute and ultimately lead to the eventual readjustment of the company by the creation of a complete suitable environment.
Finally, a revolution pace means that a company analyzes, besides its running projects, current, potential, future requirements on its products or particular sub-systems and uses the analysis results to construct or improve an infrastructure for building its future products.
Strategic drift and how it may be avoided
Strategic drift is referred to as the failure of a company to respond to its external environment. It can also be defined as the departure from a company’s strategic plan over time by a range of small or individually inconsequential actions not being undertaken or being undertaken in a way not conducive to the desired outcome. In most cases, a strategic drift arises when a company rapidly develops strategy in a way that does not keep up with the changing environment. This situation causes a company's strategies to fail to address the strategic state of the company (Thompson, & Martin, 2010, p. 10).
Despite the potential of a company encountering a strategic drift, this should not be viewed as a concrete device but rather as a hurdle that the company needs to overcome in order to succeed. However, there are steps that a company can put in place that would be able to help prevent a strategic drift before it happens.
Leadership: The viability of how any given company or organization works is usually determined by a well planned leadership strategy. Thus, while good leadership may be responsible to the success of the company, the opposite may result in a drift of the company’s strategy. A well planned, leadership oriented strategy will not only avoid a drift but also has the capability of noticing a drift before it becomes established in the company.
Growth: The future growth of any given company is determined by a perfectly defined growth strategy. The growth strategy is the one responsible for the creation of the company’s guidelines and goals for the future. Thus, a well planned growth strategy will ensure that the company sticks to its goals by coming up with good planned formulas. Lack of a clearly defined growth strategy will lead to a drift in the company’s strategies (Haberberg, & Rieple, 2007, p. 48).
Culture: The culture of any given organization determines the success or failure of that company. A company that has a well planned strategy of management that addresses a way to be followed by both employees and leaders to avoid difference in interpretation of issues and ideas that may not favor the growth of the company is a well organized company. The regulations of an organization should be impartial in order to fit not only the employees and managers, but also the customers.
Human resource: Over the years, human resource has become one of the most essential aspects in the operation of a business. A skilled and motivated work force can help the company create a competitive advantage which other companies may find difficult to imitate in a market. This will cause the company to need to have highly skilled and oriented personnel to be able to boost maintaining of market leadership to avoid the drifting or falling of the company.
Advertisement: Advertisement is one of the most essential components that characterize the operation of a market. This is because it raises the awareness of the consumers about the availability any given products in the market. Therefore a well planned advertisement is an important for it helps a company penetrate a market, especially when introducing a new product into that market. A poorly planned and executed advertisement may transmit to limited growth of the company which in return may cause a drift in the company.
The contribution of administrative management to implementing strategy in respect of leading strategic change
Administrative managements play a very important role in the implementation of strategy more so in leading strategic change. Not only is this office in charge of ensuring that the strategy set forth is implemented, but also in setting the pace as well as the style in which the strategy is implemented. Generally, it is the duty of then administrative management to ensure that the strategic vision put in place is turned into concrete and tangible results (Cunningham, & Harney, 2012, p. 67).
Strategy formulation entails heavy doses of vision, analysis, and entrepreneurial judgment. Thus, successful strategy implementation depends on the skills of working through fellow employees, organizing, motivating, culture-building, and creating stronger fits between strategies. How the organization operates and its entrenched behavior does not change just because a new strategy has been announced or put in place. In this particular case, most administrative management takes on the role of strategy management. In most cases, this is no easy task. Strategy implementation has to be tailored to the company's overall condition and promotion, to the nature of the strategy and the amount of strategic change involved and to the management's own skills, style, and methods (Camillus, 1986, p. 53).
The general duty of the administrative management in this case can be divided into four main sections. First, it is their duty to perform the recurring administrative tasks associated with strategy implementation. Secondly, it is their duty to fill the gaps between strategy and the various internal commands in order to align the whole company towards backing strategy accomplishment. Third, it the duty of the administrative management to Figuring out an agenda and a set of action priorities that matches up well with the organization's overall situation and the context of the- sluing in which implementation must take place. Finally, it is their duty to come up with what managerial approach and leadership style to adopt in inducing the needed organizational changes. How therefore does the administrative management accomplish a successful implementation of the change strategy?
The administration management has to pinpoint the key functions and tasks requisite for the successful execution of the change strategy. The requisite tasks vary depending on the company’s strategy as well as competition. Once this has been established, it is their duty to understand the relationship between Activities. This can be related by the flow of material through the production process, the distribution channels, used the type of customer served, the technical skills and know-how needed to perform them. the need for a strong centralized authority over the workers/employees, the sequence in which tasks must be performed, and geographic location in which the tasks will be performed, to mention some of the most obvious ways. Such relationships are important because interrelationships usually become the basis for grouping activities into organizational units. If the needs of strategy are to drive any given company’s design, then the relationships worth looking out for are those that link one piece of the strategy to another (Van Den Berghe et.al, 2004, p.38).
The third step is to group the activities into organizational that can easily carry out the strategy. Once the groups have been set up and their duties determined, it is imperative that the administrative management determine the degree authority and independence each unit will receive. The final step is to act as the provider of coordination between the units. In playing the important part of setting up and unifying the units, the administrative management ensures the successful implementation of the strategy set up in terms of leading a strategic change.
Conclusion
In conclusion, strategy plays an important role in the success or failure of any given company. Regardless of whether the company is just starting or has been established in the market, the strategy set up by the company determines its success rate. Therefore, a company should be very careful in outlining the kind of strategy it will adopt in a given market. Furthermore, it should be very careful in the selection of the strategy implementers because the key to any successful strategy implementation is always the people driving the implementation.
References
(2003). Realising strategy in management: themes and applications. Cambridge, Cambridge University Press.
ABRAHAMSON, E. (2004). Change without pain: how managers can overcome initiative overload, organizational chaos, and employee burnout. Boston, Harvard Business School Press.
ANALOUI, F., & KARAMI, A. (2003). Strategic management in small and medium enterprises. London [u.a.], Thomson.
CAMILLUS, J. C. (1986). Strategic planning and management control: systems for survival and success. Lexington, Mass, Lexington Books.
CERASALE, M. V., & STONE, M. (2004). Business solutions on demand transform the business to deliver real customer value. London, Kogan Page. http://www.books24x7.com/marc.asp?bookid=7869.
CUNNINGHAM, J., & HARNEY, B. (2012). Strategy & strategists. Oxford, Oxford University Press.
FLEISHER, C. S., & BENSOUSSAN, B. E. (2007). Business and competitive analysis: effective application of new and classic methods. Philadelphia, Pa, Wharton School
HABERBERG, A., & RIEPLE, A. (2007). Strategic management: theory and application. Oxford, Oxford University Press.
HATCH, M. J., & SCHULTZ, M. (2008). Taking brand initiative how companies can align strategy, culture, and identity through corporate branding. San Francisco, Jossey-Bass. http://site.ebrary.com/id/10226839.
HENRY, A. (2008). Understanding strategic management. Oxford, Oxford University Press.
HILL, C. W. L., & JONES, G. R. (2007). Strategic management: an integrated approach. Boston, Mass, Houghton Mifflin.
THOMPSON, J. L. (2001). Understanding corporate strategy. London [etc.], Thomson Learning
THOMPSON, J. L., & MARTIN, F. (2010). Strategic management. Andover, Cengage Learning.
VAN DEN BERGHE, L., & VERWEIRE, K. (2004). Integrated performance management: a guide to strategic implementation. London [u.a.], SAGE Pub
Amazon.com can be defined as the one company that has been able to use information technology to conquer and dominate its completion. This is attributed the unique and very special way that Amazon decided to carry out its business. When amazon.com first ventures into business they picked the least likely business, the book business. This was at the point where the reading culture in America was at an all time low and people were not as interested in books. On the other hand information technology and the internet had been a phenomenon that was spreading like a bush fire with more and more people subscribing to the internet and internet related services.
How amazon.com used IT to their advantage
The company decided that they would sell books but unlike the typical bookstore, they would do it online. Since its inception, the company has been able to provide billions of books to its worldwide customer base. What amazon.com does is that they provide the information of a particular book; complete with its price as well as the reviews that book has received not only from critics but from customers as well (Narayanan, 2000). To ensure that the customers are happy with the books they have chosen, the company provides a preview of the book that can be accessed online. Once one is satisfied as to the information provided for regarding the book, they are able to pay for the book which amazon.com then delivers to them. This ensures that unlike in a bookstore scenario where the customer has to leave the comfort of his house to buy a book, amazon.com merely delivers the book at ones doorstep with the push of a button. Given the uniqueness of the service that the company was offering it was able to attract a large customer base at a global level for while keeping up with global trends, they had been able to not only attract and keep the interest of the customer but also re-introduce a reading culture that had been dying (Spence & Press, 2000).
Amazon went a step further and provided electronic books popularly known as E-books. This new piece of development ensured that all one had to do was to buy a soft copy of the book they wanted. This they made possible by providing soft copies of as many books as possible even those that had only existed in printed editions only. This capture the interest of the customer due to the fact that owning printed copies of books was becoming a cumbersome procedure. By introducing electronic books, the company ensured that people would have their books in soft copy which would allow them not only to easily carry them anywhere. Also books in this form would help save them from the damage that often came with printed texts including ware and tare as well as dangers of fire and other disasters that are likely to occur to a book.
Recently, amazon.com has taken another technologically innovated step towards widening the gap as far as competition is concerned. The company has introduced a gadget they refer to as ‘KINDLE’ which has kept the company’s customers as well as funs excited. This new technology has best been described as a personal online library. This technology works by enabling one to store millions of e-books in a virtual library that can be accessed by the kindle gadget. Using cloud technology, which is among the latest technological advancements of our time, this new venture allows customers to carry around tones of books in a small tablet like gadget which they can easily access at any time as long as they can access the internet. What is appealing to the customers is the fact that not only can they carry around many books in one convenient portable gadget (Brynjolfsson & Hitt, 2000). But, they do not also have to worry if they lose the gadget in one way or another since their virtual library is online and can easily be accessible from any point where they can access the internet. Since it was launched into the market, the market value of this gadget has been on the higher side, what is however interesting is the fact that despite this the product has and is still being sold at a global level. This just goes to show that the company investment in the use of IT has done well for them.
One can therefore conclude and say that Amazon.com is one company that has been able to actively apply and utilize information technology in their business (Checkland & Holwell, 1997). This has not only set them up as global trendsetters in the bookselling business but has also enabled them create a tremendous gap between themselves and their competitors in the business. Through their ingenious incorporations of IT, they have made the once was tedious process of buying reading and storing books a fun and enjoyable process. Their clever use of IT has earned them respect, admiration and at the end of the day big profits earned from the sale of their products globally.
References
Narayanan, V. K. (2000). Managing technology and innovation for competitive advantage.
Spence, R., & Press, A. (2000). Information visualization.
Brynjolfsson, E., & Hitt, L. M. (2000). Beyond computation: Information technology, organizational transformation and business performance. The Journal of Economic Perspectives, 14(4), 23-48.
Checkland, P., & Holwell, S. (1997). Information, systems and information systems: making sense of the field.
Corporate Social Responsibility (CSR) is a relatively new term that been in existence for less than a century. This term involves that involves companies managing their business processes in a way that produces an overall positive effects on society, is a trend that has caught on in the business community. Currently, businesses of all nature, all over the world, have subscribed to this ideology and are positively giving back to society in all manner of projects. However, in their quest to achieve CSR, companies face many challenges that are brought about by both internal and external factors. The factor that this research has sought to examine is the economical factor and to be more precise the country in which a given company is positioned. The research sought to bring out the fact that there is a difference in the successful implementation of CSR in developed countries as compared to in their developing counter parts, placing much emphasis on the developing countries (Huniche, 2005 p. 10).
Corporate Social Responsibility has taken firm root in the global community. Presently, one can go as far as argue the fact that there is a ‘social contract’ between most if not all corporations and the particular societies in which they operate[1]. Actually, Blowfield and Frynas (2005) have argued that it is possible that one of the reasons why CSR and international development practice have moved closer together is that they share and reinforce assumptions that poverty and marginalization [as an example] are fundamentally matters of geography, identity or difference, rather than structural phenomena. On the other hand, this rapid growth of CSR has been said to have been attributed to an element referred to as ‘mega-diplomacy’ by ParagKanna. In an interview with Wharton Professor Steven Kobrin (2011, p.1) about his book “How to Run the World”, ParagKanna quotes that,
“mega-diplomacy is this realization that all of these different players - corporations, NGOs, governments, international organizations and entrepreneurs - are coming together into one common collective diplomatic arena. That everyone is negotiating with everyone all the time and that the solutions to our problems - whether it is arms control, poverty [or] climate change -- do not lie simply in top-down centralized solutions of inter-government organization. They rely much more in coalitions that bring together the corporate world, the civic world, the governmental world and even the religious sphere as well.[2]”
The United Nations, in 2006 set up a set of Millennium Goals for developing countries that were aimed towards driving the countries towards the achievement of better lives for their citizens. This goals aimed to establish a ‘a world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment’[3]. The fact is that every developing country’s government is faced by challenges that involve either some if not all of the problems mentioned in the UN agenda. It is around these very same problems outlined by the UN that commercial social responsibility is framed in the developing countries.
In these countries, society’s needs keep on exceeding state and government capacity making it imperative for the private sector to step in and get involved. The role played by the private sector in the development of any given country is immense. In fact, “implied in the debate is the idea that the private sector is the dominant engine of growth – the principle creator of value and managerial resources – and that it has an obligation to contribute to economic growth and opportunity – equitable and sustainable.” (Jamali & Mishak, 2007, p. 362)
The current situation in developing countries and what has been going on for a long time has been the involvement of non-governmental organizations in offering support where the government strained or failed. What most people fail to understand, is that those NGO’s get their funds from international donors who in turn get the funds from private sectors and privately owned entities (Buth, 2006, p.40).
What is becoming evident is the fact that CSR is now becoming ‘household’ name. Not only is it well established, but also one can go to the extent of saying that it is expected from the corporations in developing countries. The reasons for this establishment vary, for example, in a recent article in the Time magazine written by Knowledge @Wharton[4], it was stated that “companies care about CSR because their customers do”. The down side to such a development would be the fact that where the customers did not care about CSR, the companies would probably not.
While accepting the fact that CSR is becoming a business as usual its rate of acceptance as well as assimilation in the developing country is much slower than in the developed countries. Some of the main causes of this slow assimilation include the fact that economic growth is the center of most societal expectations in these countries. In such a situation, it is evident that projects to do with CSR would be given lesser priority (Khan, 1985, p. 157). Despite this fact and many others, there have been companies in developing countries that have been able to successfully embrace CSR.
The Boston College Carroll School of Management Center for Corporate Citizenship, “believe that four core principles (Scherer & Palazzo,2008, p. 63) define the essence of corporate citizenship, and that every company should apply them in a manner appropriate to its distinct needs: minimizing harm, maximizing benefit, being accountable and responsive to stakeholders, and supporting strong financial results.”[5] Looking at these core principles, where they can and should be applied in addressing the critical issues of human development and environmental sustainability in developing countries, a key question arises: Can a business strategy based out of Corporate Social Responsibility (CSR) as a differentiator ensure a sustainable growth in an underdeveloped country?
To be able to answer this question, our research settled for Haiti, a country ranked to the poorest in the western hemisphere and a country in which I am CEO of an IT firm titled COMPHAITI S.A. The company had at the time of the research been in business for the past 16 years; the previous seven (7) years were also devoted to an IT business making it a total of 23 years in the sector. Running a company such as ours in the Haiti business environment is no easy task. One has to always know how to intertwine Leadership and sustainability, to be able to continuously grow in the changing global environment. This is a common factor in both the developed, developing and underdeveloped countries.
In Haiti, the business environment is always under constant threat. This is due to a number of factors such as the lack of law enforcement, lack of justice, and lack of regulation. Furthermore, there is a perception of an endemic corruption with Haiti being ranked 142/165 on the 2012 corruption perception index. Despite the social obstacles placed before us that were likely to affect the company, it has been able to thrive in the Haiti business environment. However, in 2011 the current Haitian government launched a “Haiti is open for business”. The main aim of this initiative was to open up the Haiti market for trade and investment. This would also mean that our company would have competition. Thus there was need for the company to think outside the box and incorporate an idea that would make us stand out from the crowd. The company finally settled on the element of social responsibility. This was however not an easy decision considering the high levels of corruption as well as smuggling which we were sure the Haiti government was aware existed. The dilemma faced by the company and that which later led to this solution was echoed by Theodore Lewitt in his Harvard Business Review article ‘The Dangers of Social Responsibility’, in which he cautions that ‘government’s job is not business, and business’s job is not government’ (Lewitt, 1958, p. 47).
Social responsibility is a noble gesture to pursue for any business. However, practicality was needed before implementing our decision. This practicality involved examining CSR in the context of Haiti and how practical setting it up would be. The challenge of creating a culture of corporate civic responsibility is much more challenging in a developing economy. This is due to the fact that in such countries, their economy does not have the luxury of resources to engage in philanthropic programs. Therefore, it is not part of the psyche of a growing entrepreneur still under development to engage in such an activity as social responsibility. In settling for Corporate Social Responsibility, the company and I hypothesized that CSR did not necessarily adversely affect the long-term bottom line of a corporation; and furthermore that it was a necessary mindset to create a stable and sustainable economy, environment, and society. We believed that for the company to maintain the lead in the market as well as remain sustainable was to apply three main steps towards rewarding social responsibility. First, we would employ a “Strategic Corporate Social Responsibility” to ensure sustainable financial growth then employ “Corporate Citizenship” that would align with the States’ or governmental orientations that would ensure sustainability with respect to the community in which business is operating. Finally we would use “Responsive Corporate Social Responsibility” within the business itself to create goodwill, reinforce pride within internal stakeholders and improve relations with different other stakeholders.
To further understand the extent to which the CSR approach would be applicable to our company in the environment in which it was in (Haiti), the company through me decided to carry out a research. The research involved looking at the CSR approach in low income economies from the following standpoints: leadership, business sustainability and financial growth. This research would be divided into two main study points. The first involved a review of the literature about Low income economy, Social Responsibility, Business Practice and Sustainability all based on searches of some academic and professional literature on leadership and CSR as well as a keyword search on Social responsibility such as Sustainability, Corporate Social Performance, Business Ethics, Corporate Citizenship, Corporate Governance and Best Business Practices. All examinations took into consideration definitions and perceptions before 2000 but mainly focused on the outcome from 2000 to present. All references come from scholar journal articles, books chapters, articles from popular press and expert essays.
The second part of the research was in two folds. The first section developed a conceptual framework that was used for evaluating the benefits of a CSR strategy for business in developing countries. Using the results from the conceptual framework, we then applied that knowledge with a case study of the major issues affecting CSR practices in Haiti. The conceptual framework was completed by combining a Quazi and O’Brien (2000, p. 38) two-dimensional model. This model positioned actions in terms of whether their strategic motivation as far as their responsibilities are concerned was narrow or wide. In our case, would our company really benefit from CSR or action or would it be a cost for us. All this in an effort to bring out the four prevailing CSR justifications which are the Moral Obligation, Sustainability, License to Operate and Reputation (Porter & Kramer, 2006, p. 3). This would then assist in the analysis of the three CSR approaches whether strategic CSR, responsive CSR or the adoption of corporate citizenship and the position to adopt should a company opt to use CSR as a differentiator.
The conceptual framework part of the research was therefore achieved in three main parts:-
A summary of CSR actions reflected by a sample of 10 to 15 prominent multi-national corporations and well established locally-based firms operating in Haiti. Information on these firms was obtained from a review of annual reports, mainstream media and company websites. These 10 to 15 companies were identified following a web search of companies using such keywords as corporate social responsibility, corporate social accountability, philanthropy, corporate giving and charity in the Haitian context. The websites were also scanned for programs or events connected to the above set of words.
As research tools, I developed a simple questionnaire for interviews with the actual CEO,s of the 10-15 companies, about their motivation for adopting a CSR strategy and the way they also perceive the other companies being part of that survey.
A presentation of the CompHaiti case as far as Social Responsibility is concerned in the territory of Haiti combining therefore a philanthropic, a responsive and a strategic approach all in one.
Following the introduction of the problematic question about Corporate Social responsibility and its role in company sustainable financial growth if used as a differentiator, the Master thesis consists of five chapters.
Chapter 1 discusses the theoretical background of the thesis by analyzing the requirements for CSR in smaller scale economies.
Chapter 2 presents a conceptual framework to be used in analyzing the actual position of CSR in Haiti based on researches and surveys on a sample of companies.
Chapter 3 introduces the methodology of the research and discusses the results. As most social science research involves both inductive and deductive reasoning processes at some time in the project.
Chapter 4presents the economic climate, evolution of business culture and business ethics in Haiti from an environmentally responsible and ethical private sector point of view. This chapter also presents the COMPHAITI case while making an overview of the history, regulations and analysis of the current development of Corporate Governance in Haiti.
Chapter 5 presents a summary of the conclusions.
This approach should provide a useful way to present an overview of Corporate Social Responsibility in a developing country such as Haiti and a framework for further research and study.
References
BUTH, V. (2006). Capacities of participative governance: the role of NGOs in EU politics. München, GRIN-Verl.
HUNICHE, M. (2005). Corporate citizenship in developing countries: new partnership perspectives. Copenhagen, Copenhagen Business School Press.
JAMALI, D., MISHAK, R. 20007. Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics 72, 362.
KHAN, A.F. 1985.Business and Society, S. Chand & Company Ltd., New Delhi.
SCHERER, A. G., & PALAZZO, G. (2008). Handbook of research on global corporate citizenship. Cheltenham, UK, Edward Elgar.
LEWITT, T (1958), ‘The dangers of social responsibility’. Harvard Business Review, September–October, 41–50.
CHAPTER 2 LITERATURE REVIEW This chapter discusses the theoretical background of the thesis by analyzing the requirements for CSR in smaller scale economies. This will be achieved by looking at the practicality of applying CSR in developing countries and to what extend this has worked. The key issue is to determine whether what CSR has done for the developed countries can be applicable to small developing countries or whether these are theories and that it is impractical to apply the practice of CSR in developing nations.
ARE THE REQUIREMENTS FOR CSR IN DEVELOPING COUNTRIES THEORIES? In underdeveloped territories it is a fact that the needs for fundamental issues as stated by the Millennium Development Goals are more obvious than in developed countries. However, it is also a fact that lots of articles, researches, essays talk about how to address those fundamental issues in the developed countries, and the way corporations should behave to be responsibly perceived. Thus studies from the likes of Jamali & Mirshak, (2007, p.243-262), Porter & Kramer (2006), Delatour & Duggleby (1993), and Kay & Lewenstein, (2013) that there is still hope in the integration of CSR into the economies of developing countries. The key point however is how CSR can be incorporated into developing countries without the involved stakeholders feeling that they are being short changed.
Big corporations have tentacles in almost every single part of the planet one way or another and addressing them to adopt a responsible behavior, does have a positive impact on the planet. Thus one can conclude that these companies do have a lot of influence in the activities that go on in the day to day global happenings. This has shifted the world’s perspective of the corporate and business world with the roles of corporate changing to adopt with world trends as well as global happenings. One of the necessities that have now developed into a global trend is social responsibility. Nowadays companies are expected to do a bit more than focusing on profit. Depending on the territories and sectors in which they perform, and whether it be within a developed country or developing one, there are some societal expectations that vary from engagement in local communities with education to environmental standards, through health and safety standards in the absence of formal regulations, to name just a few. Kupper (2006) states that law; social roles and morals are three important criteria of responsibility. Actions labeled “social’ but taken as a means to economic ends then cannot belong to CSR as in its purest form social responsibility is supported for its own sake because it is the noble way for corporations to behave.” (Schreck, 2009, p.76). In fact, social responsibility has become a very big trend that myriad organizations rank companies based on their corporate social responsibility and these ranking attract lots of publicity. As a result CSR has emerged as an inescapable priority for business leaders in every [developed] country according to Porter and Kramer (2006).
On the flip side, what is the definition of CSR in a developing country’s context?
What about smaller corporations in developing territories?
What of the small to medium size corporations (SMB) in underdeveloped countries?
Can they also have their participation in the planet-people-well-being?
If so what would be their contribution?
How can they be socially responsible and be at the same time financially sustainable with all the challenges they face; challenges like education, corruption, culture barriers, just to name a few?
By answering these questions, the literature review will be examining the practicability of adopting CSR in developing countries and in this case Haiti. One of the ways as we will see further is a good balance of all combinations to mix social (environmental) implications with the external stakeholders with those of the internal ones addressing work environment and safety while offering products and services that are part of a strategic approach to CSR.
What is the definition of CSR in a developing country’s context?
Research has shown that the implementation of CSR in developing countries, though slow is possible. First, it has been found that in these countries consumers prefer to purchase products from and invest in the shares of those companies caring for environment (Zaman et al 1996, p.618). Secondly, countries like Haiti are getting more and more exposed to international standards, despite the CSR phenomenon still being at a very early stage. However, it is starting to gradually gain share. In developing countries, there are different schools of thought as far as CSR is concerned. Amongst the many, there two are the most prevailing ones. The “classical view” propagates that business has the only responsibility of supplying goods and services for a profit (Bhide and Stevenson, 1990, p.124; Friedman, 1970, p.122; Hass, 1979, p.34). On the other hand, the modern view, supported by scholars, sees business in a social matrix contributing to the welfare of society as a whole (Quazi & O’Brien 2000, p. 5). This school of thought supports the view that business is part of the greater society and it therefore has the responsibility of reaching beyond the narrow perspective of short term profit maximization (Quazi and O’Brien, 1996, p.4; Carroll, 1979, p.497). The first school is predominant in territories where the majority of corporations have limited financial capacities to adequately embrace the CSR projects.
Dobers, P, & Halme, M 2009, 'Corporate social responsibility and developing countries', Corporate Social Responsibility & Environmental Management, 16, 5, pp. 237-249, Business Source Complete, EBSCOhost, viewed 13 September 2013.
Dobers and Halme believe that a standard definition of CSR cannot be applicable to a developing country’s concept (2009, p.238). One may ask how this is so and why the definition may not be applicable to developing countries.
The most common definition of CSR comes from the World Business Council for Sustainable Development in 1999. This council sought to define CSR as ‘The commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life’. Thus, Dobers and Halme believe that ‘CSR is founded on the notion that corporations are in relationship with other interests in, for instance, economic, cultural, environmental and social systems because business activities affect – and are affected by – such interests in society. These relationships may have a strong economic dimension, but they may also have a primary focus on social and environmental concerns.’(2009, p.238) This being the case, it is then understandable to reason that given the difference in the economies of developed and developing countries, it is only logical for one to assume that the definition of CSR is bound to vary. Dobers and Halme believe this is due to the term ‘development’. The term development sets out different agendas for CSR in different countries. The level of accomplishments that a country has reached regarding these agendas is what defines the level of development that country has reached. The Human Development Index (HDI) classifies these indicators into monetary and non-monetary categories. These indicators have three main elements; life expectancy at birth; (2) a composite of school enrolment; and (3) adult literacy, GDP, health and education which determine a given countries development rate. ‘In such a broad understanding we include basic needs for development, such as water and the provision of food, housing and other forms of material welfare, health services and education, human rights and gender equality, democracy and freedom, a fair distribution of economic growth while considering the sustainable use of natural resources (Dobers & Halme, 2009, p.239).’ In many developed countries, all these indicators are easily available, on the other hand, these indicators are not easily attainable in developing countries.
Case study, Haiti. According to the World Bank in its income classification, economies are divided according to the 2011 GNI per capita.[6] Our observations mainly addressed the low income category as the country for which this paper is of concerned (Haiti) falls into it with a $725.00 of GNI per capita. In these so called categories, economies are fragmented with a prominent informal sector. In a report from the same World Bank (2012) it is stated that the informal sector is a strong magnet which is attracting the majority of Haiti’s 4 million-strong workforce. Thus, the application of CSR in developing countries such as Haiti context varies due to its rate of development.
What about smaller corporations in developing territories?
Idemudia, U 2011, 'Corporate social responsibility and developing countries', Progress In Development Studies, 11, 1, pp. 1-18, Business Source Complete, EBSCOhost, viewed 13 September 2013.
Having established that indeed there is a difference in the in the definition of CSR in developing nations it is important to examine the situations of corporations that operate in developing countries economies. Idemudia believes that ‘despite the importance of universal principles (that involve CSR) for both businesses and stakeholders, there is a recurring tension between universal expectations and local challenges and opportunities. (2011, p.1)’ he goes on to state that ‘This disjuncture between local priorities and global expectations is because the mainstream CSR agenda has largely been driven by Northern actors and therefore reflected the priorities and concerns of western societies without sufficient room for other concerns.(2011, p.2)’
In most developing nations, small and medium businesses face challenges that their counterparts in developed nations do not. Idemudia quotes that ‘mainstream CSR suffers from selective amnesia as issues such as tax avoidance, unsustainable investment and poverty reduction do not appear on the agenda; nor does it attempt to address the structural and policy determinants of underdevelopment.’ Despite the challenges faced by corporations in these developing countries, what can be seen is the willingness of corporations to participate in CSR. In most cases small and medium companies have been able to come up and individually or as a group sponsor activities aimed at giving back to the society.
Reasons for the participation of SMEs in community activities in developing countries
‘An SME is a formal enterprise with annual turnover, in U.S. dollar terms, of between 10 and 1000 times the mean per capita gross national income, at purchasing power parity, of the country in which it operates’.
This was a quote from a paper titled ‘Defining SMEs: A Less Imperfect Way of Defining Small and Medium Enterprises in Developing Countries’ and which was written by Tom Gibson and H. J. van der Vaartindeed. However, this definition may not be applicable to all SMEs across the globe.
According to the World Bank in its income classification, economies are divided according to the 2011 GNI per capita.[7] Our observations mainly addressed the low income category as the country for which this paper is of concerned (Haiti) falls into it with a $725.00 of GNI per capita. In these so called categories, economies are fragmented with a prominent informal sector. In a report from the same World Bank (2012) it is stated that the informal sector is a strong magnet which is attracting the majority of Haiti’s 4 million-strong workforce. This sector, mostly made up of unregulated micro and small businesses pays low salaries and provides precarious working conditions, a reflection of low-productivity and lack of the economies of scales.
The attitude adopted by SMEs in developing countries also varies from those of the developed countries in the way they view CSR. In such countries, CSR is viewed by SMEs as a means towards gaining societal acceptance for the operations that these companies run. With such attitudes it’s a wonder that there is no clear distinction between CSR and corporate citizenship among this group of business owners in developing countries. It should also be considered that in such scenarios many informal SMEs are financially successful and with the lack of fiscal enforcement, feeling no fear of fulfilling their obligations. As is the case in Haiti, Delatour and Duggleby (1993, p.1) explain in their assessment about the Haitian informal sector that “[it] is a large, permanent, energetic and high-profile segment of the Haitian economy. Its heterogeneous nature renders descriptive generalities somewhat perilous and perhaps makes beneficiary project interventions difficult to define.” What is evident is the fact that SMEs play an important role in the economies of developing countries but it is hard to keep track of them. Khrystyna Kushnir (2008) in her paper “A Universal Definition of Small Enterprise: A Procrustean bed for SMEs?” explains “that it is extremely difficult to obtain data on the annual turnover by MSMEs in developing countries. Also, the informal MSMEs in some developing countries outnumber formal MSMEs by 8 [to 10] times.”[8]
Can they also have their participation in the planet-people-well-being?
As a citizen, every person is under obligation to comply with national laws, the legitimate decisions of the courts and the authorities, and to pay legally determined taxes and other public levies. This is equally applicable for any legal entity or person such as companies or corporations. On the other hand, as far as Corporate Social Responsibility is concerned, it is generally accepted that it begins where the law ends[9]. It has a voluntarism degree as part of it, a natural obligation of supporting the community in which corporation and its stakeholders are evolving, a sense of giving back… A corporate citizen could limit itself to the law whereas a good corporate citizen could extend itself to the level of social responsibility. Fine corporate social responsibility should be viewed as the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests, the interest of its stakeholders and the interests of wider society.
How can they be socially responsible and be at the same time financially sustainable with all the challenges they face?
There is no doubt that good business practice can have effects at several levels of a corporation performance regardless of the corporations’ size. If well applied, CSR can attract more customers and therefore boost market share and profits. It can also motivate more and more employees thus increase efficiency and reduce turnover costs. If well implemented, CSR can even attract investors bringing by the same token more and more fresh capital, keeping share prices at a decent level and therefore protecting the business from takeover[10]. One can go as far as concluding that the application of "best Practices" can have a snowball effect and carry these same practices in the home and the immediate environment of the different stakeholders therefore strengthening the role and purpose in search of social responsibilities in companies.
Good Business sustainability involves businesses being able to manage their financial, social and environment issues, tasks, risk and opportunities all at once. Firms are therefore required to comply with the principles of sustainable development as described by the World Council of Economic Development: to “meet the needs of the present without compromising the ability of future generations to meet their own needs.”
Unilever’s Chief Executive Officer Paul Polman noted that, “Those companies that wait to be forced into action, or who see [sustainability] solely in terms of reputation management or corporate social responsibility, will do too little too late and may not even survive.”(Collinson et.al, 2012, p.1)
From a business’ perspective, sustainability is “a company’s ability to achieve its business goals and increase long term shareholder value by integrating economic, environmental and social opportunities into its business strategy.”(Symposium on Sustainability, 2001, p.1) Taking this point into account, means that business stakeholders must be willing to be managed. Human Resources is a key element in today’s business. This is because it provides the ability to maintain competitive advantage. Because of that, Human resources play an important if not a critical role in any business seeking sustainability while being competitive. In these changing times, whether they are organization or cultural, HR can have a strong impact in several departments of the corporation facilitating and managing conflicts. According to a Deloitte survey conducted in 2011, 70% of young Millennials, those ages range between 18 and 26, say a company’s commitment to the community has an influence on their decision to work there.[11] Employees are one of the key stakeholders for any business and evidence is growing that highlights the importance employees attach to companies demonstrating their CSR record through progressive employment practice as well as through their behavior as good corporate citizens.
From a business’ perspective, sustainability is “a company’s ability to achieve its business goals and increase long term shareholder value by integrating economic, environmental and social opportunities into its business strategy.”(Symposium on Sustainability, 2001, p.1) Taking this point into account, means that business stakeholders must be willing to be managed. Human Resources is a key element in today’s business. This is because it provides the ability to maintain competitive advantage. Because of that, Human resources play an important if not a critical role in any business seeking sustainability while being competitive. In these changing times, whether they are organization or cultural, HR can have a strong impact in several departments of the corporation facilitating and managing conflicts. According to a Deloitte survey conducted in 2011, 70% of young Millennials, those ages range between 18 and 26, say a company’s commitment to the community has an influence on their decision to work there.[12] Employees are one of the key stakeholders for any business and evidence is growing that highlights the importance employees attach to companies demonstrating their CSR record through progressive employment practice as well as through their behavior as good corporate citizens.
On the flip side, business leaders have developed a good tendency of being better accompanied by making better direct assistants choices. Ancona, Malone, Orlikowski, and Senge (2007) believe that the myth of the complete leader (and the apparent fear of appearing incompetent) makes many executives try to do just that, exhausting themselves and ending up damaging their organizations in the process. They also view leadership as a set of four capabilities: “sense making” (understanding the context in which a company and its people operate), relating (building relationships within and across organizations), visioning (creating a compelling picture of the future), and inventing (developing new ways to achieve the vision). It is however very difficult to find someone excelling in all these four domains. With today’s challenges, there is a tendency for leaders to accept the need of being accompanied where they lack in competence. And for them to adequately put that in place they need to adopt different practices within their organizations. By choosing the ones “that do things right”, business leaders end up “doing the right thing”.
Jones and Olken (2005, p. 1) found “robust evidence that leaders matter for growth.” In this sense, a good business leader should be able to diagnose any situation, problems, issues and values while addressing them with effective solutions. According to the online research and business analysis journal of the Wharton School of the University of Pennsylvania in an article published in Times Magazine, “companies that don’t pay attention to their ethical responsibilities are more likely to stumble into legal troubles, such as mass corruption or accounting fraud scandals.”[13] And it takes a good leader to keep a business and it stakeholders sharing all ethical and moral values while ensuring financial growth. “There are large numbers of people in the world who have no jobs and who have no hope. They need jobs and more education, better healthcare and food. They need to be self-sufficient, not dependent because some do-gooder gave them a handout,” says Wharton’s MacMillan. “Companies need to start creating markets in these places.”[14] “If there is one thing that the financial crisis and stock market crash of 2008 should have taught us, it is that short-run share prices are an unreliable indicator of long-run business sustainability,” says Eric W.Orts, Wharton’s Professor of Legal Studies and Business Ethics and Management and Director, Initiative for Global Environmental Leadership. “What we need is re-conception of what the purpose of business is.”[15]
In other words, business sustainability requires the adoption of best practices that in turns require a transformational leadership in the sense of the vision and the transactional leadership in the sense of the application of this said vision.
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Given the context of Corporate Social Responsibility, described by specialists as inescapable for business leaders in the Western World, we have framed this study to consider the pyramid of Social Responsibility. This would include the economic, legal, ethical and philanthropic responsibilities as presented by Greenberg (2010, ). We then applied the criteria to the Developing World, making the smaller corporations in Haiti the core of our study. The research methodology adopted sought viable answers to the question: What type of strategies will render developing countries’ participation sustainable when smaller corporations in the non-Western World adopt the triple P “profit-people-planet” approach practices?
Specifically, how can smaller corporations in the Developing World be socially responsible and financially sustainable while facing the challenges that come with operating businesses in such territories such as lower levels of education of the general population, pervasive corruption, and cultural suspicions and expectations based on common NGO practices, just to mention a few?
Due to the historic view of CSR as a developed country phenomenon, a large body of literature on social performance of firms has emerged in the developed nation’s context. On the flip side, literature on the theory and practice on CSR in the Developing World remains scant (Belal, 2000, p. 275). For the purposes of this research, an extensive literature review was undertaken to provide clues regarding the key CSR issues affecting developing countries. In this case priority was given to work central to the issues being examined rather than the collection data not closely related to the conditions and environment representative of the non-Western World.
In a general sense, I concluded that the literature review gathered data on Low Income Economy, Social Responsibility, Business Practice and Sustainability. The academic and professional literature on leadership and CSR was covered, as well as a keyword searches on Social Responsibility such as Sustainability, Corporate Social Performance, Business Ethics, Corporate Citizenship, Corporate Governance and Best Business Practices. This research took into consideration definitions and perceptions prior to the year 2000, but focused mainly on the period from 2000 to present.
The adopted methodology involved the identification and articulation of the relationships between the literature and the fundamental question of sustainable CSR practices in the developing countries. Primary sources and secondary sources were consulted in both printed and electronic format. The primary sources helped determine the central definitions, main descriptions, quotations, key points, arguments and assertions. On the other hand, secondary material was relied upon for lesser definitions, factual information, and illustrative examples and to back up supporting points. The Sources used were selected according to author expertise, credibility and relevance of the evidence.
The review of literature focused on how the four core principles that define the essence of how corporate citizenship can and should be applied to critical issues concerning human development as well as the environmental sustainability in developing countries. These core principles have been defined by the Boston College Carroll School of Management Center for Corporate Citizenship for every company as having minimizing harm, maximizing benefit, being accountable and responsive to stakeholders, and supporting strong financial results. Most importantly, the review of literature went beyond the traditional CSR concept in order to identify responses to the core question: Can a business strategy based out of Corporate Social Responsibility (CSR) as a differentiator ensure sustainable growth in an underdeveloped country?
The second research tool utilized for the purpose of this study was a survey. The term ‘survey’ is commonly applied to a research methodology designed to collect data from a specific population, or a sample from that population, and typically utilizes a questionnaire or an interview as the survey instrument (Robson, 1993, p.211). These Surveys are used to obtain data from individuals about themselves, their households, or about larger social institutions. Sample surveys are an important tool for the collection and analyzing of information from selected individuals. They are widely accepted as a key tool for conducting and applying basic social science research methodology (Rossi, Wright, and Anderson, 1983, p.755).
The United Nations Industrial Development Organization (UNIDO) developed the questionnaire used for the purpose of this study. In cooperation with local partner institutions, UNIDO carried out a survey amongst SMEs in Central, South and Eastern Europe to get a better insight into their understanding of Corporate Social Responsibility (CSR) in their particular respective regions. The results of the original survey in its context can be found in the appendices.
“The main objective of the Regional CSR Network for Small Business is to assist SMEs in South, Central and Eastern Europe to conduct business in a socially and environmentally responsible and responsive manner, and to thereby promote their competitiveness and a better alignment with emerging consumer concerns. The Regional CSR SME Network provides assistance to various kinds of business support and advisory institutions, such as business associations, chambers of commerce, business development service (BDS) providers, vocational institutions, universities or NGOs in building CSR expertise.”
In our case, the survey questions were contextualized to the Haiti situation through a process involving review committees. Reliability and validity are important aspects of questionnaire design. According to Suskie (1996), a perfectly reliable questionnaire elicits consistent responses. Thus, for the Haitian context, the review committee adapted Leary’s (1995) seven guidelines for designing a useful questionnaire:
Use precise terminology in phrasing the questions.
Write the questions as simply as possible, avoiding difficult words, unnecessary jargon, and cumbersome phrases.
Avoid making unwarranted assumptions about the respondents.
Conditional information should precede the key idea of the question.
Do not use double-barreled questions. (questions that ask more than one question but provide the respondent with the opportunity for only one response)
Choose an appropriate response format.
Pretest the questionnaire.
The Likert scale questions part of the UNIDO survey were also included to strengthen the validity of the survey. A Likert item is simply a statement which the respondent is asked to evaluate according to any kind of subjective or objective criteria. Generally the level of agreement or disagreement is measured. It is considered symmetric or "balanced" because there are equal amounts of positive and negative positions. Thus one can say that the Likert scaling is a bipolar scaling method measuring either positive or negative response to a statement. The format of a typical five-level Likert item, for example, could be:
Strongly disagree
Disagree
Neither agree nor disagree
Agree
Strongly agree
Robson (1993, p.68) indicates that a high reliability of response is obtainable by providing all respondents with the exact same set of questions. Validity is inherently more difficult to establish within a single statistical measure. If a questionnaire is perfectly valid, it must measure in such a way that inferences drawn from the questionnaire are entirely accurate. Pilot testing of instruments is a procedure to enable the researcher to make modifications to an instrument based on results.
Putting this fact into consideration, the committee proceeded to make the questionnaire valid with internal validity by using a pilot test that assured them that the instrument was clear and unambiguous. The external validity of any study or research is the extent to which the results of the study can reflect similar outcomes elsewhere, and can be generalized to other populations or situations.
Our specific context being Haiti, we designed the method by which we selected the sample of 10 to 15 prominent multi-national corporations and well established locally-based firms operating in Haiti that would participate in our survey. Information on these firms was obtained from a review of annual reports, mainstream media and company websites. These 10 to 15 companies were identified following a web search of companies using such keywords such as corporate social responsibility, corporate social accountability, philanthropy, corporate giving and charity in the Haitian context. The websites were also scanned for programs or events connected to the above set of words.
Data Collection
Questionnaires were mailed on 28 May 2013 via internet and were to be returned on paper.
Data Analysis
Data analysis consisted of examining the surveys for correctness. Subsequently, Leech and Onwuegbuzie (in press) described several qualitative data analysis techniques, including the following: method of constant comparison, keywords-in-context, word count, classical content analysis, domain analysis, taxonomic analysis, and componential analysis. In addition to these qualitative data analyses there is a class of data analytical tools known as cross-case analyses (cf. Miles &Huberman, 1994, p 103). A cross-case analysis involves analyzing data across the cases (Schwandt, 2001).
Our team decided to use the Inferential Data Analysis method to be able to fully analyze the results from the questioners we had previously sent to the organizations that would be included in our survey. We only used surveys from the organizations that had sent back the questioners on paper. We settled on the inferential analysis method because while descriptive data analysis can present a picture of the results, to really be useful, the results of our research had to allow us the researcher to accomplish other goals such as:
Using information obtained from a small group (i.e., sample of customers) to make judgments about a larger group (i.e., all customers)
Comparing groups to see if there is a difference in how they respond to an issue
Forecasting what may happen based on collected information
To move beyond simply describing results requires the use of inferential data analysis where advanced statistical techniques are used to make judgments (i.e., inferences) about some issue (e.g., is one type of customer different from another type of customer). Using inferential data analysis requires a well-structured research plan that follows the scientific method. We also put into consideration the fact that, most (but not all) inferential data analysis techniques require the use of quantitative data collection.
Onwuegbuzie and Teddlie (2003, p.372) conceptualized that when analyzing quantitative and qualitative data within a mixed methods framework, researchers undergo at least some of the following seven stages: (a) data reduction, (b) data display, (c) data transformation, (d) data correlation, (e) data consolidation, (f) data comparison, and (g) data integration. Only after completing these stages is the study able to experience completeness for the final coding and keying of the data into a database in Number Cruncher Statistic. (491 The Qualitative Report September 2006)
References
MARSDEN, P. V., & WRIGHT, J. D. (2010). Handbook of survey research. Bingley, UK, Emerald.
MILES, M. B., & HUBERMAN, A. M. (1994). Qualitative data analysis: An expanded sourcebook (2nd ed.). Thousand Oaks, CA: Sage.
ONWUEGBUZIE, A. J., & TEDDLIE, C. (2003). A framework for analyzing data in mixed methods research. In A. Tashakkori & C. Teddlie (Eds.), Handbook of mixed methods in social andbehavioral research (pp. 351-383). Thousand Oaks, CA: Sage.
ROBSON, C. (2002). Real world research: a resource for social scientists and practitioner-researchers. 2nd Ed. Oxford [u.a.], Blackwell
CHAPTER 4
FINDINGS
Data analysis
The questioners that were sent to the different organizations and we managed to receive feedback from were able to highlight some very interesting facts regarding the position of CSR in the Haiti corporate society. Using the method we had chosen to evaluate our survey (combined quadrant (Quazi mixed with Porter)), we established that all the companies surveyed showed some degree of interest in CSR. What was interesting was that out of this complete number, women who were in the management position of the companies were likely to consider participating in CSR. The percentage we established was 57%, this is 7% more that their male counterparts.
While carrying out our survey, we sought to examine the reasons as to why the Haiti corporate community would consider adopting CSR. When asked whether they believed that that CSR has to do with fulfilling fiscal and other social obligations, 50% believed that it did while the other percentage believed that it had nothing to do with obligations. Fifty seven percent believed that CSR had to do with sustainability, while another 57% believed that it had something to do with the work environment. What was interesting was the fact that a whopping 60% believed that the incorporation of CSR into the company was due to socio-economic factors. Based on these facts we sought to find out the exact perception of the companies regarding their definition of CSR. From the feedback we received from this question, we established that 50% of our responders believed in the classic definition of the term corporate social responsibility. The other 42% defined it through a socio-economic aspect while the final 8% believed that the true definition of CSR came through a philanthropic and sustainability angle.
Having established that at least all a large percentage of our surveyed participants had an inkling as to what CSR was in Haiti, we sort to know where the companies that participated in or would have liked to participate in CSR would concentrate on. The fields varied from education to equality. What seems to catch our attention was the fact that all the companies hinted at working with social problems that mainly faced the nation. Thus, our survey yielded the following result.
What is evident is the fact that a large number of corporate would willingly work with education when it comes to implementing CSR. Our survey pointed out the fact that most of these corporate are aware of the social challenges that Haiti as a developing country faces on a daily basis and the possible solutions of these problems.
However, our survey also noted possible barriers to the successful spread of CSR in the Haiti corporate society. When asked to provide the most effective hindrances to CSR in Haiti, three main problems stood out. The most common answer to barriers that likely affected CSR was employee motivation. This translates to the fact that employees were not motivated enough to participate in CSR let alone implement it. These employees viewed CSR as a duty and not a chance to give back to the society. The second hindrance comes in form of knowledge or lack of in this case. While CSR is a trend and norm known by all, in most developing countries, Haiti included, have limited information on what the CSR concept is and to what extend it would stand to benefit not only the society but also the companies involved. Finally, the third most common hindrance to CSR is the availability of funds to drive the projects. In Haiti, business is driven for the main purpose of gaining profit. At the end of the day, funds slotted for social activities such as CSR are either little of not allocated at all.
Despite the challenges likely to be faced in the implementation of CSR, the feedback we got concerning whether corporations would create free time for the implementation of CSR was positive. In fact, all corporations that responded to our questionnaire agreed that they would do so.
Finally, we sought to know the reaction that the corporations thought that CSR would have on their businesses. We achieved this by asking whether CSR had any effect on purchasing decisions made by their respective clients. Sixty percent of those surveyed agreed that indeed CSR played a role in influencing their purchasing decisions. The 28% refuted this fact and 12% did not answer our question.
A combination of a “Triple Bottom Line” with the answers we received from our survey led us to a number of conclusions. The first was that the Haiti corporate society is not totally ignorant to the existence of CSR. The second was that there was a willingness to participate in this idea regardless of the barriers existent in this particular environment. We finally concluded that the reasons as to why corporate companies would go for CSR in the Haiti business environment would be as follows.
Corporate Social Responsibility in Haiti
Corporate Social Responsibility is increasingly becoming a big part of business in developed countries. Every day, the relationship between companies and civil society organizations keeps on shifting from paternalistic philanthropy to a re-examination of the roles, rights and responsibilities of a business in society. Corporate Social Responsibility (CSR), defined in terms of the responsiveness of businesses to stakeholders’ legal, ethical, social and environmental expectations. Being competitive while making a difference in their communities gives some enterprises an edge over others in most developing countries.
In Haiti, The informal sector for the most part is still functioning without a computer and the basic economic principles are still being internalized. On the other hand, and fortunately the enterprise part of the formal sector have already left the stone age and are making money, evolving with today’s technology but fighting their way for sustainability and that is the real challenge.
We established that Some of those companies evolving in this poorest country of the western hemisphere and that are witnessing how the lack of education, health management, services, infrastructures etc…, are affecting the country’s development get themselves involved in social activities. Unibank, the largest bank of Haiti is a good example with its ‘livre en folie’[16] or ‘musique en folie[17]’ to motivate and educate the youth or Valerio Canez S.A. (top 20) with its strong participation in both ‘Haiti Tec’ a centre for excellence in education and also through “Fondation Francoise Canez Auguste”[18] to educate young fellows through history and culture or even ‘FondationBarbancourt’ (top 50) which is covering several aspects such as Youth and Sport, Education, Arts and Culture and Health[19]; no wonder they celebrated this year their 150th anniversary. Even though CSR is not a replacement for the rightful role of democratic governments to set regulatory frameworks for the benefit of society, it is more useful for enterprises to understand when and how different approaches can create business and societal benefits. And although it was not yet been officially described as CSR, there has been a clear understanding from these private companies to be more involved socially as the need for the community was beyond government and state capabilities. And by adopting such behaviour, those companies have quickly recognized the strategic value of being more responsible thus began to align products and business relationships accordingly.
Haiti has been for the longest time without big foreign investment. In 1993 we witnessed some local investments in the banking sector with Unibank followed by SocaBank entering the market. Unfortunately, the following years the country witnessed political turmoil that pushed investments down the slop. With the presidency of Rene Preval (1996 -2001), the country has seen some stability for a decade or so. Since then, some good investments in the Telecommunication industry have happened with the cellular phone penetration. The first two cellular companies did not do much socially besides sponsoring some cultural activities like being present at Carnivals and helping a few music bands here and there. It is only in 2005 with the arrival of Digicel, a new giant in the Telecommunication and Information Technology sector, that the Haiti corporate world witnessed a different concept of CSR. The Reason for this bold step was simple: they had to make a difference to penetrate the already covered market. This company had a great recipe to understand when and how different approaches can create business and societal benefits. Their marketing campaigns, their undeniable support to the football national selection, their program to promote entrepreneurship and encourage young entrepreneurs are example of how an unknown company can conquer and control new territory through CSR. Haiti’s business community is now discovering the importance following this lead as well as the real meaning and impact of CSR on the society. With Digicel’s strategy, other companies started to understand where financial success can go hand in hand with social responsibility, improvements in quality as well as management and enhance reputation.
Other small and medium enterprises are now aligning the level of their technology, their management, and their marketing in parallel with social and environmental impacts. They understand that CSR needs to be integrated in their core business strategies in order to survive global recession or even political insecurities. CSR has gained prominence against a backdrop of relative economic stability and growth. Ultimately, their long-term success will be based on their ability to position CSR within the core of business strategy and development, thereby becoming part of ‘business as usual’
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Responsive CSR – The CompHaiti Case
CSR is characterized by the contribution of the company to different challenges of sustainable development. CompHaiti, despite its size, (as medium size in the Haitian scale and small business in the international scale of developed economies), joins to this type of responsibilities and is committed to give back to the community. This commitment is evident at both organizational and environmental levels.
The company, in order to link work to the management of organizational change used simple steps previously identified in which it is socially responsible while taking into account its organizational culture.
Spark employee interest
CompHaiti has demonstrated its ability to rise to the CSR occasion. The first step in our move towards successful CSR implementation was the training of our employees, by implementing various training programs. These programs include 1.- Awareness level of energy where all employees were trained on the importance of turning off their workstation before leaving; and 2.- Awareness level impressions where all employees use more alternative methods of communication and avoid unnecessary printing. Multiple channels of communication have been established such as e-mails, Phones extension available in all workstations and 3. - created Awareness at the workplace environment by inviting all employees to keep a proper and efficient working environment, by using the relevant devices for the recycling of paper, cans and plastic.
Establish a comprehensive and forward-looking vision
CompHaiti was able to develop a practice-oriented vision through the creation of the "Club CompHaiti" inviting all levels of the company to participate in activities organized by the company. Club CompHaiti is an internal movement geared towards a 3-fold vocation plan: leisure, continuous training and community with revenue generation to keep it sustainable over time. The following examples will illustrate:
Draw Activities as an in-house lottery. Ours dabbed the "Half & Half" is whereby the winner of a purchased ticket is able to win half the pot and the other is put aside to self-finance various other activities.
Implementation of a internal Football team, that has won the championship since its first intake was at "Boule en Folie" organized by private companies that share the same company vision as ours. This success was as value enhancing team spirit "When there is a will, there is a way”.
Family activities including inviting family to free constructive activities, giving tickets to participate in the most successful theater, technology fairs and many others that helps motivate the employees and their families.
We initiated the Launching of internal seminars in several areas such as personal finance lectured by the CFO, Better living and “etiquette” kind of seminars lectured by the CBDO’s wife, sales and diplomatic behavior lectured by the CEO’s wife and other areas such as entrepreneurship done by other stakeholders, like customers and or suppliers’ resources.
Institutionalize CSR within the company
CompHaiti ensured that these new practices become a responsibilities and routine established by new changes and new designs. For example, in the context of strengthening one of the pillars of the Haitian government regarding deforestation, all employees were made aware of the importance of planting fruit seedlings. Thus it has been made the responsibility of each employee to work in teams and bring seeds, black soil, and pots to start the tree planting process up to the seedlings germination stage. As soon as the seedlings reach a certain maturity, through activities supported by the "Club CompHaiti" and other NGOs, they are replanted in areas that are at the greatest risk of soil erosion.
The Management Team of CompHaiti plays a crucial role in facilitate the deployment of CSR in the company. Therefore, it is important to consider these Managers who are usually as involved as all other employees in the company, despite the various constraints at the operational level and Human Resources. For motivation, the Management Team and the “Club CompHaiti” put in place participatory projects for the management as well as the employees. This allows all participants who in this case are not only the management but also the employees to make suggestions concerning their work place environment and how to improve them. This project also operates by involving all employees in different rigid work place environment thereby relaxing their minds and bodies while giving them a sense of giving back to the society. Thus, these projects helps the employees relax knowing that the work environment that they function in is less rigid.
Philanthropic CSR – the CompHaiti Case
Since its inception, CompHaiti has prioritized social activities that mostly involve education. Active participation in annually organized technology fairs with young people across the country is an example of such undertakings. To celebrate its fifteenth year anniversary, CompHaiti sought to accomplish an ambitious project setting up 15 fully equipped computer labs in 15 schools in the year proceeding September 15, 2012. The management of these laboratories would be entrusted to one of our company’s foundation, the CompHaiti Foundation.
The creation of CompHaiti Foundation marked the willingness of the company to be more formally involved in its community and at a larger scale.
In order to fund the 15 lab project, CompHaiti Foundation appealed to investors and suppliers to help drive the project. At the beginning of the project, CompHaiti’s general management went to the head office of its suppliers to explain the well-founded project and motivated them into being involved as stakeholders. This they gladly agreed to get involved by providing some necessary equipment. CompHaiti also involved the public and its customers in this major project by organizing a raffle with the grand prize being a car. This not only brought out the spirit of competition but also channelled the philanthropic side of the Haitian people. Finally we invited Companies in the private sector, who shared the same vision of education available to all, to participate in our project by providing raffle prizes.
The inauguration of the first laboratories helped the project gain momentum drawing the nation’s attention to the CompHaiti Foundation. However, one fundamental element was missing and presented a major obstacle to success; electricity. Whether available from the grid or backed up by generators, stable current is a challenge in a school in Haiti today, especially in the rural areas. Therefore, there was the need to involve companies that would provide solar power generation to these schools. Haiti, being a developing nation does not have the resources to channel electricity to the rural areas. The provision of solar electricity by our company would therefore play two very important roles in the respective schools and the community at large. Not only would the solar electricity be used to power up the computers that our projects would provide for these schools but it would also provide reading light for the students in the schools. At a global level, solar energy is a green thumb to the environment for it utilizes the sun and is less harmful to the environment. At the end of the day, our provision of the solar electricity not only powered our project but ended up being useful to the students who would now have electricity to use as they study more so at night.
Strategic partnerships were needed to help complete parts of the CSR puzzle. CompHaiti Foundation was not able to provide all the necessities on its own. NumaDrouin in Jérémie, Femmes en Démocratie in La Vallée de Jacmel, FESH in Croix des Bouquets and a well-known association involved in educational and technology projects in Haiti and established both in Europe and the USA, Haiti-Futur played an important role in assisting us steer our project.
Studies have indicated that the key to technology in education is efficient and quality teacher training. CompHaiti Foundation was fortunate to receive the donation of electronic equipment from Haiti-Futur. Fifteen interactive smart boards were received to equip the computer labs. The smart-boards would address two major difficulties encountered in implementation by reducing Electricity consumption to a minimum while the board would provide a learning area for a wide group. The electronic smart boards would also allow an introductory training experience for teachers with educational technology in a familiar format of a writing board. This entry point is a minor step into virtual worlds while essential concepts such as using preloaded applications, handling clickers, utilizing electronic resources and including the internet are introduced and mastered.
This first phase prepared CompHaiti Foundation to play a more important role in Haiti-Futur’s second nationwide program phase. After the 180 smart board distribution, which enabled us to receive 15 complete sets of equipment (projectors and laptops); CompHaiti Foundation will now be one of this projects managers during the next phase. 500 smart boards donated by France will be deployed and implemented in public schools and EcoleFondamentaleAppliquée Centre d’AppuiPédagogique (EFACAPs) through a governmental national program using a public-associative-private model of management.
The CompHaiti Foundation - Futur-Haiti consortium, involves teacher-training, the development of educational material, follow up and evaluation of the digital interactive whiteboards implementation, and will comprise the CompHaiti Foundation lab network and the national network.
Strategic CSR – The CompHaiti Case
As I was writing this paper, CompHaiti was concluding a long discussion with the “Office National d’AssuranceVieillesse” (ONA) which would allow its members to get access to consumer loans for environmental friendly products such as solar energy appliances like refrigerators and freezers and in another lower scale, LPG ovens. The latter one would be a transitional step towards the great project that will help diminish deforestation. This will allow the government to adopt a law prohibiting cutting trees thus eliminating the use of wood as their primary source of energy for open-fire cooking without hurting the livelihood of its citizens.
The Office National d’AssuranceVieillesse (National Old Age Insurance Office - ONA) was created by organic law dated 28 August 1967 to protect private sector employees against the risk of poverty in old age through pension insurance. Employees and employers contribute equally at the rate of 6% each.The Organic Act allows 90% of funds to be allocated to "profitable investment / placements" in Haiti.ONA has been allowing loans up to 50% of employees quote-part for constructions and other specific projects.
Microcredit loans from commercial banks use a prohibited rate of around 40% to 70%. In a French journal, « Le Monde » article ‘Microcrédit, miracle oudésastre?’, by EstherDuflo (2011), it is revealed that in a study conducted in India and in Philippines, the results are consistent. In both countries, [microcredit] borrowers acquired more durable goods (TV, refrigerator, etc…) for their homes and those who have a small business invest in it: they acquire productive assets (bicycle, sewing machine) or increase their stocks. In India, one out of eight loans led to the creation of a new independent business and in the Philippines, 100% of all borrowers already had a company. This confirmed our thoughts that there could be an opportunity with the commercialization of solar powered equipment and appliances.
Even though the use of the gas oven is not entirely pro-environment, it is considered a preliminary important step towards considerably reducing deforestation in a country that today has less than 2% of vegetation cover. Strategy is to start with LPG appliances thus offering low income families access to these kind of goods and in a second phase offering additional solar powered equipment for businesses. This is due to the fact that such appliances are still more expensive to be afforded by a population where 55.5% lives under the $2-a-day-revenue poverty line[20][21]. A 12% interest rate was negotiated over a 12 month loan period making a monthly payment averaging less than $10. As paradoxically it appears, in Haiti microcredit institutions have registered a very high loan repayment rate (as high as 100% in many cases). Promotion and risk will be equally supported by both entities ONA and CompHaiti. With that strategic approach, and according to ONA experts, CompHaiti expects to gain faster strides and in the next 9 to 12 months, 30% of the increasing 300,000 subscribers, improving therefore the live of some 100,000 families while increasing sales volume by an average of $7.5 million[22].
[1] An article titled ‘Social Responsibility Builds Long-Term Success: Opinion’ written by Michael Crooke, quoted “Until now, legal requirements for corporations focused on one goal: profits. Today, benefit corporations add the legal duty of companies to achieve profits while also focusing on socially responsible activities — also known as Corporate Social Responsibility (CSR). Start-up businesses and existing small businesses would be well-served to adopt a benefit corporation structure. Companies that seek to establish sustainable principles as part of their business and marketing strategy and, more importantly, their corporate DNA, are positioned for long-term success.” Accessed at http://www.cnbc.com/id/47599530 on August 30, 2013
[6] According to the World Bank in its income classification, economies are divided according to 2011 GNI per capita, calculated using the World Bank Atlas method. The groups are: low income, $1,025 or less; lower middle income, $1,026 - $4,035; upper middle income, $4,036 - $12,475; and high income, $12,476 or more.
[7] According to the World Bank in its income classification, economies are divided according to 2011 GNI per capita, calculated using the World Bank Atlas method. The groups are: low income, $1,025 or less; lower middle income, $1,026 - $4,035; upper middle income, $4,036 - $12,475; and high income, $12,476 or more.
[9] International Corporate Social Responsibility (CSR). 2008. The University of London, International Corporate Social Responsibility course outline. [ONLINE] Available at: http://www.londoninternational.ac.uk/sites/default/files/corporate-social-responsibility-sample-study-guide.pdf. [Accessed 11 March 13].
[11] Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/.
[12] Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/.
[13] Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.(2012). Why Companies Can No Longer Afford to Ignore Their Social Responsibilities. [ONLINE] Available at: http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/.
Marketing is one of the most important aspects requiring which should be addressed with the required attention in order for the business to reach its objectives and goals. Effective marketing strategies ensure that the business gains more and more customers and grow with time. Apple Inc will incorporate an intensive distribution strategy in order to ensure that the product is available to the customers at the recommended company price. The iTime watch from Apple has unique characteristics and features and the technology incorporated in manufacturing the device is absolutely modern. Although the price of the product is high compared to other products, these features will ensure that the consumers enjoy the quality of services from the product.
Segmentation and Target Marketing
The Identification and evaluation of the attractiveness of the target market segment for iTime consumers
Market segmentation is the combination of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action (Weinstein, 2004). It includes variables such as demographic, geographic, economic, socio-cultural, political-legal, technological, natural and financial aspects of a particular market. The traditional approach to segmentation is based on the classic '4 Ps' which are (Product, Price, Place and Promotion). Yet, in the iTime marketing overview, we will be using the extended approach of the eight Ps (price, product, place, promotion, people, programs, process, and performance) which will be further outlined in the integrated marketing mix section.
The UAE is mainly reputable as a private business, franchise market, which makes it an attractive place for the younger, more energetic age group. This exact marketing segment would be suitable for the iTime watch due to their need to be trendy. The segment purchases a product due to its trendy nature rather than its general usefulness. Thus, it is exactly the core market crowd to target market wise.
Gender plays an important role in the marketing of this particular product. UAE is largely a male dominant market, so 50/50 marketing split here won't be possible in this region. The marketing of our product in the region will therefore have to target the males rather than the female. This does not mean that we will rule out the female market all together. The product can be marketed to the female demographic as the perfect gift to that special male member. While gender is a very important aspect of any marketing, the male population generally prefers apple products globally. Also, if one is to examine the buyer profile of Apple products globally, it is a clear skew towards men.
A combination of these marketing demographics would provide a target market of an individual who is a young male in the prime of their life and who lives a particular indulgent lifestyle. Such an individual earns a good salary and can afford to indulge in a particular extravagant hobby or two.
Let’s look at case study one of Mohamad, 32, works as a business director at a global advertising agency out of Dubai. Mohamad is passionate about three things in life, football, cars and gadgets and so on. While cars are on the expensive side, he can afford to collect as many gadgets as he wants to more so those that are trending and those he sees with his friends when he interacts both socially and during his business meetings. Due to his love for gadgets, and more so those that are trending in the market Mohamed cannot resist purchasing the iTime watch.
Thus, based on the above marketing evaluation the sales of our product would be as follows:
Priority consumer - 75% of overall sales will come from individual consumption. This would include short-lived product purchasing, emotional purchasing, highly sensible to purchasing experience.
Education purchasing - emphasis on simplicity (the 'watch' + health side of it) and reliability, typical solutions consist in one watch for every student and teach, along with the installation of a wireless network
Business, government and creative purchasing
The target market for the iTime watches in UAE is majorly the youth who are between 18-35 years of age whereby in this case, both the female and male gender will be targeted but a strong emphasis will be placed on the male market.
Case study 2 is Amina, 25, a sales representative at a multinational company based in Dubai. Amina has been engaged to Sharif for the past four years. Sharif’s birthday is a few weeks away and Amina is aware of her fiancés love of gadgets. From experience, she knows that he is particular about apple products and would like to surprise him with the latest trendy apple product in the market. The iTime would be a perfect gift to her gadget loving fiancé.
Product
The product is the central point that marking energy is focusing. iTime watch from ale is a new product which comprises of unique features which will attract the people of United Arab Emirates (Mintz & Currim, 2013). Some of the unique characteristics of iTime include a Bluetooth-equipped smart wristwatch that can connect to an iPhone and allows consumers to ‘pull’ e-mails as well as Twitter posts and other pieces of text to a two-inch square screen. iTime watches from Apple will also have tracking device and the ability to play music and display text, the weather and other information from an iPhone.
Price
Price is used to create sales revenue of all other costs (Sreenivas et al., 2013). The price of iTune needs to be reasonable and affordable to all customers. In this case, the company will consider offering lower prices as compare to that of competitors in order to ensure that the product penetrates the market. Discounts will also be offered for the customers who will be the first to purchase the product. Price of any product is an important determinant of the value of sales made. However, the price of the iTime watch will be set in a manner to ensure that the company does not incur loss but generates the required income.
Place
Place is concerned with the location of the stores as well as various methods of transporting goods (Brei, et al, 2011). iTime watches will be available in all retail shops, supermarkets, and shopping malls in UAE thus making it easily accessible to customers. Customers will also access the product through an e-commerce site as well. Place should be accessible in order to make the product available to all customers. In this case, the Apple management will identify effective distribution channel whereby products will be transported by road means to the major cities and towns of UAE since these are the only places where the supermarkets and many businesses selling the product are found.
Promotion
Promotion is regarded as the business of communicating with various customers and creating awareness about the new product. It provides information that assist customers to make decision of purchasing the product. The company will incorporate television, billboards, and radio advertisement in order to enhance the product awareness. In addition, advertising through social media will also be incorporated whereby the company will have pages in the popular social sites such as facebook, twitter, LinkedIn, and Yahoo.
The market for iTime watches will also depend on the geographical aspect whereby individuals in the urban regions are the major target since the urban population is more or comprises of many youths as compared to the rural population and they are usually the working class (Lamb, Hair, & McDaniel, 2012). However, the product will also expand its market to the neighbouring countries after gaining a substantial market share in the United Arab Emirates market. In terms of psychographic segmentation, the market of iTime watches will target individuals who have desire for leisure or classic materials. For instance, majority of the youths like to wear or poses the modern materials which incorporate the new technology such as the iTime.
Competitive Analysis and Positioning
Comparative analysis of the iTime competitors
As current as this year, there has been no smart watch market established in the UAE except for Sony smart watch which is not being advertised at all. The only other such product is the pebble which is only available in virgin. Other than the two there is no physical evidence that indicates a strong market for the smart watch. However, research indicates that as of the beginning of this year, the smart watch is becoming a trending topic. This means there has been a spike in interest and that the market is slowly blooming. This is good for our product because it means that there is no direct competition. However, the fact that there are other similar products in this particular market means that we face indirect competition once interest in the product spikes higher.
Indirect competition would disadvantageous for our product. This is due to the nature of apple products. The standards set by the apple products are high thus they warrant high pricing. Currently, the price of a Sony smart watch is 550 AED. Chances are that the apple iTime would cost 950 AED. This would mean that if an individual was not purchasing our iTime they would save an extra 400 AED which would be used to purchase something else. The extra 400 be set aside and added to the vacationing kitty or if one added 150 AED they would be able to purchase two Sony smart watches.
Marketing Positioning of the iTime in the UAE market
Disadvantages:
The product may be technologically behind the rest of the world. The market is buzzing and super excited with new news, especially after the pebble phone invention success at this year's Las Vegas consumer electronics show. On the ground, the technology consumers want is a color screen that stays on and is legible in any lighting, and a battery that lasts and lasts. Until sufficient tests have been done, it's hard to say 100% satisfaction with the product, especially in the techy-savvy UAE.
Advantages:
New entry – Due to the unwaivered loyalty of the Apple consumers, the company really has a chance of being the first and really owns the market.
Create a killer offer - back when the first iPod was launched it came with 1000 free songs, what will come with iTimes that the consumer will consider using it individually and not as an appendage to the Smartphone.
Apple has incorporated strong technology and this is the reason why the product will be of high price. However, being with strong technology is not enough to win the market. The product also had to have the personality and life-fit. Thus, while the product is stacked up with unique features, the consumer is still unaware of this fact. There is need to broadcast these uniqueness and let the consumers know of their existence. These features include
Seamless integration- to make the unaware consumer interested, we need to make them need the iTimes product and the easiest way to do that is by showing how it can seamlessly be integrated into people's lives.
Superior ease of use: multi touch interface, click wheel
Innovative industrial design: it is the greenest environmental company
Once that is done, the product will be looked at as 'desirable' and 'differentiating' from other similar products. Once achieved, all the company will have to grapple with will be the ‘deliverable’ side of the product. The target consumers would want a product like this because it is long lasting, easy to use, typically in style, and it fits the demands of their busy schedules. Moreover, young people want a product that caters to an active lifestyle and therefore need a product that is hassle-free and entertaining. Thus, the iTime would be ideal for them besides the fact that owning it would be trendy.
Distribution Strategy
There are many modes that can be used to distribute our product. This includes mas distributions from the factory. However, for this particular market, we will rely on two main modes of distribution. The first will be retail store purchasing. This will involve stores, supermarkets, malls and any other franchise that can sell the product at a retail level. This will ensure that the product is taken to the customers and is readily available for any individual interested.
The second mode of distribution to be used is the on-line store. Due to the changing nature of sales to a more internet oriented market, people prefer making their purchases on line. This ensures that the company is directly responsible for delivering their product directly to the purchaser. This also allows the consumers to make purchases anywhere as long as they have the internet with them.
Thus the product will go from the manufacture to the retail stores then to the consumer or directly from the manufacture to the consumer.
Integrated Marketing Communications Plan
The company will seek to organize a launce for the iTime in the UAE market. The main objective for the launch is to get as many people to try out the product at the apple store as possible. The communication objectives from the launch will be to get people to see how the iTimes can help them run their lives more efficiently. Note that the price will not be revealed at the launch event. The idea is to test-pilot the feedback at the 'launch'. Once we have the feedback we will then re-group internally and officially launch the product after one week.
While we acknowledge the fact that loyalty of the Apple brand will help boost our sales, we also acknowledge that there are consumers who have never used apple products. Thus our target is integrate our products in stores as well as in the web. This ensure that we are able to sell not only to our brand loyal customers but also to the market that has never used our brand but are attracted by this particular product.
Suggest communications objectives for the initial launch
The main objectives of the initial launch of the product will be to ensure that among other reasons that our product gains total control over this particular market. Once we have established total control we will ensure that we create and retain a margin in this particular market. It is important that we retain quality service to our customers as well as reduce any necessary demand pressure from the buyers. Some of strengths include the fact that the apple brand has set up golden standard for its buying experience. This ensures that support and inspiration to retailers of its products.
Through our launch we will be able to establish weaknesses that the product may face in the market. This include the expenditure needed, the integration into the market of the product and competition that the product may face in the retail marketing segment of the region.
The launch will enable us establish opportunities available in that market. Opportunities such as exposure, positive brand effects, bigger market share and increased customer loyalty are an added advantage to our product marketing.
Recommend the appropriate communications tools that iTimeshould use during the first year of market launch to achieve these objectives
Advertising
The major objective of advertising is to create awareness to the customer about the product. Advertisement is considered a very effective communication tool especially if the product is new in the market (Waller, 2012). In this case, Apple Inc should consider incorporating advertising through the social media such as crating adverts to be incorporated in the YouTube where many viewers who watch YouTube videos will first view the advert. This will ensure that customers get the right information about the product. Media has benefits of reaching people within a large geographical region both regionally and internationally. Social media is just but one of the communication tools that Apple Inc cannot miss to incorporate.
Sales promotions
Sales promotion is the use of discount coupons, loyalty clubs as well as membership coupon with the incentives of creating awareness to the customers about the product (Waller, 2012). Apple Inc needs to consider incorporating this tool for ensuring that they attain the required market in the first year.
Conclusion
The report suggests that Apple considers applying strategies such as reducing the price of the product in order to penetrate the market and secure a substantial market share. Although the product may be unique once compared to the others from the competitors the management of Apple Inc needs to incorporate the most effective communication tools to create awareness to the customers about the product. The company also needs to ensure that there are no delays experienced in delivering the products to the customers by choosing an effective distribution strategy.
References
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Fleisher, C. S., & Bensoussan, B. E. (2007). Business and competitive analysis: Effective application of new and classic methods. Philadelphia, Pa: Wharton School.
Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2012). Essentials of marketing. Mason, Ohio: South-Western Cengage Learning.
Mintz, O, & Currim, I 2013, 'What Drives Managerial Use of Marketing and Financial Metrics and Does Metric Use Affect Performance of Marketing-Mix Activities?', Journal Of Marketing, 77, 2, pp. 17-40, Business Source Complete, EBSCOhost, viewed 22 June 2013.
Paley, N. (2007). The marketing strategy desktop guide. London: Thorogood.
Saxena, R. (2009). Marketing management. New Delhi: Tata McGraw-Hill.
Sreenivas, T, Srinivasarao, B, & Srinivasa Rao, U 2013, 'An Analysis on Marketing Mix in Hospitals', Advances In Management, 6, 2, pp. 46-55, Business Source Complete, EBSCOhost, viewed 22 June 2013.
Verma, H. V. (2012). Services marketing: Text and cases. New Delhi: Pearson Education.
Waller, D. (2012). Developing your integrated marketing communication plan. North Ryde, N.S.W: McGraw-Hill.
Weinstein, A. (2004). Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms. New York: Routledge.
Marketing mix is a set of decisions needed to be considered before introducing a product into a particular market. In determining these decisions, there are a number of variables that need to be considered when introducing a new product into a market or re-introducing an old product into a specific market. These variables include the product itself, the anticipated product price, the promotion the product would receive and finally, place of distribution of the product. However the successful launch of the product depends on the competitive analysis of the product.
Product: market and competitor analysis
Market and consumer analysis involves assessing the strengths and weaknesses of a products competitor in a given market. The main aim of this analysis is to provide the products producer with insight so that they can equip themselves with strategies to identify both opportunities and threats that may be presented by their competitors. Other than that this analysis helps develop insights on all aspects of the business such as the competitors of the product.
Segmentation
Demographics
As was the case with the hunter boots, it was recognized that the shoes not only had to be sold to an older customers. By observing the market, it was noted that marketing the Wellington boot to a younger customer base (both male and female) would be more profitable to the company. Prior to this discovery, the Wellington boot was only bought for practical reason such war boots and later transferred to uses by farmers and horse stall mucking, and not as a trendy fashion statement.
By observing the market and analyzing the competitors Mullen was also able to come up with a special price for the re-branded fashionable boots. Prior to this change, the boot was being sold at a very high price. However, the price of the boot went lower once the company was moved to china from Scotland. This meant that more people would be able to afford the boot.
Psychographics
Psychographics involve the use of psychological, sociological, and anthropological factors to determine and attract potential consumers. Once Mullen had modernized the Wellington boot and set its price 20% lower than the original price, he went a set further by introducing versatility of the boot by introducing it in more color ranges as well as intruding the boot in new liners and textures versions. This appealed to the younger trend-setter demographic of consumers. He also decided to bank on the boots history with royalty to target the young social-climber demography that liked to emulate royalty. This gave the product an added advantage in the market by ensuring that the boots even though they were sold at a higher price appealed to that specific demography. This was unique given the fact that the boot had once been commissioned for the British royalty and a few of the royal family members had been spotted out in the public with the boot.
In his research, Mullen noted that the production of boots was a bit on the expensive end when done in Scotland, therefore, the company shifted its production to china which ended up saving a lot of the company’s production costs. This enabled the company to be able to lower the price of the boot without having to incur losses.
In keeping up with the boot manufacturing environment, the wellington boot was introduced into the market in 25 new colors and would be found in either long or shorts sizes. This not only helped the product keep up with other designer boots that had been dominating the boot industry, but they were able to appeal to that specific demography who no longer needed boots for practical purposes but also for a fashion sense. The company played on the curiosity of the people with regards to royal trends to forge ahead over their competitors.
Positioning
Finally, through the analysis of the products market and competitors, Mullen started targeting the marketing of the newly branded boot. Not only did the company introduce the new boot to store chains all over Britain and America, but he continued marketing his brand through events. Finally the company through its other connections was able to land mentions in world famous fashion magazines which went a long way in advertising the new refurbished Wellington boot. The company received major boosting from famous trendsetters who wore the boot is a very unique way. Due to the popularity of the trend setters, people who looked up to them fashion wise purchased the boot so that they can keep up with their trend setters. This also went a long way in establishing the position of the boot in the market.
Re - brands for new product
Rebranding is a marketing strategy that usually involves a new aspect to an already established brand with the intention of creating a new image that is totally different in the minds of a specific potential market. Rebranding may take different approaches depending on what the products owner aims to achieve as the end result.
In the case of the Wellington boot, it was noted that the boot would appeal to a younger, trendier demography. So the company decided to pick the shoe that was once used for going into war and by British royalty and made it available to the younger public. This was achieved by producing the boot in 25 other colors as compared to the previous black and brown only. The shoe was also modified so that customers could purchase it in either the customary long boot or a shorter version. Finally, the company made the shoe more comfortable by introducing new boot liners and textures for the boot. By the end of the rebranding of the Wellington boot, not only the boot undergone a total transformation and would be readily available to target consumers at affordable prices but had retained the old Wellington boot feeling but its demand went up in the market.
Rebranding worked as an advantage to Mullen whose first venture into modernizing the Wellington boot had failed due to the bankruptcy. It therefore gave the company a new lease which is generally what rebranding does to companies.
Innovation in Marketing
Innovation in marketing involves the creativity in marketing of a product. This may involve the introduction of a specific older product into the market but as a new product or bringing in a totally new product. Whichever way chosen, the bottom line is that the product needs creative ways in which it may be launched into the consumer market.
New product development
New product development is the process that involves introducing a totally new product into a market. The process involves coming up with the product design then performing a marketing research the analysis. When Mullen was presented with the idea of developing the Wellington boot so that it could be used by a younger trendier demography he went for it despite that fact that for years the boot had been used for other non-trendy functions such as firming. This meant that the company had to totally change the image of the boot to less functional, trendier footwear. This process is known as idea generation. After an idea is generated, it is screened. The screening of the idea involves looking at the target market and the market in which the product will be launched in. in this case the boot was targeted towards the young trendy generation and the boot would be launched into the already booming fashionable boot manufacturing industry. The company even considered the feasible technicality of manufacturing in Scotland and moved this to china.
The company then has to conduct a business analysis, concept development and finally the marketing testing of their idea. When the new wellington boots had been manufactured, Mullen carried out a test run by placing the boots in a retail chain during a period when he was sure a lot of people would see them. This worked as a charm and soon people were buying them. Test runs are good because they test the consumers’ gravitation toward the developed product and the amount the consumers would be willing to part with for the product.
Once the products pilot testing is done and has managed to be successful, the company has to then develop the technical implementation. This would involve ways in which the product would be distributed for sale. Mullen collaborated with different store owners in both Britain and America that ensured that the sale of the new boots would be ensured.
Finally, for any product to successfully sell it needs to have sufficient commercialization. This comes in the form of advertisements and other events that would make the product known to the public. Mullen not only ensured the appearance of the wellington boots in international fashion magazines but also used the boot to sponsor events. The company also went a step higher and used the boots royal history as a way to attract customers to the boot.
This showed the commitment of Mullen to raising a brand that was once known as a functional ‘dirt’ boot into a fashion icon that has brought the company a lot of pre tax profit in the first three years since the conception of the new trendier wellington boots.
What are the key elements of IBM’s strategy for developing its resources toward social change?
Introduction
When IBM started undergoing global integration, their were doubts on whether that was indeed the right move in the first place and if so the necessary changes that were to take place and their effects on the company. Since its foundation the company had been positively recognized as being strongly committed to social responsibility. This social responsibility by the company had been maintained by a set of principles set up by the companies founder Thomas Watson. These principles were mainly geared towards the development and maintenance of strong corporate citizenship.
The fundamental tenets of achieving any form of any form of corporate governance is to ensure that corporate build bridges that link them with the communities that surround them. This enables the community to be able to look up to the corporate with respect and admiration and enables it to look less like a profit making machine and more like an organization that cares about the community. In essence these activities give the corporation a more humane aspect in the eyes of the community.
Corporate citizenship
Good corporate citizenship can be summed up in a number of ways. It basically boils down to the fact that good corporate citizenship encompasses companies exhibiting practices that not only benefit the employees of the company but also the company owners as well as the general public. Each company that has received an award for being good corporate citizens has its own way of enhancing its policies. Corporate citizenship has however, over the years been found to have four specific faces that comprise it. These faces include the economic, legal, ethical and philanthropic faces. The key question then would be how a company can incorporate this faces into there corporate citizenship.
Ethical face
IBM is known to have some of the best company values in the corporate circle. What the company decided to do when it went global is to refresh its values. This was achieved by introducing a mechanism that allowed for all stakeholders in the company to be able to discuss the company values freely. This allowed for especially the employees to be able to freely air their grievances without them feeling as if they were being victimized by the company. This ultimately helped improve on the production of the employees of the company since they felt like someone was listening to them. This method helped improve the work ethics of all employees of the company.
Legal face
For any good company to be successful in business it has to try its level best to avoid legal entanglements. This can only be achieved by striving for the highest standards at the place of work. By setting up clear business guideline conducts, IBM ensured that all stakeholders were clearly made aware of what to expect from the company as well as what was necessary in the company. This in turn minimizes the risks the company may face that may be brought about from mistakes that would have otherwise been avoided. A case example is sexual harassment suits that usually cost companies millions of dollars can clearly be avoided if a company clearly laid down the rules such as IBM did. This ensures that the stakeholders in the company are kept in check at all times. The company also ensures that it provides what it has promised to its customer for doing anything less would constitute a breach of trust which would eventually lead to legal problem.
Economic face
For a company such as IBM to continue its successful growth over the years it had to maintains its level of innovation. This is due to the fact that more and more companies are coming up with better ideas and if the company does not keep up then the competitors would take over. The company in this case decided to engage the community by interactions with them. These interactions ensured that the company was able to better understand these communities where their employees and customers came from and where the company operated from. IBM also selected experts from its company portfolio who were enjoined in community projects. This enabled the company save money that traditionally used to be donated by the company for such projects. The company also ensured that it entered many partnerships at its human resource level that ensured the success of the company while still giving back to the community.
Philanthropic face
Most companies participate in community based projects. This is what is usually termed as philanthropy and is usually very significant in the establishment of good corporate citizenship. IBM not only offers contribution to the community through corporate and employee gifts, the company ensures that it volunteers its time to these projects. This is achieved through its allowing of the companies employees and retirees to engage in community service. This not only assists the community but allows the participant employees the satisfaction of being of service to the community.
Conclusion
For any corporate citizenship to be successful, a company has to put in a lot of time and resources. Over the years, IBM has been successful in achieving this goal all thanks to strategic planning and a set of values set forth by its founder that the company has endeavored to adhere to and improve on. This ultimately has earned them not only employee trust, but trust from their customers as well as the larger global community in which they operate.
References
Austin, James, Howard Stevenson, and Jane Wei‐Skillern. "Social and commercial entrepreneurship: same, different, or both?." Entrepreneurship theory and practice 30.1 (2006): 1-22.
Carroll, Archie B. "The four faces of corporate citizenship." Business and society review 100.1 (1998): 1-7.
Lindgreen, Adam, and Valerie Swaen. "Corporate citizenship: Let not relationship marketing escape the management toolbox." Corporate Reputation Review 7.4 (2005): 346-363.
Rubenstein, Doris. The Good Corporate Citizen: A Practical Guide. Hoboken: John Wiley & Sons, 2004. Internet resource.
Vidaver‐Cohen, Deborah, and Barbara W. Altman. "Corporate citizenship in the new millennium: Foundation for an architecture of excellence." Business and Society Review 105.1 (2000): 145-168.
How is building a brand in a business to business context different from doing so in a consumer market?
Is ciscos’ plan to reach out to consumers a viable one? Why or why not?
Part A
A business-to-business branding context is also known as industrial marketing. Branding in a consumer market essence involves the creation of consumer products brought by individual consumers and households for personal use. On the other hand, industrial branding involves looking at the brand at an inter-company trade relationship and taking into account the brands behavior within an industrial context.
In industrial marketing, purchases are mainly characterized by interdependence of different factors that relate to among other things, the nature and diversity of the product as well as the concentration of sectors of activity and completion. This type of relationship ensures long-term brand management.
Business to business branding exists only in relation to the final product to which it is incorporated, for whatever production it is made for. This means that the manufacture depends on a customer who in turn depends on his customer (Smyth, 2011).
Important distinctions in business to business branding to consumer branding is the industrial context in which the purchase is done, as well as, the need for the brand to be specific. This means that the product gets specifically made for the needs of an organization, and managed by individuals (Glynn & Woodside, 2009).
In industrial purchasing, the company has the advantage of being able to develop marketing strategies with several levels of intervention. These interventions can be at their customers’ levels or at their customers’ customers’ level. Therefore, most supplies study their customers’ markets and clientele lists.
Part B
In marketing, advertising is not the only method one uses to be able to reach potential consumers. To be able to attain maximum impact on the target customers one has to be innovative when putting forth their brand into the public. It is very important to note that the importance of marketing is establishing maximum exposure of the product brand to the market.
Cisco came up with other ideas other than advertisement that have ensured its exposure to the public. Other than collaborating with other company names such as Sony for co-branding of their modems with the Cisco logo, they came up with a new project that ensures that involves sports fans. In this project, sports fans can be able to have fun when they go to different sports games.
Therefore, is Ciscoes’ plan to reach its customers a viable one? The answer to that would have to be, yes. When marketing, it is important to know who and what ones market is. This is achieved by knowing the potential and actual customers, the competition, and the industry one is operating in (Pakroo & Stewart, 2010). So far, Cisco knows its actual customers and reaches them through advertisements.
It has discovered that the sports industry has many clients; therefore, it aims at reaching these customers by creating experiences that will draw these clients to their product. This is achieved by enabling fans to link with their favorite players through videoconferencing, which is made possible by Cisco. On top of that, they provide digital displays and HD televisions in stadiums. This experience on its own is able to pull many sports enthusiasts to Cisco products.
Sources
Glynn, M. S., & Woodside, A. G. (2009). Business-to-business brand management: Theory, research and executive case study exercises. Bingley: JAI Press
Pakroo, P., & Stewart, M. (2010). The small business start-up kit for California. Berkeley, Calif: Nolo.
Smyth, H. (2011). Managing the professional practice in the built environment. Chichester [England: Wiley-Blackwell.
UNIT II CASE STUDY
Nordstrom Case Study
How else can Nordstrom continue to provide exceptional customer service and increase brand loyalty?
What are Nordstrom greatest risks and who are its greatest competitors?
Part A
Nordstrom has been able to achieve customer loyalty through an elaborate plan put up that ensures the clients complete satisfaction when shopping at their stores. Apart from the no questions asked return policy, the store awards their loyal customers in small and big ways that please them. Though the store seems to have every aspect of good customer service in place, there are a number of emerging, growing trends that Nordstrom could adopt that would further their customer service course and further increase their brand loyalty.
Gift registries are no longer restricted to bridal affairs. More stores are coming up with this idea because of the variety of customer needs. Through gift registries put up in the store or online people can check the list and pay for an individual product that the customer likes and is on the list (Linsenman & Kingaard, 2011).
Gift certificates are also becoming very popular. This kind of service allows a customer to pay a certain amount for the certificate, which someone else will come to spend in that particular store.
They should also establish a feedback system. This is because one may be surprised by what they learn about customers and their needs when asked what they think of an individuals business, products, and services. This can be achieved by surveys, feedback forms and questionnaires, but it is always good to ask customers first-hand for feedback when they are completing their orders.
Part B
The main competitors of Nordstrom are store that are specialty retail stores. These include companies such as The Gap Inc, Limited Brands Inc., Abercrombie & Fitch Co., and Saks Inc. most of these stores offer their merchandise at cheaper prices which give Nordstrom a run for their money. These Competitive conditions within this retail sector may force the company to reduce its sales price therefore bringing down the company's sales margins.
Nordstrom's business is seasonal in nature and only generates a high percentage of sales during its second and fourth quarters, which are more often than not characterized by the company's anniversary sales and holiday seasons. As a result, Nordstrom faces exposé to significant risks, if the seasons fail to deliver expected operating performance.
Diminished consumer confidence and spending behavior such as macroeconomic factors like higher fuel and energy costs, credit availability, high unemployment levels, and high household debt levels are element that may in the end, end up hurting the company's growth and profitability.
The loss of important individuals or the inability to recruit and retain individuals with the relevant talent and experience would disrupt the operation of the business and negatively affect the companies’ ability to deliver its strategy.
Sources
Linsenman, C., Kingaard, J., & Entrepreneur Press. (2011). Start your own retail business and more: Specialty food shop, gift shop, clothing store, kiosk. Irvine, Calif.: Entrepreneur Press.
Swoboda, B., Schramm-Klein, H., Morschett, D., Rudolph, T., & Schnedlitz, P. (2009). European Retail Research. Wiesbaden: Gabler Verlag / GWV Fachverlage, Wiesbaden.
UNIT III CASE STUDY
Case Study (Disney)
What does Disney do best to connect with its core consumers?
What are the risks and benefits of expanding the Disney brand in new ways?
Part A
Disney uses geographic, demographic, and psychographic segmentation. This means that, it uses multi-segment targeting. Even though it may seem like Disney targets only kids, Disney’s target market is the whole family and not the children only. Disney’s core constituency is the urban, median-income family who wants to have fun. It understands its target market thoroughly. The company uses this deep knowledge of its target market to sell all kinds of products and services. It serves the infant category as effortlessly as the teen or adult category. It creates products and services for its core constituency.
Disney is always working toward exploring and expanding its markets. It has developed theme parks in major international cities outside of the U.S., like, Paris, Hong Kong, and Tokyo. This expansion strategy is not just limited to new geographies but also encompasses new products and services. These acquisitions greatly expanded Disney’s licensing and merchandising business.
Delighting the customer is Disney’s core product strategy. Whether it is the theme parks or the movies, Disney tries to cater to children and grown ups. It believes in continually improving its products and service offerings. Disney is also constantly creating new products. It believes in building a community of dedicated and loyal fans. It has achieved this through social media. In addition to social media, Disney advertises in conventional media as well. It believes in constant advertising – both online and offline, to be always in its customers’ minds. Disney also uses direct mail and sales promotions.
Part B
Brand Extension has many advantages as well as disadvantages. Some brands have tried and terribly failed in their extension such as Coke Cola. On the other hand, some brands such as mars have extended from snack bars to ice creams and chocolate drinks.
Some of the advantages of brand extension include the fact that it increases brand image by making the product known for different ideas. This in turn reduces the risks perceived by the customer. An established brand name increases consumer interest and willingness to try new products that have the established brand name. If the efficiency of promotional expenditure increases, advertising, selling, and promotional costs are reduced (Smith & Zook, 2011). Therefore, Cost of developing new brand is saved. The consumers seek for a variety under the brand name and the expense of introductory and follow up marketing programs experiences reduction.
The core brand is likely to benefit in that the image of parent brand experiences enhancement. It also revives the brand if it was experiencing a go-slow by allowing subsequent extension. The brand meaning is clarified and it increases market coverage as it brings new customers into brand franchise. Customers hence associate the core brand to the new product
On the other hand, brand extension in unrelated markets may lead to loss of reliability if the brand name is extended too far. There is a risk that the new product may generate implications that may damage the image of the original brand (Hill & Jones, 2010). There are also chances of less awareness because the management may not provide enough investment for the introduction of new product assuming that the spin-off effects from the original brand name will recompense. It is important to observe that if the brand extensions have no advantage over competitive brands in the new category, then it will fail.
Sources
(2013, 03) The Best of Disney’s Marketing Strategies. Retrieved 03, 2013, from http://www.saleschase.com/blog/2012/05/14/best-disneys-marketing-strategies/
Smith, P. R., & Zook, Z. (2011). Marketing communications: Integrating offline and online with social media. Philadelphia, PA: Kogan Page
Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin
UNIT IV CASE STUDY
Louis Vuitton Case Study
How does an exclusive brand such as Louis vuitton grow and stay fresh while retaining its cachet?
Is the counterfeiting of vuitton always a negative? Are there any circumstances where it can be seen as having some positive aspect?
Part A
Worldwide, Louis vuitton has established itself as a luxury brand. This is because more consumers are now going for items that have a quality tag as well as a name that is recognized in a specific market. The vuitton company has come up with for main marketing strategies that enable it to earn profit even during hard economic times. This strategy, also known as the four Ps’ comprises of Product, Price, Place, and Promotion.
In general, marketing, a product seeks adequate product quality. Quality control entails fitness for use and conformance to requirement, and excess quality because principles raise the cost of the product. However, a Louis Vuitton handbag offers a product of distinguished quality and attention to detail, as well as one with a story behind it. While general marketing places importance on relative quality, for Louis Vuitton the concept seems to be absolute quality, which prompts consumers to insist on Louis Vuitton or nothing, rendering comparisons of Louis Vuitton products with competing products insignificant.
General marketing demands low prices, which are achieved by reducing costs and having off-shoring production. Louis Vuitton products, on the other hand, are priced high. In essence, the Louis Vuitton difference is value, not price, this being absolute value, not relative value. While general marketing seeks to create broad distribution channels, opening more stores or selling through no department store outlets, such as mail order and volume retailers, Louis Vuitton products are only offered through limited distribution channels.
General marketing looks to `mass advertising" in its efforts to sell at high volume. This is mainly achieved through television commercials. Louis Vuitton, however, does not advertise on television. It advertizes in newspapers and magazines, which, consist mainly of image advertisements rather than aggressive sales advertisements, therefore, more focus is given to publicity.
Part B
People who cannot afford the price of the original brand buy most pirated products. However, as soon as these people can afford these products, they go for them. Brand awareness rockets in markets where the authentic product operates as more consumers have access to these products that would otherwise be out of their reach. This increased brand publicity and helps drive sales of the authentic products from those who can afford them.
The decisions to purchase a counterfeit product usually confirms the brand’s real values as the recipient buys the item to project the very image the brand is trying to represent through its advertising and promotion. This shoddy endorsement encourages loyalty, generates awareness, and strengthens the brand’s values with both the owner of the fake as well as everyone with whom the fake product meet.
Another benefit is that counterfeiting closes off the competition. High priced branded goods encourage competition to enter the market at slightly lower price points. Counterfeiters usually produce branded goods and sell them at significantly below the cost of the competition. This means the competition is squeezed out as it has nowhere to go. This is because it is priced out of the top market by the original brand and can’t compete with the counterfeit, as their prices are too low.
Sources
Castets, S. (2009). Louis Vuitton: Art, fashion and architecture. New York: Rizzoli.
Kapferer, J.-N., & Bastien, V. (2012). The luxury strategy: Break the rules of marketing to build luxury brands. London: Kogan Page.
Chevalier, M., & Gutsatz, M. (2012). Luxury retail management: How the world's top brands provide quality product and service support. Singapore: Wiley.
UNIT V CASE STUDY
RITZ CARLTON CASE STUDY
How does the Ritz match up to competitive hotels? What are the differences?
Discuss the importance of the wow stories in customer service for a luxury hotel as the Ritz
Part A
The Ritz is like any other comfort hotel. However, there are some standards set up by the hotel management that make it stand out from the other hotel brands. For any hotel to achieve success, it needs to have the best location, beautiful rooms, and nice rooms. The Ritz recognizes that any great brand has to be better, different, or cheaper to win. However, the hotel focuses their attention on impeccable service standards to separate themselves from other Hotels in the industry. What they have done is to incorporate culture into their brand.
One of these cultures is the idea of meeting the “unexpressed” needs of their guests irrespective of whom the guest is. Most marketers struggle in knowing what their customers need. The Ritz has created a culture where bartenders, bellhops, front desk clerks, and any other employee instinctively meets these “unexpressed needs”. Employees carry around note pads and record the expressed and unexpressed needs of every guest and then they use their instincts to try to surprise and delight these guests.
Employees are fully empowered to create unique, memorable, and personal experiences for their guests. Unique in this case meaning doing something that helps to separate the Ritz from other hotels. Memorable forces the staff to do something that truly stands out to the guests. In addition, personal defines people doing things for other people.
The “Radar is on and Antenna is Up” culture ensures that employee can be looking for the unexpressed needs of the customers. This in turn ensures that the customers leave the hotel with a ‘wow story’. Employees are therefore always on the look out for potential wow moment.
Part B
Story telling branding is a recent development that marketers have come up with to help them sell their brands. The idea is to come up with stories related to your brand that will draw customers to your brand by making them feel like they connecter with your brand.
The main aim is to create an emotionally compelling brand or company story used to develop and implement a content-based marketing program. In the case of the Ritz, their wow stories are based on the customers’ experience of their hotel service and the extra mile they go for the customer. This pulls other customers to the hotels who also want to experience their own personal wow moment.
Stories help identify the characteristics of an “emotional space” the companies want to own for brand strategy development. Most businesses seem like they always want money from the consumer. However, stories show the emotional side of the brand therefore drawing more potential customers to the brand.
Stories help to engage with prospects, customers, influencers, and other audiences in order to establish thought management and become a trusted influence. They also identify the deep emotional drivers associated with a specific experiences used for operational improvements, personnel training and customer loyalty metrics. Furthermore, they identify the essence of corporate culture used to evaluate and plan for successful mergers.
Sources
Gallo, C. (2012). The apple experience: Secrets to building insanely great customer loyalty. New York: McGraw-Hill.
Gitman, L. J., & McDaniel, C. D. (2009). The future of business: The essentials. Mason, OH: South-Western Cenage Learning.
Michelli, J. A. (2008). The new gold standard: 5 leadership principles for creating a legendary customer experience courtesy of the Ritz-Carlton Hotel Company. New York: McGraw-Hill.
(2013, 03) Stories That Stay With You-Memorable moments from the Ladies & Gentlemen of The Ritz-Carlton. Retrieved 03, 2013, from http://www.ritzcarlton.com/en/StoriesThatStay.htm
UNIT VI CASE STUDY
Amazon.Com Case Study
Why has amazon.com succeeded online when so many companies have failed?
Will the kindle revolutionalize the book industry? Why or why not?
What is next for them? Is cloud computing the right direction for the company? Where else can it grow?
Part A
Amazon is currently the biggest online store in the world. This is attributed to among other things the fact that Amazon is famous for knowing what their customers need before the customer is even aware of that need. The company’s vision was and still is to offer “Earth’s biggest selection and to be Earth’s most customer-centric company. Since its conception, amazon.com, which was originally founded for providing books online, has expanded its venture to other products like music and furniture. The company’s’ success can be attributed to a number of reasons.
The company started by building the largest online listing of books in the world, made sure that these listings appeared in search results and delegated the long tail by allowing third party sellers to sell less popular titles via the Amazon Marketplace. They then applied the same practice across fifteen other categories, including music, therefore providing both the breadth and depth in selection that consumers like. Where necessary, it purchased strong affinity brands, as Zippo’s that shared Amazon’s e-commerce philosophy and customer focus. By ensuring, that their customers have a variety of their products to choose from they retain their old customers and gain new ones.
The company offers the lowest prices in the market. Their prices are the lowest in the market, which gives their competitors a hard time in competing with then. It is estimated that the longest a product can stay on the Amazon shelf is thirty-three days.
Customer convenience is very important to the company. With the growing trend of online shopping Amazon ensure that among other customer comforts like shipping; their consumers get reviews of the products they intend to purchase.
Part B
On November 19, 2007, Kindle the handheld reading device, was released by amazon.com, and sold out within four and a half hours. The device has the ability to hold over one thousand five hundred books, effectively condensing ones library into a third inch thick, ten point two ounce reading device the size of a normal paperback. This means that the owner of the device can carry many books as they want in the device. Before the conception of this idea, book owners had to carry books everywhere if they needed them. People who were book lovers had to create space for storage of the books, which was inconvenient if one had small or no storage at all.
With the kindle, not only are people and even institution able to access the books they love at a cheaper rate but they can also conveniently carry around all their favorite books in a portable device. Currently the price of the kindle is a little bit on the high end. However, with the expanding technological world, the kindle will soon overtake the need to purchase paper books.
Part C
Amazon has recently incorporated cloud computing into their production. This is a major step towards not only good marketing but also efficiency in the running of the company. To better, understand the impact of cloud computing in any business.
The biggest advantage cloud computing does the user is saving up on the money in purchase and maintainace of stand-alone software or servers. By cloud computing, one can easily save the overhead charges such as cost of data storage, software updates, management, and most importantly cost of quality control. Now anyone can use the services of cloud computing at affordable rates.
Other than that, storing information in the cloud gives the company almost unlimited storage capacity. Hence, you no more need to worry about running out of storage space or increasing ones current storage space availability. It also allows for backing up and restoring ones, data since it is stored in the cloud. It also allows for security of the data since it is stored in cloud therefore cannot be lost easily.
Cloud computing delivers a better cash flow by eliminating the capital expense associated with building the server infrastructure. This is good for Amazon because they are an online store.
The future of Amazon.Com is a bright one. Not only can they sell books and music online, they should also consider introducing other products into their brand such as movies, computer programs and applications, games and learning instructions/lessons.
(2013, 03) Morehouse Jim, et al., “Are You More Capable Than Your Competitors Are Ruthless? Retrieved 03, 2013 http://www.atkearney.com/images/global/pdf/Are_You_More_Capable.pdf, page 18
Kelly, M., & McGowen, J. (2011). BUSN 3. Mason, OH: South-Western Cengage Learning.
Stair, R. M., & Reynolds, G. W. (2012). Principles of information systems. Australia: Course Technology Cengage Learning.
UNIT VII CASE STUDY
Gillette Case Study
Gillette has successfully convinced the world that “more is better” in terms of number of blades and other razor features. Why has that worked in the past? What’s next?
Some of gilletes’ spokespeople such as tiger woods have run into controversy after becoming endorsers of the brand. Does this hurt there brand equity of marketing massage. Explain?
Can gillette ever be as successful in marketing to women? Why or why not?
Part A
The introduction of the more is better campaign was actually Gillette responded to the introduction of disposable razors. The value proposition of disposables was, the quality of the shave is almost as good as you get with real razors, but we are a lot cheaper. This made the target consumers and the loyal customers to start re-evaluating their purchases with more people now going for the disposable blade. This is because the blades were cheaper. Gillette faced a choice. They could would either embrace the new technology or start making disposables themselves. Alternatively, they could double down on their existing business model.
They chose the latter. They came up with models that included many blades that ensured that the customer would get maximum us the blade before it worn out. They had a quality advantage, and they have continued to invest in stretching that advantage. Instead of trying to shore up their weakness, which was their pricing, Gillette put all of their energy into building their advantage. Their consumers were therefore convinced that having more blades that lasted a bit longer was better than disposable blades. Gillette had a clear advantage in performance and they have been able to build on that. The result has been that even in the face of a potentially disruptive innovation, they have to maintain a lead in the razor market.
Part B
In marketing there is a term coined up that states that bad publicity is good publicity. This is because many people arte attracted to scandal. The more the people learn about the scandal the more likely they are to hear about the brand the individual was endorsing.
Scandals attract attention. If a brand can overcome the negativity and control the consumer outrage that can quickly pop up online through social networking, the brand, and even category, can benefit from increased awareness. It can also level the marketing field by bringing up issues that were not previously in the consumer consciousness. The brand gets an edge. If the scandal is just enough to make you seem “bad” but not enough to actually be detrimental your business or consumers, a proactive “sorry” in the right way is often enough to allow the issue to subside and the brand to move forward. The scandal will eventually become part of the brand’s mythology.
A scandal prompts course correction and can lead to overall improvements in various sectors of the brand awareness. Scandal can also bring fame. Brands that are already in the public perception are celebrities in their own right. Scandals not only have the power to break a brand, they have the power to make a brand.
Part C
Shaving is now becoming a popular trend in women. The modern woman wants to shave for hygiene purposes. Women's shaving is Gillette's fastest-growing blades and razors division, and Venus, the brand it launched for women in 2001, took in more than a half-billion dollars in sales 2008. The brand at first just sold to women male products that had been packaged prettily, however with the introduction of the Venus brand this changed.
The company has come up with razors that fit the female profile more with more and more innovative products being introduced every now and then. So as it stands, Gillette has a fighting chance of marketing to women and succeeding.
Sources
Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. London: Cengage Learning.
Starbucks has worked hard to act ethically and responsibly. Has it done its best to communicate with its consumers? Do consumers believe that it is a responsible company? Why or why not?
Where does a company like star bucks draw a line on supporting socially responsible for example how much of its annual budget should go towards these programs? How much time should employees focus on them? Which program should it support?
How do you measure the results of its socially responsible programs?
Part A
The primary key to Starbucks' success has always been people. This translates to the customers who enter Starbucks franchises everyday to drink their coffee and the people responsible for growing that coffee. They have set up a business model that is all about people worldwide.
The company has put up some of the best payment plans, benefits packages available to all of their farmers, has great payment plans, and benefits packages for their local employees including fantastic benefits for their part time employees. With this idea of people, they have worked hard to please those that work hard to please their customers.
Customer service has always been a high priority with Starbucks. It is why a manager or assistant manager at a Starbucks receives at least 80 hours of training and a barista receives 40 hours of training before they are allowed to make drinks without supervision. A confident barista is cheerful, capable, and works to make that perfect cup of whatever you wish. This attitude of people first together with a great product has made Starbucks the success that it has become. Starbucks has worked hard to boost it's line of products and all that it offers. It has done so to please its growing number of faithful customers.
Part B and C
Starbucks is currently involved in a number of social programs aimed at benefiting the community. Recently the company was involved in a program that aimed to support our military. Other than that, the company is also involved in other programs such as sustaining small coffee communities they also ensure that they get supplier loyalty from the farmers.
By the year 2003, the company contributed 11.3 million dollars towards community support. This has since gone up with more and more projects joining this bracket. In the same year, the company was able to volunteer 200,000 hours. This means that the company prides itself in giving back to the community. This endeavor should not be reduced at any rate because it shows the customers that the company cares about what is going on in the community around them. It should be observed that despite the amount of time placed in these social programs, Starbucks gains a lot off annual profit at the end of the company’s financial year. The company has embraced the community and by doing so the community embraces back by buying their products therefore supporting it back
It is therefore clear that Starbuck’s thrive in giving back to the community. In doing this, the community and all its current and potential customers take pride in the company.
References
(2013, 03). Retrieved 03, 2013 from http://news.starbucks.com/
Bussing-Burks, M. (2009). Starbucks. Santa Barbara, Calif: Greenwood Press.
Saks, A. M., Haccoun, R. R., Belcourt, M., & Belcourt, M. (2010). Managing performance through training and development. Toronto: Nelson Education.
Arimount, a well-known beauty and grooming company that has been in the hygiene market for 20 years with an average return on investments seeks to introduce ‘MASQUE’, a deodorant that can last up to five days- even after a shower, into the market. Arimount believes that its 20 years experience in the hygiene market offers leverage as far as consumer information is concerned because pleasing the customer always comes first.
Target market
Men
Women
Teenagers
Persons between the ages of 13-40
Marketing Demographics
Geographies
‘Masque’ is not limited to a specific geographic area. Since the need body hygiene is universal, masque aim not only to serve its users regionally but at an international level.
Demographics
‘Masque’ is a unique deodorant in that it does not target a single group of buyers but is available for all groups of buyers. Its target clients will be anybody who wants to maintain proper body hygiene. However, its biggest target client will be the people who are unfortunate enough to be born with natural body odor.
Marketing Strategy
Masque is a simple deodorant that is not limited to any single gender or age. However, our main target groups as far as age is concerned are ages 13-18 and 19-40. It is not limited to those who desire a clean hygienic look but also caters for those that have problems fighting body odor. It also targets persons who have to work for long hours and have an active lifestyle but who desire to maintain a clean cut and fresh scent through out.
Potential target markets’ expectation
They expect a deodorant that not only keeps the dry all the time and is gentle on their skin but also something that will make them feel fresh and smelling clean for a longer time without fading off after a short time.
SWOT analysis
This SWOT analysis captures the strengths and weaknesses as well as the opportunities and threats facing masque.
Strengths:
Aside from the fact that Arimount is a well-known name in the beauty and grooming business, it has a 20-year experience in the market.
Arimount prides itself in producing products that not only appeal to its consumers but also has the long-lasting effect that enables our consumers get value for their money.
Masque aims at satisfying our customers by ensuring that they enjoy its scent for a period of five days after application, even after taking a bath.
Weaknesses:
The reception of other deodorant products from Arimount has not been as good as we expected
Masques’ reception into the consumer market may not be as rapid as we expect.
Opportunities:
More and more people are concerned about their grooming and therefore hygiene is a growing market both locally and internationally.
Threats
The grooming market is already crowded with major companies dominating the market thus making it hard to penetrate this particular market.
Quality production is necessary for one to penetrate the market because of the high standards set by other competitors
Competitors
Our main competitors in the market are Nivea, Dove and Rexona.
Nivea
Nivea is a global German based company brand that specializes in the production of product that deal with facial, body , all purpose, lip, deodorants, bath , sun and men’s care. It has currently been working on and produced a deodorant for women that leave no underarm stain on garments. This deodorant product alone cost Nivea a production cost of 2 million pounds and they expected to make a profit of 1.3 million pounds by the end of 2012.
Dove
Dove is a Unilever brand that expanded from consumption only in the U.S to being a global brand. It targets both male and female consumers. In 2012, it ranked the fourth most valuable care brand in the world with an estimated net value of $4.7 billion. Its availability in the market is customary being that it is obtainable in any retail store whether in a supermarket or a drugstore.
Rexona
Rexona is also a Unilever brand that specializes specifically in deodorant production. It spans over eighty markets with a target consumer of 12.6 billion worldwide and in fact owns a 14.5% share in the global deodorant market. They target both men and women between the ages of sixteen and forty. Rexonas’ net profit as of 2010 was $6.3 billion.
Financials
The financial section will offer Arimounts’ marketing expenditure concerning Masques’ marketing, advertisements, and sells.
Break Even Analysis
Break-even analysis indicates that $10,000 in monthly sales will be required to reach the break-even point.
Break even analysis:
Monthly units break-even
100
Monthly sales break-even
$10,000
Assumptions:
Average per unit revenue
$30,000
Average per unit variable cost
$30
Estimated monthly fixed cost
$15
Sales Forecast
Given that ‘MASQUE’ is a new product been introduced into the market, Arimount feels that the sales forecast can only increase as the cost of advertisement will allow. For the purpose of sales forecast, Arimount will divide its target customers into two major groups: the male and the female consumers.
Sales Forecast
Sales
2013
2014
2015
Female
$200,000
$300,000
$400,000
Male
$100,000
$150,000
$200,000
Total sales
$300,000
$450,000
$600,000
Direct cost of sales
2013
2014
2015
Female
$40,000
$60,000
$80,000
Male
$20,000
$30,000
$40,000
Subtotal cost of sales
$60,000
$90,000
$120,000
Expense forecast
Controls
ASSIGNMENT II
Part A
Which types of marketing research will Arimount adopt?
Although there are, many types of marketing strategy available, Arimount will use both the qualitative and quantitative marketing research approach.
The quantitative type of research bases on attitudes, opinions, beliefs, and intentions of the consumer. Its aim is to understand why customers behave in a certain way or how they may respond to a new product. This research mostly collects from small groups of consumers and collective and one on one interview.
Given these opinions are often obtained from small numbers of people, the findings are not necessarily statistically valid but data helps to highlight potential issues which can be explored in quantitative research that will follow soon after its completion.
Arimount will achieve the qualitative research through in-depth interviews, focus groups, projective technique, and random probability sampling.
Given that qualitative type of research will not answer all questions required to support the market strategy, the company will also use the quantitative type of research to fill in the gaps left by the qualitative research method. This method involves large data collection, and usually involves the construction of questioners and scales which the respondents are have to complete as a survey. Quantitative research method seeks to answer questions such as how many, how often, who, when and where. The main aim of this approach is to define a problem; collect the data analyze it then report findings.
Some of the questions that Arimount will use include:
How old are you?
Are you a male or female?
Do you use any grooming product?
Do you use deodorants?
Why do you use it?
Which is your preferred deodorant brand?
What is the main quality you look for when selecting a deodorant brand?
How often do you use your deodorant in a day?
How long does your deodorant last before it wares off?
Have you ever seen a ‘Masque’ advertisement?
Would you feel like buying masque after seeing its advertisement?
What do you think about the price?
Have you spotted this product in any local retail store?
What do you think of the products name?
What do you think about its scent?
What do think about its ability to last for five days even after a shower?
How would you rate this particular product?
How often do you replace your deodorant?
How many times do you have to apple you deodorant?
Where have you seen a masque advertisement?
Who told you about this product?
Who do you know that uses this product?
Part B
How will Arimount ensure customer satisfaction?
Arimount will ensure that the consumer is always the first priority! Business exists because of the consumer, and they should be the primary focus of the companies operations. A bad product can be disastrous because most unhappy consumers never complain but they will not buy the product again and they will tell many others.
Ensuring that Arimount employees are well trained and competent for the job required, will guarantee that the final product is to the satisfaction of the consumer. By encouraging, empowering, and communicating with staff Arimount will foster the Use of creativity and experience of its staff. This in turn will make them more productive leaving the management with time to manage operations.
By increasing the knowledge level of its customers, arimount will ensure their customers know the full range of services provided in order to get sales in new areas. Communication with the customer regarding information affecting the purchase decision such as the timing, availability, and freight information of the product is also of paramount importance.
Since price, quality, and service are the three main areas of comparison when consumers are making a purchasing decision Arimount will ensure work completes in a timely and efficient manner by setting timelines and deadlines for production.
Arimount will Listen to requests, accept changes, and respond positively to uncertainty brought forth by customers. This is because Customers may require order changes affecting existing arrangements. How these requests get handled is important to the purchaser and their comfort level for making future orders.
Arimount will research if and how other companies are doing that is better than ours, with the ultimate goal of imitating or improving on their techniques. We will talk to suppliers and customers to collect general information on how our competitors operate and what they do differently.
We will ensure that we build customer service into every job, not just frontline sales, and marketing positions. Inventory control, delivery people, switchboard operators, repair and service staff, billing and accounts receivable employees are all important to us.
Encourage complaints. This is because unhappy customers usually do not complain, but most will never use your product again. Clients who express their dissatisfaction will do business with you again if their problem is resolved to their satisfaction, and they will relay their satisfaction to other people.
Arimount will ensure that it respond quickly and fairly to all complaints by providing customers with a simple procedure for registering a complaints; and keep clients informed regarding the resolution of a complaint. This allows us to deliver more than what our customer expects.
ASSIGNMENT III
What marketing segmentation will Arimount use?
Market segmentation mostly bases on five main variables namely: gender, age group, income, marital status, and occupation. Arimount will use only three of these bases to determine our market segment. These are gender, age group, and occupation.
Gender is very important in our decision because masque is a product for both male and female consumers. Thought the name is standard, different products will be in production for both our male and female customers. As far as age is concerned we seek to target both teenagers and grown ups. This is because more teenagers are now using deodorants in their daily grooming. Even thought Arimounts’ main target is all consumers we seek reach out to those who are mainly involved in occupations that require body activity such as sports or lifting activities.
Media segmentation
Arimount recognizes that different media reaches different people differently. Therefore, we will seek to employ all means of advertisement to reach our target consumers. This gains achievement through print media, by circulating word through newspapers, magazines, and pamphlets. Broadcasting the product in local media and billboards and by the involvement of social media for our younger potential consumer ensures that word on the product spreads.
Psychographic segmentation
Deodorant is not a necessity and may even to a certain extend be categorized as a luxury. That said arimount recognizes that while deodorant may appeal to some people, not all people can buy it. Deodorant buying is a matter of lifestyle.
Positive market segmentation
Even thought there is stiff completion in the deodorant market, Arimount may have some advantage because they have developed a product that has long lasting power unlike the rest. Our 20-year experience in the hygiene industry has also given us a boost of sorts in the market.
Behavioral segmentation
Arimount has been in the market for the past 20 years and the reception of our customers has been satisfactory. We will be relying on this response from our loyal customers to introduce masque into the consumer market.
Benefits
Masques’ creation is for the sole purpose of being able to last for five days on the body even after taking a bath. Arimount are relying on this element to attract potential customers.
Price segmentation
Most deodorant prices range from four dollars up to even ten dollars depending on the brand. Arimount seeks to provide a good and quality product for a cheaper and affordable price. This ensures that our customers do not have to overspend or dig deeper into their pockets to be able to afford our product.
Part B
How will the company address your customers’ buying decision process?
A customers buying decision process divides into five main categories: Problem/Need Recognition, Information Search, Evaluation of Alternatives, Purchase Decision, and Post-Purchase Behavior. Arimount will address every decision process individually.
Problem/Need Recognition
This is what leads to the buying of the product. Need is a very important catalyst when it comes to buying of a product. Arimount recognizes that the customer not only needs to be hygienic but also has to maintain that hygiene. By ensuring that Masque has a longer lasting staying power on the body even after a wash, we appeal to customers who really value the maintenance of their hygiene. Our product also caters for the people who may have problems concealing their natural body odor.
Information Search
The second stage is where the consumer searches for the relevant information about the either from other people, advertisement, retailers, dealers or by examining the product itself. Arimount will ensure that as much information circulates not only through vigorous advertisements and experimental sources but also by word of mouth.
Evaluation of Alternatives
Thought Arimount cannot stop a customer’s evaluation of alternatives we can ensure that our product ‘Masque’ has good first impression through attractive packaging, good quality, and a long lasting staying power. A products good quality always precedes it.
Purchase Decision
After evaluation, the customer will either purchase the product or post pone the purchase. Arimount will ensure that there are few postponements by ensuring that there is sufficient information on ‘Masque’ so that there are no second guesses during purchase.
Post-Purchase Behavior
After purchase, a customer is either satisfied with the purchase or not. Arimount will ensure that the quality produced is the highest and the very best. However, should the customer still not be satisfied with our quality then they will have a choice of voicing their opinion or stating their concern/grievance with us, which we will gladly address and get back to them. Arimount only seeks to please our customer.
ASSIGNMENT IV
Part A
Brand elements most useful for differentiating our company’s brand from competing brands
A products brand is very important if one hopes to achieve sales. Arimount recognizes these thus will rely on a number of brand elements to distinguish us from other competing deodorant brands.
Brand position
Arimount has been in the cleaning and cleaning industry for 20 years. With this experience, we are able to come up with a product that is best suited for the specific needs of our customers.
Brand promise
We at Arimount promise that our products not only meet the needs and expectations of our substantial customer base, but also come at affordable and pocket friendly prices.
Brand personality
‘Masque’ is a word that derived from the 16th and 17th century festival entertainments that mostly involved song, dance, and acting. Therefore, our product aims at leaving our customer feeling that they can to have a good time without worrying of compromised to their hygiene or grooming.
Brand story
Arimount feels that its twenty years in the cleaning and grooming business is a story that speaks for itself. Moreover, we boast of achieving average returns on our investments, which speaks volumes in these hard economic times.
Part B
Positioning for the company’s product
‘MASQUE’ is for any person who enjoys an active lifestyle and wants to remain feeling fresh and cleans through out.
Part C
Amount has identified three main factors that will identify our company’s strategic group concerning our new product. These three factors are the pricing policy, extend of product diversity, and extend of geographic coverage.
Pricing policy
The average price of deodorants in the U.S ranges from eight to ten dollars, depending on the brand purchased. Most popular brands such as Nivea sell their deodorants from eight dollars going up, depending on the type and size. Arimount seeks to put this into consideration by selling our product at more affordable pricing thereby ensuring that consumers get an option of quality products for more affordable prices.
Extend of product diversity
Most deodorant manufactures have come up with different types of deodorant that suit their diverse target consumers. Arimount will also incorporate these ideas by making sure that masque is available in different varieties for our male, female, and teen consumers as well as different scents for the diverse number of target consumers of this product.
Extend of geographical coverage
Most of our competitors are global brands; therefore, arimount will try to introduce our products in markets outside America and watch the reaction of these markets.
ASSIGNMENT V
Part A.
Core benefit
Arimount understands the need of individuals to maintain a clean and healthy hygiene while pursuing their normal lifestyle.
Basic product
Masque is a deodorant that functions like any other deodorant in the market. Its main function is to keep the underarm fresh, clean and dry for the longest period it can.
Expected product
Masque, like other deodorants minimize the underarms sweating capacity by keeping it dry as well as providing a clean scent that leaves the underarm smelling fresh and clean.
Augmented product
Unlike other deodorants masque has the staying power. This means that not only will it keep the user fresh and dry for the whole day but will keep on working for five days even after taking a bath. This ensures continuous protection
Potential product
Masque is a deodorant that differentiates from other deodorants for its longer lasting feeling with the user. This means that the customer saves not only on the expenditure but also on the use since it does not need continuous application like other deodorants.
Part B
Primary pricing objective of Arimount
Market penetration objective
Arimount understands that even though it has been in the grooming industry for long, Masque is its first deodorant product. For a proper introduction into the market, the produce price has to be low. This is mainly will be to secure a large share of the market so that in case of a highly price sensitive market, that way, we may continue to sell our products even without profit.
Arimount is interested in growth rather than in making a profit. In these objective, the unit cost of production and distribution will decrease when the volume of sales achieve a particular target.
Part C
Packaging and labeling
Masques’ packaging will be in three different containers for the purpose of our consumers. These will be in liquid and solid form in plastic and glass bottle respectively and in compressed air form in aerosol cans.
The labeling will be on paper glued to the container. This label will include information such as the contents of the product, the address of the manufacture, quality of the contents, cosmetic warning statement, quantity statement, and warnings where applicable. The language on the label will be English and other foreign languages.
The transportation package will be plastic paper and carton box.
ASSIGNMENT VI
Part A
Channel levels appropriate for your company’s’ targeted business segment
Arimount will use the four-stage distribution channel. This means that we will distribute from the manufacture, which is us, to the wholesaler who buys the product in bulk, the wholesaler will then sell it to the retailer who sales it in small quantities to the customers. With the growth of online consumption, Arimount will also sell our product online in sites such as e-bay.
Based on this distribution strategy, Arimount has chosen to use intensive product distribution. This will enable us to place our product is readily available and in as many markets as possible. This will heighten our sales generation. It will also ensure that our customers are able to access our product from any number of different outlets ranging from the biggest supermarket to the smallest drug store. By doing this, Arimount will not only target our customers but also other consumers who frequent these outlets.
Successful intensive distribution will not only enhance the sales of our product but will also, as part of the process, build recognition of our brand by customers. This will in turn increase the chances that the consumer will reach for our brand over other similar brands.
Part B
Retailers the company use for distributing product
Department stores
By selling masque in department store, we ensure that our product is placed with other brands so that the consumer can make a comparison, and go for what we offer. We are relying on the fact that our product is of good quality for a cheaper price. The main disadvantage of this decision is that our competitors already have strong, recognized brand names such as Nivea.
Discount stores
Discount stores are more popular with the consumer than the manufacture. This is because they offer cheaper prices for products. Arimount therefore seeks to use discount stores to introduce consumers to our product. The only disadvantage is that the sales will have to go down for the products in this particular retail. However, it will increase our market for Masque.
Drug stores
Drug stores mainly concentrate on health and personal grooming merchandise. By using drug store, Arimount seeks to ensure that our customers are able to access our product. The main problem is that customers who prefer to buy their grooming products from discount store and supermarkets are not frequenting drugstores.
E- Retailers
Each day more and more people prefer to order their merchandise online. This is because the world is now relying more on the internet and E- services. Our customers can order our product through an online retainer who will handle the sale while we deliver the product to them straight on their doorstep. This is good because we get to deal straight with our customers. However, this form of retail may be potentially bad if the customers change their minds and return the product or refuse it.
ASSIGNMENT VII
Part B
Communication objectives and channels of the company
Arimount seeks to achieve three main objectives through our marketing communication to our target audience.
We seek to inform our target audience that we have a new product in the market. This objective is intended to create and stimulate the interest and awareness by making our target consumers know our product and where they can find it. This will be achieved by running advertisements that will aim to draw their interests. Given that a bid percentage our main target group are teens and young adults, we aim to engage them through social media. This is because many of them spend a lot of their time online. Along with social media, we aim to incorporate email marketing and banner advertising for those that spend a lot of their time online. For the other percentage of our target, consumers who do not spend time on the internet but would rather read or watch television; we will come up with television advertisements, newspaper advertisements, pamphlets, and billboards.
Our second objective is to persuade our target. This goal aims to convince our customers that our product will provide the best value to your customers, compared to our competition. This will be done by giving competitive pricing, money-back guarantees, and flexible return policies. We will also create urgency by giving limited time offers and time specific free shipping discounts.
Lastly, we aim to remind our target consumers to purchase our product. It is important to stay visible to our customers. This is because the more they are reminded of our existence, the higher the chance of them buying from us the next time they need something that we offer.
Part B
Event sponsorship
Arimount seeks to sponsor a music concert. This will mostly target our teen and young adults target consumers. This is in spirit with our brand name MASQUE that emphasizes on the need to have fun while staying fresh the whole time. We will also sponsor charity walks that will specially target our older target audience. Our target is that by the end of our separate event sponsorship programs, the brand name MASQUE will have reached many target consumers.
Part C
New product ideas
Based on the analysis made by our team with the help of our target consumers, Arimount has come up with two product ideas that may help further develop our product. We took samples of masque to our consumers and asked them questions like what they did not see in the product that they would have liked to see. We were able to get positive feedback and based on the feedback we have come up with two new product ideas.
Silky Masque
This idea is because of many of our target consumers’ complaints that most deodorants start melting a few hours upon application due to the temperature under the armpit. This melting in turn leaves a very wet and uncomfortable underarm, which is not easily rectifiable, especially if the individual is on the move. This new product idea will ensure that our product keeps the wearer dry all the time as well as leaving them with a silky feeling in their underarm. This will also address the sweat issue, which most often leans to cloth staining. A wet underarm often causes sweating; therefore, this new product will ensure that the underarm remains dry and sweat free the whole day.
Natures Masque
There is an alarming growing need to go green globally. Each day more industries have to come up with products that encourage the conservation of the earth. Each day more and more target consumers are going for products that have natural ingredients incorporated in them. Arimount has considered the needs of this particular target group and has come with a product of our new brand that replaces most chemicals such as aluminum, parabens, and toluene with more natural ingredients such as essential oils, baking soda, and vinegar. This targets our potential consumers who feel that deodorants have too many artificial ingredients and therefore feel comfortable with natural ingredients.
ASSIGNMENT VIII
THE EXECUTIVE SUMMERY OF MASQUE
Arimount is a well-known beauty and grooming company that has been in the hygiene market for 20 years with an average return on investments. In addition to our beauty and grooming products such as soaps, shower gels and shampoos, Arimount seeks to introduce ‘MASQUE’, a deodorant that can last up to five days- even after a shower, into the market. Arimount believes that its 20 years experience in the hygiene market offers an added advantage as far as consumer information is concerned because pleasing the customer always comes first.
The deodorant market is a large one and has major players such Nivea and Rexona targeting all kinds of consumers. No steady statistics that show the exact number, but it is believed that at least 10% of the worlds population uses deodorants. Arimount seeks to venture into this market bearing our surprise element, which is the fact that our product can last for five days after application and can even withstand a wash giving it a longer lasting effect. Arimount is also currently working on other product ideas of Masque such as ‘Silky Masque’ and ‘Natures Masque’ that target at catering for specific requirements of our target consumers. This is because of the marketing research carried out by our marketing experts. Our main target consumers are anybody over the age of thirteen who enjoys life and value their hygiene therefore, want to feel clean and fresh the whole day.
Arimount seeks to penetrate this market through rigorous and expansive advertising that includes television, internet, and print advertisements, billboards as well as making sure that our products are available in as many retail stores as possible. Through our interactions with our target audience, Arimount has established that most quality deodorant retail at a very high price. It has therefore seen the need to provide our quality deodorant product for a cheaper, more affordable price. Our product will achieve a fast and significant market penetration through our solid business, long-range planning, and our strong management team that is able to execute this stimulating chance. Having worked for twenty years with our team in producing other Arimount products that have been a success so far, we are confident that our new product will surpass even our own expectations. We also aim to go global by slowly introducing Masque into other global markets other than the American market such as Asia and Africa.
Other than making our product available in as many retail stores as possible including department, discount, and drug stores, Arimount seeks to sell our product on-line. This direct to the customer approach will allow arimount to achieve higher sales margins but also to maintain a close relationship with our customers. This is ensures the production of products that have a true market demand.
Bibliography
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Arimount, a well-known beauty and grooming company that has been in the hygiene market for 20 years with an average return on investments seeks to introduce ‘MASQUE’, a deodorant that can last up to five days- even after a shower, into the market. Arimount believes that its 20 years experience in the hygiene market offers leverage as far as consumer information is concerned because pleasing the customer always comes first.
Target market
Men
Women
Teenagers
Persons between the ages of 13-40
Marketing Demographics
Geographies
‘Masque’ is not limited to a specific geographic area. Since the need body hygiene is universal, masque aim not only to serve its users regionally but at an international level.
Demographics
‘Masque’ is a unique deodorant in that it does not target a single group of buyers but is available for all groups of buyers. Its target clients will be anybody who wants to maintain proper body hygiene. However, its biggest target client will be the people who are unfortunate enough to be born with natural body odor.
Marketing Strategy
Masque is a simple deodorant that is not limited to any single gender or age. However, our main target groups as far as age is concerned are ages 13-18 and 19-40. It is not limited to those who desire a clean hygienic look but also caters for those that have problems fighting body odor. It also targets persons who have to work for long hours and have an active lifestyle but who desire to maintain a clean cut and fresh scent through out.
Potential target markets’ expectation
They expect a deodorant that not only keeps the dry all the time and is gentle on their skin but also something that will make them feel fresh and smelling clean for a longer time without fading off after a short time.
SWOT analysis
This SWOT analysis captures the strengths and weaknesses as well as the opportunities and threats facing masque.
Strengths:
Aside from the fact that Arimount is a well-known name in the beauty and grooming business, it has a 20-year experience in the market.
Arimount prides itself in producing products that not only appeal to its consumers but also has the long-lasting effect that enables our consumers get value for their money.
Masque aims at satisfying our customers by ensuring that they enjoy its scent for a period of five days after application, even after taking a bath.
Weaknesses:
The reception of other deodorant products from Arimount has not been as good as we expected
Masques’ reception into the consumer market may not be as rapid as we expect.
Opportunities:
More and more people are concerned about their grooming and therefore hygiene is a growing market both locally and internationally.
Threats
The grooming market is already crowded with major companies dominating the market thus making it hard to penetrate this particular market.
Quality production is necessary for one to penetrate the market because of the high standards set by other competitors
Competitors
Our main competitors in the market are Nivea, Dove and Rexona.
Nivea
Nivea is a global German based company brand that specializes in the production of product that deal with facial, body , all purpose, lip, deodorants, bath , sun and men’s care. It has currently been working on and produced a deodorant for women that leave no underarm stain on garments. This deodorant product alone cost Nivea a production cost of 2 million pounds and they expected to make a profit of 1.3 million pounds by the end of 2012.
Dove
Dove is a Unilever brand that expanded from consumption only in the U.S to being a global brand. It targets both male and female consumers. In 2012, it ranked the fourth most valuable care brand in the world with an estimated net value of $4.7 billion. Its availability in the market is customary being that it is obtainable in any retail store whether in a supermarket or a drugstore.
Rexona
Rexona is also a Unilever brand that specializes specifically in deodorant production. It spans over eighty markets with a target consumer of 12.6 billion worldwide and in fact owns a 14.5% share in the global deodorant market. They target both men and women between the ages of sixteen and forty. Rexonas’ net profit as of 2010 was $6.3 billion.
Financials
The financial section will offer Arimounts’ marketing expenditure concerning Masques’ marketing, advertisements, and sells.
Break Even Analysis
Break-even analysis indicates that $10,000 in monthly sales will be required to reach the break-even point.
Break even analysis:
Monthly units break-even
100
Monthly sales break-even
$10,000
Assumptions:
Average per unit revenue
$30,000
Average per unit variable cost
$30
Estimated monthly fixed cost
$15
Sales Forecast
Given that ‘MASQUE’ is a new product been introduced into the market, Arimount feels that the sales forecast can only increase as the cost of advertisement will allow. For the purpose of sales forecast, Arimount will divide its target customers into two major groups: the male and the female consumers.
Sales Forecast
Sales
2013
2014
2015
Female
$200,000
$300,000
$400,000
Male
$100,000
$150,000
$200,000
Total sales
$300,000
$450,000
$600,000
Direct cost of sales
2013
2014
2015
Female
$40,000
$60,000
$80,000
Male
$20,000
$30,000
$40,000
Subtotal cost of sales
$60,000
$90,000
$120,000
Expense forecast
Controls
ASSIGNMENT II
Part A
Which types of marketing research will Arimount adopt?
Although there are, many types of marketing strategy available, Arimount will use both the qualitative and quantitative marketing research approach.
The quantitative type of research bases on attitudes, opinions, beliefs, and intentions of the consumer. Its aim is to understand why customers behave in a certain way or how they may respond to a new product. This research mostly collects from small groups of consumers and collective and one on one interview.
Given these opinions are often obtained from small numbers of people, the findings are not necessarily statistically valid but data helps to highlight potential issues which can be explored in quantitative research that will follow soon after its completion.
Arimount will achieve the qualitative research through in-depth interviews, focus groups, projective technique, and random probability sampling.
Given that qualitative type of research will not answer all questions required to support the market strategy, the company will also use the quantitative type of research to fill in the gaps left by the qualitative research method. This method involves large data collection, and usually involves the construction of questioners and scales which the respondents are have to complete as a survey. Quantitative research method seeks to answer questions such as how many, how often, who, when and where. The main aim of this approach is to define a problem, collect the data analyze it then report findings.
Some of the questions that Arimount will use include:
How old are you?
Are you a male or female?
Do you use any grooming product?
Do you use deodorants?
Why do you use it?
Which is your preferred deodorant brand?
What is the main quality you look for when selecting a deodorant brand?
How often do you use your deodorant in a day?
How long does your deodorant last before it wares off?
Have you ever seen a ‘Masque’ advertisement?
Would you feel like buying masque after seeing its advertisement?
What do you think about the price?
Have you spotted this product in any local retail store?
What do you think of the products name?
What do you think about its scent?
What do think about its ability to last for five days even after a shower?
How would you rate this particular product?
How often do you replace your deodorant?
How many times do you have to apple you deodorant?
Where have you seen a masque advertisement?
Who told you about this product?
Who do you know that uses this product?
Part B
How will Arimount ensure customer satisfaction?
Arimount will ensure that the consumer is always the first priority! Business exists because of the consumer, and they should be the primary focus of the companies operations. A bad product can be disastrous because most unhappy consumers never complain but they will not buy the product again and they will tell many others.
Ensuring that Arimount employees are well trained and competent for the job required, will guarantee that the final product is to the satisfaction of the consumer. By encouraging, empowering, and communicating with staff Arimount will foster the Use of creativity and experience of its staff. This in turn will make them more productive leaving the management with time to manage operations.
By increasing the knowledge level of its customers, arimount will ensure their customers know the full range of services provided in order to get sales in new areas. Communication with the customer regarding information affecting the purchase decision such as the timing, availability, and freight information of the product is also of paramount importance.
Since price, quality, and service are the three main areas of comparison when consumers are making a purchasing decision Arimount will ensure work completes in a timely and efficient manner by setting timelines and deadlines for production.
Arimount will Listen to requests, accept changes, and respond positively to uncertainty brought forth by customers. This is because Customers may require order changes affecting existing arrangements. How these requests are handled is important to the purchaser and their comfort level for making future orders.
Arimount will research if and how other companies are doing that is better than ours, with the ultimate goal of imitating or improving on their techniques. We will talk to suppliers and customers to collect general information on how our competitors operate and what they do differently.
We will ensure that we build customer service into every job, not just frontline sales, and marketing positions. Inventory control, delivery people, switchboard operators, repair and service staff, billing and accounts receivable employees are all important to us.
Encourage complaints. This is because unhappy customers usually do not complain, but most will never use your product again. Clients who express their dissatisfaction will do business with you again if their problem is resolved to their satisfaction, and they will relay their satisfaction to other people.
Arimount will ensure that it respond quickly and fairly to all complaints by providing customers with a simple procedure for registering a complaints; and keep clients informed regarding the resolution of a complaint. This allows us to deliver more than what our customer expects.
ASSIGNMENT II
What marketing segmentation will Arimount use?
Market segmentation mostly bases on five main variables namely: gender, age group, income, marital status, and occupation. Arimount will use only three of these bases to determine our market segment. These are gender, age group, and occupation.
Gender is very important in our decision because masque is a product for both male and female consumers. Thought the name is standard, different products will be in production for both our male and female customers. As far as age is concerned we seek to target both teenagers and grown ups. This is because more teenagers are now using deodorants in their daily grooming. Even thought Arimounts’ main target is all consumers we seek reach out to those who are mainly involved in occupations that require body activity such as sports or lifting activities.
Media segmentation
Arimount recognizes that different media reaches different people differently. Therefore, we will seek to employ all means of advertisement to reach our target consumers. This will be achieved through print media, by circulating word through newspapers, magazines, and pamphlets. Broadcasting the product in local media and billboards and by the involvement of social media for our younger potential consumer ensures that word on the product spreads.
Psychographic segmentation
Deodorant is not a necessity and may even to a certain extend be categorized as a luxury. That said arimount recognizes that while deodorant may appeal to some people, not all people can buy it. Deodorant buying is a matter of lifestyle.
Positive market segmentation
Even thought there is stiff completion in the deodorant market, Arimount may have some advantage because they have developed a product that has long lasting power unlike the rest. Our 20-year experience in the hygiene industry has also given us a boost of sorts in the market.
Behavioral segmentation
Arimount has been in the market for the past 20 years and the reception of our customers has been satisfactory. We will be relying on this response from our loyal customers to introduce masque into the consumer market.
Benefits
Masques’ creation is for the sole purpose of being able to last for five days on the body even after taking a bath. Arimount are relying on this element to attract potential customers.
Price segmentation
Most deodorant prices range from four dollars up to even ten dollars depending on the brand. Arimount seeks to provide a good and quality product for a cheaper and affordable price. This ensures that our customers do not have to overspend or dig deeper into their pockets to be able to afford our product.
Part B
How will the company address your customers’ buying decision process?
A customers buying decision process divides into five main categories: Problem/Need Recognition, Information Search, Evaluation of Alternatives, Purchase Decision, and Post-Purchase Behavior. Arimount will address every decision process individually.
Problem/Need Recognition
This is what leads to the buying of the product. Need is a very important catalyst when it comes to buying of a product. Arimount recognizes that the customer not only needs to be hygienic but also has to maintain that hygiene. By ensuring that Masque has a longer lasting staying power on the body even after a wash, we appeal to customers who really value the maintenance of their hygiene. Our product also caters for the people who may have problems concealing their natural body odor.
Information Search
The second stage is where the consumer searches for the relevant information about the either from other people, advertisement, retailers, dealers or by examining the product itself. Arimount will ensure that as much information circulates not only through vigorous advertisements and experimental sources but also by word of mouth.
Evaluation of Alternatives
Thought Arimount cannot stop a customer’s evaluation of alternatives we can ensure that our product ‘Masque’ has good first impression through attractive packaging, good quality, and a long lasting staying power. A products good quality always precedes it.
Purchase Decision
After evaluation, the customer will either purchase the product or post pone the purchase. Arimount will ensure that there are few postponements by ensuring that there is sufficient information on ‘Masque’ so that there are no second guesses during purchase.
Post-Purchase Behavior
After purchase, a customer is either satisfied with the purchase or not. Arimount will ensure that the quality produced is the highest and the very best. However, should the customer still not be satisfied with our quality then they will have a choice of voicing their opinion or stating their concern/grievance with us, which we will gladly address and get back to them. Arimount only seeks to please our customer.
Nokia Mobile Phone Company serves as one of the best companies that can be used to study the marketing strategies. This is because the company is currently doing well in the mobile phone industry in UK. This report analyses the secondary data available in the books regarding the marketing strategies used by the company. The report analysis the current marketing strategies as well as the market segmentation, position and targeting as used by the company. Objectives and goals (SMART), explain how Nokia management should set goals, which are specific, measurable, attainable, realistic and time-bound. Marketing Strategies and Programmes covers the recommendations for better marketing strategies that Nokia management should apply in order improve the marketing of the company.
Introduction
Nokia is one of the leading mobile provides in UK. The company entered in the UK mobile phone industry in the in 1984 with a small workforce. However, the company has managed to expand in their in their market share to become one of the leading company in the market. This report therefore studies the various marketing strategies used by the company. In relation to this the report first analyses the current marketing strategies that are used by the company. The report also analysis the market segmentation, targeting and position as used by the company. Moreover, the report also analyses the company using the PESTLE and SWOT analysis model. Most importantly the report also gives some of the recommendation that can help to improve the marketing strategies of the company.
Methodology
The methodology of the case mainly involve the analyzing the already available secondary material. In this case the use of the secondary data will allow one to compare effectively the various marketing strategies used by different company and therefore make the necessary recommendation. The use of the secondary information will also help to save on the cost of carrying out the analysis. This is because in the analysis of the secondary information one only analysis the already published information. Beside, the use of the currently published books on the marketing strategies of the company, the company websites will also be used.
Current marketing strategies
The Nokia current marketing strategy is mainly based on the marketing intelligence. This is because the management of the company first analyses the marketing strategies of their competitors and then they determine the strategies to employ. The management of Nokia have currently adopted a marketing strategy aimed at mainly aimed at advertising the products using the social medias and digital technology. The company has also developed advertising strategy where they have change the Nokia tone to a voice, which has dramatically changed the marketing strategy. In addition, the company has also developed a youthful approach in their marketing. This is where the company has introduced features in the phone that incorporate youthful aspects. In this case the company has introduced the “blips” ads mainly to target the youth.
Moreover, the management of the company has also introduced a Nokia smart phone that uses Microsoft window for its operating system. This is to help ensure that the customers are able to use their phone as ordinary computer. In addition the company is also partnering with other companies such as the shell, Express, the daily star, channel 5 and ok magazine, in order to advertise the new feature of the phone. This includes the placing of the editorial tiles to reflect the phone interface. The use of this type of advertisement has in turn helped to ensure that the company is able to advertise their product. Most importantly the management of the company has also embarked on an effort towards ensuring that they promote the company brand in the market. This is because with a good company brand company can be able to create customers loyalty. Promotion of the company brand also helps to motivate the customers to buy the company products. These strategies have therefore helped the Nokia to attract more customers and ensure that their products continue to fetch a high market share.
In order to ensure that the company continue to increase on its market share the company has also embarked on an effort toward ensuring that they embrace the consumer internet services. The company has also engaged in strategies aimed at ensuring that the customer engagement and fulfillment strategies. In relation to this the management of the company has embarked on strategies aimed at ensuring that the company responds to any consumer complain promptly. Another important point to note is the fact the company has embarked on efforts aimed at ensuring that the company continues to embrace the current technology. This has helped to ensure that the company is able to become the leading player in terms of embracing the new technology management and advertising of the company product.
Segmentation Targeting & Positioning
Market segmentation
Nokia Company has divided the market into various segments. These segment help the management of the company to deliver product to the consumers and at the same time satisfy the target. The market segment consists of the customers who share a similar set of needs. The company also uses the criteria of ensuring that the segment is accessible in terms of communication and distribution of channels. The segments are also indentified based on the profitability of the segment uniqueness of the need and the durability of the segment. Market segmentation plays an important role in ensuring that a company continues to earn profit. In relation to this the management of the company is able to develop segments in which the customers are able to accept high prices. Most importantly market segmentation facilitates proper choice of the target marketing (Smith, & Taylor, 2004, p.32). This is because the market segmentation helps in ensuring that the marketers distinguish one customer group from another.
The management of the company has divided the market four different segments. First is the geographical segment. In relation to this the management of the company has divided the market into various regions, populations’ density, and climate among others. The company has also divided the market segment depending on the demographic factors. In this case the, market is divided depending on the feature such as the age, income, purchasing power among other factors. In addition, the Nokia market is also dividend based on the psychographic segmentation. In this case the market is divided based on the buying psychology of the customer. This is one of the major segmentation method used by the company. This is because the company has committed effort towards ensuring that the cover the interest of the young people in terms of the product they offer in the market. Finally it is also evident that the company has divided their market segment based on the buyer’s behavior at a particular segment.
Targeting
Market targeting mainly involves breaking the market into segments and then concentrating the market effort toward that segment (Lamb, Hair & McDaniel, 2012, p.276). Nokia Company has organized their market target depending on the attractiveness of the market segment. In relation to this the management of the company first considers the size of the segment that depends on the number of the customer or the number of the units available. The company also uses the growth rate to establish a segment. In addition, the brand loyalty of the existing customers can also be used to establish a market. The sales potential of the segment can also be used to establish a market target.
The suitability of the market segment to the firm is also another criteria that is used by the management of the company to establish a market target. In relation, to this the management first establishes the impact of serving the segment on the firm image. This is to help ensure that the market target created should be able to ensure that it help to promote the image of the company. it is also evident that the company also uses the accessibility of the distribution channel to establish.
Positioning
The market positioning is the last stage in the market segmentation cycle. In this case, management of Nokia Company strives hard to create an image of the product in the minds of the consumers. This therefore implies that the market positioning helps in ensuring that the company creates a good perception in the minds of their customers. The company also uses the customer benefit approach to position themselves in the market. This has helped to ensure that the company is also able to address the needs of their customer in different market segment. Using the customer benefit approach the organization usually places its brand above the competitor, based on the specific brand attribute and the customer benefit. Moreover, the company also uses the application approach to position their brand.
The unique selling preposition refers to the various ways that an organization defines their advertisement strategy in order to help in creating a picture to the client on how the product is compared to the product from other competitors. In this case since the Nokia Company is one of the leading companies in offering smart phone it has managed to create a uniqueness in terms of the products they are offering. Another important point to note is the fact that the company has managed to establish a strong company brand. This has helped to ensure that their customers can be able to identify the company products. In relation to this, company has managed to create unique products in which the customers are able to recognize their products. This has in turn helped to ensure that the company continues to increase on their market share.
SWOT analysis
Strength
One of the major strength that the company is the fact that the company has a large network distribution channels selling mobile phone worldwide. This has helped the company to enjoy enormous amount of the profit compared to other companies. The company also has a strong quality and professional team in the human resource department (Böhm, 2009, p.2). In addition the company has also a strong financial base. This has helped the company to survive in the recent economic recessions. In addition, the company also offers a wide range of product to consumers.
Weakness
The company also has some weakness in their management. In relation to this the company usually offers some of its products at high prices. This in turn discourages most of their customers who cannot afford such prices from purchasing the products. Another major weakness of the company is the fact the company does not carry out promotion plans aimed at targeting the low-income earners. In addition the company has also not been offering a good after sale services to their clients.
Opportunity
The company has an opportunity of expanding its business. This is because the company offers a wide range of products to its customers. Moreover, the company also offers their products with high quality features. This can therefore help to ensure that the company is able to increase on its market share.
Threat
The company has many threats to tackle this is mainly from the rival companies such as the Motorola and Sony Ericson. These companies pose great threat since they sell mobile phones with improved features at considerable prices. In addition, the company also major threat since they do not offer good after sale services.
Pestle analysis
Political
The political factors mainly refer to the various influences that the government may cause to the business (Cheverton, 2004, p.72). The management of the company has committed efforts towards ensuring they follow all the rules and regulations set by the government. In relation to this the Nokia management company has committed effort towards ensuring that they respect the minimum wage bill that has been set by the government through ensuring that their staffs are well paid. Moreover, the management of the company has committed effort toward ensuring that the address the interest of the employee. This helps prevent the strikes that may damage the reputation of the company.
Economic
The economic factors also affect the management of the company in various ways (Lorat, 2009, p.6). In this case the management of the company must ensure that they develop measure to address the rise in the levels of inflations. The management must also ensure that they also address the various changes in the interest rates. This can help to ensure that the company continues to earning profit.
Social factors
The social factors have also impacted the business in several ways. In this case Nokia Company has devised smart phone with features that are able to fit to the needs of the consumers in the market. This is because most of the consumers nowadays usually judge the products depending on how fashionable they are. In relation to this most of the consumers nowadays usually buy the mobile phone depending on their feature. In this case the management of the company has to continue producing mobile with advance features.
Legal
These refer to the various laws and policies that affect the business. In this case Nokia mainly operates in an environment where it is difficult to have a product that is different from other competitors. This therefore implies that the company must ensure that they develop strategies, to help deal with the issue related to the patent rights. However, it is also important for the management of the company to ensure that they also do not fall victims of counterfeit products.
Environment
Environmental factors refer to the influence that the surrounding has on the business. In the case the management of the company has committed effort toward ensuring that they conserve the environment where they have introduced a recycling program. This programs aims at ensuring the used phones are recycled. This has also helped to ensure that the battery phones are also disposed correctly to prevent environmental damage.
Recommended objectives and goals (SMART)
SMART stands for Specific, Measurable, Attainable, Realistic, and Timely (O'neill, 2006, p.5). This is the strategy used in determining the process of setting goals in an organization. SMART applies in Nokia Company as explained below.
Specific
Specific generally encompasses several factors. For instance, the management of Nokia needs to determine what needs to be accomplished. This might be either improving quality or customer satisfaction. The management also needs to determine the purpose or benefits of attaining such goals as well as identifying the participants who will ensure that the set goals are achieved. Finally, the management of Nokia should identify constrains and requirements of attaining the set goals.
Measurable
In order to determine the progression of activities towards achieving a certain goal, there must be measures incorporated (Dyck & Neubert, 2010, p.237). In essence, a goal should be measurable. Measuring the progression of the goals helps the team remain on track and keep up with time towards achieving the goal. In this case, the management of Nokia should ensure that these goals are measurable and incorporate strategies to determine the progression of the goals.
Attainable
In some cases, organizations may set goals which cannot be attained given the resources and ability of the organization. Therefore, the management of Nokia should determine whether the set goals are achievable in the right time, given the resources of the organization.
Time-bound
For a goal to be effective, it should be time-bound. In essence, a time schedule should be developed which will indicate how certain stages of the achieving the goal will be reached (Dyck & Neubert, 2010, p.237). Generally, there should be a time limit upon which the goal should be accomplished. In this case, the management of Nokia should understand that different goals will require different time schedules and they should set a limit to which the organization should attain the set goals.
Recommended Marketing Strategies and Programmes
Apparently, Nokia incorporates different marketing techniques, which include advertisements and participating in communal activities. The management should incorporate strong strategies in order to keep Nokia in the leading edge. In this case, the management should identify and develop a strong marketing team, which will incorporate strategies like market research in order to improve the performance of Nokia in both regional and global market (Ranchhod & Gurau, 2007, p.4). The other issue is that the management should implement training programs for the marketing team and educate them on how to use technology, internet, and other sources of knowledge to come up with ideas on how to improve the market position of the company. The other strategy is that the management of Nokia should focus on implementing promotions and offering discounts to the customers while maintaining a desirable income. For instance, Nokia phones should have special features that the customers should enjoy which is not found in the other phones or rather, the company should guarantee of their customers in accessing application using the Nokia phone without paying after purchasing the phone. For example, the company can provide free internet access for the customers who purchase a certain Nokia phone. The marketing team of Nokia should come up with a strong motto which relates to what the company offers (Ranchhod & Gurau, 2007, p.4). For instance, the motto can be that the company sells quality and durable goods. The last strategy that the management of the company should consider is reducing the prices of the products. This helps in increasing the competitive advantage of the business.
Conclusion
The current marketing strategies used by Nokia have helped it to increase on their market share. This is because the company has nowadays developed phones with feature mainly targeting the youth who comprise a big proportion of the UK mobile phone industry. The market segmentation, targeting and positioning is also represents another strategies that the company uses in order to increase on their market share. It is also important to note that the current political environment in UK has also helped in the growth and development of the company. However, the company is also currently facing stiff competition from rival companies such as the T-mobile. This therefore implies that the management of the company must ensure that they continue offering quality products to their customer in order to increase customer loyalty and attract new customers.
References
Böhm, A. 2009. The SWOT Analysis. München: GRIN Verlag.
Cheverton, P. 2004. Key Marketing Skills 2: Strategies, Tools and Techniques for Marketing Success. London: Kogan Page.
Dyck, B., & Neubert, M. J. 2010. Management: current practices and new directions. Boston, MA, Houghton Mifflin.
Lamb, C. W., Hair, J. F., & McDaniel, C. D. 2012. Essentials of marketing. Mason, Ohio: South- Western Cengage Learning.
O'neill, J. 2006. The Power of SMART goals: using goals to improve student learning. Bloomington, IN, Solution Tree.
Ranchhod, A., & Gurau, C. 2007. Marketing strategies: a contemporary approach. Harlow [u.a.], Financial Times Prentice Hall.
Smith, P. R., & Taylor, J. 2004. Marketing communications: An integrated approach. London: K. Page. Lorat, N. 2009. Market audit and analysis. München: GRIN Verlag GmbH.
In order for various organizations to meet their objective, the top management must ensure that they develop an effective relationship between the organization and employees. The management of an organization can use the reward system in order to motivate their employee. Motivation plays an important role in acting as the driving force in the ensuring that the employee works in order to meet their target. Various studies have shown that motivation helps in promoting positive behavior among the employee in an organization. The management of an organization may use the rewards such gifts, incentives, promotion among others. However this essay mainly outlines the role of the financial rewards in enhancing the employee motivation. In relation to this the essay also outlines the possible benefit of using the financial reward in an organizational performance. In addition, this essay also presents some of the negative effects of using the financial rewards.
Positive impacts of using the financial rewards
Money is regarded as one of the most effective incentives in the society. Various organization use money in order to motivate the employee to continue working hard for the organization. These financial incentives may take the form of direct person gain such an increase in the personal income. The following are some of the positive impacts of using financial rewards.
Motivation
The financial rewards are mainly used by various organizations to motivate the employee. In relation to this, financial rewards help in ensuring productive use of the resources. This is because the utilization of the physical and the financial resources depends on the willingness of the people to work hence when the employee are motivated they will utilize the organizational resource effectively. Financial incentives also help to ensure that there is increased efficiency and output in an organization since they facilitate the employee to work enthusiastically (Gilbert, & Walker 2001). Most importantly the use of the money to motivate the employee also helps in creating a goals directed behavior in an organization. In addition the use of the money to motivate the employee also helps to develop a friendly relationship among the workers in an organization. This is because motivation helps in bringing the employee closer to the organization since their needs are met (Holland, Pyman, Cooper & Teicher, 2011). Finally the use of the financial rewards helps in increasing the stability of the workforce. In relation to this good incentives helps to increase the loyalty of the customers and in turn helps to increase the enthusiasm among the employee to continue working for the organization. This can further help to increase the job satisfaction and hence help to issues reduce absenteeism among the employee in an organization.
Improved self-esteem
Financial rewards also help to improve the self-esteem among the employee in the society. Through providing the financial rewards such the bonus the employee are motivated to work harder in the hopes that the organization will reward them. Improved self-esteem among the employee can help to ensure that the company maintains a good image. This in turn helps to ensure that the company is able to attract the highly qualified individuals who can allow the company achieves its growth strategies. Moreover, with employee-improved self-esteem, an organization can also be able to improve on its long-term association with their employee.
Employee retention benefit
Use of the financial reward also helps to play a critical role in ensuring that there is employee retention. This is because the workers who are given incentive are rarely can they start looking for employment in other organizations. This in turn helps in ensuring that an organization retains some of its best skilled employee. Employee retention also facilitates smooth production of goods and services in an organization.
Boosts productivity
The urge of the employee to acquire the financial incentive in turn help to ensure that the employee put more effort in their work. Through such improved commitment and effort from the employee the company is able to realize an increase in the productivity. It is therefore important for the management to ensure that they lay out clear policies on the reward system. This can help to promote fairness in the companies and ensure that the employees are comfortable with operation and the implementation of the reward system in the organization (Wilson, Brown & Cregan, 2008). In order to increase on the productivity the manager may use the financial rewards to reward the employee who works hard in the organization. This can help to promote a hard working culture in the organization.
Financial advantage
Another major function of the financial rewards is fact that it helps in increasing the overall income of the employee. The extra income earned by the employee from the financial reward can help them to meet their bill and even start their own projects. Various studies have shown that the most of the people usually spend more money than they make. This therefore implies that the bonus given to the employee can help to supplement their income. The addition the financial incentives can help to reduce the employee overreliance on the basic pay.
Supporting organization change
The financial rewards can also be used to support the implementation of the change in an organization. This is because the management of the organization may use the reward strategies to convince the employee to accept change in an organization (Josephine, & Lisa, 2005). This therefore implies that financial reward strategies can allow the management to plan and accomplish the various goals and objectives related to the growth in the company. In relation to this these types of reward strategies can allow the management to reduce the power of the various trade unions. This is because the management may decide to devolve the pay determination to the local managers; this can in turn help to erode the power of various trade unions.
Development of a high performance culture
The financial reward system help to provide a mechanism that recognize achievement competency and merit in an organization. This is because it helps to provide a platform where the people who work hard in organization are recognized and rewarded. The use of the financial reward system may help to create a high performance culture in an organization. This may therefore allow the human resource manager to implement this type of culture in an organization (Teo, Clerc, & Galang, 2011). This is because the financial reward system helps to motivate the employee to work hard in order to achieve the reward. Such performance cultures are well manifested in the organization with a high performance work system. In addition this mainly happens in the companies, which have developed a clear performance expectation that is understood by the entire workforce.
Encourages the risk taking and innovation
Various organizations also use the financial rewards to encourage their employee to take risks and engage in the innovative activities. The managers of various companies usually set a various rewards to their employee who achieves certain set targets. This can in turn help to create the culture of innovativeness in the organization.
Negative impact of financial rewards
The use of the financial rewards may also have some negative in an organization these include:
Slows down team work
The use financial rewards slow down the team work spirit. This is because in most the financial rewards are based on the individual performance of the employee. This therefore implies that the financial incentives may inhibit the teamwork in an organization. An example is the case where many companies usually give out bonus to their employee at the end of the year. These types of incentive give the workers incentives to hold the work rather than collaborating with their colleagues (Curtis, Upchurch, & Severt, 2009). Another major disadvantage of the financial rewards is the fact that they hinder effective retention. This is because use of the financial reward creates a concept in the employee minds that ‘I work for you because you pay for’. This notion may make the employee to leave the company for a better pay however on the other hand the non-financial rewards helps in enhancing an effective relationship in an organization and therefore may help to promote retention of the employee in an organization.
Inconsistency
Another major drawback of various organizations using the financial reward is lack of inconsistency. This situation mainly happens due to the fact that some of the business do not constantly make profit and therefore may be forced to use other methods of rewarding their employee in the situations where the business does not make profit. In addition, the companies that perform poorly in the industry in a certain year may be forced to lower the financial incentives that the management had promised the employees.
Overworking
In most case the financial rewards normally rewards the individual employee effort, this can in turn lead to burn out. This is due to the fact that in most case the bonus rewards the employee for the extra hours that they have worked in the organization (Katzenbach, 2006). This may therefore lead to overworking on the part of the employee since they may end up working for long hours, nights and even weekend. Overworking may among other thing pose serious health threat on the employee due to lack of enough time to rest.
Perception of fairness
The reward system based on the profit sharing may have negative influence on the workers satisfaction. Most of the workers complain that the profit of the company also depend on the external factor and hence should be shared equally among the employee (Richardson, 2010). This therefore implies that the use of the financial reward system may lead to the employee assuming that there is no perception of fairness. It is also evident that the financial rewards also do not encourage strategic behaviors in an organization. However the non-financial rewards such as the gifts and promotion serve to encourage strategic behaviors in an organization. In relation, to this the use of the non-financial recognition helps in creating a sense of unity in the organization. This is because through recognizing the outstanding employee in an organization can help to create an organizational culture where the entire work forces are committed towards ensuring that organization achieves its objective.
Lack of good employer branding
The use of the financial reward fails to promote good employer branding in an organization. Various studies have indicated that the thinking behind the employer branding is that if an organization has an external brand to attract and retain the customers should also have the same branding internally. In this case the non-financial rewards help to link this concept better than the financial rewards. Linking of the internal and external employer branding helps promote positive organizational advantage. This implies that an organization using only the financial rewards may fail to enjoy such benefit.
Conclusion
From the above it is evident that the use of the financial rewards has both advantages and disadvantages when used in an organization. First, the financial reward helps in motivating the employee to continue working for the organization. This motivation plays a role in ensuring that there is effective utilization of various resources available in an organization. The financial rewards can also help the management of an organization to implement an organizational change. This is because these types of rewards can be used to entice the employee to accept the change in an organization. Moreover, the financial rewards can help to improve the self-esteem of the employee in an organization. Most importantly the financial rewards helps in increasing the employee overall income. This in turn help to ensure that the employee have an additional income which they can use to increase on their daily income. However, the use of the financial rewards may also have disadvantage since they may slow down the teamwork among the employee. This is because in most case the financial rewards normally rewards the individual effort rather than the group effort. However from the above it is evident that financial rewards have more advantage than disadvantages and therefore should be encouraged in various organizations.
References
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