Category: Free Essays

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

Shamrock Rovers F.C., self -described as the most successful football club in Ireland(Shamrock Rovers F.C. Membership 2015) had asked the television broadcaster RTE to refrain from showing the club’s remaining matches for the year on television on the opinion that each live broadcast resulted in approximately ˆ10,000 of lost revenue per event.

It is understood that other clubs within the Premier League agree with the club’s position and were very sympathetic to their position. The Premier League clubs felt that it would be good practice for them to be financially compensated when their games were televised, providing hours of television entertainment. (McDonnell 2015). This paper will discuss the notion of free exposure including whether it was good or bad for a business as well as examine decision making within a company with the objective of attaining long term goals. The relevance and connection of these concepts to the aforementioned decision by Shamrock Rovers F.C. will also be discussed and analysed.

The Irish football league, founded in 1921 is an important part of Ireland’s tradition and history. It consists of 20 clubs as well as the Football Association of Ireland, FAI which is the umbrella body responsible for the promotion, regulation and organisation of activities. The unique nature of the Irish sports environment means that the league faces robust competition for a comparatively small market in comparison to its European peers from the GAA Hurling and Football organisation and Rugby in addition to other growing sports (Conroy Consulting 2015). This is in addition to a good amount of television exposure for non-Irish football including the English Premiership. Revenue generation within the League has been described as challenging especially with the economic conditions of the past number of years (Conroy Consulting 2015). How does free exposure or long term planning impact this competitive landscape?

Free Exposure

Studies have shown that when people encounter something repeatedly, the likelihood of having a preference for it or a positive reaction in future is increased. This is known as the mere exposure effect, MEE (Kahneman 2012; Schacter 1987; Zajonc 1968, 2001). Kahneman (2012) explains that repetition results in cognitive ease and a comfortable feeling of familiarity linking this to eventually developing a degree of mild affection for the stimulus in question. The state of cognitive ease denotes relaxation, no threats or need to redirect attention. The main factors contributing to the concept of cognitive ease are illustrated in the figure below:

Figure 1: Causes and Consequences of Cognitive Ease

Source: Kahneman 2012, p.60

Zajonc (1968, 2001) goes further to argue that the mere exposure effect not only transcends conscious experience but that in fact the positive effect of repetition on liking is an extremely important biological fact supported by numerous experiments on humans and animals alike. The MEE effect is very important from marketing and advertising perspective since past experiences plays a significant role in one’s future decisions including consumption and consumer purchases (Kahneman 2012). It could be inferred based on this that repeated exposure for the football clubs within the Irish league through the televising of matches by a major broadcaster would be very beneficial in increasing the profile of the league within the Irish market. Moreover, the leading clubs such as Shamrock Rovers F.C who were more frequently featured stood to gain more in the form of higher recognition of their specific brands in comparison to less featured clubs. This imparts a degree of competitive advantage as a result.

The German Bundesliga, considered to be one of the most successful leagues in Europe (Albach and Frick 2013; Blitz 2012) prioritises maximum exposure of its matches to fans as part of its business model. One of the ways this is achieved is by making sure ticket prices are very low and therefore accessible to a wide spectrum of the market across different age groups and social backgrounds. In addition, the Bundesliga restricts the quantity of season tickets in circulation to ensure that they have as many fans as possible able to actually attend their own team matches (Doyle 2014). Live coverage of matches is generally broadcast by German television companies including Pay TV. The Bundesliga and its clubs leverage the resulting popularity of exposure due to wide match attendances, television and media coverage to generate income by balancing match day ticket sales and media rights with sponsorship and merchandising in addition to transfer income. In actual fact, the clubs on the average generate 21% of their total revenue from ticket sales (Chadwick 2010). In examining the English Premier League, described as Europe’s’ largest football league by value it was found that while the number of live matches broadcast had increased from 60 in 1992/93 to 138 in 2005 accompanied by increase in viewership, attendance of live matches also increased (Ofcom 2005).

The preceding examples lend credence to the assertions of the FAI that more exposure of the game through televised broadcasts was positive for the long term revenue increase for the league and its clubs. Furthermore, it should at the least cause Shamrock Rovers F.C. and the other clubs in the league to re-evaluate their business considerations in coming to the conclusion that free exposure was causing them lost income in match ticket sales and therefore too expensive for business. In the case of Shamrock Rovers F.C. specifically, the question would be whether the club might actually be ceding competitive advantage to others by rejecting the free advertising offered in the form of live match broadcasting. One difference between the Irish league and both Bundesliga and the English Premiership lies in the fact that while clubs in both leagues receive payment for television coverage (Chadwick 2010; Ofcom 2005), the nature of the competitive environment for the Irish league means that the clubs do not get paid for television coverage of matches. This then raises the dilemma of how to balance the tension between maintaining exposure to the market in line with long term goals of increasing league value and short term financial needs. Due to the fact that the clubs are not being paid for exposure, they view this from the perspective of a sunk cost which is about ˆ10,000 per event for Shamrock Rovers F.C. and see no direct relation between this and their immediate profits.

Evidence supports the fact however, that competitive advantages can be created through giving something away for free (Anderson 2009). Examples drawn from the history of companies behind household names like Jell-O, Gillette and Microsoft show that giving something away can be good for business and can be leveraged as a competitive tool. This is particularly useful in a very competitive marketplace where margins are driven down relentlessly (Anderson 2009). In such a situation, it is inferred that an organisation will benefit from recognising the realities of the marketplace in which it operates, undertakes comprehensive analysis of its environment such as carrying out SWOT (Strengths, Weakness, Opportunities and Threats) analysis based on Michael Porter’s strategic forces that affect competition (Porter 2013) to strategically create a business framework that will enable it to tap into creative channels for exploiting what it has in its possession including using the concept of ‘free’ to gain competitive edge, differentiate itself in the eyes of the consumer and convert these advantages to economic benefits for long term sustainability.

Long term decision making

The value of an organisation is based on its long term ability to generate income necessary to support growth that adds to its value. In effect, a firm’s value is understood not only by looking at its present financial income but also weighing other factors like its competitive position, the growth potential for its industry, strength of competitors and the management of the organisation (Rappaport 2005). On this basis, the importance of making plans and setting objectives from a long term perspective is obvious. Sometimes the immediate financial reality or financial expectations of stakeholders can make focusing on long term goals difficult. The company’s strategy based on long term objectives serves as a guide for defining the framework of how the organisation creates value for its stakeholders. This framework is the business model and it defines what choices, trade-offs, sacrifices or tactics are employed in competing within the marketplace (Porter 2013). Hamel and Prahalad (2005) maintain that defining strategic intent usually including a long term desired goal provides stability to a firm’s short term actions and allows for the flexibility to adapt correctly when new opportunities or threats are identified. Commitment to a strategic target requires discipline and effort, often forcing an organisation to be more creative and innovative in using limited resource to attain its goals rather than focusing only on current opportunities or threats and how existing resources match these (Hamel and Prahalad 2005). It can then be surmised that the organisation is challenged, stretched and fitter as a result.

Relating this to the situation with Shamrock Rovers F.C., information on the positive effects of mere exposure and examples of economic advantages possible by giving something away for free; long term decision making could provide the structure and motivation that will guide how it could boost its value and long term sustainability by taking advantage of the benefits of the exposure provided by RTE’s television coverage of its matches which in itself can be viewed as advertisement that the club does not have to pay for. Given the size of the market, economic conditions and strong competition from GAA Hurling and Football organisation, Rugby and the English Premiership on Irish television (Conroy Consulting 2015), it is believed that the exposure for the Irish league and its club gained from televised matches provides a net positive. There are a number of creative ways discussed by Anderson (2009) through which the club might monetise its advantages against its competitors as a result of having more exposure as shown below:

Figure 2: Four basic business models of Free

Source: Anderson 2009, p.27

Looking at figure 2, the club could adopt options 1, 2 or 3 or a combination of all or some of the three. In allowing televised matches without being paid for it, Shamrock F.C. could seek to use its exposure advantage to increase income from merchandising and sponsorship. Increased exposure as shown in option 2 could be used to attract advertisers for placement in prominent places within their stadium since the stadium receives good television coverage as a result of match coverage. Option 3 opens up the possibility that increased exposure for Shamrock Rovers F.C. and associated clubs in the Irish league would make it easier for consumers to accept the prospect of paying to watch football on TV thus opening the door to future income from media rights for the clubs within the league. These three business models as illustrated above, contribute in some form or the other to the success of the German Bundesliga and English Premiership (Chadwick 2010; Ofcom 2005). The Bundesliga for example received 33% of its income in 2006/2007 from television, radio and other media, 21% for match day income, 25% from sponsorship while merchandising and transfer fees constitute the rest (Chadwick 2010).

Conclusion

The intent in this brief was to examine whether free exposure was good or bad for an organisation in its quest to compete in the marketplace. Also addressed is the question of whether or not companies should make decisions based on a long term goal. It was found that exposure whether free or paid for is a positive component of marketing to consumers and increasing awareness and likability based on what we know about the mere exposure effect. Football, because of its entertainment value receives what amounts to free advertisement and exposure in Ireland and other countries such as Germany and England as a result of television match coverage. Successful leagues like the Bundesliga and English Premiership have also capitalised on the entertainment value of the matches covered to broadcasters and receive payments some of which go to member clubs but in Ireland, it does not appear that the economic landscape have allowed the Irish league clubs to achieve this.

The reaction to this situation does not point to reducing existing exposure even if it meant giving it away for free to television broadcasters as envisaged by Shamrock Rovers F.C. which in turn could lead to a reduction in brand awareness, brand equity and income (Aaker 1996). In order to counter short term financial impacts of not getting paid for this exposure and its perceived impact on the ticket sales, strategic planning would enable the organisation define objectives and steps it can employ to leverage the exposure it is getting to create value. Long term goal setting and decision making will be important and helpful for the firm to be able to adapt to short term financial short falls that might arise as a result.

Reference List

Aaker, D.A. (1996). Building Strong Brands. New York: The Free Press

Albach, H., Frick, B. (2013). Sportokonomie. Berlin: Springer-Verlag

Anderson, G. (2009). Free: The Future of a Radical Price. London: Random House

Blitz, R. (2012). German soccer beats England on profits. Financial Times [Online] Available from: http://www.ft.com/cms/s/0/e31b65cc-aa64-11e1-899d-00144feabdc0.html#axzz3ovgEEG7F

Chadwick, S. (2010). Managing Football. London: Routledge

Conroy Consulting, (2015). SSE Airtricity League Consultation Process Report

Doyle, P. (2014). Bundesliga chief says Premier League prices not an option in Germany. [online] The Guardian. Available at: http://www.theguardian.com/football/2014/aug/13/bundesliga-premier-league-germany-ticket-prices

Hamel, G., Prahalad, C.K. (2005). Strategic Intent. Boston, USA: Harvard Business Press

Kahneman, D. (2012). Thinking, Fast and Slow. London: Penguin Books

McDonnell, D. (2015). Shamrock Rovers ask RTE to stay away from Tallaght to boost crowds. Irish Independent [Online] Available from: http://www.independent.ie/sport/soccer/league-of-ireland/shamrock-rovers-ask-rt-to-stay-away-from-tallaght-to-boost-crowds-31515540.html

Ofcom, (2005). Premier League Football: Research into viewing trends, stadium attendance, fans’ preferences and behaviour, and the commercial market. Commission of the European Communities, in case COMP/C/38.173 – FAPL

Porter, M. (2013. On Competition. Boston, USA: Harvard Business Press

Rappaport, A. (2005). The Economics of Short-Term Performance Obsession. Financial Analysts Journal, Volume61, No.3, pp 65-79

Shamrock Rovers F.C. Membership (2015). [Online] Available from: http://www.shamrockrovers.ie/images/2015/eventspromotions/pdfs/2015-members-brochure-a5.pdf

Schacter, D.L. (1987). Implicit Memory: History and Current Status. Journal of Experimental Psychology: Learning, Memory and Cognition, Volume 13, No.3, pp. 501-518.

Zajonc, R.B. (1968). Attitudinal Effects of Mere Exposure. American Psychological Association Inc., Volume 9, No.2, Part 2, pp. 1-27

Zajonc, R.B. (2001). Mere Exposure: A Gateway to the Subliminal. American Psychological Society, Volume 10, No.6, pp. 224-228

Bibliography

Powell, T.C. (1992). Strategic Planning as Competitive Advantage. Strategic Management Journal, Volume 13, No.7, pp. 551-558.

Szymanski, S. (2005). Handbook on the Economics of Sports. Cheltenham, UK: Edward Elgar

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

There are a number of factors that compel businesses to trade and market their products internationally. For instance, international marketing enables businesses to (1) increase their customer base and market share, (2) minimise their reliance on any single market and (3) avail benefits of becoming multinational brand (Buckley and Ghauri, 2004). Over the last decade and a half, international marketing has become substantial (Hill, 2012); to the extent that consumers barely notice the fact that a majority of the products they consume routinely are either sourced from international markets or contain components that are sourced from international markets.

Successful international marketing requires a diligent strategic planning process involving the assessment of the business environment and suitability of the target market. A conductive business environment of the target market and the presence of a lucrative market gap render a target market as suitable (Tallman, 2007). Following this assessment, a brand intending to internationalise needs to plan and execute ‘the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational objectives’ (Sak and Shaw, 2004 p. 3). This essay relates to the internationalisation of Nicolites, the company that produces Nicolites electronic cigarettes in the UK to the Indian market. This essay evaluates the suitability of India as a selected target market for the expansion of Nicolites. It also evaluates a suitable entry method for Nicolites in India and suggests marketing strategies for the product as well.

Market Opportunity

Despite being widely considered as hazardous to health, smoking of cigarettes prevails at large across the globe. Therefore, any measures that can reduce the consumption of cigarettes, including providing an alternative for smoking are widely seen as a positive development. Provision of an alternative for smoking tobacco based cigarettes is the core marketing concept behind Nicolites e-cigarette.

Nicolites e-cigarette was first introduced in 2007 in UK (Nicolites, 2015). Nicolites e-cigarette does not have any tobacco whatsoever, and hence it is free of more than 4000 known toxic chemicals and substances present in a regular cigarette (Nicolites, 2015). Nicolites e-cigarette is an innovative product that offers smokers a right alternative for regular cigarette through a true simulation of smoking experience – which is cleaner, safer and healthier. Despite having a glowing red tip depicting a real flame, Nicolites e-cigarette does not require any flame or fire to burn. Moreover, it does not cause any unpleasant smoke and odor, or gather smoky residue on walls, clothes, skin and hair of the users (Nicolites, 2015).

Justification and Evaluation of the Target Market

According to the Datamonitor Market Insights report titled ‘Tobacco in India’ (2011), the overall tobacco industry in India was estimated to be worth approximately INR 58,730 crores (or $10 bn), in 2009. During the period 2004-2009, tobacco industry in India grew at an average of 8.5 percent; whilst during 2009-2014, it grew at an average of 6.5 percent (Tobacco Free Kids, 2015). The overall tobacco market in India is dominated by smokeless tobacco sales which constitutes 75 percent of the market (Tobacco Free Kids, 2015). Out of the remaining 25 percent tobacco market, 20 percent tobacco consumption comprises of smoking bidi, which is a hand-rolled, small, thin cigarette (Tobacco Free Kids, 2015). Thus manufactured cigarettes form only 5 percent of the market. Despite cigarettes being not one of the most popular tobacco products in India, Indians consumed 96 billion cigarettes in the year 2014, making the country the 6 largest cigarette consuming nation in the world and an important target for international tobacco companies (Tobacco Free Kids, 2015). A large, growing product market of cigarettes in India signals a lucrative product market for alternate products – such as Nicolites e-cigarette. Thus it is established that India has a huge potential for alternative products to cigarettes such as Nicolites e-cigarette.

After establishing the existence a lucrative market for Nicolites e-cigarettes in India, it is also important to assess whether the overall business environment of India is conductive for international brands. In terms of political environment, the Indian market has become liberal following the reforms in 1991 (Nuruzzaman, 2011). However, the capital market in India remains vulnerable to political changes (Nuruzzaman, 2011). In terms of economy, India has been growing steadily over the last decade. Last year, the Indian economy underwent a 7.5 percent growth (Ayres, 2015). According to the World Bank estimates, Indian economy has become the world’s third largest economy in purchasing power parity terms (Ayres, 2015). The country has an escalating middle class which will continue to drive its economy and demand. Socially, India has a very diverse population in ethnic, religion, culture and socio-economic terms (Nuruzzaman, 2011). These factors can either be advantageous or disadvantageous for an international brand depending upon how it deals with them. Technologically, the urban centers in India are advancing with most of the urban middle class Indians having access to internet and media technologies through which branding and marketing communication activities can be pursued (Nuruzzaman, 2011). The economic and technological factors of India indicate towards a favorable business environment for Nicolites e-cigarettes. As for the political factors, any adversities posed by the political environment can be easily negated by choosing a right market entry strategy by Nicolites e-cigarette. The social factors of India are unlikely to be impactful upon Nicolites as the company will most likely target a small niche market in India.

Market Entry

Selecting an appropriate international marketing entry strategy is a critical important decision within the process of internationalisation as it can be vital for the sustainable competitive advantage of the company (Buckley and Ghauri, 2004). There are many ways in which a brand can enter a foreign market. These can categorized as (1) direct production – direct entry, acquisition, and joint-ventures – (2) indirect production – licensing, franchising, technical agreements, service contracts, etc. or (3) exports – indirect, direct agent/distributor, direct branch/subsidiary, etc. (Rugman, 2009).

The suitability of one of the above market entry modes for Nicolites depends upon the combination of several internal and external factors (Koch, 2001). For instance, Nicolites is a relatively young, medium size company with around one hundred employees (Nicolites, 2015). The company currently operates only across UK and does not have any international operations. The limited size of the company – and subsequently its resources – coupled with its inexperience in internationalisation makes it very unlikely for Nicolites to adopt a direct production as a market entry method. Direct production methods are the most capital and resource intensive methods of market entry requiring highest levels of commitment from the internationalising firm (Ireland, et al. 2011). Moreover, although Nicolites is the largest UK’s e-cigarette brand (Evening Standard, 2013); it currently does not have the global brand equity and popularity of a multinational company. Therefore, Nicolites is less likely to be able to attract investors to operate franchises in India or secure favorable license agreements for indirect production. Resultantly, the internal factors of the company oblige it to pursue internationalisation through exports.

Exporting local products to a foreign market is perhaps the most simplest and common methods of entry in international markets. Exporting involves sending goods from the home country to another for distribution, sales and services (Ireland, et al. 2008). Since the amount of goods exported can vary, exporting enables internationalising firms to move into an international market in a controlled manner – that is, without risking high capital or making intensive commitments initially. This gradual process of market entry provides internationalising firms with the opportunity to explore the prospects of the target market and gain knowledge and experience before making large investments (McDonald and Burton, 2002). It is noteworthy that exporting strategy is vulnerable to exporting tariffs and can often face supply chain/logistics challenges in getting their goods to the international markets and eventually to the end-consumers (Ireland, et al. 2008). Additionally, exporting firms may also face difficulties in managing and dealing with local distributors (Ireland, et al. 2008).

In case of NIcolites, exporting is the seemingly the most appropriate market entry method, as this method will negate any major risks of failure by allowing the company to gain experience in many facets of international business and particularly learn about the Indian market. This method will incur the least amount of initial costs for internationalisation. Considering that Nicolites’ products are value added finished goods, Nicolites will find it most suitable to continue to use its existing production facilities and supply chain to manufacture e-cigarettes and export it to international destinations. In order to overcome the challenges related to distribution and sales activities, Nicolites can hire its own local managers to avert the disadvantages of underperforming agents in a foreign market. As for the concerns regarding export tariffs, this is less likely to affect the business strategy of Nicolites in India as currently the Indian government has levied heavy taxes on all tobacco products (Narayan, 2015) which make tobacco free Nicolites e-cigarette an attractive alternative for smokers.

Segmentation

Targeting customer segments in marketing strategy enables firms to decide ways for acquiring competitive advantage (Proctor, 2000). ‘A market segment is a fraction of the whole target market that has one or more unique attributes that provide it a distinction and sets them apart from other consumer segments’ (Proctor, 2000 p.24) . Customer segments can be identified through demographic variables – such as sex, age groups, family life cycle, literacy, earning, religion, ethnicity, etc.; and geographic variable – which divides customer segments according to their localities (Proctor 2000). In India, Nicolites should target upper-middle and upper class consumers specifically from young adults and adult age groups – who are open to new technologies and brands – from various professional classifications living in upscale urban centers of major metropolises.

Marketing Mix

After identifying the targeted consumer segments, a firm should then determine a suitable targeting strategy (Kotler, 2000). By applying the marketing mix model in the Indian context, Nicolites can adapt its marketing strategy for Indian consumers. Internationalising firms have a choice of targeting their customers through either a standarised strategy – in which standarised products are sold all over the world – or through adaptation – in which products are localised to meet the preferences of each target market. In the current context, it is suggested to apply a mix of both these targeting strategies.

Product

Nicolites has a trusted reputation as a brand and offers a high level of choice to its consumers in terms of strength and flavour of its products (Evening Standard, 2013). Moreover, Nicolites uses most advance cartomiser technology for e-cigarettes unlike most other brands which use 3 piece models that are associated with poor quality and leak (Evening Standard, 2013). Therefore, it is suggested that Nicolites should export the same high quality products in India to target its affluent consumers; although the company can bring in some variation in the strength and flavour of its e-cigarettes according to local preferences.

Price

From the four basic pricing strategies – that is (1) premium pricing, (2) penetration pricing, (3) economy pricing, and (4) price skimming (Kotler, 2000) – the current pricing strategy of Nicolites can be termed as premium. In India, the company should pursue the same pricing strategy to target its affluent consumers.

Place

In the UK, Nicolites works in conjuncture with a number of high street retail firms such as Tesco, Superdrug, WH Smiths, Co-op, Sainsbury, etc. as well as local newsagents and online (Evening Standard, 2013). Partnering with the National Federation of Retail Newsagents (NFRN), Nicolites has been filling the shelves of local corner shops across the country in pursuit of penetration and consolidation (Ansoff, 1965) growth strategy. In India, Nicolites can similarly distribute its products through high street retailers in upscale posh area of urban centers.

Promotion

Nicolites pursues a push strategy (Kotler, 2000) in UK in which it tries to make its e-cigarettes available in as many high street and corner shops as possible to penetrate the market. However, in India, it should focus on creating a niche market of affluent consumers out of the 5% consumers of manufactured cigarettes through a pull strategy (Kotler, 2000). In this way, it will be able to establish a superior international brand image in the minds of its consumers and increase its attractiveness among them.

Conclusion

This essay concludes that in order to expand the consumer base of the company and negate its reliance on a single market, Nicolites e-cigarette should internationalise its brand and enter the lucrative Indian market – which is the 6th largest consumer of cigarettes in the world – through exports. India has good market prospects for alternative cigarette products and a conductive environment for international businesses. By using a mix of standardised and localised marketing strategies, Nicolites should target the upper-middle and affluent class consumers of the country to pursue its international ambitions.

References

Ansoff, H. (1965), Corporate Strategy. New York: McGraw-Hill

Ayres, A (2015). Economic Growth and India’s Global Rise. Forbes. Available from http://www.forbes.com/sites/alyssaayres/2015/08/17/economic-growth-and-indias-global-rise/

Buckley, P. and Ghauri, P. (2004) Globalization, Economic Geography and International Business’, Journal of International Business Studies 35(2), 1-18.

Datamonitor Market Insights, (20011).Tobacco in India An insight into the Indian tobacco market. Datamonitor Report Published: Feb 11 | Code: DMCM4789

Evening Standard (2013). Nicolites officially becomes the largest UK brand of electronic cigarette. Available from http://www.standard.co.uk/lifestyle/nicolites-officially-becomes-the-largest-uk-brand-of-electronic-cigarette-8463753.html

Hill, C. (2012) International Business. New York: McGraw Hill Education.

Ireland, R. Hoskisson, R. and Hitt, M. (2008). Understanding Business Strategy: Concepts and Cases. Mason: Cengage Learning.

Ireland, R. Hoskisson, R. and Hitt, M. (2011). Understanding Business Strategy: Concepts Plus. Mason: Cengage Learning.

Koch, A. J. (2001). Factors influencing market and entry mode selection: Developing the MEMS model. Marketing Intelligence & Planning. 19:5 351-361

Kotler, P (2000) Marketing Management. New Jersey: Prentice Hall

McDonald, F. and Burton, F. (2002) International Business. London: Cengage Learning.

Narayan, A (2015). Indian Tobacco Giant Tries Short Cigarettes as Taxes Hit Demand. Bloomberg. Available from http://www.bloomberg.com/news/articles/2015-04-15/india-tobacco-giant-tries-short-cigarettes-as-taxes-hit-demand

Nuruzzaman, A. (2011). Indian Futures Market: An Analysis. Research Scholar, Department Business Administration, Aligarh Muslim University, Aligarh, Uttar Pradesh 7(2) Dec., 2011

Proctor, T (2000), Strategic Marketing: An Introduction, London: Routledge

Rugman, A (2009). The Oxford Handbook of International Business. New York: Oxford University Press.

Sak, O and Shaw, J., (2004). Process of International Marketing. International marketing: analysis and strategy (4th ed.) London: Routledge.

Tallman, S. (2007). A New Generation in International Strategic Management. Massachusetts: Edward Elgar.

Tobacco Free Kids (2015). The Global Cigarette Industry. Available from http://global.tobaccofreekids.org/files/pdfs/en/Global_Cigarette_Industry_pdf.pdf

This work was produced by one of our professional writers as a learning aid to help you with your studies

1.1 Introduction

As has been commented upon in academic research, “today, in the business world, management recognises that customers are the core a business.” Expanding market share for any business relies upon the strength of their ability to be able to attract customers to purchase their product or service. However, it has not been until relatively recently that business has begun to understand that it is not solely the reliance upon attraction of customers that is important to success. Equally, if not more important, is the need to retain the customer and their future loyalty to the product offering or brand, as this is the only way in which the corporation can sustain their competitive advantage over other market players. Moreover, it has also been recognised that there is a significant cost benefit in the retention of existing customers in comparison with adding a new customer and this is especially true in an industry that has reached saturation point, which is certainly the case in the UK mobile telecommunications sector.

1.2 Background on CRM tools and systems

Consequently, it is not surprising to find that an increasing number of businesses are becoming more focused upon the need for including customer relationship management (CRM) processes, tools and systems as a key element of their corporate marketing strategy. Indeed, in a survey conducted by Boston based Bain and Company, which covered 708 corporations across the America’s, Europe, Asia and Africa and resulted in 6,373 respondents, 78% were actively using management tools as a key element of their drive for competitive advantage, with the same percentage incorporating customer surveys within this strategic area. With the advancement of technology, both in terms of software, the internet and other developments, these CRM tools and systems have become more innovative as corporations seek to improve their customer retention and loyalty. It is this particular element of the CRM discipline that forms the focus for this dissertation which, by using T-mobile as a case study corporation, intends to undertake an assessment and evaluation of the impact that such tools have upon the corporation’s marketing department.

1.3 Case study T-Mobile

T-Mobile is a wholly owned subsidiary of the German telecommunications giant Deutsche Telekom. The current brand name was introduced in 2002. Within its sector, the company is the world’s sixth largest mobile communications business, based upon the number of subscribers, and the third largest mobile multinational after Vodafone (UK) and Telefonica (Spain). Globally, the company has over 101 million subscribers. In the UK, T-Mobile has 13 Million subscribers and operates through 294 separate retail locations in addition to its online website. On the 1st July 2010, T-Mobile UK became part of a joint venture with Orange, operating through a new corporation called Everything Anywhere Ltd, which is “jointly owned by Deutsche Telekom and France Telecom.” Together the two businesses account for around 28 million subscribers and share administrative facilities.

As stated, T-Mobile is operating within a highly saturated industry sector, which can be evidenced from recent statistics. For example, as can be seen from figure 1, mobile phone ownership had increased to over 80% by 2008 . More recently, by 2010, this number had risen to around 90% ownership of 2G and 3G mobiles (figure 2), although it should be noted that the number of actual mobiles owned significantly exceeds this figure because many individuals have more than one phone.

Figure 1 Consumer durable statistics

Source: http://www.statistics.gov.uk/cci/nugget.asp?id=868

Figure 2 Communications adoption 2010

Source: OFCOM (2010)

In terms of market share, the statistics show that T-Mobile’s percentage of the UK market has remained relatively static during the course of the five years to 2009, as indeed has that of Orange, the company with which it has now formed an alliance. In contrast, O2, Vodafone and 3UK have achieved significant share growth during the same period. Superficially, at least, this appears to suggest that the latter corporations have not only managed to secure a greater rate of market share growth than T-Mobile but have also been more successful at retaining the loyalty of their existing consumer base. Consequently, this result suggests that there is a need for improvement in the T-Mobile CRM systems.

Figure 3 Mobile phone market shares

Source: OFCOM (2010)

1.4 Aims and objectives

The aim of this study is to evaluate and assess the impact and success of CRM tools and systems within a practical corporate environment, in other words, it seeks to ascertain the extent to which these tools are achieving their goals of customer retention. Therefore, it is intended to resolve the following research propositions:

1. That CRM tools are having the effect of increasing customer loyalty to the T Mobile brand and improving repurchasing levels.

2. That the marketing department at T Mobile have been successful in introducing innovative CRM tools which has provided the corporation to achieve a competitive advantage over its main competitors within the mobile phone sector.

To facilitate the robustness of this dissertation and the fulfilment of the aims that have been set, it is intended to conduct the research within the following framework of objectives. The focus of these objectives will be the mobile sector of the UK telecommunications industry, using T Mobile as the case study organisation: –

To provide a brief overview of the definition of CRM and its purpose within a corporate environment, with particular reference to its development and effectiveness of use within the UK mobile telecommunications sector

To provide a detailed examination of the main challenges faced when using CRM tools and identify the latest technologies that are being used to address these issues.

To provide a critical analysis of the way in which the case study organisation, T Mobile, has introduced CRM tools and systems into their business. Moreover, this objective will also seek to investigate how these systems have been incorporated into the latest strategies developed by their marketing department.

The final objective is to use the results of the research conducted t make recommendations for improvement, if applicable.

1.5 Scope and structure of dissertation

To aid clarity and understanding of the content the remainder of this study has been formatted within the following framework. In the next chapter (2) a critical literature review is presented which concentrates upon the definition of CRM, the various tools and systems that are used to improve and enhance its management, as well as identifying how T Mobile have utilised these tools within their CRM strategy. Chapter three examines the methodology options available to the research and provides the reasoning for the methods that have been chosen, as well as indicating the limitations and how these have been addressed. Within chapter four, the research findings are presented and explained and these are further discussed in the chapter (5) that follows. The final chapter (6) brings the dissertation to a conclusion and, based upon the findings that have been discussed, also contains recommendations that are intended to assist the case study organisations and other in maximising the benefits the receive from effective implementation of CRM systems.

Furthermore, as attachments to the main dissertation, additional appendices have been added. These comprise of a biography that provides details of all the publications and other information that has been relied upon and referred to within this study. Additionally, the appendices contain details of the primary research conducted, such as the questionnaires and interviews, together with full details of the responses received.

Chapter 2: Literature review

2.1 Introduction

The academic and corporate interest in the importance of a relationship that a business can and should develop with their customers has been a part of the corporate strategy for some time . In this respect, it has long been recognised that the extent to which a corporation understands its customer and their needs will have a significant impact upon both their achievement of competitive advantage and in developing appropriate marketing strategy . However, since the middle of the 1990’s CRM has not only taken the theory and art of interacting with customers to a new, more collaborative level, but the concept itself has become almost inextricably linked with the rapidly developing area of information technology and systems . In other words, from a practical, if not psychological aspect, the majority of CRM related studies are now focused upon its development and practice within the internal and external technologies tools and systems available to the corporation.

Therefore, within this critical review of existing literature the intention, following a brief overview of the various definitions that have been applied to CRM, is to focus upon the CRM, how these are implemented in the IT environment, and to also evaluating the benefits and barriers. Following on from this the relationship between these issues and the manner in which they have been implemented within the case study corporation T-Mobile.

2.2. Defining CRM and its purpose

As has been the case with almost every theory related to corporate strategy and management, there have been a number of attempts at providing a comprehensive and robust definition for the term CRM. These have ranged from the complex to the simple. At the former end of this scale is the lengthy definition that was used by Payne and Frow for the purpose of their research study into this area.

Figure 4 CRM definition

Source: Payne and Frow (2006, p.168)

However, as Payne and Frow indicate the term, which gained prominence in the 1990’s, has in the past been defined as “CRM can be interpreted as a process of digitizing a staff’s knowledge about his or her customers.” Nevertheless, in view of the connection that exists between CRM and IT, perhaps the simplest and most appropriate definition that exists can be more succinctly described as it being “information-enabled relationship marketing.”

2.2.1 Purpose of CRM

In terms of the purpose of CRM systems, from the corporation’s viewpoint, the consensus of opinion is that this can be applied to five key areas, which are as follows:

1. Acquisition of new customers

The purpose being to secure new customers whose values equate with those that the firm or its brand is delivering. In financial terms, this will also reduce the fixed cost per customer, which can add further value by, for example, reducing product price.

2. Increasing revenue from existing customers

This is achieved by encouraging existing customers to purchase other products or accessories, which in the mobile environment might consist of additional apps.

3. Improving customer retention rates

Aimed at improving customer loyalty which will result in a continuation of their repurchasing habit

4. Reducing recurring costs

Improvements made to internal/external systems should lead to a reduction in the cost of delivering messages and services to the customer without impacting adversely on quality

5. Reduce costs of acquisition

Helps to improve the efficiency of attracting new customers, which has cost benefits

2.2.2 Key changes brought about by introducing CRM

As can be seen from the following table (1), the design, execution and implementation of the CRM process within the business has an impact upon four key areas of its operations.

Table 1 key change elements of CRM

Source: Gurau et al (2003, p.211)

It is apparent that the two main elements of this change are the effect that it will have upon firstly, the customer and, secondly, the business employee’s. From a customer aspect, the process will be focused upon understanding and satisfying their needs, which at the same time will provide them with a greater sense of being appreciated and respected by the firm as their views are being listened too. The other aspect, which is interrelated with the first, is ensuring the efficiency of understanding that the staff have in terms of operating the new CRM system as, only through this approach will the customer satisfaction determinants be fulfilled.

2.3 CRM theoretical models

There have been several theoretical CRM models developed over recent years, which have set out to provide an understanding of the way that these processes work and the interaction between the various elements. Of these, it is considered the two that provide the greater amount of detail about these processes are the QCI (figure 5) and Payne’s five processes (figure 6) models.

Figure 5 QCI model

Source (Buttle 2009.19) QCI model developed by a consultancy firm

Figure 6 Payne’s five processes m model

Source (Buttle 2009, p.20) Payne’s five process model

The benefit of the QCI model is that it shows the revolving and continuing cycle of the CRM customer based element. In other words, it defines the triple task of which is to win-back old customer, target new ones and continue to learn from the information gathered from the consumer so that the value of the product and brand can be constantly evolving to meet their changing needs and demands. Another important element of this model is that it indicates the bi-directional approach or communication between the various elements, which is essential in the development of a successful customer relationship programme.

Conversely Payne’s model, which has been adapted from Michael Porter’s ‘value chain,’ takes a straight line approach and splits the process into two distinct parts, these being the primary steps, related to external and customer activity, and the supporting direction, which is related to internal operations. In focus therefore, this model is targeting the impact of the relationship between the customers on the one hand and the profitability of the business. Nevertheless, it is apparent in both cases that there needs to be a robust link between all of the component parts and it is this link which has been found to be best created through the adoption and implementation of appropriate CRM IT systems.

2.4 CRM and IT

As this review has revealed earlier, most CRM tools and systems are now implemented through the use of information technology and this is increasingly being seen as the most appropriate manner of controlling and measuring customer relationship. Nonetheless, in terms of corporate acceptance of this situation, this has been slower in materialising. However, this position is rapidly changing as indeed can be evidenced from a survey conducted in 2002 which showed corporate employee’s satisfaction with IT CRM systems increased from 35% in 2000 to 78% in 2992.

It is apparent from this change of opinion that corporate employees have now begun to recognise the main advantages that exist within the new IT developments in CRM, which have been clearly identified within academic research (Table 2).

Table 2 difference between old and IT based CRM

Source: Gurau et al (2003, p.201)

One interesting observation becomes immediately apparent from a review of this list is the increased interactivity force and power of the customer and the impact that this has upon the corporation’s and its drive for competitive advantage. For example, not only does the Internet provide bi-directional between the customer and the corporation, it also allows for the same to occur between customers, which means that their influence upon other and potential customers is much greater within the World Wide Web environment. For this reason, it is important that the best practice is adopted for the CRM systems.

2.4.2 Best practice for CRM in IT

The first important factor to remember, which is linked to that discussed in the previous section is that CRN management tools usage on the internet should not be confined to just being price driven. The reason for this is that most online retailers have resorted to this approach, which reduces its competitive advantage for the firm. In addition therefore, the Internet message also has to achieve customer satisfaction “to increase competitive advantage” against other online competitors.

The level of the customer satisfaction both with the product and with the relationship that he or she enjoys with the firm is a key factor in determining the extent of their loyalty to the firm and their repurchasing behavioural patterns. Moreover, as indicated within the following diagram (figure 7), if there is a significant level of dissatisfaction being experienced, the person in question can act as a disruptive force. Through the communication means available on the Internet, these ‘dissatisfied’ customers can create adverse perceptions in the minds of potential new customers about the quality and appropriateness of the product and brand. This could act as a deterrent, dissuading these new customers from an initial purchase trial.

Therefore, to ensure competitive advantage is maintained a high level of customer satisfaction with both the product and the brand and its service and promotion must be maintained, to such an extent that, as Shrimp and Madden “a triangular love relationship” develops between the brand product and customer.

Figure 7 Customer satisfaction matrix

Gurau et al (2003, p.201)

2.6 CRM tools, systems and their objectives

2.4.1 Use of Internal Tools and systems

With regard to the internal implementation and management of CRM processes, the core factor is for the business to comment this process using a two-step process:

Step one

This step focuses upon the business and customer strategy review. Business strategy is to commence with an overview of the internal and external business environment. Customer strategy involves examining the existing and potential customer base to identify which segment is most appropriate for the business product

Step two

Consists of building a multichannel objective, which means that s number of channels must be managed in an integrated manner

The multiple channels that are referred to in step two above will include a number of activities. For example, perhaps the most important of these is the need for a data depository (or memory bank) from which information can be mined and retrieved. In addition, the business will need to have front and back office applications which a) interface with customers, and b) include back office applications that support internal administrative, supply and logistical processes. All of these elements must be aimed at improving the quality of service marketing that is applied to the external CRM tools. In other words, they should be designed to enhance the service value chain operated by the business and from the business viewpoint, the effective management of its customer base.

Another of the beneficial uses of internal CRM tools is that it can be integrated with other computerised systems, providing information to areas such as the supply chain, resource planning and even financial systems

2.4.2 Use of external CRM tools

In essence, most of the external CRM tools will be related to marketing , especially those that are focused upon the Internet and, in this respect can provide opportunities that can be used to adopt new marketing models that will enable the marketer to get “inside the lives [and minds] of your customer.”

Within the offline environment, many businesses have used these systems for the purpose of direct mailing and the creation of loyalty and reward programmes, all of which are designed to improve customer retention and loyalty. Alternatively, in the online environment the marketers are provide with three main marketing opportunities, which include the development of a brand website and involvement with social networking, as well as online advertising. In relation to all of these opportunities, the focus for the marketer must be upon the creation of an interactive dialogue between the business and the customer to ensure the objectives and needs of each party are met.

However, it is equally important, having implemented these processes, that their performance is monitored, which means that control systems, such as a KPI’s or Balanced Scorecard approach needs to be also included within the process.

2.7 CRM at T-Mobile

In relating the above elements of the literary review to the case study organisation, T-Mobile, the extent to which this corporation has followed the advices and processes described in the previous section can now be identified. It is apparent from a visit to their website that the company is offering similar promotional material and product descriptions to those of other mobile organisations. Furthermore, in terms of building a customer relationship the site also offers a discussion forum, although it has to be said that this is not immediately apparent unless one visits the ‘contact us.’ Similarly, with the same criticism, the company has also engaged with online social networking, though this appears to be limited to the ‘Twitter’ site at present.

Consequently, when all of this activity is added to the data that is collected from the contact us site and the further customer details that are required when requesting help, or making a payment, it is also apparent that the organisation must have the internal CRM systems available to enable it to develop a data depository. From this, the business would be able to produce a targeting programme that can design offers for a specific group of customers, where existing or new.

2.8 Summary

In summary therefore, it can be concluded from this review that the main elements required for the implementation of a successful CRM system that will deliver the goal and objectives of the business, must be based upon the following key factors:

Mission vision

Creating basic functions, structure and content that are designed to deliver customer satisfaction and are designed to prevent the death of the relationship

Commitment

Ensuring clarity of definition, good leadership and help from the supply chain to achieve objectives

Monitoring

Effective management, use and control of the information acquired and evaluating the ongoing performance

Customer orientation

Focus on committed customers and a loyalty programme with financial incentives tend to lead to a greater level of customer satisfaction. Also learning to see the brand through the customer’s eyes

Marketing

Concentrate upon firing up the front line

Within the following chapters, it will be discovered the extent to which T-Mobile’s current CRM tools and systems have succeed in these goals and objectives.

Chapter 3: Research methodology

3.1. Introduction

One of the most essentials prerequisites for the conduct of any study of this nature, which includes both an understanding of the theoretical processes and their transition into a practical commercial environment, is ensuring that the appropriate methodology is chosen for use . The following sections outline the approach that has been adopted for this dissertation.

3.2 Research philosophy

The philosophy adopted for the study has been based upon a combination of the positivism and interpretivism approach. In relation to the former, the benefit is that it allows the researcher to introduce previously published facts and concepts that can be reviewed objectively, for example, in this case such a modus would include previously published academic literature and the opinions of expert observers. Interpretivism, on the other hand, permits the researcher to observe the reactions and perceptions of individuals, which in this case would be those who supply mobile product and the consumers who use them.

3.3 Methodology strategy

With a study that combines the theoretical with the effectiveness of its transitioning into a practical environment, the methodology chosen would rely upon either the quantitative or qualitative approach, or a combination of the two. The former allows for a more detailed and study of specific elements or opinions, for example, as would be gained from the use of an individual case study organisation or the conducting of interviews. The latter relies upon a large scale of investigation and, in this respect the use of existing academic resources or the conducting of a survey would have the desired outcome.

3.4. Choice of research methodology

In considering the appropriate approach that would be suitable for this dissertation, the author has heeded the advice from other academics that a combination of the qualitative and quantitative approach might enhance the results and findings and has therefore decided upon this method. The reason for this choice is based upon the fact that, although only one organisation is being included as a case study, the size of the consumer market is considerable. The intention with the latter is to seek a consensus of opinion from these consumers as to what CRM strategies and tools are most likely to affect their purchasing and loyalty choice and for what reason. The data and information required from these approaches will be amassed through the secondary and primary data collection processes.

3.5. Secondary data collection process

Secondary data comprise two areas of research, both of which will have been pre-published and generally available in the public domain. For the first part, this will include publications related to theoretical concepts related to the key elements of CRM and the models and tools developed which are available in books and journals located in either bookstores, libraries or reputable online publishing websites. The second part is the collection of statistics and other external opinions that have been made available from the Office of National Statistics, the OFCOM regulator and other NGO organisations or expert observers.

3.6. Primary data collection process

Regarding the collection of primary data, three approaches have been used. The first of these was the case study itself, for which T-Mobile’s own website has been used in conjunction with reviews related to the corporation that have been published by other industry observers. However, to appropriate and robustly address the aims and objectives of the dissertation it was also determined that there was a requirement for the researcher to gather information, opinion and evidence from those considered to have a more intimate involvement with the industry sector . To achieve this situation it was decided to use an approach that combined the use of semi-structured interviews together with consumer surveys .

3.6.1. Semi-structured interviews

For the purpose of semi-structure interviews, two employees from the case study corporation were chosen and, in addition, a representative from the OFCOM regulator and a consumer group . The benefit of this approach was that it provided the researcher with the ability to achieve an understanding of the CRM tools and strategies implement by the T-Mobile Corporation, as well as their views and opinion as to the success of these methods.

3.6.2. Questionnaire and survey

The questionnaire took the form of an online survey , which was targeted to social networking groups as well as a similar survey conducted at one of T-Mobile’s retail location, where the corporation’s customers formed the respondents. These surveys, to which only the researcher had access to the results, were aimed at providing a collective consumer view and opinion in relation to the benefits the considered applicable to them from CRM processes. The questionnaire itself was constructed with a range of question styles. From the closed type which was used for responses such as age and gender, to the ‘linert’ style, which is designed to test the degree to which the consumer agrees or disagrees with a specific statement, with five choice options being available.

3.6.3. Ethical issues within primary research

There are issues that need to be appropriately addressed with any primary research. Predominantly, these are related to data and privacy protection. In the design, construction and implementation of the semi-structured and survey used within this particular dissertation the ethical issues were dealt with in the following way. Firstly, as can be seen from the questionnaires, there were no questions that required the divulgence of any person data save for age and gender. In other words, no information of a personal or financial nature was requested. Furthermore, it was made clear to the respondents that their involvement with the survey was a matter of personal choice. With the interviews, again it was confirmed that participation was voluntary and, moreover, that privacy would be protected by not indicating the interviewee by name. In addition, in this case transcripts of the interview were sent to each participant for their agreement prior to the results being included within this study.

Therefore, it is considered that the primary research processes have been implemented in a manner that cannot be seen to have caused harm to the respondents and, furthermore, comply with current protection legislation and codes.

3.7. Limitations

The limitations that can be seen to ‘potentially’ affect the chosen methodology can be described as follows. Concerning the secondary research process, the main concern is to ensure two things. Firstly, it is important to ensure that the data has been collected from reliable sources and is, as far as can be assessed, free from bias or inaccuracies. Secondly, it is also important to ensure that the research relied upon is the most current available.

With the primary research, it is equally essential to ensure that bias is not allowed to affect the design in terms of things like questions. In addition, the other limitation is related to the sample size selected for these events.

Within reason it is considered that, taking into account the restrictions in relation to issues such as time, cost and geographical locations, the research conducted for secondary and primary purposes has reduced the impact of these limitations to acceptable levels.

3.8. Summary

It is the researcher’s considered opinion that the methodology adopted for this study, as set out within this chapter, was sufficiently robust as to add value to current research into the area of customer relationship management and, in addition, has adequately addressed the aims and objectives..

Chapter 4: Findings and data presentation

4.1. Introduction

The findings presented within this chapter include those related directly to the case study data provided in the introductory chapter, as well as the results of the primary interview and questionnaire results.

4.2. Case study and interview findings

One factor that has become apparent about T-Mobile and its development over the past few years is that the UK market share for the business has not increased, in other words, if there has been any customer gains, these have been countered by similar levels of losses. This result appears to indicate that, to date at least, the business CRM process is not perhaps as robust as other competitors are, particularly when compared with O2 and Vodafone. However, this view of the CRM process does not appear to be a viewed shared by the two representatives of T-Mobile who took part in the semi-structured interview.

4.2.1. Interview findings

The full transcri

This work was produced by one of our professional writers as a learning aid to help you with your studies

This essay will present an analysis of some of the reasons for the commercial success of the recent movie “The Hunger Games” a film that generated $155m in ticket sales in the US alone (LA Times, 2012).

One of the key activities of the marketing function is to undertake environmental analysis in order to consider adaptations to the marketing mix which will ultimately lead to higher levels of profitability (Jobber, 2007). A key aspect which the success of The Hunger Games draws upon is a changing social dynamic within the external environment which has seen a preference of consumers for movies over books. As such, it is argued that the success rate of many recent movies including The Hunger Games and other well known films such as the Harry Potter series have come from what is essentially a product adaption from book to motion picture, a conversion which better meets the needs of the consumer (LA Times, 2012).

Other factors that may be seen as relating to the successes driven by considerations in the external environment relate to the timing of the release of the product. A well known definition of good marketing being the right product, in the right place at the right time (Brassington and Pettitt, 2006). In this case, Velasco (2012) argues that the timing of the release of the product was a crucial piece of marketing, in effect the March rollout seeing that The Hunger Games was released into a market which was largely devoid of competition with many competing major motion pictures not being due for release until the later summer period.

Other theoretical considerations which aid one’s understanding of the reasons for the commercial success of the hunger games may relate to customer segmentation and targeting (Kotler et al, 2009). In this case, sources compare the success of The Hunger Games to that of the Harry Potter series. Here it is indicated that The Hunger Games takes advantage of a broader approach to demographic segmentation than that of the Harry Potter films (LA Times, 2012). For instance, while the Harry Potter series has a very limited audience, namely children and those looking after them, The Hunger Games was marketed at a much broader demographic including the lucrative teenage segment. As such, a broader interpretation of the segmentation concept saw The Hunger Games simply having a wider audience to draw upon in the first place. Some sources have also indicated that in its current format as a motion picture, the film has “downplayed” the romantic aspects of the original book in an attempt to further widen the appeal to both male and female segments of the population (Velasco, 2012). Again this may be seen as a key reason for the success of the movie with an audience which is potentially twice as big in comparison to targeting only one gender group.

Other sources in analysing the commercial success of the movie have considered the direct promotional elements of the marketing mix (Brassington and Pettit, 2006) most notably focusing upon contemporary forms of promotion such as social media advertising (Belch and Belch, 2009). In this case, Acuna (2012) argues that The Hunger Games has made use of the most comprehensive social media marketing campaign of any movie to date which has included a raft of activity on social networking sites such as Facebook and activity using other sources such as Tumbler and Twitter. Such activities are designed to effectively amplify the official messages transmitted by advertisers with advertising in the social media often resembling that of traditional word of mouth forms of marketing (Yeshin, 2006). In analysing this element of the marketing mix, one may consider that the use of such promotional activities also links to the segmentation and targeting strategy as previously outlined. In this case, one may see that the teenage to early twenties target audience is also the audience which is most susceptible to social media and other forms of contemporary advertising.

Other sources such as Reuters (2012) go further in assessing the impact of The Hunger Games online and social media marketing campaign. In this case there is a consideration that the marketing campaign on the behalf of The Hunger Games in the social media environment has been so large in scale and so successful that this will limit the amount of money future film producers spend on traditional advertising such as television advertising. Despite this success seen in the context of The Hunger Games, the article (Reuters, 2012) goes on to point out that such a tactic is far from risk free with the previous 2009 film “Bruno” suffering from “bad-word-of-mouth” reviews in the online social environment and damaging the credibility of the offer.

Despite the use and success of contemporary forms of marketing such as online marketing and social media marketing, the films promoters have not neglected classical forms of promotional material with considerable effort being made to raise the profile of the movie through traditional paper based forms of advertising. In this case Acuna (2012) indicated that in the US 80,000 free posters for the film were handed out while another 3,000 billboard and bus shelter hoardings were paid for. All of these may be seen as key methods of raising the profile of a marketing offer in the context of an untargeted marketing audience (Yeshin, 2006).

Having reviewed the evidence there is little doubt that the recent major motion picture The Hunger Games has been a commercial success and that furthermore, a large amount of this success has been due to positive marketing activities. However, the paper has also revealed that in order to create such a marketing success a whole range of activities and factors have had to be taken into account including environmental analysis, effective segmentation and the creation of an innovative marketing mix. If there is a single important factor to be derived from this paper then it is perhaps the need for contemporary marketers to truly understand the changing landscape of the promotional environment in which social media marketing may now be seen as a core area of focus moving forward.

Bibliography

Acuna, K. (2012). The Hunger Games by the numbers: 20 marketing tactics to ensure success. Available online at: http://www.businessinsider.com/the-hunger-games-box-office-debut-will-marketing-will-2012-3?op=1 [Accessed on 19/11/12].

Belch, G, E. Belch, M, A. (2009). Advertising and promotion. 8th ed. Boston: McGraw-Hill.

Brassington, F, Pettitt, S. (2006). Principals of marketing. 2nd ed. Harlow: FT Prentice Hall.

Jobber, D. (2007). Principles and practice of marketing. 5th ed. London: McGraw Hill.

Kotler, P, Keller, K, L, Brady, M, Goodman, M, Hansen, T. (2009). Marketing management. Harlow: Pearson Education.

LA Times. (2012). The hunger games: five lessons from its box office success. Available online at: http://latimesblogs.latimes.com/movies/2012/03/hunger-games-jennifer-lawrence-box-office-155-million.html [Accessed on 19/11/12].

Reuters. (2012). Hunger Games success spells trouble for TV ads. Available online at: http://in.reuters.com/article/2012/05/04/hollywood-socialmedia-idINDEE8430EM20120504 [Accessed on 19/11/12].

Velasco, S. (2012). How The Hunger Games scored a marketing win. Available online at: http://www.csmonitor.com/Business/2012/0327/How-The-Hunger-Games-scored-a-marketing-win [Accessed on 19/11/12].

Yeshin, T. (2006). Advertising. Australia: South-Western.

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

The American Marketing Association (1960, pp. 9-10), stated one of the first definitions of a brand. They stated that a brand was “a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors” (AMA, 1960, pp. 9-10).

Unfortunately, due to this definition being very product-orientated with a lack of definition for visual features, it was heavily criticised by a various amount of academics (Arnold, 1992; Crainer, 1995). Since then, the definition of ‘brand’ has been adapted to a more modern form. Many research academics offer a variant of the definition (Aaker, 1991; Doyle, 1994; Kotler, et al., 1996; Stanton, et al., 1991), with most of these using the revised version provided by Bennett (1988, p. 18) “a brand is a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers.”

There have been a vast variety of other brand definitions, with some being more customer-orientated and others being more product orientated, but Bennett provides a simple and sophisticated definition on what a brand is.

A strong brand can offer a variety of benefits for a company as it can be used to differentiate between competitive offerings. This can allow a brand to become a critical factor for the success of a company. The majority of companies will seek to maintain an incredibly strong and positive brand that can identify with customers on a personal level.

This report will conduct an in-depth exploration into the various factors that constitute a successful brand, and how a company can build a strong brand. With brand image being such an integral force on a company’s success, it is imperative that they successfully create and manage their brand. A variety of factors that can impact on the creation and maintenance of a brand will be explored, included brand identity, brand image, brand equity, brand congruence, co-branding and the evaluation of brand performance.

Brand Identity

A company should be have a clear, defined strategy on what their brand identity is meant to be. Kapferer (2012, p. 156) provides an excellent framework that allows a company to measure and decide on their brand identity. It measures brand identity on six levels, these are;

Physique
Relationship
Reflection
Personalit
Culture
Self-Image

A company may seek to favour some of these factors more than others, or they will attempt to balance their brand identity amongst all of the factors. This is largely dependent on the industry in which the company operates. A company like Apple may focus on self-image, relationships and personality, whereas Marks & Spencer’s would be more concerned with self-image, relationship and culture.

Furthermore, Aaker (1997) conducted a detailed study to define five brand characteristics that can help develop a company’s brand identity or personality. The definition of brand personality is “the set of human characteristics associated with a brand” (Aaker, 1997, p. 347). The use of brand personalities has become more common because consumers often associate brands with human personality traits. Aaker (1997) defined the five brand characteristics as;

Sincerity: Down-to-earth, honest, wholesome and cheerful.
Excitement: Daring, spirited imaginative and up-to-date.
Competence: Reliable, intelligent and successful.
Sophistication: Upper class and charming
Ruggedness: Outdoorsy and tough.

Brand characteristics can be used “to compare personalities of brands across product categories, thereby enabling researchers to identify benchmark personality brands” (Aaker, 1997, p. 354).

Brand Image

A company’s brand image can be measured through a variety of channels. One of these channels is in a literal sense, and is through the use of a logo. The American Marketing Association defines a logo as (AMA, 2015) “a graphic design that is used as a continuing symbol for a company, organization, or brand. It is often in the form of an adaptation of the company name or brand name or used in conjunction with the name”. Furthermore, Budelmann, et al., (2010, p. 7) define a logo as “a graphic representation of a brand…a logo is a picture that represents the collection of experiences that forms a perception in the mind of those who encounter an organization”. A logo can be used to portray a brands identity through the use of imagery, and allow a company to spread their brand awareness via a constant icon.

However, brand image is not only related to a company logo. It is also how consumers perceive a product or service that a company has to offer (Levy, 1978). This is strongly related to the brand identity or personality traits that a company attempts to adopts. However, the brand identity will be what the company is trying to achieve, whereas brand image is generally in regards to the consumers perception of a brand (Dobni & Zinkhan, 1990).

Brand Equity

A company’s brand equity can be measured through a variety of methods. Feldwick (1996) identifies three main factors on how a company can measure their brand equity. These are; stating the total brand as a separable asset on the balance sheet, the level of strength of a consumer’s attachment to a brand and a description of the beliefs the consumer has about a brand. Different companies will measure their brand equity in different ways. Activision Blizzard value the goodwill of their company at approximately ?7bn (Blizzard, 2014, p. 93), which will include how much they believe their brand equity to be.

Keller (1993) takes a more consumer-based approach to brand equity, suggesting that brand equity represents a condition where the customer is familiar with the brand, and recalls a favourable, strong brand association. This approach would be more concerning to a brand manager, as they would have to build a brand that is attractive to the target audience of the company. Furthermore, it would also mean that the company should be offered positive service quality, as brand equity can be heavily dependent on a consumers’ past experience with a company. This attitude allows brand equity to be very subjective and personal, meaning it is hard to measure or manage by a brand manager.

Co-branding

Co-Branding is a relatively recent branding strategy, with its original formation thought to be in the 1990s. One of the first research studies to be conducted on co-branding was by Norris (1992) who investigated brand alliance within the field of brand ingredients.

As competition becomes even stronger within markets, and with the introduction of more and more companies, the use of co-branding is becoming a more prominent strategy for companies to undertake (Washburn, et al., 2004). Co-branding strategies are being implemented through a variety of markets, from Betty Crocker and Hershey’s to Dell and Intel processors.

A co-branding strategy “represents a long-term brand alliance strategy in which one product is branded and identified simultaneously by two brands” (Helmig, et al., 2008, p. 360). Furthermore, there are four fundamental characteristics that compose co-branded products, these are:

Participating brands should be independent before, during, and after the offering of the co-branded product (Ohlwein & Schiele, 1994).
The co-branding strategy should be implemented on purpose (Blackett & Russel, 1999).
Co-operation between two brands should be visible to potential customers (Rao, 1997).
One product must be combined with two other brands at the same time (Hillyer & Tikoo, 1995).

If all four of these core characteristics are successfully implemented in a co-branding strategy, then it can provide a variety of benefits for all organisations involved. A co-branding strategy helped Kwik Shop stores appeal to all age groups and to “offer a range of healthful to indulgent eating options” (Odesser-Torpey, 2015, p. 1). This is because it teams up and ‘co-brands’ with a variety of restaurants across Iowa. This co-branding strategy helped the company grow its revenues, along with improving their brand image and spreading brand awareness. This would be a great success for any brand manager, however deciding on which companies to co-brand with, and how to successfully implement the strategy can be very difficult.

There has also been a growing interest in the co-branding of corporate brands and social or cause-related brands (Simmons & Becker-Olson, 2006; Dickinson & Barker, 2007). This is because a cause-related brand can bring a corporate brand “a Fair Trade value, a safety and ethical guarantee that they are beyond the level corporate brands can usually offer” (Senechal, et al., 2013, p. 367). Many brand managers will use this strategy to simplify the company’s co-branding strategies, as being associated with fair trade usually offers an instant positive reception and increased brand awareness.

The main purpose for companies to pursue a co-branding strategy is to increase customer awareness and perception of certain products. Prior research has concluded that pre-existing attitudes of one brand can be passed on and related to brands within the co-branding alliance (Simonin & Ruth, 1998). Dickinson & Barker (2007) highlighted that the existence of such a positive transfer between brands is one of the key motives for a company to follow a co-branding strategy.

Evaluation of Brand Performance

Although a brand manager may be able to successfully identify the company’s brand identity, and successfully market this brand image, they must also be able to monitor and evaluate their brand performance. There has been a direct link between brand performance and an increase in market share, premium pricing strategies and an increase in customer loyalty (Chaudhuri & Holbrook, 2001). This highlights the significant impact that branding has on a company’s financial and operational success.

Brand performance is generally measured through two methods, brand profitability performance and brand market performance. Profitability performance tries to relate a brand to revenues, whereas market performance is how the brand has impacted market share or sales volume (Chirani, et al., 2012). However, a company can combine both of these factors by monitoring market share, price and distribution coverage as indices for brand performance. If a brand is performing successfully then a company would expect an increase in market share and profitability.

There is definitely a variety of factors that can be accounted for by brand performance, and all have an intrinsic part to play in a company’s success. It is for this reason that a company will hire a brand manager to construct, maintain and monitor a brand profile, in the hopes of increasing profitability and market share.

Conclusion

There are a variety of frameworks and theories that a brand manager can utilise to successfully create a strong brand for a company. With branding being strongly linked with market and financial performance, it is imperative that a brand manager use these theories to their advantage. Furthermore, they can systemically go through the various theories to build and monitor a strong brand.

The brand identity and personality is the first stage to achieving this, and should be decided by the managers of a company. These traits would be heavily dependent on the products a company make, or the market they operate in. A brand manager will want to ensure that the perceived brand image of a company is in-line with the brand identity that managers were wanting to achieve. As the brand identity should be a reflection of the products that a company produces, this should already partly be met. However, the brand manager should ensure that all marketing activities are also centred on promoting the appropriate brand image to coincide with the desired brand identity.

After a brand manager has devised a successful brand image, they should continue to monitor the brand’s equity and performance. The brand equity can be measured via the balance sheet, but should primarily be valued based on consumer perceptions. As brand equity is heavily tied to customer experience, all employees of a company should ensure they are providing the highest degree of quality possible. Furthermore, a brand manager can also review the performance of a brand through market share and generated revenues. This is because a strong brand has strong ties to customer loyalty, which in turn should generate significant revenues for a company.

Bibliography

Aaker, D., 1991. Managing Brand Equity: Capitalizing on the Value of a Brand Name. New York: Free Press.

Aaker, J., 1997. Dimensions of Brand Personality. Journal of Marketing Research, 34(3), pp. 347-356.

AMA, 1960. Marketing Definitions: A Glossary of Marketing Terms. Chicago: American Marketing Association.

AMA, 2015. Dictionary. [Online] Available at: https://www.ama.org/resources/Pages/Dictionary.aspx

Arnold, D., 1992. The Handbook of Brand Management. s.l.:Century Business: The Economist Books.

Bennett, P., 1988. Dictionary of Marketing Terms. Chicago: The American Marketing Association.

Blackett, T. & Russel, N., 1999. Co-Branding – The Science of Alliance. Basingstoke: Macmillan.

Blizzard, 2014. Annual Report, Irvine: Blizzard.

Budelmann, K., Kim, Y. & Vozniak, C., 2010. Brand Identity Essentials: 100 Principles for Designing Logos and Building Brands. s.l.:Antiques and Collectibles.

Chaudhuri, A. & Holbrook, M. B., 2001. The Role of Brand Loyalty. Journal of Marketing, 65(2), pp. 81-93.

Chirani, E., Taleghani, M. & Moghadam, N. E., 2012. Brand Performance and Brand Equity. Institute of Interdisciplinary Business Research, 3(9), pp. 1033-1036.

Crainer, S., 1995. The Real Power of Brands: Making Brands Work for Competitive Advantage. London: Pitman Publishing.

Dickinson, S. & Barker, A., 2007. Evaluations of branding alliances between non-pro¬?t and commercial brand partners: the transfer of affect.. International Journal of Nonpro¬?t and Voluntary Sector Marketing, 12(1), pp. 75-89.

Dobni, D. & Zinkhan, G. M., 1990. In Search of Brand Image: a Foundation Analysis, Houston: Association for Consumer Research.

Doyle, P., 1994. Marketing Management and Strategy. New Jersey: Prentice-Hall.

Feldwick, P., 1996. Do we really need “brand equity”?. Journal of Brand Management, 4(1), pp. 9-28.

Helmig, B., Huber, J.-A. & Leeflang, P. S., 2008. Co-Branding: The State of the Art. Schmalenbach Business Review, 60(1), pp. 359-377.

Hillyer, C. & Tikoo, S., 1995. Effect of Cobranding on Consumer Product Evaluations. Advances in Consumer Research, 22(1), pp. 123-127.

Kapferer, J.-N., 2012. The New Strategic Brand Management: Advanced Insights and Strategic Thinking. 5th ed. London: Kogan Page Publishers.

Keller, K. L., 1993. Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, 57(1), pp. 1-22.

Kotler, P., Armstrong, G., Saunders, J. & V., W., 1996. Principles of Marketing. Hemel Hempstead: Prentice-Hall.

Levy, S. J., 1978. Marketplace behavior–its meaning for management. s.l.:AMACOM.

Norris, G., 1992. Ingredient branding: A strategy option with multiple beneficiaries. Journal of Consumer Marketing, 9(3), pp. 19-31.

Odesser-Torpey, M., 2015. Co-Branding: It’s What’s for Dinner. [Online] Available at: http://www.cstoredecisions.com/2015/02/03/co-branding-whats-dinner/

Ohlwein, M. & Schiele, T. P., 1994. Co-Branding. Wirtschaftswissenschaftliches Studium, 23(1), pp. 577-578.

Rao, A. R., 1997. Strategic Brand Alliances. Journal of Brand Management, 5(1), pp. 111-119.

Senechal, S., Georges, L. & Pernin, J. L., 2013. Alliances Between Corporate and Fair Trade Brands: Examining the Antecedents of Overall Evaluation of the Co-branded Product. Journal of Business Ethics, 124(3), pp. 365-381.

Simonin, B. & Ruth, J., 1998. Is a company known by the company it keeps? Assessing the spill-over effects of brand alliances on consumer brand attitudes. Journal of Marketing Research, 35(1), pp. 30-42.

Stanton, W., Etzel, M. & Walker, B., 1991. Fundamentals of Marketing. 9th ed. New York: McGraw Hill.

Washburn, J. H., Brian, D. T. & Priluck, R., 2004. Brand Alliance and Customer-Based Brand-Equity Effects. Psychology of Marketing, 21(7), pp. 487-508.

Wood, L., 2000. Brands and brand equity: definition and management. Management Decision, 38(9), pp. 662-669.

This work was produced by one of our professional writers as a learning aid to help you with your studies

Why is it important for an international marketer to study culture? Outline the main techniques available for undertaking cultural analysis?

Where once marketers of goods or services may have targeted customers only in their domestic market, the globalisation of the business environment through improved technology, reduction in trade barriers and emergence of large multinational corporations (Palmer & Hartley, 2002), means that the marketers of today may have the option to consider marketing internationally. It is posited that an international firm is one that expands from its domestic market into new markets, using its existing capabilities, and this differs from a multinational corporation (MNC) which may have units acting autonomously in several countries (Miroshnik, 2002). Globalisation is not a new concept, and has been seen as the standard for some time (Levitt, 1983).

Entry into a new international market is both an opportunity and a risk and may be achieved through a number of means, including exporting, direct investment, licensing, joint ventures and strategic alliances, each with varying levels of risk that the company must weight up prior to entry (Palmer & Hartley, 2002). Once an entry decision has been made, it is posited that cultural analysis of the target country is imperative for this to be undertaken successfully (Morden, 1995). Management styles, strategies, technologies and structures appropriate to one culture, may be detrimental to the brand when used in a different culture (Miroshnik, 2002). The international marketer must consider what adaptation, if any, is required to its marketing mix (Palmer & Hartley, 2002) and may use cultural analyses to determine to what extent current marketing programmes can be utilised, or how appropriate they would be to the new market (Kotabe & Helsen, 2001). Indeed, recent studies appear to favour adaptation to the new culture, thus the interest of the international marketer in culture and its consequences continues to increase (de Mooij & Hofstede, 2010).

It is suggested that the behaviours modelled by an individual will be the result of the prevailing cultural values within their society, their social class, reference groups (e.g. family and friends) and their individual physical and psychological attributes (Palmer & Hartley, 2002, p 382). Notable contributors in the field of cultural knowledge include Hofstede, Hampden-Turner and Trompenaars (Morden, 1995).

Of use for the international marketer wishing to analyse the culture of a new country versus its domestic market are conceptual models which identify, classify and measure culture as specific dimensions, enabling a comparison to take place (Miroshnik, 2002). Herskovits’ (1989) five dimensions of culture are material culture, social institutions, men and universe, aesthetics and language and language (Miroshnik, 2002).

Material culture concerns consumer demand, including quality and attributes of goods/services required and encompasses both economics and technology; the former looks at how a country makes use of its capabilities and technology concerns its production of goods and development techniques (Miroshnik, 2002). An understanding of material culture will be imperative for the international marketer in its marketing mix decisions; while considering whether the product/service meet local demands for quality and attributes, or whether there exists a capability for the product/service to be produced in the country. Many brands will adapt their product to suit the culture in that country, even if only slightly, an example would be Coca Cola and McDonald’s who adapt their products/menus to suit local tastes; McDonald’s also consider the experience, for example, in France where fast food was not as consistent with the culture of enjoying and taking time over food (Palmer & Hartley, 2002).

Social institutions include decision making, leadership styles and social class (Miroshnik, 2002). Social class may be particularly important to the international marketer, for example the Hindu caste system remains relatively stable throughout a Hindu’s life, with less likelihood of movement between social classes than in western societies and overall it is posited that those within a particular class will share common attitudes and behaviour patterns (Palmer & Hartley, 2002). An understanding of the class system in the target country, and its similarities/differences to current countries will be paramount.

Man and universe comprises religion and superstition, this could be very important to the marketer as religions, beliefs and practices can vary greatly between countries, for example superstitions are integral to Russian culture and religion is intrinsic to Arab and Asian business (Miroshnik, 2002). To be unaware of cultural sensitivities around this area could be detrimental to any international marketer.

Aesthetics involves folklore, music, arts and visual/aesthetic/symbolic norms and whilst this dimension could be glossed over as simplistic or superficial, aesthetics can be extremely important to a culture and thus to the international marketer, for example it would be inadvisable to use a bat within branding in Russia as it is considered bad luck (Miroshnik, 2002).

Finally, language as a dimension is to consider the nuances of what is said, unsaid, plus non-verbal communication (Miroshnik, 2002).

Hofstede cultural dimensions

The assumption that an employee working for a multinational with its own organisational culture will adopt that culture, rather than retain their individual pre-existing culture, was found not to be the case by Hofstede (1983), Miroshnik, 2002). Hofstede’s four dimensional model of national culture, introduced in the 1970’s, may be used to analyse cultural differences; it is posited that this allowed culture to be unwrapped from a single dimension into multiple dimensions (Minkov & Hofstede, 2011). The dimensions are power distance, individualism-collectivism, masculinity-femininity and uncertainty avoidance (Hofstede, 1983). Hofstede’s cultural model shares similarities with the work of Trompenaars (1993) and the GLOBE study (House et al, 2004), a strong inducement for international marketers to use Hofstede’s cultural dimensions to analyse cultural distance is the large number of countries measured, enabling easy comparison (de Mooij & Hofstede, 2010).

Power distance relates to the way the society deals with power distance including the importance and respect allotted to superiors, and conversely to subordinates (Hostede, 1983), also attitudes to inequality (Hofstede, 2006b). Luxury brands may be important in high power distance countries, as their acquisition would demonstrate to others that they are required to show deference (de Mooij & Hofstede, 2010).

Individualism/collectivism concerns personal goals as opposed to collective or group goals (Hostede, 1983). Self-actualisation is important to consumers in individualist cultures and brands that help the consumer to promote their sense of self may do better than in collectivist cultures, where identity is linked to the social system they belong to (de Mooij & Hofstede, 2010). The more direct communication style suitable for an individualist culture may be deemed inacceptable in a collectivist culture, and they may respond more favourably to marketing that promotes collective benefits and family harmony (de Mooij & Hofstede, 2010). Of the four dimensions, Hofstede states that it is this dimension which has lessened in its impact, for example Japanese youth are more individualistic than their parents whilst they continue to mirror their parents in the other dimensions (Hofstede, 2006a).

Masculinity-femininity classifies the cultures relative importance of what may be considered as more male characteristics such as advancement and success versus more traditionally feminine characteristics such as being nurturing (Hostede, 1983). The Netherlands have a more feminine culture with both men and women valuing the softer skills; this can impact upon marketing strategy as more feminine cultures may wish to communicate differently than masculine cultures (Hofstede, 2006a), for example a tour operator using travel agents or call centres more heavily in feminine cultures to allow more opportunity for direct communication. Also, it is posited that household chores such as shopping will be shared more in feminine cultures, thus the marketer must consider who will be making the buying decision; perhaps that target audience will be different from the domestic market. In masculine cultures, status brands may symbolise success and achievement (de Mooij & Hofstede, 2010).

Uncertainty avoidance deals with anxiety relating to the unknown and the extent to which consumers within the culture would seek to avoid this uncertainty (Hostede, 1983); this would also include the expression of emotion and control of aggressive behaviours (Minkov & Hofstede, 2011). In high uncertainty avoidance cultures, the ‘seal of approval’ from experts may be welcome within marketing, additionally this may impact upon the types of product that will be more successful in the country, for example, preventative medication is more prevalent in high uncertainty avoidance cultures (de Mooij & Hofstede, 2010).

Hofstede added a fifth dimension in 1991, long versus short term orientation which relates to gratification deferment (Hofstede, 2006b) and cultural focus on the past, present or future (Minkov & Hofstede, 2011), thrift may be more important to long term orientated cultures (de Mooij & Hofstede, 2010) which could affect pricing decisions for international marketers.

Hofstede’s dimensions are not without their critics; criticisms include incorrect characterisation of dimensions (Jacob, 2005) and that the dimensions are out of date with a lack of societal range in the sample (McSweeney, 2002)however Hofstede posits that the adoption of his dimensions into the mainstream as a cornerstone of cultural research (Minkov & Hofstede (2011) has its disadvantages, namely that they may not be used as originally intended- as a means to discover differences in national culture (Hofstede, 2002).

Like Hofstede, Trompenaars also looked at time orientation and individualism/collectivism, yet Trompenaars looked at a further five dimensions, namely universalism/particularism, affective/neutral relationships, specificity/diffuseness, achievement/ascription and internal/external control (Trompenaars, 1996)., Criticism of this typology hinge on its reduction of acomplex construct such as leadership style to two dimensions when the respondent may use both leadership styles in different circumstances, or indeed a different style altogether, but is forced to choose from one of two given styles (Jacob, 2005).

The conceptual work of Hall (1976) considers cultures as being either high or low context, as a continuum of how much context matters in the culture, and may be used as a tool for international marketers to understand cultural differences and the management implications of the same (Kim et al, 1998). It is posited that a high context culture would have strong respect for social hierarchy, bonds between people would be strong, people may be more self-contained with feelings and messages may be simple but with deep meaning, examples of countries with a high context culture include Japan, China and Korea (Kim et al, 1998). In high context cultures personal relationship may be important in the business to business relationship (Kim et al, 1998), which would have important implications for the marketer, for example, how the relationships could be developed. Conversely, the low context country would be a more individual culture, messages may be more overt, and bonds between people may be more fragile and breakable should they be considered to be untenable; countries such as Switzerland, Norway and Sweden are considered to have low context cultures (Kim et al, 1998). The marketer in a low context culture may not have as much trouble acquiring customers, as they may have in retaining them.

With the wealth of information gained from the various means of cultural analyses, the international marketer will then need to consider the impact upon its marketing strategy. Using Hofstede’s terminology, they may be currently marketing in an individualist culture and attempting to persuade through marketing, but it is suggested that this would be quite wrong if they were attempting to begin to market to a collectivist culture where inducing positive feelings about the brand and building trust would be paramount (de Mooij & Hofstede, 2010). What the international marketer should seek to achieve is congruence in the brand’s marketing set against the cultural norms of that country (de Mooij & Hofstede, 2010).

However, the international marketer must also take on board that culture will never be a ‘one size fits all’ descriptor for a country, as there will most likely be subcultures, for example the UK, with its distinctive subcultures (Palmer & Hartley, 2002). Additionally, people may be members of more than one cultural group at one time- the traditional family culture, work culture, and perhaps even a different cultural group of friends (Jacob, 2006).

Culture surrounds the consumer; to develop international marketing strategy without an understanding of it would be foolhardy (de Mooij & Hofstede, 2010), equally, the international marketer undertaking cultural research based upon a single model of cultural analyses, subsequently assuming cultural homogeneity could be equally set upon the wrong path (Jacob, 2006). What is clear is that culture is by no means a simple concept, and is one that would require extensive research on the part of the international marketer.

References:

De-Mooij, M., & Hofstede, G. (2010). The Hofstede model. Applications to global branding and advertising strategy and research. International Journal of Advertising. 29 (1), 85-110.

Herskovits, E. (1989). Man and His Works. New York.:Knopf

Hofstede, G. (1983). National cultures in four dimensions: a research based theory of cultural differences between nations. International Studies of Management and Organisation. XIII (1-2), 46-74.

Hofstede, G. (2002). Dimensions do not exist: A reply to Brendan McSweeney. Human Relations. 55 (11), 1-7.

Hofstede, G. (2006a). Geert Hofstede: Challenges of cultural diversity. Human Resource Management International Digest. 14 (3), 12-15.

Hofstede, G. (2006b). What did GLOBE really measure? Researchers’ minds versus respondents’ minds. Journal of International Business Studies. 37, 882-896.

Jacob, N. (2005). Cross cultural investigations: emerging concepts. Journal of Organizational Change Management. 18 (5), 514-528.

Kim, D., Pan, Y., & Soo Park, H. (1998). High versus low context culture: a comparison of Chinese, Korean and American cultures. Psychology & Marketing. 15 (6), 507-521.

Kotabe, M., & Helsen, K. (2011). Global Marketing Management: International Student Version. John Wiley & Sons

Levitt, T. (1983). The globalisation of markets. Harvard Business Review. May-June, 92-102.

McSweeney, B. (2002). Hofstede’s model of national cultural differences and their consequences: A triumph of faith- a failure of analyses. Human Relations. 55 (1), 89-118.

Minkov, M., & Hofstede, G. (2011). The evolution of Hofstede’s doctrine. Cross Cultural Management: An International Journal. 18 (1), 10-20.

Miroshnik, V. (2002). Culture and International Management: A Review. Journal of Management Development. 21 (7), 521-544.

Morden, T. (1995). International Culture and Management. Management Decision. 33 (2), 16-21

Palmer, A., & Hartley, B. (2002). The Business Environment. McGraw-Hill Education.

Trompenaars, F. (1996). Resolving international conflict: culture and business strategy. Business Strategy Review. 7 (3), 51-68.

This work was produced by one of our professional writers as a learning aid to help you with your studies

Introduction

The development of e-marketing has been one of the most important and influential trends in the field of business, marketing and Information Technology offer the past decade. It has revolutionised the manner in which certain businesses market their products and the advent of social media offers the potential to revolutionise the manner in which businesses and consumers interact in the future. This essay will evaluate the impact of e-marketing upon businesses and will do so in three clear sections. The first section of the essay will define the concept of e-marketing and the second section will examine how e-marketing helps businesses to reach their customers. The third and final section will highlight some of the most important advantages and disadvantages of e-marketing. The conclusion will argue that the impact of e-marketing upon businesses has been largely positive and that despite a number of potential problems e-marketing offers exciting new opportunities for business growth and development.

Defining the concept of e-marketing

In the first section of this essay it is important to clearly define the concept of e-marketing. This is a vital task, because in order to be able to fully understand how e-marketing affects businesses and their customers it is important that the notion of e-Marketing is first of all adequately defined. Patricelli argues that e-marketing is a general term used to denote a wide array of different Internet-related activities. These include “website building and promotion, consumer communications, e-mail marketing and newsgroup advertising” (Patricelli 2002: p.141). However, the term e-marketing has developed enormously over the past decade and today it encompasses a far wider range of activities and one of the most important of these is the use of social media in order to advertise online. Pride settles on an altogether more comprehensive definition of e-marketing, stating that he understands the concept as referring to the “strategic process of creating, distributing, promoting and pricing products for targeted customers in the virtual environment of the Internet” (Pride 2010: p.70). E-marketing is best understood as a broad concept and one that has gained additional platforms in recent years with the advent of smart phones and tablets such as the iPad. As a result, the notion of e-marketing is defined most clearly when it is understood as referring to the creation, distribution, promotion, pricing and communication of products across the entirety of the Internet and the wide variety of platforms that constitute the Internet in a modern context.

How does e-marketing help businesses reach their customers?

E-marketing helps businesses reach their customers in a wide variety of different ways. Boone claims that the Internet offers businesses the chance to reach their customers in a number of unique ways and that one of the most important of these is the global reach of the consumer base that the Internet is able to provide. According to Boone, “the net eliminates geographic protections and limitations of local businesses and it gives smaller firms a wider audience” (Boone 2011: p.105). It is for this reason that the Internet is often seen as being inextricably linked to the wider force of economic globalisation, which some economists see as being responsible for the increasing retrenchment of the nation state and the rising power of non-state actors such as multinational corporations (MNCs). The ability to reach customers connected to the Internet anywhere in the world is seen as an enormous benefit to businesses in their quest to reach, attract and retain customers. Another way in which e-marketing helps businesses to reach their consumer bases is the extent to which it is able to further personalised marketing. It allows businesses to create products that “meet customer specifications” and in recent years the advance of this type of marketing in particular has been seen as perhaps the most significant long-term development in the course of e-marketing (Boone 2011: p.105). Through the use of social media, for example, business analysts believe that corporations may well be to harness enough information in order to tailor products, services and critically search engine results in such a way that consumers will be automatically attracted to them, because the products and services shown will be of interest either to them personally or to their close friends on social networking websites. However, even in the absence of such sophisticated targeting techniques certain websites such as Amazon have made great strides in personalising content to individual users, as Chaffey explains. “Amazon is the most widely known example where the customer is greeted by name on the website and receives recommendations on site and in their emails based on previous purchases” (Chaffey 2009: p.32). Boone argues that e-marketing offers other important ways for businesses to reach their customers including the use of interactive marketing and integrated marketing. Interactive marketing is a form of marketing in which the advertising process is driven by buyer-seller communication and where the “customer controls the amount and type of information received from the marketer” (Boone 2011: p.106). Integrated marketing refers to a type of marketing strategy in which all promotional and communication efforts are combined in order to create a unified and consumer-centric promotion campaign. It is clear; therefore, that e-marketing offers a wide variety of different ways for businesses to reach consumers.

What are the advantages and disadvantages of e-marketing for businesses?

E-marketing has a number of important advantages that make the adoption of e-marketing approaches and strategies attractive for businesses. One powerful argument in favour of e-marketing revolves around the cost and speed of this approach to marketing and Jones argues that these two factors in particular set e-marketing apart from other marketing approaches. “There is much evidence that makes a case for marketing electronically because of the cost-benefit ratio and the speed-to-market advantage” (Jones 2008: p.304). However, it is important to understand that e-marketing is only a cheap option when one considers it in the context of the size of advertising budgets that large firms used to have in relation to television and radio advertising. Whilst small e-marketing campaigns may be cheap, any larger scale campaign is likely to still incur a significant cost, but some of the other most important advantages of e-marketing ensure that this approach to advertising has become increasingly popular in recent years. These advantages mainly revolve around the ability of this form of marketing to collect information and deploy it in unique ways.

The increased ability to garner data and critically the ability to analyse this data in relation to consumers is something that offers businesses many valuable insights into not only their marketing campaigns, but also their business strategies as a whole. In fact, in certain cases e-marketing has developed to such an extent that certain businesses are able to make vast profits by offering comparisons between different websites, websites that are commonly referred to as comparison websites. These companies have no discernible products of their own and instead they offer a service in which they “are uniquely equipped with product listings, consumer reviews, store ratings, and personal shopping lists that offer creative shopping options to consumers on the Internet” (Lebson 2011: p.10). Examples of such comparison websites include Money Supermarket, Compare the Market and Go Compare and once these businesses have built their infrastructure their business model revolves almost exclusively around collecting consumer data and maximising SEO (Search Engine Optimisation). Comparison websites are therefore in one sense one of the most pure examples of e-marketing, because their business models rely almost exclusively upon effective e-marketing to target customers. E-marketing offers further important advantages including the ability to reduce costs via the use of automation and software programs and also allows marketers and consumers to interact in a far faster fashion than would be the case when using traditional means of communication. However, the analysis above has already touched upon one significant advantage of e-marketing that has great potential to evolve substantially in the future. The use social networking and social media in particular offers enormous potential to marketers and opens the door to revolutionary changes in the way customers and businesses interact with one another. The impact that social media websites such as Facebook and Twitter have had upon the way in which people use the Internet has been evident in the past few years and Rana argues that the user-driven, community orientated way in which social media communicates leads to a different type of Internet, full of organic content and user-friendly websites (Rana 2009: p.255). Businesses are thus far only scratching the surface of how to exploit such new opportunities, but Facebook for example offers an advertising service that allow businesses to target individuals based on a range of different criteria. Such adverts therefore are targeted at particular consumers in a much more focused way than even adverts traditionally used on Google, known as Google Ads (Facebook, 2011).

However, despite the numerous advantages of e-marketing businesses must be aware of the fact that e-marketing also presents businesses with a number of potential pitfalls. Certain businesses such as the comparison websites listed above rely completely upon the Internet to the extent that without technology they would actually have no business. Clearly, the Internet will not go away, however the dependency upon technology is something that can cause Internet-centric businesses major problems and also make them vulnerable to a wide range of different cyber attacks (Liebsch 2009: p.87). Another disadvantage of e-marketing has become particularly apparent in recent years and is inextricably connected with the rise of social media. Whilst social media has the potential to offer many e-marketing benefits, businesses must also beware of the danger that poor reviews and poor customer service can have upon their operations. The opinions of one disgruntled customer can go viral at lightning speed and therefore irrevocably undermine a particular business, product or service in an instant. This type of increased transparency also manifests itself in other ways and leads to a situation in which consumers are empowered to search for the lowest prices from a wide range of different online businesses. The fact that the Internet offers an almost unlimited consumer base is one of its clear advantages, but its global reach also affects the competition that businesses experience and as a result online businesses are likely to face stiff competition and many other companies highly competent in their e-marketing expertise. As a result, companies must focus upon distinctive e-marketing strategies and campaigns that differentiate themselves from their competitors in order to be able to cope with the extent of the competition that can be found online in today’s marketplace.

Conclusion

In conclusion, this essay has clearly shown that e-marketing impacts upon businesses in a number of important ways. When used effectively, e-marketing campaigns and strategies have the potential to reach customers in a speedy and low-cost manner and can provide promotion for a wide range of products and services. E-marketing also offers businesses the opportunity to garner data about their consumer base to an extent that has hitherto been very difficult to achieve via traditional marketing methods. The development of e-marketing and social media advertising has led to examples of businesses in recent years that appear to little more than categorise and filter information relating to products and services on the Internet, taking a small cut from any transaction that may occur as a result. However, despite the global reach, speed and the extent of information that can be gained from e-marketing there are a number of important disadvantages to this type of marketing that businesses must bear in mind. The technology driven approach of e-marketing leaves certain businesses vulnerable and overly-dependent upon technology. It also empowers dissatisfied consumers to a far greater extent than ever before and can lead to bad reviews that have the potential to greatly destabilise certain e-marketing campaigns and operations. However, despite these problems it is reasonable to conclude that e-marketing is on the whole a positive development for businesses and that despite certain dangers its impact upon businesses has been largely positive.

Bibliography

1. Boone, L., 2011. Contemporary marketing. London: Cencage
2. Chaffey, D., 2009. Internet marketing. London: Pearson
3. Facebook, 2011. Facebook Adverts. http://www.facebook.com/advertising/?campaign_id=214294157440&placement=exact&creative=5811616952&keyword=facebook+ads&extra_1=66df06ba-739c-b0c8-f265-00003f94ac68 Accessed 05/01/2012
4. Jones, S., 2008. Business-to-business. London: Maximum
5. Lebson, S., 2011. Intellectual property operations and implementation in the 21st Century. Oxford: Blackwell
6. Patricelli, F., 2002. E-business and e-challenges. London: IOS
7. Pride, W., 2010. Marketing Express. London: Cencage
8. Rana, N., 2009. E-marketing intelligence. London: E-Marketing Intelligence

This work was produced by one of our professional writers as a learning aid to help you with your studies

There are many academics that suggest the correct way to conduct market research (Lockett & Blackman, 2004; Beall, 2010), but in truth, there are a variety of different ways that are effective dependent on the situation. Kolb (2008) states the research process is comprised of four steps, which are; determining the research question, choosing the research approach, planning the research method and implementing the research. This highlights the importance that planning has in the market research process, as physically implementing the process comes after extensive planning and preparation.

This report will critically discuss the above four stages to conducting effective market research. An in-depth analysis of each stage will be conducted, to understand how each factor within the process affects the overall shape and effectiveness of market research.

Determining the Research Question

This is the first step to conducting effective market research and can often be rushed by many companies. As most organisations are eager to implement the process, they can be quick to decide on the research questions. However, it is imperative that the company or researcher decides on a clear research question, as the research question guides and centres the overall shape of the market research. Furthermore, it is absolutely crucial to the rest of the research process. Answering the wrong question can waste tremendous amounts of resources for a company, and make the market research completely ineffective (Springett & Campbell, 2006).

One of the main reasons for companies choosing the wrong research question is because they make false assumptions (Kolb, 2008). This means, to avoid false assumptions from being made, that a company will have to take the time to think critically about what the issue is, or what they are trying to understand through the implementation of market research. As previously stated, the research question should not be rushed, as it is a crucial step for implementing effective market research. This can be overcome by basing assumptions on previous research or experiences, which will guide the company to an educated and precise research question (Swartz, 2001). Some internal research data that a company could use are; sales receipts, complaint information, databases, orders or financial analysis. Furthermore, the research could show a variety of different problems, which could then be condensed into one research question to provide precise and effective market research (Martin, 2007).

Research Approach

Kolb (2008) states there are three different research approaches. These are; descriptive research, exploratory research and causal research. The approach that a researcher will take will be largely dependent on the research question, as they differ quite significantly.

Descriptive research is “concerned with the present and attempts to determine the status of the phenomenon under investigation” (Singh & Nath, 2010, p. 195). In essence, this will be used by a researcher or company when they want to discover specific details about something, such as consumer average spending. This is because it will analyse statistical data, and is most commonly in the form of surveys. A survey is most commonly used because it can obtain results of a large sample to draw conclusions that can be generalised amongst the population.

However, descriptive research is often expensive and time-consuming. This is because of the large amount of data that needs to be collected and analysed (Kolb, 2008). Furthermore, the type of research that surveys provide is often limited, as it only measures a small percentage of the population. It can also be an inconvenient approach to research, which makes it difficult to conduct research effectively. Consumers value their time, and generally do not want to spend it filling out surveys. However, online channels are minimising the inconvenience of surveys, and making a descriptive approach, once again, an effective method of conducting market research (Kolb, 2008).

Exploratory research is “about putting one’s self deliberately in a place – again and again – where discovery is possible and broad, usually (but not always) non-specialized interests can be pursued” (Stebbins, 2001, p. vi). This type of research could be used to measure consumer attitudes, opinions or beliefs towards a brand. These studies vary in size, but will usually be smaller than descriptive research. To conduct exploratory market research effectively, the researcher must explore deep into consumer’s emotions and attitudes, which would be hard to do with a large sample. The focus is more on choosing the right participant, and not trying to conduct the research on a large amount of people. Furthermore, it usually comes at a lower cost to a business, and doesn’t take quite as much time. However, it still suffers with inconvenience, as it can be hard to find participants to conduct the research with (Stuart, et al., 2002).

Causal research is a research approach that focuses on investigating into cause-and-effect relationships. That is to say, it will measure one variable with another and how these variables interact with each other (Brains, et al., 2011). Furthermore, it can be used to give insight into strategic change that a company may wish to pursue. This is because it can investigate whether the change will be beneficial or not for a company. However, it can still be used to research the effectiveness of change after it has happened. Causal research is often used as a preliminary approach, with the results being made more conclusive with the use of descriptive or exploratory research (Brains, et al., 2011).

It is imperative that a researcher or company knows what research approach it wants to take. As stated, it is largely dependent on the research question. However, if a company takes the wrong approach to answer the research question than they will not conduct effective market research, as they would be using the wrong tools and values to gather the data. Kolb (2008) compares choosing a research approachto a car mechanic, if a mechanic was fixing a car, he would choose a wrench, not a spatula. Furthermore, similarly to how the research question shapes the research approach, the approach will also have a significant impact on the research method. This highlights the important of each stage, and why planning and preparation is crucial to successful market research.

Research Method

There are two methods to market research; quantitative and qualitative. These methods differ greatly; quantitative research is an “approach for testing objective theories by examining the relationship among variables…which can be measured…so that numbered data can be analysed” (Creswell, 2014, p. 4) and qualitative approach will “allow a researcher to examine people’s experiences in detail, by using a specific set of research methods such as in-depth interviews or focus groups…” (Hennik, et al., 2011, pp. 8-9). More recently, especially in larger studies, these methods have been combined to form a mixed-method approach. This is a method which “combines elements of qualitative and quantitative research approaches for the purpose of breadth and depth of understanding and corroboration” (Johnson, et al., 2007, p. 123). What method a researcher or company will take is largely dependent on the situation. If a company wishes to understand consumer perceptions then they may prefer a qualitative study (Brunso, et al., 2002; Knox, 2000), whereas measuring consumer average spend would primarily be quantitative in nature (Muijs, 2010). Which method a researcher will conduct must be decided, as it will influence the approach and philosophy the research will inherit. Furthermore, it will also be a determining factor on the form of market research, such as via questionnaires, focus groups or interviews (Muijs, 2010).

Qualitative research will primarily take on an interpretivist philosophy, and an inductive approach. An interpretivist philosophy gives importance to human belief, and focuses on evaluating a small sample in detail to understand the views of many (Easterby-Smith, et al., 2002). Furthermore, an inductive approach “begins with the collection of data, rather than with a theory, and uses data to identify regularities or themes, or to suggest theories…” (Hayes, 2000, p. 789).

On the other hand, quantitative research will generally take on a positivist philosophy, and will also usually take on an inductive approach. A positivist philosophy is quite different to interpretivist, because it focuses on the collection of large amounts of data and quantifying the data with thorough statistical analysis (Lee, 1991). Using the examples above, if a company wanted to conduct effective market research to analyse consumer average spend, than they would conduct quantitative research with a positivist and inductive approach. This is because the researcher will collect a large sample of data to statistically analyse the average spend of a company’s consumers. Doing interviews would be small-scale and ineffective as it wouldn’t represent a large enough sample.

As previously mentioned, the research method will be a determining factor for what tool to use to conduct the research. Quantitative research will usually take the form of a questionnaire, which is a “survey instrument used to collect data from individuals about themselves, or a service or product…each respondent is exposed to the same questions…to ensure the differences can be interpreted as reflecting differences” (Siniscalco & Auriat, 2005, p. 3). On the other hand, qualitative research is usually in the form of focus groups or interviews, which are “a form of group interview that capitalises on communication between research participants in order to generate data” (Kitzinger, 1995, p. 299). This shows the disparity that exists between the different methods, and why a researcher must be clear on what their research method. Trying to obtain data using the wrong research method will yield negative results and will more than likely cause the market research to underperform.

Implementation and Findings

After the planning and preparation has been conducted, the market research, such as questionnaires or focus groups, can be implemented and analysed. Physically conducting research is perhaps the most complex stage of the market research process, but is made significantly easier through rigid planning and preparation (Craig & Douglas, 2005). Furthermore, this stage may consist of going out into the field to collect results, or simply waiting for participants to fill out a survey. It can be both the longest, or shortest, stage of the marketing process, with it being made significantly more effective with proper planning.

All the data collected would be analysed by whatever means appropriate. If a survey was used then the most effective method would be through the use of statistical software. However, qualitative research, such as focus groups, will primarily be analysed by the researcher or company, which will allow them to interpret the data how they sit fit. This can raise issues of bias, which is the extent to which researchers or participants may seek to influence the process of data collection, analysis and findings (A Bryman, 2008). However, if the company wishes for the market research to be conducted effectively, then it will be sure of eliminating all possible threats of bias.

Furthermore, this would be the stage where secondary research could be used, as it would help supplement the primary market research. Secondary research is “the re-analysis of data for the purpose of answering the original research question with better statistical techniques, or answering new questions with old data” (Glass, 1976, p. 3). The use of secondary research is usually decided by the researcher, but generally helps fortify any of the findings from the primary research ensuring that the market research is more effective and thorough.

Conclusion

From the discussion of how to conduct effective market research, it becomes quickly apparent that the most vital stage to conducting market research is the planning and preparation stage. A company must clearly define what there aims and objectives are, as it will help shape and design the overall market research process. There are a plethora of alternative methods to conducting market research, but each different method has its merits. A survey will not explore in-depth attitudes of consumer behaviour, but it will gauge a good understanding of average spend.

Utilising the wrong tools, approaches or philosophies to answer the research question will end up with ineffective market research being conducted, with the company losing substantial amounts of resources. Furthermore, the planning and preparation stage is so important because it will make the physical conduction of the research much easier. If a company knows what they are trying to discover, in what method, and with what tools, than they will be able to conduct the most effective market research in the most efficient manner.

Bibliography

A Bryman, E. B., 2008. Business Research Methods. s.l.:Oxford University Press.

Beall, A. E., 2010. Strategic Market Research: A Guide to Conducting Research That Drives Businesses. Bloomington: iUniverse.

Brains, C., Willnat, L., Manheim, J. & Rich, R., 2011. Empirical Political Analysis. 8th ed. Boston: Longman.

Brunso, K., Fjord, T. A. & Grunert, K. G., 2002. Consumers’ food choice and quality perception, Aarthus: MAPP working paper 77.

Craig, C. S. & Douglas, S. P., 2005. International Marketing Research. 3rd ed. Chichester: John Wiley & Sons.

Creswell, J. W., 2014. Research Design: Qualitative, Quantitative and Mixed Methods Approaches. Thousand Oaks: SAGE Publications.

Easterby-Smith, M., Thorpe, R. & Lowe, A., 2002. Management Research: An Introduction. 2nd ed. Thousand Oaks: SAGE Publications.

Glass, G. V., 1976. Primary, Secondary, and Meta-Analysis of Research. Educational Researcher, 5(10), pp. 3-8.

Hayes, N., 2000. Foundations of Philosphy. 3rd ed. London: Thomson.

Hennik, M., Hutter, I. & Bailey, A., 2011. Qualitative Research Methods. Thousand Oaks: SAGE Publications.

Johnson, R., Onwueghuzie, A. & Turner, L., 2007. Toward a definition of mixed-methods research. Journal of Mixed Method Research, 1(2), pp. 112-133.

Kitzinger, J., 1995. Introducing Focus Groups. BMJ, Volume 311, pp. 299-302.

Knox, B., 2000. Consumer perception and understanding of risk from food. British Medical Bulletin, 56(1), pp. 97-109.

Kolb, B., 2008. Marketing Research: A Practical Approach. 1st ed. s.l.:SAGE Publications.

Lee, A. S., 1991. Integrating Positivist and Interpretive Approaches to Organizational Research. Journal of Organization Science, 2(4), pp. 342-365.

Lockett, A. & Blackman, I., 2004. Conducting market research using the Internet: the case of Xenon Laboratories. Journal of Business & Industrial Marketing, 19(3), pp. 178-187.

Martin, R., 2007. How Successful Leaders Think. Harvard Business Review, Volume June.

Muijs, D., 2010. Doing Quantitative Research in Education with SPSS. Thousand Oaks: SAGE Publications.

Singh, Y. K. & Nath, R., 2010. Research Methodology. 1st ed. New Delhi: APH Publishing.

Siniscalco, M. T. & Auriat, N., 2005. Questionnaire Design, Paris: International Institute for Educational Planning.

Springett, K. & Campbell, J., 2006. An introductory guide to putting research into practice, s.l.: PodiatryNow.

Stebbins, R. A., 2001. Exploratory Research in the Social Sciences. 1st ed. Thousand Oaks: SAGE Publications.

Stuart, I. et al., 2002. Effective case research in operations management: a process perspective. Journal of Operations Management, 20(5), pp. 419-433.

Swartz, J., 2001. Popular Online Grocery Pioneer Webvan Shuts Down, s.l.: USA Today.

This work was produced by one of our professional writers as a learning aid to help you with your studies

This essay explores the need for customer relationship management systems. It begins by explaining how the organisational environment has changed and the pace of change is accelerating. It then considers how a better understanding the customer contributes to organisational success. Following this, it defines what is understood by ‘CRM’ or customer relationship management, and finally it considers the importance of using technology effectively when designing a CRM system.

The emergence of CRM is a response to a changing global environment, as Court (2004:4) observed twenty years ago, large companies used one of very few television channels to reach 80% of the US population, but the media explosion would require them to advertise across 20 channels to reach the same. Furthermore, brand loyalty is in decline, and product life cycles are shortening: customers are becoming more indifferent to marketing messages since “customers, whether consumers or businesses, do not want more choices. They want exactly what they want, when, where and how they want it – and technology now makes it possible for companies to give it to them” (Pine et al, 1995:104). This belief forms the very basis of the purpose of CRM – that customers have hidden or overt preferences that marketers can reveal by building a learning relationship (Mukerjee, 2007). Thus, it involves not only attempting to interpret the needs of customers based on their buying behaviour but predicting their future needs.

However, there remains no universal definition of CRM – some distinguish between customer relationship management and others argue the M refers to marketing (Gamble et al, 1999) and as a result, different approaches to CRM have been identified.

A strategic approach is a core customer-centric business strategy which aims to win and keep profitable customers whereas an Operational approach focuses on the automation of customer-facing processes such as selling, marketing and customer service. A third approach is analytical in nature: focusing on the intelligent mining of customer-related data for strategic or tactical purposes and finally, a collaborative approach applies technology across organisational boundaries with a view to optimizing company, partner and customer value (Buttle, 2009).

These different approaches when combined, however, do enable firms to explore their relationship with the customer in a more holistic way. Thus CRM is not merely a matter of database marketing, nor just a marketing process of segmenting the market and acquiring customers or any single IT initiative or loyalty scheme (Buttle, 2009). Firms must be driven by a desire to be more customer-centric if they want to compete effectively and thus, CRM can be thought of as “a core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer-related data and enabled by information technology” (ibid, 2009: Loc 852).

A strategy is the long-term direction of an organisation and operates on three main levels. Firstly, it is concerned with the overall scope of an organisation and how to add value to the organisational as a whole, or the corporate-level. Secondly, at a business level: how the business should compete in their particular market. And thirdly, how the components of an organisation deliver effectively the corporate-level strategies in terms of resources, processes and people (Johnson et al, 2014:7).

Therefore, a CRM approach must devise clear objectives to be achieved and which are measureable. Clearly one of those objectives is profit but clearly linked to this is sustainability. Mukerjee (2007) argues that this requires a firm to have four capabilities. The firm must have the technological capabilities to enable the desired functionality for the CRM practice. Secondly, its people must have the skills, abilities and attitudes responsible to generate CRM and implement initiatives. Thirdly, it must focus on the processes that the company has identified to enable the CRM initiatives to be fulfilled, including its transactional interactions with customers, and finally the firm must identify the right approaches to acquire the knowledge and insight into enhancing the customer value by developing stronger and deeper customer relationships with the right set of customers.

Thus ‘finding the right set of customers’ is the starting point for CRM. The IDIC model devised by Peppers and Rogers (1996) suggest firms must first identify who its customers are and build a deep understanding of them. Then, the firm must identify which customers have the most value now and which will offer the most for the future. Following this, the firm must interact will customers to ensure an understanding of customer expectations and their relationship with other suppliers or brands, and finally the firm must customise the offer and communications to ensure the expectations are met.

The next step is building a relationship with the customer. Buttle (2009: Loc 1082) defines a relationship as distinct from a transaction: The latter is a one off, but the former is a more enduring social construct, but emphasises trust and commitment. Thus a CRM system must continually strive for improved customer retention as well as recruiting new customers who have future profit potential. A useful tool for exploring this is customer portfolio management.

A portfolio segments customers into mutually exclusive customer groups which are clustered on the basis of one or more strategically important variables. This allows for different groups to manage in different ways as it recognises differing needs, preferences, expectations, but also enables analysis of revenue and cost profiles. Clusters can by consumer type, e.g. other businesses (B2B) or ultimate consumer (B2C). And each sub-group can be further categorised, e.g. business type, or through psychological, geographical, demographical and behavioural clusters (Jackson, 2015).

Then it is to appraise the value of such groups. It is a mistake to value according to revenue or volume since they take no account of the costs to win and keep the customer, it must be related to profit (Ambler et al, 2004). Such comparisons can then be modelled on a bivariate grid, and then combined again, for example, ‘attractiveness’, or kept separate, and adding a third dimension (trivariate grid approach) for example, assessing against the company and network fit: the operational, marketing, technological, people and other competencies and liquidity a company has, or can develop, to exploit the segment (Buttle, 2009).

Thus the portfolio approach provides a sense of focused decision-making that can take into account a number of variables and classifications and assist with forming the strategy of the organisation from a corporate prospective. It provide the ‘vision’ of the organisation. It follows, then, that the business and operational CRM strategies can then focus on the ‘how’ to implement CRM systems.

This starts with determining priorities to determine the goals and objectives. Chan (2005) believes that in order to successfully build a customer-centric organisation, all the organisational interactions with the target customers must be tracked whether it is at a primary stage, e.g. marketing, during the interaction, or following the interaction. One approach to this is Value Chain analysis.

Porter’s (1985) Value Chain identifies nine ways that company create value, and classifies them as primary or secondary, as the diagram below demonstrates:

Value is created by companies managing each component more efficiently and effectively, and in particular improving the co-ordination of these activities across the business. The competitive position is strengthened by understanding which of these are especially significant to customers, how rare and difficult to mimic these core competencies are, as well as any other factors which support the organisation in achieving its goals (Johnson et al, 2014).

These other factors include understanding the role that the organisational stakeholders, including suppliers, customers, owners, partners and employees contribute (Buttle 2009). He (ibid: Loc 9638) argues that the relationship between suppliers is particularly critical. The organisation, therefore, acts as a link between the suppliers and customers, and for the customer-centric organisation that relationship between the suppliers and customer must de-emphasise the short-term, opportunistic behaviours to maximise immediate profit but rather stress the long-term mutually beneficial gains.

Furthermore, companies need to keep adding value to retain customers in order to sustain competitiveness, and potentially leap-frog rivals. There are several approaches that organisations can enhance customer value, for example, product and service innovation, finding complete solutions, lowering costs, using more efficient technology and removing ‘pain points’ – simplifying or removing those activities which a customer must endure to get the value (Mukerjee, 2007). Shaw and Ivens (2002) believe that it is the latter issue that is the main focus for CRM: understanding the customer experience rather than just the customer.

Firms can make use of a number of methods for investigating customer experience, including ‘mystery shopping’ and experience mapping, a process to chart and improve what happens at every point the customer interacts with the organisation; process mapping (Buttle, 2009). Another approach is to study the customer activity cycle, which involves breaking down the process into basic elements and collecting data at each point in the cycle (Vandermerwe, 1993).

Thus, CRM systems make use of sophisticated analytical tools, and these must be supported by CRM technologies. CRM technology must be able to meet a wide-range of functions, not just to capture data, but assist with assimilating that data into databases, which must be robust, scalable and secure (Mukerjee, 2007). Furthermore, such technologies must be accessible to all stakeholders, meaning they cannot be difficult to navigate or configure. They must also be able to operate across any communication channel and integrate with other systems to contribute to a single view of, and for, the customer (Buttle, 2009) who lists many well-known CRM solution providers, for example Oracle, SAP, salesforce. Com, Microsoft and E.piphany (ibid: Loc 8026).

Therefore, when designing a CRM systems a thorough understanding of the interconnectivity of the customer, the suppliers, the technology, analytical tools and the firm’s strategy is required and needs to be constantly monitored, as the model below demonstrates:

Adapted from: Buttle (2009: Loc 2863)

Earlier in this assignment, ‘finding the right set of customers’ was suggested as the starting point for CRM system design, and thus it is appropriate to return to this in order to stress the importance of the cyclical and interconnectedness of CRM when designing a system. The activity of ‘finding the right set of customers’ means right now and in the future in order to devise an appropriate strategy, and do so profitably. This process is known as data mining. Buttle (2009) defines data mining as “the application of descriptive and predictive analysis to support the marketing, sales and service functions”. Data mining provides answers to questions that are at the heart of CRM and therefore when designing a system, it is important to understand that CRM is a holistic approach.

Another key consideration when designing a CRM system is that it should assist the organisation in its quest to keep abreast of and prepare for changes in current trends. Traditional marketing methods have been challenged in recent years by changing social trends, the reduction of governmental controls, rising income levels, threats from rivals, an increasingly sophisticated customer who has greater access to information (Mukerjee, 2007). All of this, has contributed to the shortening product life cycle, which as substantially increased the pressure on firms to not just acquire customers but retain them.

Any system that is designed must also be implemented. Narver et al (1998) state that customer orientation is a type of organisational culture, therefore before embarking in CRM, the organisational culture must be ready and able to fulfil the CRM objectives. The organisation, or rather the people within it, must be able to respond quickly, and the company able to support, train and hire people with the necessary attitude, skills and abilities in order for them to contribute to CRM. Furthermore, the company may have to radically reconstruction its entire systems, particularly the structural design of the organisation in order to change the culture from resistant to embracing change.

This assignment has explored the notion that CRM is a holistic approach which assists the organisation in not just responding to its environment but to also compete against rivals. Customer relationship management cannot deliver its promised benefits without appropriate customer-related data, which in turn must be analysed using a wide-range of tools in order to meet the strategic, operational, analytical and collaborative CRM purposes. To design a CRM system means putting the customer at the heart of the organisation and adapting and sustainably exploiting all the resources available in order to meet their needs.

References

Ambler, T., Kokkinaki, F. and Puntoni, S (2004) Assessing marketing performance: reason for metrics selection, Journal of Marketing Management, Vol. 20, p 475 – 98.

Buttle, F. (2009) Customer Relationship Management, Abdingdon:Routledge.

Chan, J.O. (2005) Toward a unified view of customer relationship management, Journal of American Academy of Business, Vol 6 (1), p 32 – 38.

Court, D.C (2004) A New Model of Marketing, McKinsey Quarterly, Vol 4, pages 4 – 6

Gamble, P, Stone, M, and Woodcock, N (1999) Customer Relationship Marketing: up close and personal, London: Kogan Page.

Jackson, J. (2015) Marketing, E-bookPartnership.

Johnson, G., Whittington, R., Scholes, K., Angwin, D. & Regner, P. (2014) Exploring Strategy, Harlow: Pearson Education.

Mukerjee, K (2007) Customer Relationship Management, New Delhi: PHI Learning.

Narver, J, Slater, S and Tietje, B (1998) Creating a Market Orientation, Journal of Market Focused Management, Vol 2, p 241 – 255

Peppers, D and Rogers, M (2004) Managing Customer Relationships: a strategic framework, London: Piatkus.

Pine, B, Joseph, I.I, Peppers, D and Rogers, M (1995) Do you want to keep your customers forever? Harvard Business Review, Vol 73 (2) p 103 – 114.

Porter, M (1985) Competitive Advantage: creating and sustaining superior performance, New York: Free Press.

Shaw, C and Ivens, J (2002) Building great customer experiences, Basingstoke: Palgrave MacMillan.

Vandermerwe, S (1993) Jumping into the customer activity cycle: a new role for customer services in the 1990s, Columbia Journal of World Business, Vol 28 (2), p 28 – 66.

This work was produced by one of our professional writers as a learning aid to help you with your studies

This question will be answered in three distinct sections. In the first section the major differences in the evaluation of goods and services will be outlined and in the second section the reasons behind these differences will be examined further. In the third and final section it will be important to concentrate upon the impact that the differences between goods and services will have upon concept evaluation techniques and/or methods. Throughout this investigation we will refer to the case of the Concept Development Corporation and consider this case study in order to further elucidate upon this investigation.

It is important to begin this investigation by answering the first question, namely what are the major differences between the evaluation of tangible goods (like toys) and services? The vast majority of money in an economy is spent on either goods or services and therefore it is important to be aware of the differences between the two concepts. Firstly of all, goods are an entity that can be consumed by the customer. An example of a good is a book or food. In the case of a book, the customer can consume the product on many occasions, in the case of food only once. However, both books and food are united in the sense that they are tangible goods that a customer can use. It is the tangible nature of goods that is often used in order to define goods and as Adil points out, “goods are real things that people can touch and use” (Adil 2006: pp.4). Services, on the other hand are defined as something that a person does for another, for example, fixing another person’s car or completing some handiwork in the house would be classed a service. In contrast to goods, services tend to be defined by their intangible nature, because the product one receives is not something one can physically grasp, but rather it is the provision of something that one needs by another person. As Berry points out, “whereas goods are first produced, then sold and then consumed, services are first sold, then produced and consumed simultaneously” (Berry 1985: pp.34). It is clear that there are important conceptual and practical differences between goods and services. Kerr also focuses upon the intangibility of services as their defining feature and argues that as the ubiquitous haircut example illustrates, services tend to have an intangible quality and often (though not always) require the physical presence of both client and service provider” (Kerr 2008: pp.151). However, the difference between tangible good and intangible services are not the only theoretical and practical differences between the two concepts. Firstly, services are often an input into the production process, as the examples of telephone services or accounting illustrate. Due to the fact that such input services can be vital to the development of certain parts of the economy, one could argue that without adequate input service provision certain parts of the economy may never grow at all. “Countries with inefficient service provision, thus tend to have lower productivity in the manufacturing, agriculture and government sectors” (Kerr 2008: pp.151). Adequate service provision can, therefore, at times be vital in developing an economy in a manner that goods cannot be. Another important difference between goods and services is that “services tend to be differentiated products, whereas some goods are homogenous in nature and other goods are differentiated” (Kerr 2008: pp.151). As one can see, therefore, there are a number of important differences between the evaluation of goods and services.

It is important now to move on to discuss why these differences between goods and services exist in the first place. As has already been noted above, the major difference between goods and services is the fact that goods are tangible products whereas services tend to be intangible in nature. The differences between the two concepts is clearly illustrated by the example of the Concept Development Corporation. Crawford and Di Benedetto ask the reader to imagine a scenario in which a group of talented and creative friends decide to embark upon a business venture in which they can put their skills to effective use. “So, they quit their jobs, pooled their savings, rented a small, three-room office, hired a couple of people, coined the name Concept Development Corporation and started serious work” (Crawford & Di Benedetto 2006: pp.189). They quickly realised that they were far more effective at creating ideas than evaluating them and they came up with two product ideas that exemplify the differences between goods and services outlined above. The first area in which they had a creative idea was regarding a product that can be defined as a good and their idea was to create toys for children, particularly toys that contained some education value for the children that played with them. “Their strategy was to develop unique toys that required little up-front expenditures. Most toys would have some game or competitive aspect, be it educational, and involve paper, colour, numbers and the like” (Crawford & Di Benedetto 2006: pp.190). The second area in which the group of friends had a business idea was in the field of writing and this product is best defined as a service. “These services primarily involved designing and writing instruction sheets for area firms (training manuals, copy for package inserts, instruction signs – anywhere words were used to instruct people in doing things)” (Crawford & Di Benedetto 2006: pp.190). It is clear, therefore, from examining the two types of products developed by the Concept Development Corporation that one product is best defined as a good and the other as a service and that a number of important differences exist between the two products.

In the final section it is important to consider the consequences of the differences between the two products of the Concept Development Corporation on concept evaluation techniques and/or methods. It is clear, that, due to the fact that goods and services are different in nature, different techniques must be employed in order to evaluate the two concepts. For example, in order for a customer to evaluate the extent to which a good is soundly constructed, they may want to stress-test the product to ensure that it can withstand external pressure inflicted upon it. This type of test would not be applicable to a service. Therefore, due to the fact that goods a re tangible in nature and services tend be intangible, it is far easier to test the toys that the Development Corporation will produce than to test the writing service of the Corporation. As Berry states, “most services contain few search properties and are high in experience and credence properties, making their quality more difficult to evaluate than quality of goods”

(Berry 1985: pp.40). On the other hand, another study has found that customers use different criteria in order to judge the quality of goods and services. Whereas customers are more likely to trust their own judgment or those of sales people when it comes to products, one study found that “buyers relied heavily agreed or strongly agreed with the statement that there is upon personal sources of information in evaluating services, a difference in the purchasing of goods and services” (Jackson 1995: pp.103). It seems, therefore, that the evidence suggests strongly that goods are more readily evaluated than services and Hartman argues that this is the only effective criteria that can used to distinguish in the evaluation of goods and services. He states that “goods were distinguished from services only on the ease of evaluation dimension” (Hartman 1993: pp.10).

In conclusion, it has become evident during this study that a number of fundamental differences exist between goods and services. Goods are tangible in nature and can be consumed once or multiple times by the customer whereas services tend be intangible in nature. This fundamental difference between the two products has been clearly reflected in the experiences of the Concept Development Corporation, which created toys for children as well as a writing enterprise. The toys for children were a clear example of a good whereas the writing enterprise was a clear example of a service. It is likely that the Concept Development Corporation would have far more success in evaluating the toys as a product, because the studies cited in this investigation suggest that evaluating goods is a simpler task than evaluating services. The Concept Development Corporation will have to bear the differences between goods and services in mind when developing their products further.

Bibliography
Adil, J., 2006. Goods and services. Minnesota: Capstone Press
Berry, L., 1985. Problems and Strategies in Services Marketing. The Journal of Marketing, 49 (2), pp.33-46
Crawford, M., Di Benedetto, 2006. New Products Management. London: McGraw-Hill Publishing
Hartman, D., 1993. Consumer Evaluations of goods and services: implications for services marketing. Journal of Services Marketing, 7 (2), pp.4-15
Jackson, R., 1995. An Empirical investigation of the differences in goods and services as perceived by organisational buyers. Industrial Marketing Management, 24 (2), pp.99-108
Kerr, W., 2008. Handbook on International Trade Policy. Cheltenham: Edward Elgar Publishing